R E P O R T O F T H E B O A R D O F D i r e c t o r S j a n u a ry 1 - 3 0 S E P T E M B e r 2 0 2 3

www.aerostar.ro

9,Condorilor Street, Bacau - 600302, Romania

GENERAL INFORMATION

The report of the Board of Directors is prepared in accordance with the provisions of Law 24/2017 on the issuers of financial instruments and market operations and Regulation A.S.F. No. 5/2018 of the Financial Supervisory Authority on the issuers of financial instruments and market operations, namely Annex 13.

Date when the company was founded: APRIL 17, 1953;

Unique European Company Identification Code (EUID): ROONRC.J04/1137/1991, LEI code for identification as a legal entity - 315700G9KRN3B7XDBB73;

Subscribed and paid-up share capital: RON 48.728.784;

Unique Registration Code 950531, ISIN code ROAEROACNOR5;

Company address: the company's activities are carried out at the registered office, which is located at 9, Condorilor Street, Bacău, postal code 600302;

AEROSTAR has two secondary offices, a working point in the perimeter of Iasi International Airport and a working point in the Municipality of Fetești;

The company's main field of activity is production;

The company's main object of activity is 'Manufacture of aircraft and spacecraft' - CAEN code 3030;

The Company Financial Statements prepared for 30 September 2023 are not accompanied by the statutory auditor's report. They have been audited by the company's internal auditor;

Applicable accounting standards:

The Company Financial Statements were prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, the Accounting Law No. 82/1991, republished, as amended and supplemented, and are presented in accordance with the requirements of IAS 1 (Note 3);

AEROSTAR S.A. is listed on the Bucharest Stock Exchange under the code ARS, all the issued shares falling under the Standard category. The records of shares and shareholders are kept, in accordance with the law, by S.C. Depozitarul Central S.A. Bucharest;

The Company's shareholders can obtain information about AEROSTAR S.A. and its main events on the website www.aerostar.ro;

The purpose of this report is to inform the investors about the changes in the company's position and performance that have taken place during the reporting period January-September 2023, as well as about the foreseeable developments in the aviation and defence industry market and in relation to the company's development opportunities.

REPORTING PERIOD 1 JANUARY - 30 SEPTEMBER 2023

REPORT OF THE BOARD OF DIRECTORS……. ………………….........4

COMPANY FINANCIAL STATEMENTS............…………......……20

GENERALASPECTS

AEROSTAR S.A. is a privately owned company operating in global aircraft manufacturing and maintenance programs at industrial level for civil and military aircraft. The information about the company is disseminated simultaneously, in accordance with the provisions of the Corporate Governance Code, in both Romanian and English.

Significant events in the reporting period ended 30 September 2023

24 Mach

End of the annual negotiations of a new Additional Act to the Collective Labour Agreement for the period 01.04.2023 - 31.03.2024 between the Administration of AEROSTAR S.A. and the Employees' Commission.

As of 1 April, benefit packages and salary increases of 15% have been granted to the company's employees.

17 April

AEROSTAR S.A. celebrated 70 years of Continued Activity!

28 April

Information on the dividend payment methods was posted on the company's website www.aerostar.ro in the Investor Relations section.

17 May

The mandate of the external auditor Auditeval Consulting SRL was extended for a period of 3 years.

7 June

A BLOOD DONATION CAMPAIGN was held at AEROSTAR S.A. headquarters, with the support of our colleagues who wanted to offer a second chance at life to those in distress.

7th June

Opening of a secondary office in the Municipality of Fetești, Romania.

Events after the reporting date

No events have been recorded after the reporting date.

2023 vs 2022

KEY FIGURES

AEROSTAR prepares the company financial statements in accordance with the International Financial Reporting Standards IFRS.

	UM	30.09.2023	30.09.2022
Share capital	k lei	48.729	48.729
Turnover	k lei	361.523	317.363
• Export sales	k lei	295.507	227.192
• Share of export in turnover	%	82%	72%
Total number of employees	no.	1.853	1.805
Net profit	k lei	61.096	73.914
Current ratio	-	9,45	8,29
Expenses for investments from own sources	k lei	12.757	8.974

Indicators	30.09.2023	30.09.2022
Debt ratio indicator	0	0
Debt turnover ratio - customers	52	52
Fixed assets turnover rate	1,58	1,46
General solvency ratio	14,02	12,28
Financial rate of return	0,12	0,16
Net profit rate	16,90	23,29%
Net treasury	59.562 k lei	87.152 k lei
Cash flow	225.730 k lei	232.316 k lei

Monetary indicators	UM	30.09.2023	30.09.2022
Average exchange rate EURO/12 months	lei/Euro	4,9387	4,9352
Average exchange rate USD/12 months	lei/USD	4,5586	4,6417
Average exchange rate GBP/12 months	lei/GBP	5,6715	5,8300
Inflation	%	5,74	13,06

* Source: www.bnr.ro/cursurivalutare

2023 vs 2022

SALES RESULTS

Comparative evolution of sales for each business line (thousand lei)

Comparative evolution of sales for each sales market (thousand lei)

During the period January - September 2023, a turnover of 361,523 thousand lei was achieved, up by 12% compared to the same period of last year.

From the turnover achieved, the company sold on the domestic market products and services worth 65,687 thousand lei and on the foreign market products and services worth 295,836 thousand lei.

Approximately 82% of the turnover represents export sales. The customers of AEROSTAR are located in Europe, Asia, Africa, USA and Canada.

Compared to the same period last year, the percentage of export sales has increased in Europe, where we provide maintenance services for civil aviation, aviation products (landing gear systems, mechanical parts, assemblies and sub-assemblies), electronic equipment and ground equipment.

In Asia and Africa, we provide civil aviation maintenance services and in Canada we supply aviation products.

In Romania we provide repair services for military aircraft and repairs of electronic parts and components for military aircraft, upgrades, integrations and maintenance for military aviation systems, repair services for systems and launchers and civil aviation products.

Percentage of sales from turnover by sales market

BUSINESS LINES

Manufacture of Aeronautical Products

52% of turnover recorded on 30 September 2023

Aerostar is a significant supplier of aerostructures, components, assemblies and hydraulic systems for various global manufacturing programs. The equipment, assemblies and parts produced by AEROSTAR are used on a large number of commercial aircraft: Airbus A320, A321, A330, A350, Boeing B737, B787, B767, Gulfstream G650, Dassault F7X, Bombardier Challenger 600 series and Global 5000/6000.

MRO Civil Aviation

28.7% of turnover recorded on 30 September 2023

AEROSTAR is a major supplier of industrial level maintenance services (basic and complex B, C and D level maintenance, structural modifications, avionics upgrades) for Airbus A320 family and Boeing B737 commercial aircraft.

Defence Systems

16.6% of turnover recorded on 30 September 2023

AEROSTAR actively participates in modernisation, integration and maintenance programmes for military aviation and defence systems, being a first-tier supplier for the Romanian Ministry of National Defence and an authorised economic operator registered in the Single Register of Economic Operators and Defence Production and/or Service Capabilities in the national defence industry.

From 1 January to 30 September 2023, the upward trend in the aviation manufacturing business line continued, thanks to the partial recovery in international air travel and as a result of the resumption of new aircraft orders.

EXTERNAL ENVIRONMENT

The first nine months of 2023 saw a recovery in air traffic while the economic uncertainties did not curb people's appetite for travelling, even though ticket prices increased due to the rise in fuel prices.

However, there are still challenges for the aviation industry in terms of volatile prices, skilled staff, supply chains and inflation.

The rising costs of production and general inflation generate uncertainty about the future costs.

The global supply chain continues to impact the industry through short-term capacity shortages and delivery shortfalls, as well as through the changes required to fill the gaps caused by the ongoing geopolitical tensions and the challenges experienced during the COVID pandemic.

The labour shortage in the industry remains a real challenge given the demand for skilled and specialised personnel and the high level of experience and professional training required by the specific activities in this field.

Perspectives

The company's perspectives depend to a large extent on the global context and the evolution of the key factors.

The global economic and geopolitical crisis does not alter AEROSTAR's commitment to its established responsibilities. The conflict between Ukraine and Russia had no direct impact on the company's business.

OUR EMPLOYEES

Through the human resources policies adopted, equal opportunities are ensured for all employees, without discrimination, in terms of professional career or any other work practice.

As of 30 September 2023, Aerostar had an effective headcount of 1853 employees, an increase compared to the same period last year. The share of women in the total number of employees is 29% and 26% in the management structure.

Currently, 86% of AEROSTAR's individual labour agreements are concluded with an indefinite duration.

During the reporting period, there were no fatal accidents at AEROSTAR. AEROSTAR acts consistently to reduce the risks of accidents and illnesses and applies internal rules and regulations in its work that ensure compliance with the legal requirements.

AEROSTAR is committed to supporting its employees, their professional development, attraction and retention in the organization through the concerns included in the development strategy and performance evaluation.

In the first nine months of 2023, 3569 employees were included in professional training programmes.

We support, respect and guarantee equal and non-discriminatory treatment!

We support the professional development of our employees by including them in professional training programmes.

As far as the benefits of our employees are concerned, the Additional Act that entered into force on 1 April 2023 for the Collective Labour Agreement for the period 01.04.2023 - 31.03.2024 provides for benefit packages and salary increases of 15% for the company's employees.

BOARD OF DIRECTORS

The Board of Directors of AEROSTAR S.A. was elected for a period of four years at the General Meeting of Shareholders held on 9 July 2020. The election was carried out by secret ballot and the mandate lasts until 10.07.2024.

EXECUTIVE MANAGEMENT

The Executive Management is carried out by the General Director and the Financial Director. The management structure at executive-operational level is completed by the other division and directorate directors. There were no changes in this structure in the first 9 months of 2023.

The Board of Directors is composed of:
Name	Position
Filip Grigore	President
Damaschin Doru	Vice-president
Toncea Mihail-Nicolae	Member
Doroș Liviu- Claudiu	Member
Vîrnă Daniel	Member

The Executive Management is composed of:

Name	Position
Filip Grigore	Director General
Damaschin Doru	Financial Accounting Manager
Filip Alexandru	Deputy Director General
Rogoz Vasile Laurențiu	Quality Director
Popa Dan Paul Mălin	Human Resources Director
Cristea Andra	Logistics Division Director
Buhai Ovidiu	Director of Defence Systems Division
Iosipescu Șerban	Director of Aeronautical Products Division
Veleșcu Ioan - Dan	Director of Civil Aviation MRO Division
Branche Cătălin Bogdan	Director of Utilities and Infrastructure Division

SHAREHOLDERS OF AEROSTAR

The significant shareholders of AEROSTAR S.A. are IAROM S.A. Bucharest and EVERGENT Investments S.A. Bacau. The synthetic structure of the company's shareholding as at 30 September 2023 is as follows:

Shareholders	Number of shares	Percentage %	The shareholders of
IAROM S.A.	108,866,403	71.4921	AEROSTAR S.A. can obtain
Evergent Investments S.A	23,106,135	15.1737	information about AEROSTAR S.A. and its
Other shareholders	20,304,912	13.3341	main events on the website
Total	152,277,450	100%	www.aerostar.ro.

RELATIONS WITH SHAREHOLDERS AND THE CAPITAL MARKET

In its relations with the shareholders, Aerostar has taken care to protect and guarantee the rights of the shareholders, namely:

to participate in General Meetings directly or by proxy - by providing them with special proxies, postal ballot papers, other useful information;
to be treated fairly, irrespective of ownership;
to receive dividends in proportion to each shareholder's holdings.

In its relations with the capital market, Aerostar has fulfilled all the reporting obligations arising from the legal provisions by publishing continuous and periodic mandatory reports in the electronic system of the Financial Supervisory Authority and the Stock Exchange, on the company's website and through press releases.

In accordance with the provisions of the Corporate Governance Code, continuous and periodic information was disseminated simultaneously in both Romanian and English.

All shareholders can obtain information about Aerostar and its main events on the website www.aerostar.ro.

It is also possible to download annual and half-yearly reports corresponding to the last ten years and quarterly reports corresponding to the last five years, current reports and other information of interest to the shareholders.

There are no changes concerning the shareholders' rights. There have been no major transactions entered into by the company with persons with whom it acts concertedly or in which such persons have been involved during the relevant period.

ASPECTS RELATED TO THE COMPANY'S EQUITY AND MANAGEMENT

There were no changes affecting the equity and management of Aerostar S.A.

The company was not unable to meet its financial obligations during this period.

AEROSTAR'S RELATIONS WITH ITS PARENT COMPANY, OTHER SHAREHOLDERS AND COMPANIES IN WHICH IT HAS EQUITY HOLDINGS

Aerostar is a subsidiary of IAROM S.A. and therefore the parent company consolidating the Group's financial statements is IAROM S.A., with the unique identification code 1555301 and the head office in Bucharest, B-dul Aerogării no. 39. The consolidated financial statements for the financial year 2022 have been filed with the A.N.A.F. under registration number 602356101- 2023/31.08.2023.

The parent company will prepare and publish a set of consolidated financial statements in accordance with the applicable accounting regulations for the financial year ended on 31.12.2023.

AEROSTAR SHARES

The shares of Aerostar S.A. Bacău have been traded since 1998 on the regular market administrated by the Bucharest Stock Exchange.

Main characteristics of the issued shares: 152,277,450 registered, ordinary, equally-valued, fully-paid shares issued in dematerialised form and registered in the Register of Shareholders. This register is managed by Depozitarul Central S.A. Bucharest. The issuer Aerostar S.A. Bacău is registered with the following data: Unique Registration Code 950531, ISIN code ROAEROACNOR5, stock exchange symbol ARS, all issued shares being in the Standard category.

Aerostar shares in figures:	30.09.2023	30.09.2022	30.09.2021
Number of shares	152.277.450	152.277.450	152.277.450
Nominal value per share (lei)	0,32	0,32	0,32
Price at the end of the period (lei)*	8,60	6,50	8,15
Stock exchange capitalization (lei)*	1.309.586.070	989.803.425	1.241.061.218
Maximum price (lei)*	9,50	9,50	8,40
Minimum price (lei)*	7,00	6,40	4,00
Result per share (lei)	0,40	0,49	0,32

Source: Monthly bulletin issued by the Bucharest Stock Exchange

The monthly evolution of the reference price of the ARS shares in 2023 compared to the same period of 2022 (lei/share):

AFFILIATED PARTIES

On 30.09.2023 AEROSTAR S.A.'s shareholdings in other companies are as follows:

Name of subsidiary/ affiliated company	Main activity	No. of shares held by Aerostar	Voting rights	Aerostar's holding value (thousand lei)	Financial information for the last financial year (year 2022) for which the financial statements of the affiliated companies were approved
					Sales (k lei)	Own capitals (k lei)	Net profit (k lei)
Airpro Consult S.R.L.Bacău	cod CAEN 7820	100	100%	10	8.635	215	34
Foar S.R.L. Bacău	cod CAEN 7739	408	51%	4	357	731	116
	TOTAL			14	8.992	946	150

AEROSTAR's shareholdings in these companies are recorded at cost.

Both companies in which AEROSTAR also holds stakes are registered in Romania.

The transactions with the affiliated parties are presented in the Financial Statements, Note 26.

BUSINESS MODEL

TANGIBLE ASSETS

AEROSTAR operates on the global market for products and services in the aerospace and defence industry as an independent company.

The company's business model did not change despite the instability caused by the international context, but the way of doing business was adapted to the specific nature of the business flows.

Production activities are carried out under commercial contracts with customers who are integrators and/or endusers/beneficiaries in the aerospace and defence industry. Committed to a sustainable future, the management has adopted an ambitious strategy and an integrated business model based on a process-systems approach and Risk Based Thinking.

Our company's management policy is focused on maintaining a solid capital base for continued development in the context of the global market and competitive advantage through quality, capabilities, high level technologies for continuous and organized development and implicitly for achieving our strategic objectives.

The production facilities and capacities of Aerostar S.A. are located at the company's registered office in Bacău, Romania, at 9 Condorilor Street, postal code 600302, and at the secondary unincorporated office, lucrative facility in Iași, 25B Aeroportului Street.

The company owns land totalling 48.63 hectares with access to the E85 European road. Aerostar has direct access to the runway of "George Enescu" airport in Bacau.

The registered office has all the facilities necessary for the good performance of the production activity, consistent with the object of activity.

The production premises include hangars, industrial halls, production test benches, administrative and social facilities. The company also has office areas for technical and economic activities.

All these facilities are maintained in good condition. The built-up area of the buildings is approximately 14.67 hectares.

The assets of Aerostar S.A. comply with the provisions established in the health, safety and environmental management system, in accordance with the applicable legislation and regulations on occupational safety, as well as with the property protection and safety rules.

On 30 September 2023, Aerostar S.A. Bacău owns tangible assets for carrying out its activity in the gross amount of 368,494 thousand lei, materialized in land, buildings, special constructions, installations, technological equipment, means of transport.

In the first 9 months of 2023, no risks were identified regarding the ownership of tangible assets.

Category of tangible assets	Gross value (k lei)	Degree of wear (%)	Estimated useful lifetime (years)
Land	30.894	N/A	N/A
Constructions	97.055	45,39%	30-50 years
Investment property	12.749	41,41%	25-50 years
Technical installations, of which:	223.956	68,49%
• technological equipment	215.061	68,51%	4-25 years
• means of transport	8.895	68,00%	4-18 years
Other tangible assets	3.840	53,07%	2-18 years
TOTAL	368.494	55,57%	N/A

Other categories of assets	Value price/share (lei)	No. of shares	Portfolio value (k lei)	Name of issuer
Shares	1,2150	47.588.046	57.820	Evergent Investments S. A.

INVESTMENTS FOR SUSTAINABILITY

In the first 9 months of 2023, AEROSTAR made and deployed investments worth 12,757 thousand lei. The investment expenditure is represented as follows:

Category	Percentage %
Development expenditure	89.5%
Replacement costs	10.5%
TOTAL	100%

Investments in the first 9 months of 2023	Percentage %
Equipment	79%
Constructions	8%
Measuring, controlling and regulating	5%
instruments and installations
Means of transport	2%
Intangible fixed assets	5%
Furniture, appliances, office equipment	1%

AEROSTAR's policies on investments aim to ensure sustainable development, sustainable use of resources and reduction of environmental footprint, to support professional excellence, to secure effectiveness, and to optimize the operational flows.

QUALITY AND ENVIRONMENT

We manage, evaluate and monitor in a responsible and effective way our activities with environmental impacts! These activities are kept under control by analysing the results of the monitoring and measurements carried out in accordance with the provisions of the environmental permits, as well as by carrying out the environmental protection control and guidance programme.

Within the company, the training of employees in order to raise their awareness on environmental compliance is a permanent preoccupation.

Environmental impacts are periodically analysed with regard to: air emissions, noise generation, discharges on land, waste generation, and environmental aspects are assessed by determining the which aspects are significant.

All dangerous substances and preparations used in AEROSTAR are managed according to the applicable regulations in force.

The dangerous substances and preparations covered by the REACh Regulation are used in accordance with the conditions of the permits issued by the European Commission.

In the first 9 months of 2023, the controls established by the Environmental Permits that Aerostar holds were carried out, ascertaining that the maximum permitted values of the indicators were not exceeded.

Mitigating climate change Atmospheric emissions of greenhouse gases:

Down by 10% compared to the same period last year;

11931 GHG certificates in reserve.

Pollution prevention 85% waste recovered; 15% waste disposed of; 92% more waste recovered in H1 2023

compared to the same period of 2022.

We are certified to the requirements of ISO 9001, ISO 14001 environmental management standard and ISO 45001 occupational health and safety standard.

We are also authorised as a Part 145 Maintenance Organisation, a Part 21G Production and Design Organisation and a Part 21J Production and Design Organisation. Our partnerships associated with the defence market have led us to implement a quality management system based on NATO quality assurance requirements AQAP 2110 and AQAP 2210.

CERTIFICATIONS AND AUTHORIZATIONS

1.Extension of the scope of approval granted by the National Military Aviation Authority to Aerostar as a military design organisation - for major modifications and repairs. 2.Extension of the approval granted by the Civil Aviation Authority of Bermuda to Aerostar as a maintenance organisation. 3.Extension of the approval granted by the National Aerospace Association for NonDestructive Testing (RO-NANDTB) to the NDT personnel of Aerostar for nondestructive examination methods. 4. Extension of the validity of the authorisation granted by the Civil Aviation Authority - for specialised civil aeronautical testing.

Extension of Aerostar's approval as a supplier to GKN Aerospace/Fokker Aerostructures BV and Gulfstream Aerospace Corporation.

RISKS AND UNCERTAINTIES

In the first nine months of 2023, a number of changes were identified in the general economic, political or market conditions, air travel disruptions and the aggravation of geopolitical events due to terrorist attacks as well as increased military tensions with the imposition of international sanctions.

Consequently, the actual results may deviate from the plans, objectives and expectations set out in the prospective statements.

The results analysed for the reporting period reflect the organisational resilience and strong performance of the company, showing growth in turnover and headcount compared to the same period of last year.

The company's management continues to analyse risks, aiming at securing medium and long-term sustainability and at reducing the uncertainty associated with its strategic objectives, while focusing on mitigating the consequences in terms of economic and financial imbalances.

SUMMARISED FINANCIAL STATEMENTS

Financial performance	UM	30.09.2023	30.09.2022
Total revenue	k lei	414.959	345.345
Total expenses	k lei	347.230	259.170
Gross profit	k lei	67.729	86.175

Financial position	UM	30.09.2023	31.12.2022
Fixed assets (net values)	k lei	246.201	252.380
Current assets	k lei	473.732	461.382
Share capital	k lei	48.729	48.729
Shareholders' equity	k lei	519.012	493.709
Total liabilities	k lei	80.352	90.259

AEROSTAR S.A. BACĂU

SEPARATE FINANCIAL STATEMENTS FOR 30 SEPTEMBER 2023

UNAUDITED

The financial statements as of 30.09.2023 have been audited by Aerostar's internal auditor.

COMPANY STATEMENT OF PROFIT OR LOSS

OTHER COMPREHENSIVE INCOME

COMPANY STATEMENT OF FINANCIAL POSITION

COMPANY STATEMENT OF CASH FLOWS

COMPANY STATEMENT CHANGES IN EQUITY

NOTES TO THE COMPANY FINANCIAL STATEMENTS

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF PROFIT OR LOSS FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

	Notes	30 September 2023	30 September 2022
Operating income
Proceeds from sales	19	361.523	317.363
Other income	19	1.659	1.798
Proceeds related to the inventories of finished goods		29.885	7.361
and work in progress	19
Proceeds from production of fixed assets	19	631	130
Proceeds from operating subsidies	19	576	(5)
Total operating income		394.274	326.647

Operating expenses Material expenses	20	(166.842)	(114.178)
Expenses with employees' benefits	20	(125.817)	(106.018)
Expenses regarding amortization of fixed assets	5;6;20	(19.285)	(17.995)
Net income (expenses) from adjustments regarding	20	(8.738)	1.631
currents assets
Net income (expenses) from adjustments regarding	20	9.226	3.640
provisions
Expenses regarding external services	20	(27.719)	(19.731)
Other expenses	20	(3.746)	(2.975)
Total operating expenses		(342.921)	(255.626)

Profit/loss from operating activity		51.353	71.021
Financial revenue	21	20.685	18.698
Financial expenses	22	(4.309)	(3.544)

Financial profit/loss		16.376	15.154

Profit before tax		67.729	86.175
Tax on current and deferred profit	17;23	(6.633)	(12.261)
Net profit of the period		61.096	73.914

Grigore Filip Doru Damaschin

General Director, Financial Director,

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF OTHER COMPREHENSIVE INCOME FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

	30 September 2023	30 September 2022
Net profit of the period	61.096	73.914
Deferred income tax recognized on company equity	(2.011)	(1.272)
Gain transferred to retained earnings on sale of equity instruments through other comprehensive income	26	-
Re-evaluation at fair value of equity instruments through other comprehensive income	(6.398)	2.705
Other comprehensive income	(8.383)	1.433
Total comprehensive income	52.713	75.347

Grigore Filip Doru Damaschin

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF FINANCIAL POSITION FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

	30 September	31 December











































Total company equity, liabilities and provisions	719.933	713.762

Grigore Filip Doru Damaschin

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF CASH FLOWS (DIRECT METHOD) FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

	370.831	329.616


	2.420	4.766
	606	-
		(235.067)
	(54.075)	(52.420)
	(4.509)	(9.031)
27	9.952	37.864

		5.667
		-
		2.541
		311
		(50.785)
	(14.109)	(18.409)
27	(3.960)	(60.675)


		(21.866)
27	(26.239)	(21.866)
	(20.247)	(44.677)

		274.471
27	(196)	2.522
11	225.730	232.316
	27 7, 27	(305.321) 11.488 5.516 3.645 153 (10.653) (26.239) 246.173

Grigore Filip Doru Damaschin

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF CHANGES IN EQUITY FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

	S ha re i l ta ca p	Re se rv es	Re fr se rv es om re lu io f t ev a a n o f in ia l a ts an c ss e hr h he t t ou g o r he iv co m p re ns e in co m e	De fe d in rr e co m e ize d ta x r ec og n i ty o n eq u	Re l t su ie d ca rr fo d rw ar	f Re l t o su he io d t p er	To l e i ta ty q u
iv in To l c he ta om p re ns e co m e
A. Ba la 1 Ja 2 0 2 3 nc e o n nu ar y	4 8. 7 2 9	3 2 4. 1 4 9	7. 2 3 5	( 1 9. 6 5 4 )	5 0. 9 3 8	8 2. 3 1 2 *	4 9 3. 7 0 9
Pr f i f he io d t o t o p er						6 1. 0 9 6	6 1. 0 9 6
O f c iv in t he lem ts he r e en o om p re ns e co m e Se in f de fer d p f i ize d o t t t tax g up o re ro re co g n n i f e t o ty ac co un q u is i bu ion he i he he D f f fo 2 0 2 2 tr t t t t to t				( 2. 1 4 ) 7	1 6 3		( 2. 0 1 1 )
o p ro r y ea r de in ion de i de d by he ha ho l de in t t t s a s c s re rs f i l ( ) O G M S 2 0 Ap 2 0 2 3 N 1 2 te o r o is i bu ion f he f i de f hs fo D 9 m tr t t t m ter t o p ro a a on r					8 2. 3 1 2	( ) 8 2. 3 1 2	-
in f isc l fa i l i ies in t t re se rv es re p re se n g a c g ro ss ts am ou n in fer d in d e in le f Ga tra to ta ns re re e arn g s o n sa o		2 0. 2 3 0				( ) 2 0. 2 3 0	-
i in hr h he he iv ty tru ts t t eq u s m en ou g o r c om p re ns e in co m e lu ion fa ir lu f he i Re t t t ty -ev a a a va e o eq u			( ) 6 5 8		6 8 4		2 6
in hr h he he iv tru ts t t s m en ou g o r c om p re ns e in co m e			( ) 6. 3 9 8				( ) 6. 3 9 8
To l c he iv in fo he io d ta t om p re ns e co m e r p er	-	2 0. 2 3 0	( 7. 0 5 6 )	( 2. 1 7 4 )	8 3. 1 5 9	( 4 1. 4 4 6 )	5 2. 7 1 3
Re d is i bu d fro he f i f 2 0 2 2 tr te t t o se rv es m p ro iv i de ds d is i bu d fo D 2 0 2 2 tr te n r		5 4. 9 0 2			( ) 5 4. 9 0 2 ( 2 7. 4 1 0 )		- ( 2 7. 4 1 0 )
Tr io i h ha ho l de ise d t t an sa c ns w s re rs re co g n d ire ly in i t ty c eq u	-	5 4. 9 0 2	-	-	( 8 2. 3 1 2 )	-	( 2 7. 4 1 0 )
B. Ba la 3 0 Se be 2 0 2 3 te nc e o n p m r	4 8. 7 2 9	3 9 9. 2 8 1	1 7 9	( 2 1. 8 2 8 )	5 1. 7 8 5	4 0. 8 6 6 **	5 1 9. 0 1 2
C. C ha in i ( No 1 2 ) ty te ng es eq u	-	7 5. 1 3 2	( 7. 0 5 6 )	( 2. 1 7 4 )	8 4 7	( 4 1. 4 4 6 )	2 5. 3 0 3

* The result of 90,273 thousand lei as on 31.12.2022 is influenced by the profit distribution to other reserves from fiscal facilities in the amount of 7,961 thousand lei; ** The result of 61,096 thousand lei as on 30.09.2023 is influenced by the profit distribution to other reserves from tax facilities in the amount of 20,230 thousand lei;

Grigore Filip Doru Damaschin

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF CHANGES IN EQUITY FOR 30 SEPTEMBER 2022 (unless specified otherwise, all amounts are stated in thousand lei)

	S ha re i l ta ca p	Re se rv es	Re fr se rv es om re lu io f t ev a a n o f in ia l a ts an c ss e hr h he t t ou g o r he iv co m p re ns e in co m e	De fe d rr e in ta co m e x ize d re co g n i ty o n eq u	Re l t su ie d ca rr fo d rw ar	Re l f t o su he t io d p er	To l e i ta ty q u
iv in To l c he ta om p re ns e co m e
A. 1 2 0 2 2 Ba la Ja nc e o n nu ar y	4 8. 2 9 7	2 8 4. 3 6 5	-	( 1 1 3 4 ) 7.	1. 1 4 8 5	4. 2 8 0 * 5	4 2 1. 3 8 8
f i f io Pr he d t o t o p er						3. 9 1 4 7	3. 9 1 4 7
O f c iv in he lem he t ts r e en o om p re ns e co m e
Se in f de fer d p f i ize d o t t t tax g up o re ro re co g n n f e i t o ty ac co un q u				( 1. 4 2 3 )	1 1 5		( 1. 2 2 ) 7
is i bu ion f he f i fo he D 2 0 2 1 tr t t t t to o p ro r y ea r he de in ion de i de d by he ha ho l de in t t t t s a s c s re rs f i l ( ) O G M S 2 0 Ap 2 0 2 2 N 1 2 te o r o					5 4. 2 8 0	( ) 5 4. 2 8 0	-
lu ion fa ir lu f he i Re t t t ty -ev a a a va e o eq u in hr h he he iv tru ts t t s m en ou g o r c om p re ns e in co m e			2. 0 7 5				2. 0 7 5
D is i bu ion f he f i de f 9 m hs tr t t t m ter t o p ro a a on fo in f isc l fa i l i ies in t t r r es erv es re p re se n g a c g ro ss ts am ou n		5. 7 7 6				( 5. 7 7 6 )	-
iv in fo io To l c he he d ta t om p re ns e co m e r p er	-	6 5. 7 7	2. 0 7 5	( 1. 4 2 3 )	4. 4 3 1 5	1 3. 8 8 5	3 4 7 5. 7
d is i bu d fro he f i f Re 2 0 2 1 tr te t t o se rv es m p ro		3 1. 4 3 8			( ) 3 1. 4 3 8		-
iv i de ds d is i bu d fo D 2 0 2 1 tr te n r					( 2 2. 8 4 2 )		( 2 2. 8 4 2 )
io i ise Tr h ha ho l de d t t an sa c ns s re rs re co g n w ire in i d ly t ty c eq u	-	3 1. 4 3 8	-	-	( 5 4. 2 8 0 )	-	( 2 2. 8 4 2 )
Se B. Ba la 3 0 be 2 0 2 2 te nc e o n p m r	4 8. 7 2 9	3 2 1. 5 7 9	2. 7 0 5	( ) 1 8. 5 5 7	5 1. 2 9 9	** 6 8. 1 3 8	4 7 3. 8 9 3
C. C ha in i ( No 1 2 ) ty te ng es eq u	-	3 7. 2 1 4	2. 7 0 5	( 1. 4 2 3 )	1 5 1	1 3. 8 5 8	5 2. 5 0 5

*) The result of 59.940 k lei as on 31.12.2021 is influenced by the profit distribution to other reserves from fiscal facilities in the amount of 5.660 k lei;

**) The result of de 73.914 k lei as on 30.09.2022 is influenced by the profit distribution to other reserves from fiscal facilities in the amount of 5.776 k lei;

General Director, Financial Director, Grigore Filip Doru Damaschin

NOTE 1 - DESCRIPTION OF THE COMPANY

AEROSTAR was established in 1953 and operates in accordance with the Romanian Law. AEROSTAR S.A. performs its activity at its registered head office located in Bacau, 9, Condorilor Street, code 600302. In accordance with the Resolution no. 2/14.12.2017 of the Board of Directors, the opening of a secondary place of business without legal personality (lucrative facility) was approved in Iasi, on 25B Aeroportului Street. Moreover, in accordance with the Decision of the Board of Directors no.1/02.06.2023, the opening of a secondary office without legal personality (lucrative facility) was approved in Fetești, at 2, Carpati Street, ap. 7.

The main line of work of AEROSTAR S.A. is production.

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

The company was registered as a shareholding company at the Bacau Trade Register (under number J04/1137/1991), with the current name "AEROSTAR S.A." and the individual identification code 950531, the European Unique Identifier (EUID) code ROONRC J04/1137/1991.

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

Over the course of 2023 there was no subscription of new shares, nor of any participation certificates, convertible bonds, warranties, options or similar rights.

In terms of accounting regulations, AEROSTAR S.A. is the subsidiary of the company IAROM S.A. and, therefore, the parent company that consolidates the financial statements of the group is S.C. IAROM S.A., with the unique identification code 1555301, having its registered head office in Bucharest, 39 Aerogarii Blvd. The consolidated financial statements for the financial year 2022 were submitted to A.N.A.F. under registration number 602356101-2023/31.08.2023. Copies of the consolidated financial statements can be obtained from the head office of the parent company, IAROM S.A. The parent company will prepare and publish a set of consolidated financial statements in accordance with the applicable accounting regulations, for the financial year ended on 31.12.2023.

The company has a sole operating segment in accordance with IFRS 8 and no distinct financial information is available for various components of the entity. The information regarding the sales by categories of products and markets is presented in detail in the Report of the Board of Directors.

The company's policy is focused on maintaining a solid capital basis in order to support the continuous development of the company and accomplish its strategic objectives.

The company will continue to act firmly so as to ensure the sustainability of its investments and to maintain its production capabilities. Furthermore, thanks to the experience gathered within our collective, the company acts so as to find the most suitable solutions to the new economic challenges.

NOTE 2 - ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS

2.1. Estimates

The preparation and presentation of the individual financial statements in accordance with IFRS involves the use of estimates, judgements and assumptions that affect the implementation of the accounting policies as well as the reported value of the assets, liabilities, revenues and expenses.

The estimates and judgements are made based on the historic experience as well as on a series of factors considered adequate and reasonable. The accounting estimates and judgements are continuously updated and take into account reasonable expectations with respect to future probable events. The reported accounting values of the assets, the liabilities that cannot be determined or obtained from other sources are based on these estimates considered adequate by the company's management.

Such estimates, as well as the reasoning and assumptions behind them are reviewed on a regular basis and the result thereof is recognized in the time period when the estimate was reviewed.

Any change in the accounting estimates will be recognized prospectively by its inclusion in the result:

of the period of time when the change occurs, if it affects only that period of time; or
of the period of time when the change occurs and of the subsequent periods, if the change also affects such periods.

The company uses estimates in order to determine:

the uncertain customers and the adjustments for impairment of related receivables;
the value of the provisions for risks and expenses to set up at the end of the period (month, trimester, year) for litigations, for the dismantling of property, plant and equipment, for collaterals granted to customers, for obligations toward manpower and other obligations;
the adjustments for impairment of property, plant and equipment and intangible assets. At the end of each reporting period, the company estimates whether there are indications of impairment. If such signs are identified, the recoverable amount of the asset is estimated to determine the extent of impairment (if any).
the lifetimes of property, plant and equipment and intangible fixed assets. The company reviews the estimated life of the tangible and intangible fixed assets at least at the end of each financial year to determine their adequacy.
the inventories of raw materials and materials, work in progress and finished products requiring the setting up of adjustments for impairment.
deferred taxes.

Disclosure of information

The Company will, to the extent practicable, disclose the nature and value of a change in an accounting estimate that is effective in the current period/future periods.

2.2. Errors

Errors may arise regarding the recognition, evaluation, presentation or description of the items of the financial statements.

The company corrects retroactively the significant errors for the prior period presented in the first set of financial statements approved for publication after discovering the errors, by:

restating the comparative values for the prior period presented when the error occurred, or
if the error occurred before the prior period presented, by restating the opening balances of assets, liabilities and equity for the prior period presented.

In case of identifying an error, the company presents the following information:

the nature of the error for the previous period;
- for each previous period presented, to the extent possible, the correction value:
  - for each affected line item in the financial statement;
  - for basic and diluted earnings per share.
- the correction value at the beginning of the earliest period presented;
- if retrospective restatement is impracticable for a specific prior period, the circumstances leading to the existence of that condition and a description of how and when the error was corrected.

2.3. Changes in the accounting policies

Any change in the accounting policies is only permitted if requested by IFRS or if it results in more relevant or more reliable information with reference to the company operations.

The company modifies an accounting policy only if such change:

is required by an IFRS; or
results in financial statements that provide reliable and more relevant information with reference to the effects of the transactions, of other events or conditions on the financial performance or cash flows of the entity.
- Application of changes in the Accounting Policies:
the entity takes into account a change in the accounting policy that results from the initial implementation of an IFRS in accordance with the specific transitory provisions, if any, of that IFRS; and
at the initial application of an IFRS that does not include specific transitory provisions.

Disclosure of information

When the initial application of an IFRS has an effect on the current or prior period of time, the company discloses in the explanatory notes the following:

the title of IFRS;
the nature of the accounting policy change;
when applicable, the fact that the change is made as an effect of the transitory dispositions and a description of these transitory provisions;
for the current period and for each prior period, the amount of adjustments for each affected element of the statement of the financial position, to the extent possible.

When it is impossible to determine the specific effects for one or more prior accounting periods, the company will apply the new accounting policy of assets and liabilities for the first period for which the retroactive application is possible, which may also be the current period.

When a voluntary change in the accounting policy has an effect on the current or prior period, the company discloses in the explanatory notes:

the nature of the change of accounting policy;
the reasons for which the application of the new accounting policy provides more reliable and relevant information;
for the current period and for each prior accounting period, the estimated amount of the adjustments for each affected item of the statement of the financial position, as far as possible.

NOTE 3 - ACCOUNTING AND EVALUATION PRINCIPLES

3.1. Bases for the preparation and presentation of financial statements

The individual financial statements of AEROSTAR S.A. are prepared in accordance with the provisions of:

the International Financial Reporting Standards (IFRS) adopted by the European Union;
Accounting Law no. 82/1991, republished, as subsequently amended and supplemented;
O.M.F.P. no. 881/2012 on the application of International Financial Reporting Standards by companies with securities admitted for trading on a market regulated by the International Financial Reporting Standards;
O.M.F.P. no. 2.844/2016 on the approval of the Accounting Regulations conforming to the International Financial Reporting Standards, as amended and supplemented;
OM.F.P. no. 2.861/2009 for the approval of the Norms regarding the organization and execution of the inventories of elements such as assets, liabilities and equities;
O.M.F.P. no. 1.826/2003 on the approval of the Explanations regarding some measures of business accounting organization and management;
O.M.F.P. no. 2.634/2015 regarding the financial accounting documents, as amended and supplemented.
Law no. 24/2017, republished, regarding the issuers of financial instruments and market operations.

The accounting is kept in Romanian and in the national currency.

The accounting for transactions in foreign currency is carried out both in national currency and in foreign currency.

The financial year is the calendar year.

The financial statements are prepared and reported in thousand lei and all values are rounded to the nearest thousand lei. Due to rounding, the numbers presented do not always accurately reflect the totals provided, and the percentages do not accurately reflect absolute figures.

The financial statements are prepared based on historical cost.

The financial statements are presented in accordance with IAS 1 "Presentation of Financial Statements". The company has opted for a presentation by nature and liquidity in the statement of financial position and a presentation of income and expenses by nature in the statement of profit or loss, considering that these methods offer information relevant to the company's situation.

3.2. Applied Accounting Policies

Aerostar SA describes the accounting policies applied to the individual financial statements and avoids repeating the text of the standard, unless it is considered relevant to understanding the content of the note. Compared to the presentation made at the end of the financial year 2022, no changes were made to the applied accounting principles, methods, policies and procedures.

NOTE 4 – TRANSACTIONS IN FOREIGN CURRENCIES

AEROSTAR considers the Romanian LEU as the functional currency and the financial statements are presented in thousand LEI.

The currency transactions are recorded at the exchange rate of the functional currency on the date of the transaction.

On the date of the Financial Position Statement, the assets and financial liabilities denominated in foreign currency are evaluated in the functional currency using the exchange rate, communicated by the Romanian National Bank, valid on 30.09.2023:

Currency	30.09.2023	31.12.2022
1 EUR (Euro)	4,9746 lei	4,9474 lei
1 USD (American Dollar)	4,6864 lei	4,6346 lei
1 GBP (British pound)	5,7433 lei	5,5878 lei

The favourable and unfavourable exchange rate differences resulting from the settlement of the assets and financial liabilities denominated in foreign currency are recognized in the Profit or Loss Statement for the financial year in which they occur.

Considering that 82% of the turnover registered in the reporting period is denominated in USD and EUR, while a significant part of the operating costs is denominated in LEI, the foreign exchange rate variations will affect both its net income and its financial position as expressed in the functional currency.

In the reporting period, the net currency exposure resulted as a difference between the amounts collected from the financial assets and the payment of the financial liabilities denominated in that currency is as follows:

JANUARY - SEPTEMBER 2023	K EUR	K USD	K GBP
Collected from financial assets	19.396	41.470	-
Payments of financial liabilities	(10.479)	(24.328)	(1.082)
Foreign exchange net exposure	8.917	17.142	(1.082)

In the reporting period, the quarterly variation of the foreign exchange rate USD/LEU was: - 1,10% in the 1st quarter of 2023 compared to 31.12.2022

0,10% in the 2nd quarter of 2023 compared to 31.03.2023
0,60% in the 3rd quarter of 2023 compared to 30.06.2023

and

EUR/LEU:

0,60% in the 1st quarter of 2023 compared to 31.12.2022
0,02% in the 2nd quarter of 2023 compared to 31.03.2023
0,30% in the 3rd quarter of 2023 compared to 30.06.2023

resulted in the recording of a financial profit from favourable exchange rate differences of 1.107 thousand LEI.

NOTE 5 - INTANGIBLE ASSETS: reporting period 30 September 2023

	Va lu 3 0 Se be 2 0 2 3 te es o n p m r			Va lu 1 Ja 2 0 2 3 es o n nu ar y
	G t ro ss am ou n	Ac la d te cu m u ia io de t p re c n	Ne lu t v a e	G t ro ss am ou n	A la d te cc um u ia io de t p re c n	N lu t v e a e
L ice nc es	6. 9 4 5	( 6. 3 8 ) 7	6 5 7	6. 8 2 7	( 6. 0 3 4 )	8 3 8
O he in i b le t ta ts r ng as se ( f ) tw so ar e	1. 0 9 4	( 8 ) 5 5	3 6 5	4 9 7	( ) 4 7 6	2 1
To l ta	8. 0 3 9	( 6. 9 3 6 )	1. 1 0 3	3 6 9 7.	( 6. 1 0 ) 5	8 9 5

Net accounting value

	Ne t v lu a e o n 1 Ja 2 0 2 3 nu ar y	ies En tr t g a ro ss lu va e	ia io De t p re c n du in he io d t r g p er	Ne t v lu a e o n 3 0 Se be 2 0 2 3 te p m r
L ice nc es	8 3 8	1 3 7	( 4 0 8 )	5 6 7
O he in i b le t ta ts r ng as se	2 1	9 5 7	( 8 2 )	3 6 5
To l ta	8 5 9	7 3 4	( 4 9 0 )	1. 1 0 3

COMPARATIVE FIGURES - INTANGIBLE ASSETS: reporting period 30 September 2022

	Va lu 3 0 Se be 2 0 2 2 te es o n p m r			Va lu 1 Ja 2 0 2 2 es o n nu ar y
	G t ro ss a m ou n	A la d te cc um u ia io de t p re c n	N lu t v e a e	G t ro ss a m ou n	A la d te cc um u ia io de t p re c n	N lu t v e a e
L ice nc es	6. 3 1 1	( 9 0 0 ) 5.	4 1 1	6. 2 1 7	( 6 0 6 ) 5.	6 1 1
O in i t he ta b le ts r ng as se ( f ) tw so ar e	4 8 3	( ) 4 2 0	6 3	4 1 7	( ) 3 4 0	7 7
To l ta	6. 9 4 7	( 6. 3 2 0 )	4 4 7	6. 6 3 4	( 9 4 6 ) 5.	6 8 8

Net accounting value

	Ne lu t v a e o n 1 Ja 2 0 2 2 nu ar y	En ies tr t g a ro ss lu va e	De ia io t p re c n du in he io d t r g p er	Ne lu t v a e o n 3 0 Se be 2 0 2 2 te p m r
ice L nc es	6 1 1	1 7 8	( ) 3 7 8	4 1 1
O in i he b le t ta ts r ng as se	7 7	6 5	( ) 7 9	6 3
To l ta	6 8 8	2 4 3	( 4 ) 5 7	4 4 7

The category of intangible assets includes the following classes of assets of similar nature and use:

Licences
Other intangible assets

The software programmes are registered under other intangible assets.

The useful lifetimes for the intangible assets are established in years, based on the period of the contract or the service life, as the case may be. The useful lifetime of the licenses and software purchased or generated internally is 3 years.

Depreciation expenses are recognised in the income statement using the linear method of calculation.

The intangible assets in the balance sheet account as on 30.09.2023 are not depreciated and no adjustments were made for the depreciation thereof.

When determining the gross accounting value of the intangible assets, the company uses the historical cost method.

The value of the completely amortized software licenses on 30 September 2023 and which are still in use is5.861 mii lei.

All the intangible assets recorded in the balance sheet on 30 September 2023 are the property of AEROSTAR.

he ie f in i b le de by T tr ta ts en s o ng as se er e m a : w	7 3 4 ho d le i t us an
de lo f p du io io I T 3 t o t t te  ve p m en ro c n m an ag em en sy s m ve rs n -	ho d le i 5 9 7 t us an
ha f s f l ic tw  p ur c se o o ar e en ce s	1 3 7 ho d le i t us an

In the reporting period there were no entries of licences generated internally or acquired through business combinations.

In the reporting period there were no assets classified as held for sale in accordance with IFRS 5.

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT: reporting period 30 September 2023

	Va	lu 3 0 Se be te es o n p m r	2 0 2 3	Va lu 1 Ja 2 0 2 3 es o n nu ar y
	G lu ro ss va e	Ac la d te cu m u iza io t t am or n	Ne lu t v a e	G lu ro ss va e	Ac la d te cu m u iza io t t am or n	Ne lu t v a e
La d n	3 0. 8 9 4	-	3 0. 8 9 4	2 9. 5 3 4	-	2 9. 5 3 4
Co io tr t ns uc ns	9 7. 0 5 5	( ) 4 4. 0 5 8	5 2. 9 9 7	9 6. 6 3 4	( ) 3 9. 4 2 8	5 7. 2 0 6
Te hn lo ica l c o g ip d h ic les t a eq m en n ve u	2 2 3. 9 5 6	( ) 1 5 3. 3 8 9	7 0. 5 6 7	2 0 2. 6 4 0	( ) 1 4 0. 4 2 3	6 2. 2 1 7
O he ip d t t a r e q u m en n f f ice ip t o eq u m en	3. 8 4 1	( 2. 0 3 9 )	1. 8 0 2	3. 8 3 3	( 1. 7 9 3 )	2. 0 4 0
In tm t p ty ve s en ro p er	1 2. 4 9 7	( 2 9 ) 5. 7	4 0 7. 7	1 1. 2 7 5	( 4. 6 1 ) 7	6. 1 4 5
Pr la d ty t a op er p n n , ip de t u eq u m en n r io tr t co ns uc n	3. 8 3 9	-	3. 8 3 9	1 5. 1 7 9	-	1 5. 1 7 9
To l ta	3 7 2. 3 3 4	( 2 0 4. 7 6 5 )	1 6 7. 5 6 9	3 5 9. 0 9 5	( 1 8 6. 4 0 5 )	1 7 2. 6 9 0
Ne ing lue 3 0. 0 9. t a t cc ou n va on	2 0 2 3:
	Ne lu t v a e 1 2 0 2 3 Ja on nu ar y	G in lu ts ro ss va e p u	G lu tp ro ss va e o u u	Am iza ion du in ts t t or r g io t he d p er	Ne lu t v a e o n 2 0 2 3 3 0 Se be tem p r
La d n	2 9. 5 3 4	1. 3 6 0	-	-	3 0. 8 9 4
Co io tr t ns uc ns	5 7. 2 0 6	4 2 1	-	( ) 4. 6 3 0	5 2. 9 9 7
ica Te hn lo l c o g ip ic d h les t a eq m en n ve u	6 2. 2 1 7	2 1. 7 2 2	( ) 4 0 7	( ) 1 2. 9 6 5	7 0. 5 6 7
O he ip d t t a r e q u m en n f f ice ip t o eq m en u	2. 0 4 0	8	-	( 2 4 6 )	1. 8 0 2
In tm t p ty ve s en ro p er	6. 1 4 5	1. 4 3 7	-	( 1 ) 5 7	4 0 7. 7
Pr la d ty t a op er p n n , ip de t u eq u m en n r io tr t co ns uc n	1 5. 1 7 9	1 2. 0 2 3	( ) 2 3. 3 6 3	-	3. 8 3 9
To l ta	1 7 2. 6 9 0	3 7. 0 0 7	( 2 3. 7 7 0 )	( 1 8. 3 5 8 )	1 6 7. 5 6 9

COMPARATIVE FIGURES: PROPERTY, PLANT AND EQUIPMENT: reporting period 30 September 2022

	3 0 Se Va lu be te 2 0 2 2 es o n p m r			1 Va lu Ja 2 0 2 2 es o n nu ar y
	G lu ro ss va e	Ac la d te cu m u iza io t t am or n	Ne lu t v a e	G lu ro ss va e	Ac la d te cu m u iza io t t am or n	Ne lu t v a e
La d n	2 9. 3 4 7	-	2 9. 3 4 7	2 9. 2 6 6	0	2 9. 2 6 6
Co io tr t ns uc ns	9 6. 6 2 5	( 3 8 0 ) 7. 7	8. 6 9 2 5	9 1 9 3 5.	( 3 3. 2 ) 7 7	6 1. 9 1 6
Te hn lo ica l c o g ip d t a eq u m en n h ic les ve	2 0 0. 6 0 0	( 1 3 7. 0 2 1 )	6 3. 5 7 9	1 9 3. 9 7 0	( 1 2 4. 9 7 5 )	6 8. 9 9 5
O he ip d t t a r e q u m en n f f ice ip t o eq u m en	3. 7 9 0	( 1. 7 1 2 )	2. 0 7 8	3. 7 6 1	( 1. 4 7 7 )	2. 2 8 5
In tm t p ty ve s en ro p er	1 1. 2 7 5	( 4. 9 8 ) 5	6. 6 7 7	1 0. 3 5 7	( 4. 1 4 2 )	6. 3 9 5
Pr la d ty t a op er p n n , ip de t u eq u m en n r io tr t co ns uc n	1. 2 3 9	-	1. 2 3 9	1. 4 5 2	-	1. 4 5 2
To l ta	3 4 2. 8 1 3	( 1 8 1. 2 0 1 )	1 6 1. 6 1 2	3 3 4. 1 8 0	( 1 6 3. 8 7 1 )	1 7 0. 3 0 9

	Ne lu t v a e o n 1 2 0 2 2 Ja nu ar y	G lu ro ss va e in ts p u	G lu ro ss va e tp ts ou u	Am iza ion in t t du or r g he io d t p er	Ne t v lu a e o n 2 0 2 2 3 0 Se be tem p r
La d n	2 9. 2 6 6	8 1	-	-	2 9. 3 4 7
Co io tr t ns uc ns	6 1. 9 1 6	1. 3 6 9	-	( 4. 5 9 3 )	5 8. 6 9 2
Te hn lo ica l e ip t c o g q u m en d h ic les an ve	6 8. 9 9 5	6. 8 0 8	-	( 1 2. 2 2 4 )	6 3. 9 5 7
O he ip d f f ice t t a r e q m en n o u ip t eq m en u	2. 2 8 5	2 9	-	( ) 2 3 6	2. 0 7 8
In tm t p ty ve s en ro p er	6. 3 9 5	7 3 8	-	( 4 5 6 )	6. 6 7 7
Pr la d ty t a op er p n n , ip de t u eq u m en n r io tr t co ns uc n	1. 4 5 2	8. 7 3 1	( ) 8. 9 4 4	-	1. 2 3 9
To l ta	1 7 0. 3 0 9	1 7. 7 5 6 1	( ) 8. 9 4 4 8	( ) 1 7. 5 0 9	1 6 1. 6 1 2

Property, plant and equipment are valued at acquisition or production cost less accumulated depreciation and impairment losses.

These items of property, plant and equipment are amortized by using the linear method.

Amortization expenses are recognized in the profit and loss statement.

The following useful lifetimes are assumed:

- constructions	30-50 years
- technological equipment	2-25 years
- vehicles	4-18 years
- other property, plant and equipment	2-18 years
- investment property	25-50 years

The useful lifetimes are established by committees consisting of specialists from the company. The useful lifetimes of the property, plant and equipment are stipulated by the fiscal legislation on assets.

The company did not purchase assets from business combinations, nor did it classify assets for future sale.

The investment property contains a number of 12 real estate – buildings that are rented to third parties based on renting contracts.

The value of renting income in this category of fixed assets was 2.065 mii lei. thousand lei.

On the date of transition to IFRS, the company estimated and included in the cost of the property, plant and equipment the estimated costs for their decommissioning at the end of a useful lifetime.

These costs were reflected in the set-up of a provision, which is recorded in the profit and loss account throughout the lifetime of the property, plant and equipment, by inclusion in the amortization expense.

The amortization of an asset begins when the asset is available for use and ends on the day when the asset is reclassified in another category or when it is derecognized.

The amortization does not end when the asset is not in use.

The land and buildings are separable assets, and their accounts are kept separately, even when they are acquired together.

The land has an unlimited useful lifetime and, therefore, is not submitted to amortization.

In accordance with the provisions of IAS 36 - Impairment of assets, the company proceeded to the identification of any signs of impairment of property, plant and equipment, taking into accopunt the external and internal sources of information.

Internal sources of information:

The economic performance of the assets is good, all fixed assets that are in operation benefit the company.

External source of information:

The indicator that offers information regarding the interest from the investors in the companies listed on the capital market is the market capitalization with reference to the company equity (MBR).

indicator MBR-Market to book ratio	30.09.2023	30.09.2022	31.12.2022
Stock exchange capitalization/ company equity	2,5	2,1	2,4

The over-unit value of the MBR indicator is obtained by companies well-listed on the capital market and that are of interest to the investors.

The property, plant and equipment in the balance sheet on 30.09.2023 are not depreciated and no significant depreciation indicators were identified.

The gross accounting value of the fully amortized property, plant and equipment still in operation on 30 Septembrie 2023 is 87.940 thousand lei.

On 30.09.2023 no mortgages were set on the fixed assets owned by Aerostar S.A.

Entries of property, plant and equipment, achieved by:  commissioning of technical equipment, hardware equipment, measuring	37.007 k lei
and control equipment  land purchase	8.944 k lei 81 k lei
 property, plant and equipment under construction in 2023	12.023 k lei
Outflows of property, plant and equipment, achieved by:	23.770 k lei
 transfer of property, plant and equipment as a result	23.363 k lei
of the commissioning thereof
 Disposal of technological equipment and vehicles	407 k lei

AEROSTAR S.A. BACĂU NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR 30 SEPTEMBER 2023

(unless specified otherwise, all amounts are stated in thousand lei)

NOTE 7- FIXED FINANCIAL ASSETS

	S ha he l d in re s f f i ia i ies l d te t t a en	O he t r im i ize b l d m o i ies t se cu r - ha s re s	O he t r im b i l ize d m o i ies t se cu r – i io bu tr t to co n ns i l a ta ts ca p sse	O he t r im b i l ize d m o iv b les re ce a – ier l su p p te g ua ra n es	To l ta
O 1 Ja 2 0 2 3 n nu ar y	1 4	5 8. 9 7 5	2	3 8	5 9. 0 2 9
/ In D cr ea se s ec re as es	-	( 1. 1 ) 5 5	-	4	( 1. 1 1 ) 5
O 3 0 Se 2 0 2 3 be te n p m r	1 4	2 0 5 7. 8	2	4 2	5 7. 8 7 8

A) Investments in affiliated entities registered under cost:

		N f o. o / ha s re s ha s re s iss d ue	V in t o g ig h ts r ( % )	V lu f a e o ha s re s he l d by ( i ) k le	F in ia l in fo io t an c rm a n la d he 2 0 2 2 te to t re y ea r
i ia Su bs d / ry n am e is f f ic R d he d te eg re a o e	C A E N Co de				Co 's m p an y ha s re i l ta ca p ( k le i )	Re se rv es ( k le i )	N t e f i t p ro ( k le i )	in l N om a lu /s ha va e re ( k le i )	N t e / t as se ha s re ( k le i )
A ir Co l S R L Ba ău t p ro ns u c 9, Co i S do lo tr t n r r ee	in - m a iv i t ty ac d in to ac co r g C A E N de co 8 2 0 7	1 0 0	1 0 0 %	1 0	1 0	1 7 1	3 4	0, 1 0	2, 2
Fo S R L Ba ău ar c 9, Co i S do lo tr t n r r ee	in - m a iv i t ty ac d in to ac co r g C A E N de co 3 9 7 7	4 0 8	5 1 %	4	8	1. 0 0 0	1 1 6	0, 0 1	1, 8
T O T A L	x	x	x	1 4	x	x	x	x	x

Aerostar's shareholdings in the affiliated companies are recorded at cost.

On 30.09.2023, the company recorded no modifications i.e. no increases/decreases as to the shareholding percentage, maintaining the same influence as in 2022 on the remaining companies in the equity portfolio.

Both companies in which AEROSTAR holds shares are registered in Romania.

B) Investments in equity instruments through other elements of global result:

Is 's su er na m e R is d he d f f ic te	C A E N de co	N f s ha o. o re s	Sy bo l m	f p ic V lu a e o r e /s ha re o n ( i ) 3 0. 0 9. 2 0 2 3 le	V lu f p fo l io t t a e o or a ic ( i ) ke k le t p m ar r e
eg re a o e
S. A Ev In t tm ts er g en ve s en	in iv i t ty - m a a c d in C A E N to ac co r g	4 7. 5 8 8. 0 4 6	E V E R	1, 2 1 5 0	5 7. 8 2 0
S ic A 9 4 C, P Ba ău tr. to r m an c	de 6 4 9 9 co

The company holds 47,588,046 shares of the company Evergent Investments S.A, listed at the Bucharest Stock Exchange. Aerostar records the shares held at fair value through other elements of global result, in accordance with IFRS 9 "Financial Instruments". The Company used the irrevocable option to designate such equity instruments at fair value through other elements of global result as these financial assets are held both to collect dividends, and also for earnings from their sale, but not for trading. The earning or loss related to these equity instruments is recognized in other elements of global result, except for the revenue from dividends.

C) Contribution in cash to setting up the original patrimony of the Association "Education cluster for sustainable development C-EDD"

The association was established voluntarily by the founding members, operating as a Romanian legal person of private law without patrimonial purpose. The association is non-governmental, non-political, non-profit and independent, not subordinated to any other legal person.

The purpose of the Association is to develop and implement efficient mechanisms of public-private dialogue in the field of education, to act as a space of dialogue and collaboration between the main players involved in education, to increase the quality of the educational processes and to connect the ongoing education with the economic environment in order to provide to it qualified human resources for sustainable development.

The value of AEROSTAR's contribution to the assets of the association " Education Cluster for Sustainable Development C-EDD " is 2.500 lei.

NOTE 8 - TRADE RECEIVABLES

	30 September 2023	31 December 2022
TRADE RECEIVABLES, of which:
Customers, of which:	74.840	74.311
Domestic customers	10.698	17.378
Foreign customers	64.142	56.933
Uncertain customers	2.860	1.871
Adjustments for impairment of receivables – customers	(1.441)	(954)
Suppliers – debtors	4.818	5.453
TOTAL TRADE RECEIVABLES	81.077	80.681

In accordance with the provisions of the Accounting Policies Manual, to cover the non-recovery risk of the amounts that represent the uncertain trade receivables, the company registers adjustments for the depreciation of the uncertain customers as follows:

‐ in percentage of 50% of the value of the receivables not collected on time if the due date is between 30 days and 180 days. On 30 September 2023, the company registered adjustments for depreciation of this nature in the amount of 1.418 thousand lei;
‐ 100 % of the amount of the receivables not collected on time, if the delay is more than 180 days. On 30 September 2023, the company registered adjustments for depreciation of this nature in the amount of 23 thousand lei.

When determining the recoverability of a trade receivable, the changes considered were those occurred in the customer's credit rating from the time when the credit was granted till the date of reporting.

Debtors-suppliers have a discount limit:

in 2023: 4.323 thousand lei
in 2024: 495 thousand lei

The receivables were evaluated at the market exchange rate communicated by the National Bank of Romania available for the end of September 2023.

The favourable and unfavourable exchange rate differences between the exchange market rate, for which are accounted the receivables in currency, and the market exchange rate communicated by the National Bank of Romania available for the end of September 2023 were recorded in the related income or expense account.

NOTE 9 – OTHER RECEIVABLES

	30 September 2023	31 December 2022
Receivables related to manpower and similar accounts	133	16
Receivables related to the budget of social insurance and the state budget, of which:	3.357	1.436
VAT to recover  Non-exigible VAT  Amounts to recover from the National Health  System (allowances on medical leaves)	689 152 1.963	- 172 654
Amounts in the form of subsidies 	46	75
Excise duties to recover for the fuel used  Other receivables in relation to the local budget  representing the sanitation tax to recover resulting from the rectifying declarations	460 31	509 10
submitted Other receivables in relation to the social  security and state budget	16	16
Interest to receive from bank deposits	1.509	1.814
Sundry debtors	672	574
Impairment adjustments for receivables - sundry debtors	(535)	(539)
TOTAL OTHER RECEIVABLES	5.136	3.301

NOTE 10 - INVENTORIES	30 September 2023	31 December 2022
of which:
Raw material *	63.048	52.381
Consumables **	63.541	63.093
Other materials	100	129
Semi-finished products	32	471
Packaging	39	56
Finished products	30.012	23.828
Products and services in progress	63.987	42.559
Gross value of the inventory (unadjusted)	220.759	182.517

ADJUSTMENTS FOR IMPAIRMENT OF INVENTORIES

	30 September 2023	Increases/ Setups	Decreases/ Reruns	31 December 2022
Total adjustments	60.140	30.231	21.998	51.907
Adjustments for impairment of raw material	32.049	16.645	7.646	23.050
Adjustments for impairment of consumables	25.602	11.332	12.874	27.144
Adjustments for impairment of semi-finished products	32	36	475	471
Adjustments for impairment of finished products	685	11	2	676
Adjustments for impairment of production in progress	1772	2.207	1.001	566

Notes:

* The raw material directly participates in the manufacture of the products and is found in the semifinished or finished product, either in their initial state, or transformed (bars, pipes, plates, profiles, wires etc.);

** The consumables participate or assist in the manufacturing or operating process, without being usually found in the finished product (auxiliary materials, fuels, spare parts, tools, jigs, fixtures and other consumables).

The inventories are assessed at the lowest value between the cost and the net achievable value. The net achievable value is the estimated sale price for inventories minus all estimated costs for completion and the estimated costs required for the sale.

The cost of inventories includes: acquisition costs, conversion costs as well as other costs incurred to bring inventories to the state and in the place where they are currently found.

Value adjustments are made regularly based on the findings of the inventory commissions and/ or the module managers, in order to present them at the lowest value between the cost and the net achievable value.

Within the Company, the goods considered to be depreciated are those that are older than the storage period established by internal decision of the Board of Directors.

In accordance with the Accounting Policy Manual, various adjustments are set up at Aerostar SA for the inventory depreciation, as follows:

for raw material, consumables, semi-finished products and spare parts, different periods are established, for each profit centre;
for the inventories of finished products, depreciation adjustments are set up for each period, as follows:

a) 100% of the value thereof, for inventories of this nature that do not rely on contracts with the customers;

b) in variable percentages, as agreed with the profit centres involved, for the inventories of unfinished products not delivered in due time as per the contractual provisions.

The total value of inventories recognized as an expense during the period is 166.842 thousand lei, which consists of:

156,025 thousand lei representing the value of expenditure on stocks of materials;
9,772 thousand lei representing the value of expenditure relating to the consumption of water, gas and electricity;
1,045 thousand lei representing the value of expenditure on non-stored materials.

Aerostar S.A. holds stocks of finished (safety) products at the levels agreed in the contracts with its customers. Aerostar S.A. has no pledged stocks.

NOTE 11 – CASH AND CASH EQUIVALENTS

The cash contains:

cash available at the AEROSTAR cash desk;
sight deposits held by banks (current accounts at banks).

The cash equivalents consist in:

term deposits held by banks;

At the end of the reporting period the cash and cash equivalents consist in:

	30.09.2023	31.12.2022	30.09.2022
Cash at the cashier's office	58	63	48
Sight deposits held at banks	28.366	20.277	27.176
Term deposits held at banks	197.306	225.833	205.092
Cash and cash equivalents	225.730	246.173	232.316

There are no restrictions on the current bank accounts and deposits held by the banks.

The value of the bank Credit Line usable in the form of an overdraft, available for the future operating activity, is 2.500 THOUSAND USD (the equivalent of 11.716 thousand LEI). During the reporting period the bank Credit Line was not used.

NOTE 12 – COMPANY EQUITY

The company equity on 30 September 2023 is 519.012 thousand lei. The net increase of the company equity in 2023 compared to the end of the year 2022 amounted to 25.303 thousand lei.

Main equity elements in the period January-September 2023 compared to the year 2022:

The share capital remained unchanged:

On 30 September 2023, the share capital of AEROSTAR SA Bacau is 48.728.784 lei, divided into 152.277.450 shares having a nominal value of 0,32 lei.

The reserves increased by 68.076 thousand lei:
- o An increase by 54.902 thousand lei as a result of the distribution of the profit made in 2022 to the destinations decided by the shareholders in the OGMS meeting of 20 April 2023;
- o An increase by 20.230 thousand lei on account of the distribution of the profit made in the first 9 months of 2023 for reserves from fiscal facilities;
- o A decrease by 6.398 mii lei on account of the fair value re-valuation of equity instruments through other comprehensive income;
- o A decrease by 658 thousand lei resulting from the transfer to retained earnings of fair value re-valuation differences on equity instruments recognised through other comprehensive income following their sale.
Other equity elements decreased by the amount of 2.174 thousand lei on account of the deferred income tax recognized in the company equity.

The result carried forward increased by 847 thousand lei as follows:

o Following the resolution of OGMS dated 20 April 2023, the profit made in the financial year 2022 taken over the result carried forward, representing the undistributed profit, was fully distributed to the destinations decided by the shareholders;
o An increase by 163 thousand lei on account of the deferred income tax recognized in the company equity;
o An increase by 684 thousand lei representing the net gain obtained from the sale of equity instruments recognised through other comprehensive income.
The balance of the result carried forward on 30 September 2023 is 51.785 thousand lei, consisting of:
- o The result carried forward incurred by the use, on the date of transition to IFRS, of the fair value as presumed cost =26.938 thousand lei;
- o The result carried forward representing the gain generated from re-evaluation reserves, capitalized against the depreciation of tangible fixed assets = 24,163 thousand lei;
- o the net gain generated from the sale of equity instruments recognised through other comprehensive income = 684 thousand lei.
The result of the period was a profit in the amount of 61.096 thousand lei.

NOTE 13 - PROVISIONS

	31 December 2022	Increases/ Set-up/ Reclassification of provisions	Reductions/ Reruns/ Reclassifica tions of provisions	Differences from re evaluation	30 September 2023
Total provisions	129.794	11.446	21.207	536	120.569
Provisions for bonds granted to customers	47.844	11.446	13.096	239	46.433
Provisions for decommissioning property, plant and equipment	16.426	-	-	-	16.426
Provisions for the employees' benefits	7.784	-	7.700	-	84
Other provisions	57.740	-	411	297	57.626
Long-term provisions	95.271	4.571	3.955	480	96.367
Provisions for bonds granted to customers	25.888	4.571	3.544	210	27.125
Provisions for decommissioning property, plant and equipment	16.426	-	-	-	16.426
Other provisions	52.957	-	411	270	52.816
Short-term provisions	34.523	6.875	17.252	56	24.202
Provisions for bonds granted to customers	21.956	6.875	9.552	29	19.308
Provisions for customer's benefits	7.784	-	7.700	-	84
Other provisions	4.783	-	-	27	4.810

Provisions set up for guarantees granted to customers

Provisions for bonds granted to customers are set up to cover the non-conformance risks of the products sold and the services performed, in accordance with the contractual provisions.

Provisions for decommissioning the Property, Plant and Equipment

Provisions for decommissioning of property, especially buildings are set up to cover the decommissioning costs, of removal of the elements and restoration of the locations in which they are placed and such provisions are included in their cost. Their value was estimated using an update annual rate of 6,5%.

Provisions for benefits granted to employees

The provisions for benefits granted to employees are set up for the annual holidays leave not taken by the employees in the previous year.

Other provisions

The category Other provisions contains the provisions set up for:

covering risks specific to the aviation industry, such as: risk of hidden defects, risk of detecting quality incidents that can incur damages.
coverage of some expenses regarding the Company's obligations towards A.J.O.F.M., based on O.U.G. 95/2002;
coverage of some risks regarding the application of delay penalties and damages associated with the production of aeronautical products.

NOTE 14 - SUBSIDIES Subsidies related to assets

AEROSTAR recognizes as deferred income the subsidies related to assets.

	30.09.2023	30.09.2022
Balance on 1 January, of which:	3.028	4.192
Short-term	1.020	1.167
Long-term	2.008	3.025
Subsidies received	-	-
Subsidies registered in income
corresponding to the calculated	(805)	(898)
amortization
Balance on 30 September, of which:	2.223	3.294
Short-term	801	1.071
Long-term	1.422	2.223

During January-September, AEROSTAR S.A. did not receive any subsidies for financing its assets. The subsidies received in the previous years for financing its assets were related to the implementation of 3 investment projects under 3 non-reimbursable financing agreements:

1. contract no. 210304/22.04.2010: "Extension of the manufacturing and assembly capacities for aerostructures for civil aviation", carried out between April 2010 – October 2012, the value of the subsidy received from the Ministry of Economy, Trade and Business Environment (MECMA) being 5.468 thousand lei.
1. contract no. 229226/14.06.2012: "Setting up a new manufacturing capacity for diversifying production and export growth", performed between June 2012 – May 2014, the value of the subsidy received from the Ministry of Economy, Trade and Business Environment (MECMA) being 6.011 thousand lei;
1. contract no. 5IM/013/24.03.2015: "Consolidation and sustainable development of the machining and painting sectors by high performance investments", carried out between March – December 2015, the value of the subsidy received from the Ministry of European Funds (MFE) being 8.299 thousand lei.

All investment projects in immobilized assets were implemented and finalized in accordance with the contractual provisions assumed.

The balance registered on 30 September 2023 represents subsidies related to investments in fixed assets to be recorded as income as the calculated amortization is registered under costs.

NOTE 15 – COMMERCIAL DEBTS

	30 September 2023	31 December 2022
Prepaid amounts collected on customers' account, of which:	6.060	10.991
Domestic customer-creditors	291	47
Foreign customer-creditors	5.769	10.944
Suppliers, of which:	28.034	37.619
Domestic suppliers of material and services	7.949	9.878
Foreign suppliers of material and services	13.461	21.162
Suppliers – invoices not arrived	4.888	2.576
Suppliers of non-current assets	1.736	4.003

Total commercial debts	34.094	48.610

The payments in advance collected from foreign customers are received for aircraft maintenance and repair work (99,38 %) and other services provided (0,62 %).

For the registered debts no mortgages were set up.

The favourable or unfavourable exchange rate differences between the market exchange rate to which the debts in foreign currencies are registered and the market exchange rate communicated by the National Bank of Romania for the closure of September 2022, were registered in the corresponding accounts of revenues or expenses.

NOTE 16 - OTHER LIABILITIES

	30 September 2023	31 December 2022
Other current liabilities, of which:	13.449	13.297
 Liabilities related to manpower and similar accounts	3.937	3.668
 Liabilities related to social security budget and state budget, of which:	5.478	6.827
– VAT payable	-	1.859
– social security	4.115	3.678
– labour safety contribution	262	234
– tax on income in the form of wages	845	722
– contribution for unemployed people with disabilities	188	150
– other taxes	20	137
– other social liabilities	48	47
 Other liabilities, of which:	4.034	2.802
– dividends	3.722	2.502
– diverse creditors	269	257
– bonds received	43	43
Other long-term liabilities	1.490	1.503

The category "Other long-term liabilities" includes the liability related to the right to use the land under concession for the Maintenance Hangar in Iasi.

The dividends in balance on 30 September 2023, in the amount of 3.722 thousand lei represent the amounts remained in balance for the shareholders who did not show up at the offices of the paying agent CEC Bank S.A. (the paying agent designated by AEROSTAR) and that were not time-barred.

The company has no outstanding debts to the state, social security and local budgets.

NOTE 17 – DEFERRED PROFIT TAX

The deferred tax is determined for the temporary differences occurring between the tax base of the assets and liabilities and their accounting base. The deferred tax is calculated at a tax rate of 16% applicable to the temporary differences.

The Company estimated and registered liabilities regarding the deferred tax related to immobilized assets (resulting from differences between accounting and fiscal values, different useful lifetimes, etc.) and reserves, and it recognized receivables regarding the deferred tax related to immobilized securities (assets), inventories and trade receivables that were adjusted for depreciation, provisions for customer bonds, provisions for benefits granted to the employees and other provisions.

Structure of the deferred income tax registered on 30.09.2023:

Liabilities from deferred tax

1. Liabilities related to the deferred tax generated by the differences between the accounting bases (higher) and the fiscal ones (lower) of the non-current assets	1.193
2. Liabilities on deferred tax related to non-current assets-securities	29
3. Liabilities related to the deferred tax concerning legal reserves	1.559
4. Liabilities on deferred tax related to reserves from the fiscal facility	20.778
5. Liabilities on deferred tax related to the result carried forward representing a surplus from re-evaluation reserves	61
Total liabilities on deferred tax	23.620

Receivables on deferred tax

1. Receivables on deferred tax related to other provisions
2. Receivables on deferred tax related to provisions for bonds granted to customers	7.431
3. Receivables on deferred tax related to provisions for employee benefits
4. Receivables on deferred tax related to adjustments for depreciation of inventories
5. Receivables on deferred tax related to adjustments for depreciation of trade receivables	316
Total receivables on deferred tax	17.920

The Company did not recognize receivables on deferred tax related to other provisions for the aviation industry risks due to an uncertainty regarding the fiscal deductibility of the expenses that could arise from the settlement of obligations in the future periods. Therefore, the differences between the tax base and the accounting base would be null.

In the period 1 January 2023 – 30 September 2023, the company registered income from the tax on deferred profit in the amount of 3.639 mii lei and expenses with the tax on deferred profit in the amount of 3.702 thousand lei.

The tax on deferred profit recognized on the account of equity in the amount of 21.828 thousand lei consists of liabilities on deferred tax in the amount of 22.366 thousand lei and receivables on deferred tax in the amount of 538 thousand lei.

NOTE 18 - FINANCIAL INSTRUMENTS

A financial instrument is any contract generating simultaneously a financial asset for an entity and a financial liability or an equity instrument for another entity.

The financial assets and liabilities are recognized when AEROSTAR SA becomes part of the contractual provisions of the instrument.

On the reporting date AEROSTAR S.A. does not hold:

any financial instruments kept for making transactions (including derived instruments);
any financial instruments kept till due date;
any financial instruments available for sale.

The financial assets of AEROSTAR S.A. include:

cash and cash equivalents;
trade receivables;
immobilized receivables (bonds for third parties).

The financial liabilities of AEROSTAR S.A. include:

trade liabilities.

On the reporting date, AEROSTAR does not have financial any liabilities concerning financial leasing, overdrafts and long-term bank loans.

The main types of risks, generated by the financial instruments held, to which AEROSTAR S.A is exposed are:

a) credit risk
b) liquidity risk,
c) currency risk,
d) interest rate risk.

a) Credit risk

The credit risk is the risk that one of the parties involved in a financial instrument generates a financial loss for the other party as a result of the failure to meet a contractual obligation, related mainly to:

sight and term deposits held with banks
trade receivables;

Sight and term deposits are held only in first-tier banking institutions with the lowest risk ratings.

In some cases, specific instruments of commercial credit risk decrease (receipts in advance, letters of payment bank security, confirmed export letters of credit).

AEROSTAR has no significant exposure to a single partner and no significant concentration of receivables in a single geographical area.

Exposure to credit risk

The accounting value of the financial assets, net of the depreciation adjustments, represents the maximum exposure to the credit risk.

The maximum exposure to the credit risk on the reporting date is presented in the table below:

	30.09.2023	30.09.2022
Sight and term deposits held at banks	225.672	232.268
Trade receivables, net of adjustments for depreciation	72.053	66.005
Non-current receivables	42	38
Total	297.767	298.311

The maximum exposure to credit risk by geographical area for trade receivables net of impairment adjustments is shown in the table below:

	30.09.2023	30.09.2022
Domestic market	10.698	21.219
Euro zone countries	25.489	21.713
U.K.	27.472	15.891
Other European countries	2.199	628
Other regions	6.195	6.554
Total	72.053	66.005

Depreciation adjustments

The timeframe structure of gross trade receivables on the reporting date is presented in the table below:

	Gross value	Adjustments for		Adjustments for
		depreciation	Gross value	depreciation
	30.09.2023		30.09.2022
In due time	70.634		64.781
Past due, total of which:	2.861		1.971
31-60 days	1.907	954	954	449
61-90 days	51	26	852	166
91-120 days	383	191	20	10
Over 120 days	520	271	104	81
Over 1 year	-	-	41	41
Total	73.495	1.442	66.752	747

The movement in impairment adjustments for trade receivables during the year is shown in the following table:

	30.09.2023	30.09.2022
Balance on 1 January	954	1.332
Adjustments set up for depreciation	2.727	1.162
Adjustments for depreciations resumed as	(2.239)	(1.747)
revenues
Balance on 30 September	1.442	747

On 30.09.2023, 96% of the balance of trade receivables are related to customers with a good payment record.

b) Liquidity risk

The liquidity risk is the risk that AEROSTAR encounters difficulties to meet the obligations associated to the financial liabilities which are settled by cash payments.

AEROSTAR's policy regarding this risk is to maintain an optimum level of liquidity so as to pay for the liabilities, as they become due.

To evaluate the liquidity risk, the treasury cash flows from operations, investments and financing operations are monitored and reviewed weekly, monthly, quarterly and yearly in order to determine the estimated level of net liquidity modifications.

Also, the specific liquidity indicators are reviewed monthly (general liquidity, immediate liquidity and rate of general solvency) against the budgeted levels.

Furthermore, in order to reduce the liquidity risk, AEROSTAR maintains annually a liquidity reserve as a Credit Line (usable as an overdraft) granted by banks to a maximum limit of 2.500 thousand USD.

The time intervals used to review the contractual due dates of the financial liabilities, with a view to recording the timeframe for the cash flows in due time, are shown in the table below:

	Liabilities	Accounting value	Contractual cash flows	0-30 days	31-60 days	over 60 days
30.09. 2023	Trade liabilities	23.145	(23.145)	(19.509)	(3.022)	(614)
30.09. 2022	Trade liabilities	24.455	(24.455)	(19.768)	(3.911)	(776)

The cash flows included in the analyses of the due dates are not expected to take place earlier or at significantly different values.

On 30.09.2023 AEROSTAR has no records of overdue financial liabilities.

c) Foreign currency risk

The foreign currency risk is the risk that the fair value or future cash flows of a financial instrument fluctuate because of the changes in the currency exchange rates.

Exposure to the foreign currency risk

AEROSTAR is exposed to the foreign currency risks, as 82% of the turnover recorded in the reporting period is denominated in USD and EUR, while a significant part of the operating expenses is denominated in LEI.

Therefore, AEROSTAR is exposed to the risk that the currency exchange rate variations will affect both its net income and its financial position as expressed in LEI.

The net exposure of the financial assets and liabilities to the foreign exchange risk is presented below based on the carrying amounts denominated in foreign currency recorded at the end of the reporting period:

	thousand	thousand	thousand
30.09.2023	EUR	USD	GBP
Sight and term deposits held with banks	2.334	3.327	19
Trade receivables	2.533	10.403	-

AEROSTAR S.A. BACĂU NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR 30 SEPTEMBER 2023

(unless specified otherwise, all amounts are stated in thousand lei)

Trade liabilities	(1.319)	(1.739)	(90)
Net exposure in original currency	3.548	11.991	(71)

Sensitivity analysis

In view of the net exposure calculated in the above table, Aerostar can be considered to be mainly exposed to the currency risk generated by changes in the USD/USD and EUR/USD exchange rate.

Taking into consideration the evolution of USD/LEU and EUR/LEU exchange rate in the previous years, a relatively high volatility (+/-5%) of the USD/LEU exchange rate and a moderate volatility (+/-2%) of the EUR/LEU exchange rate can be noticed.

Thus, a reasonably possible variation of +/-5% USD/LEU for of the USD/LEU foreign exchange rate and +/-2% for the EUR/LEU foreign exchange rate may be taken into account at the end of the reporting period.

The effect of the reasonably possible variation of the USD/LEU and EUR/LEU exchange rates over the financial result of AEROSTAR is calculated in the following table:

30.09.2023	EUR/LEU	USD/LEU
Net exposure, in the currency of origin	3.548 MII EUR	11.991 MII USD
Currency exchange rate	4,9746	4,6864
Net exposure in functional currency	17.650 MII LEI	56.195 MII LEI
Possible reasonable variation of exchange	+/- 2%	+/- 5%
rate
Effect of variation on the financial	+/- 353 MII LEI	+/- 2.810 MII LEI
result

d) Interest rate risk

For the reporting period AEROSTAR contracted a multi-product Credit Facility of 7.000 thousand USD, intended for financing the Company's operations, which includes:

1) Product A: in the amount of 2.500 thousand USD, usable as an overdraft, set up to provide at any given time the necessary financial liquidity and flexibility (liquidity reserve);
2) Product B: in the amount of 7.000 thousand USD (provided that the aggregate amount used from Product A and product B does not exceed the value of the multi-product Credit Facility), usable under the form of a facility of issuing bonds as instruments to ensure collateral for the commercial contractual obligations by issuing bank bond letters and import Letters of Credit.

The bank interest is applicable only for the overdraft utilized from Product A in amount of 2.500 thousand USD.

As Product A was not used in the reporting period, income and cash flows are independent of changes in bank market interest rates.

On 30.09.2023, the level of bonds granted by AEROSTAR under commercial agreements, by issuing bank bond letters and import Letters of Credit amounts to 9.071 MII LEI (equivalent to 1.936 thousand USD).

On 30.09.2023 no mortgages are set up on the property assets in AEROSTAR ownership.

NOTE 19 - OPERATING INCOME

	30 September 2023	30 September 2022

Revenues from sales, of which:	361.523	317.363
Revenues from product sales	221.385	155.537
Revenues from services provided	137.230	159.396
Revenues from selling goods	361	16
Revenues from renting	2.065	2.035
Trade discounts granted	-	-
Revenues from other activities	482	379
Revenues related to inventories of products finished and in progress	29.885	7.361
Revenues from the production of fixed assets	631	130
Revenues from operating subsidies	576	(5)
Revenues from subsidies for investments	802	897
Other revenues from operations	857	901
Total operating income	394.274	326.647

In the first six months of 2023, the company recorded income from operating subsidies in the amount of 576 thousand lei. Most of the amounts were granted for the employment, for an indefinite period, of graduates of educational institutions in accordance with Law No. 76/2002 on the unemployment insurance system and stimulation of employment.

Other operating income in the amount of 857 thousand Lei is represented, among others, by income from the recovery of debts from former employees (tuition fees and other debts), income from recovered damages and fees and income from compensation of purchases from protected entities.

NOTE 20 – OPERATING EXPENSES

	30 September	30 September
	2023	2022
Expenses with employee benefits, of which:	125.817	106.018
Salaries and allowances	110.413	94.644
Expenses with meal tickets granted to employees	8.539	5.860
Expenses with social security	6.865	5.514
Expenses with raw material and material	147.412	93.645
Energy, water and gas	9.772	10.834
Other material expenses, of which:	9.658	9.699
Expenses with non-inventory materials	1.045	934
Expenses with goods	315	11
Expenses with packaging	634	445
Expenses with other material	7.664	8.309
Expenses with external services, of which:	27.719	19.731
Repairs	10.073	6.240
Transport costs	5.505	2.605
Commissions and fees	2.626	2.913
Travels, deployments	869	1.087
Renting expenses	634	533
Other expenses with services supplied by third parties	8.012	6.353
Trade discounts received	(90)	(76)
Amortizations	19.285	17.995
Net expenses (revenues) from adjustments on provisions	(9.226)	(3.640)
Net expenses (revenues) from adjustments on current assets	8.738	(1.631)
Other operational expenses	3.836	3.051
Total operating expenses	342.921	255.626

In accordance with the provisions of the International Financial Reporting Standards and of the Accounting Policies Manual, the company registers adjustments on provisions (Note 13) and adjustments for the impairment of the current assets, inventories, production in progress and receivables, respectively (Note 8, Note 9 and Note 10).

In the first 9 months of 2023 the company granted its employees meal vouchers and holiday vouchers worth 8,539 thousand lei.

Other operating expenses amounting to 3,836 thousand lei include, among others: expenses with local taxes, sponsorships, donations.

In 2023, AEROSTAR registered increased/set up and decreased/resumed adjustments, as follows:

Adjustments on provisions	30 September	30 September
	2023	2022
Increases/setups	11.982	13.009
Decreases/reruns	(21.208)	(16.649)
Net expenses (revenues) from adjustments on provisions	(9.226)	(3.640)

In the first 9 months of 202r, the impact of the adjustments on provisions is a decrease in the operating expenses of 9.226 thousand lei.

Adjustments regarding impairment of current assets	30 September 2023	30 September 2022
Increased/set up adjustments
Adjustments for the impairment of investments	30.231	4.974
Adjustments for the impairment of receivables	2.778	1.481
Losses from receivables and various debtors	21	63
Total increased/set up adjustments	33.030	6.518
Decreased/resumed adjustments
Adjustments for the impairment of inventories	(21.998)	(6.353)
Adjustments for the impairment of receivables	(2.294)	(1.796)
Total decreased/resumed adjustments	(24.292)	(8.149)

Net expenses (revenues) from adjustments on the impairment of current assets	8.738	(1.631)

In the first 9 months of 2023, the impact of the impairment adjustments on current assets is an increase in the operating expenses of 8.738 thousand lei.

NOTE 21 - FINANCIAL INCOME

	30 September	30 September
	2023	2022

Income from foreign currency exchange differences	5.387	8.599
Interest income	11.183	7.113
Income from shares held in subsidiaries	153	311
Income on financial assets measured at fair value	3.962	2.675
Total financial income	20.685	18.698

Aspects regarding the Company's exposure to the risks generated by the financial instruments held are presented in Note 18 Financial Instruments.

The income on financial assets measured at fair value represents the dividends related to the holding of instruments in the equity of Evergent Investments S.A.

NOTE 22 – FINANCIAL EXPENSES

	30 September 2023	30 September 2022
Expenses from exchange rate differences Expenses with interest related to leasing contracts	4.279 30	3.514 30
Total financial expenses	4.309	3.544

In 2023 the company registered in the financial expenses category:

expenses from unfavourable exchange rate differences;
expenses with interests related to the right to use the land under concession for the Maintenance Hangar in Iași.

NOTE 23 - TAX ON PROFIT

Tax on profit

The tax on profit is recognized in the statement of profit or loss.

The tax on profit is the tax payable related to the profit made in the current period, as determined in accordance with the fiscal regulations applicable on the reporting date.

The profit tax rate applicable for 30.09.2023 was 16% (the same rate was applied for the financial year 2022).

	30 September 2023
Gross accounting profit	67.728
Expenses with current tax on profit	6.569
Income tax on gains from the sale of securities held	131

Reconciliation of accounting profit with the fiscal profit for 30 September 2023			Differences
Accounting revenues*	414.958	Fiscal income	366.445	-48.513
Accounting expenses*	347.230	Fiscal expenses	299.891	-47.339
Gross accounting profit, restated*	67.728	Fiscal profit	66.554	-1.174
Accounting tax (16%)	10.836	Fiscal tax (16%)	10.649	-188
		Tax reductions, from which:	3.949	+3.949
Tax reductions	-	 Related to investments made acc. to Art. 22 Fiscal Code	3.237	+3.237
		 Sponsorship	712	+712
Tax on final profit	10.836	Tax on final profit	6.700	-4.137
Applicable legal rate	16,00%	Legal rate applicable	16,00%
Actual average tax rate, calculated on gross accounting profit, restated		9.89%

Comparative key figures 30 September 2022

Gross accounting profit		86.175
Expenses with current tax on profit		11.452
Reconciliation of accounting profit with the fiscal profit				Differences
Accounting revenues*	343.082	Fiscal income	315.581	-27.501
Accounting expenses*	256.935	Fiscal expenses	235.489	-21.446
Gross accounting profit*	86.147	Fiscal profit	80.092	-6.055
Accounting tax (16%)	13.784	Fiscal tax (16%)	12.815	-969
		Tax reductions, of which:	1.363	+1.363
Tax reductions	-	 Related to investments made acc. to Art. 22 Fiscal Code	924	+924
		 Sponsorship	439	+439
Tax on final profit	13.784	Tax on final profit	11.452	-2.332
Applicable legal rate	16,00%	Applicable legal rate	16,00%
Actual average tax rate, calculated on gross accounting profit, restated		13.29%

* The revenues and expenses are obtained after deducting from the total revenues and total expenses, respectively, the revenues and expenses related to the activities subject to the specific tax.

The main factors that affected the actual tax rate:
non-deductible expenses in fiscal terms (expenses concerning the set-up or increase of certain provisions and value adjustments on the current assets, which are non-deductible fiscally, expenses with fiscally non-deductible accounting amortization a.o.).
fiscal facilities representing the tax exemption on profit corresponding to the investments made in accordance with Art. 22 of the Fiscal Code, sponsorships;
non-taxable income obtained from the recovery of certain non-deductible expenses.

The difference between the average effective tax rates stems from the application of tax facilities related to reinvested profit in the amount of 20,230 thousand lei, of which 3 MWP PV system in the amount of 11,613 thousand lei, representing a percentage of 57.40% of the total tax facilities.

On 30 September 2023 the company registered a debt related to the tax on current profit in the amount of 2.460 thousand lei corresponding to the third quarter of 2023.

NOTE 24 - RESULT PER SHARE

The profit per basic share was calculated based on the profit attributable to the ordinary shareholders and on the number of ordinary shares.

The diluted result per share is equal to the result per basic share, as the company did not register any potential ordinary shares.

30.09.2023	30.09.2022
	73.914.382
152.277.450	152.277.450
0,401	0,485
	61.095.637

NOTE 25 - AVERAGE NUMBER OF EMPLOYEES

Average number of employees	9 months 2023	9 months 2022
Own employees	1.695	1.591

Total number of employees	30.09.2023	30.09.2022
Own employees	1.722	1.726

As on September 30, 2023, the total number of employees in the Company is 1,824, of which 1,722 are own employees and 102 are employees hired through the temporary labour agent.

As on 30 September 2022, the total headcount was 1,805 employees, of which 1,726 were own employees and 79 persons represented employees hired through the temporary labour agent.

NOTE 26 - TRANSACTIONS WITH AFFILIATED PARTIES

Acquisitions of goods and services	9 months 2023	9 months 2022
Airpro Consult SRL Bacău	2.846	4.645
Foar SRL Bacău	300	301
TOTAL	3.146	4.946
Sales of goods and services	9 months 2023	9 months 2022
Airpro Consult SRL Bacău	-	-
Foar SRL Bacău	1	1
TOTAL	1	1
Liabilities	Balance on 30.09.2023	Balance on 30.09.2022
Airpro Consult SRL Bacău	816	468
Foar SRL Bacău	33	38
TOTAL	849	506
Dividends received by Aerostar	9 months 2023	9 months 2022
Airpro Consult SRL Bacău	-	68
Foar SRL Bacău	153	242
TOTAL	153	310

The transactions with the affiliated parties in the period January-September of 2023 consisted in:

Services provided by Airpro Consult SRL Bacau to AEROSTAR SA Bacău for temporary manpower;
Machinery rental services provided by Foar SRL Bacau to AEROSTAR SA Bacău;
Space rental services provided by AEROSTAR SA Bacau to Foar SRL Bacău;
Dividends received by AEROSTAR SA from Foar SRL Bacău (Note 7).

NOTE 27 - INFORMATION REGARDING THE CASH FLOW

The method used in the Cash Flow Statement is the direct method.

The cash flows statement presents the cash flows and cash equivalents classified by operating activities, investments and financing, thus indicating how AEROSTAR generates and uses the cash and cash equivalents.

In the context of preparing the Cash Flows Statement:

the cash flows are the amounts collected and paid in cash and cash equivalents;
the cash includes the cash available in the company's cash office and the sight deposits held with banks (available in the current accounts).
the cash equivalents comprise the term deposits held with banks.

The treasury cash flows from the transactions made in foreign currency are registered in the functional currency (LEU) by applying to the foreign currency value the exchange rate between the functional currency and the foreign currency on the date of the cash flow (date of making payments and collections). The earnings and losses arising from the exchange rate variation are not treasury cash flows. Nevertheless, the effect of the exchange rate variation on the cash and cash equivalent held or owed in foreign currency is reported in the treasury cash flows statement, but separately from the treasury cash flows arising from operations, investments and financing, so as to reconcile the cash and cash equivalents at the beginning and end of the reporting period.

The operating activity is AEROSTAR S.A.'s main cash-generating activity. Thus:

the amounts collected from customers were 370.831 thousand LEI;
the proceeds from the State Budget amounted to 3,026 thousand LEI, of which 2,420 thousand LEI are VAT and excise duty recoveries and 606 thousand LEI are operating subsidies;
payments to the suppliers and employees amounted to 305.321 thousand LEI, of which 228.233 thousand LEI payments to the suppliers and 77.088 thousand LEI payments to the employees;
tax payments to the State Budget amounted to 58,584 thousand LEI, of which 48,750 thousand LEI in taxes and payroll taxes, 3,574 thousand LEI in VAT and 4,509 thousand LEI in profit tax.

The operating activity generated net cash of 9,952 thousand LEI, a decrease by 27,912 thousand LEI compared to the same period last year.

The investment activities comprised the following:

bank interest receipts of 11,488 thousand LEI from bank deposits.
dividends received from Evergent Investments S.A. amounting to 3,645 thousand LEI;
dividends received from affiliated entities (FOAR S.R.L.) in the amount of 153 thousand LEI;
payments for the purchase of tangible and intangible fixed assets in the amount of 14,109 thousand LEI;
payments for the purchase of financial fixed assets in the amount of 10,653 thousand LEI, representing purchases of Evergent Investment S.A. shares (stock symbol: EVER), traded on the Bucharest Stock Exchange;

The shares purchased are held for the collection of dividends as well as for gains from their sale, and not for trading.

Thus, in view of the Public Offer for the purchase of own shares (EVER) initiated by Evergent Investments S.A in December 2022, AEROSTAR decided during January 2023 to participate in the Offer by selling part of the EVER shares held for 5,516 thousand LEI.

This transaction resulted in a gross gain of 814 thousand LEI.

The amount of cash flow allocated so as to increase the operating capacity represents 3% of the aggregate amount of cash used in operating, investing and financing activities.

Within the financing activity, an amount of 26,239 thousand LEI was paid as dividends due to AEROSTAR shareholders.

The level of cash and cash equivalents recorded as on 30.09.2023 is 225,730 thousand LEI, down by 20,443 thousand LEI compared to the beginning of the year.

NOTE 28 - LIABILITIES AND OTHER OFF-BALANCE ITEMS

AEROSTAR S.A. registers as off-balance items, the rights, liabilities and goods which are not recognized in the company assets and liabilities, i.e:

		30 September 2023	31 December 2022
	Liabilities:
o	guarantees granted to partners as letters of bank guarantee and letters of credit	113	186
o	guarantees received from partners – as letters of bank guarantee and letters of credit	37.020	84.353
	Goods, of which:
	Inventories of other material released for use (tooling, jigs, fixtures, safety equipment, measuring and control equipment, technical library etc.)	45.006	42.240
o	o materials received in custody	2.239	2.239
o	o finished products received in custody	64	65
o	materials - customers	76	157
o	tangible and intangible assets – obtained or purchased as a result of co-financed activity	573	573
o	material values received for processing/repairs	26.454	29.328
o	supporting assets related to concession agreements Hangar Iasi	2.477	2.477
o	fixed assets proposed for disposal	103	446
	Other off-balance values, of which:
o	material guarantees established for the managers' liability for the management of assets	238	201
o	liabilities for covering certain future obligations to A.J.O.F.M. based on OUG 95/2002 regarding the defence industry	3.365	3.777
o	debtors removed from accounts, monitored further	127	127
	on
o	creditors	25	25
o	de minimis aid for participation to fairs and exhibitions	190	514

Greenhouse Gas Emission Certificates 4.787 5.701

On 30 September 2023, AEROSTAR S.A. held a total of 11,931 greenhouse gas emission certificates. The market value on the last trading day of a GHG certificate was 80.66 euro, according to the European Energy Exchange website (in December 2022: 80.90 euro), at a re-evaluation exchange rate of 4.9746 lei/euro.

NOTE 29 – DIRECTORS' REMUNERATION

	Surname and first name	Position	Profession
	FILIP GRIGORE	President of the Board of Directors	Aviation engineer
	DAMASCHIN DORU	Vicepresident of the Board of Directors	Economist
	TONCEA MIHAIL - NICOLAE	Member of the Board of Directors	Aviation engineer
	DOROŞ LIVIU-CLAUDIU	Member of the Board of Directors	Economist
	VÎRNĂ DANIEL	Member of the Board of Directors	Legal Advisor

Board of Directors of AEROSTAR S.A. on 30.09.2023:

In 2023, did not grant advance payments or credits to the members of the Board of Directors and did not make any commitment on their account as a collateral of any kind.

In the Ordinary General Meeting of 16 December 2022, the shareholders of Aerostar agreed to freeze, at the level decided by the Ordinary General Meeting of Shareholders on 9 July 2020, the directors' remuneration for the financial year 2023, respectively:

By maintaining for each elected Member of the Board of Directors a monthly fixed net remuneration of 4.750 lei;
A maximum level of additional remuneration for the members of the Board of Directors who also have executive duties of a fixed monthly amount of no more than 10 (ten) times (including) the fixed remuneration of 4.750 lei, applied individually, as appropriate;
By empowering the Board of Directors to negotiate them within the approved ceiling.

The gross indemnities granted to the members of the Board of Directors in the period January-September 2023, by virtue of their responsibilities amounted to 1,294 thousand lei.

NOTE 30 – RISK MANAGEMENT

AEROSTAR is exposed to multiple risks and uncertainties that can affect its financial performance. The business lines run by AEROSTAR, the operational results or the financial statements could be affected by the materialization of the risks presented below.

AEROSTAR pursues to secure the average and long-term sustainability and to reduce the uncertainty associated with its strategic and financial objectives.

Risk management processes are in place to ensure that risks are identified, analysed, assessed and managed so as to minimise their effects to an agreed level.

However, there may be risks and uncertainties in addition to those described below, which are not currently known or are considered insignificant, but which in the future may affect the lines of business run by AEROSTAR.

Operational Risk

It is the risk to incur losses or the risk of failure to make the estimated profits, determined by:

the use of processes, systems and manpower that were either inadequate or failed to function properly;
external events and actions: deterioration of the global economic conditions, natural disaster or other events that can affect AEROSTAR's assets.

Considering the global political turmoil, in the future we may face new types of risks, which is why AEROSTAR closely monitors the main areas of conflict.

The Operational Risk is also associated to the Legal Risk, defined as the risk of loss, resulting from the fines, penalties and sanctions AEROSTAR is liable to in case of non-application or misapplication of legal or contractual dispositions or regulations, as well as due to the fact that the rights and contractual obligations of AEROSTAR and/or of its business partner are not properly established.

The effects of the legal risk are monitored and eliminated through a permanent information system regarding the legislative modifications, as well as by setting up a review, endorsement and approval system for the terms and conditions included in the commercial agreements.

AEROSTAR has allocated and will continue to allocate investment funds and other operational expenses in order to prevent and manage the operational risk.

Moreover, AEROSTAR aims to have at its disposal own funds to cover the risks to which it is exposed, by setting up provisions for risks and related expenses.

Furthermore, in order to mitigate the operational risk, AEROSTAR renews each year a civil liability insurance contract with leading insurance and reinsurance companies for its main lines of business (manufacture of aviation products and maintenance of commercial aircraft).

The Credit Risk is the risk that AEROSTAR might bear a financial loss as a result of the failure to meet the contractual obligations by a partner, being determined mainly by sight and term bank deposits with banks and trade receivables.

Deposits held with banks are placed only with first-tier banking institutions that are considered to have high creditworthiness.

The credit risk, including the country risk for the country where the customer performs its activity, is managed per business partner. When necessary, specific instruments of credit risk mitigation are requested (advance payments, letters of bank guarantee, confirmed letters of credit).

AEROSTAR has no significant exposure towards a single partner and does not register a significant concentration of the turnover on a single geographical area.

However, there is a remarkable exposure to the global market for Airbus programmes, with a large proportion of the company's products being incorporated into Airbus aircraft.

A presentation of the quantitative information regarding AEROSTAR's exposure to the credit risk is detailed in Note 18 (Financial Instruments) to the Financial Statements.

Liquidity risk is the risk that AEROSTAR will encounter difficulties in meeting its liability obligations as they fall due.

For liquidity risk management purposes, cash flows are monitored and analysed on a weekly, monthly, quarterly and annual basis to determine the estimated level of net changes in liquidity. These analyses provide the basis for funding decisions and capital commitments.

In order to mitigate liquidity risk, AEROSTAR maintains an annual liquidity reserve in the form of a Credit Line available for use in the form of bank overdrafts in the amount of 2.500 THOUSAND USD. During the reporting period AEROSTAR did not use the Credit Line, as all the Company's activities were financed from its own sources.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.

AEROSTAR is mainly exposed to the price risk caused by fluctuations in the price of raw materials and materials used in the production processes, caused by exceptional events such as the Brexit Agreement with impact on the supply of material from the UK, the imposition of international sanctions resulting in the limitation of the possibility to supply parts and materials, the increase in costs of specific taxes for import/export of metal products to and from the USA.

This risk is managed by:

diversifying the supplier portfolio, which can provide increased negotiating leverage in the event that the price of raw materials increases with some suppliers.
concluding long-term contracts with fixed price clauses.

AEROSTAR is exposed to the exchange rate risk because 82% of its turnover is related to USD and EUR, while a significant part of the operating expenses is denominated in LEI.

Thus, AEROSTAR is exposed to the risk that the exchange rate variations will affect both its net income, as well as its financial position, as they are expressed in LEI.

An analysis of AEROSTAR's sensitivity to the foreign exchange rate variations is detailed in Note 18 (Financial Instruments) to the Financial Statements.

As far as the interest rate is concerned, due to the fact that AEROSTAR did not use the contracted Credit Line in the reporting period, the income and cash flows are independent from the interest rate variation on the banking market.

Other aspects concerning risk management are presented in the chapter OPPORTUNITY AND RISK MANAGEMENT of the Board of Directors' Report.

NOTE 31 – PREPAID EXPENSES AND INCOME

	30 September	31 December
	2023	2022
Prepaid expenses (short-term)	1.170	617
Prepaid income (short-term)	3.016	1.876

The expenses made and the income obtained in the current period, but regarding future periods or financial years are registered distinctly in the accounting department, as prepaid expenses or prepaid income, as applicable.

The category of prepaid expenses on the books on 30 September 2023 includes amounts to resume within a period of up to one year representing, inter alia, fees and taxes, subscriptions, insurance policies, commissions, participation in fairs and conferences, on-line services, maintenance of IT systems.

As on September 30, 2023, Aerostar did not recognize any long-term prepaid income. The category short-term prepaid income includes amounts relating to the delivery of goods and services rendered, where the income recognition conditions of IFRS 15 are not met ( the customers have not yet taken control of the goods/services).

NOTE 32 - ASSETS REGARDING THE RIGHTS TO USE THE LEASED ASSETS:

reporting period 30 September 2023

Va lu 3 0 Se be 2 0 2 3 te es o n p m r			Va lu 0 1 Ja 2 0 2 3 es o n nu ar y
Ac 2 1 5 t co un	G t ro ss am ou n	Cu la iv t m e u de ia io t p re c n	Ne t a t m ou n	G t ro ss am ou n	Cu la iv t m e u de ia io t p re c n	Ne t a t m ou n
As t r la te d to t he se e ig h t to t he la d r u se n fo he M R O H t r an g ar in Ia i ș	1. 9 1 6	( ) 1 8 5	1. 7 3 1	1. 9 0 7	( ) 1 5 4	1. 7 5 3
To l ta	1. 9 1 6	( 1 8 5 )	1. 7 3 1	1. 9 0 7	( 1 5 4 )	1. 7 5 3

Net book value on 30.09.2023:

	Ne t a t o m ou n n 0 1 Ja 2 0 2 3 nu ar y	Re lu io t -ev a a ns in Q 3 2 0 2 3	De ia io t p re c n du in he io d t r g p er	Ne t a t o m ou n n 3 0 Se be 2 0 2 3 te p m r
As la d he t r te to t se e ig h he la d t to t r u se n fo he M R O H t r an g ar in Ia i ș	1. 7 5 3	8	( 3 0 )	1. 7 3 1

The right to use the land for the Maintenance Hangar in Iaşi was reassessed at the foreign exchange rate communicated by the National Bank of Romania on the last banking day of each reporting period (30 September 2023).

COMPARATIVE KEY FIGURES - ASSETS REGARDING THE RIGHTS TO USE THE LEASED ASSETS:

reporting period 30 September 2022

	3 0 Se 2 0 2 2 Va lu be te es o n p m r			0 1 2 0 2 2 Va lu Ja es o n nu ar y
Ac 2 5 1 t co un	G t ro ss am ou n	Cu la iv t m u e de ia io t p re c n	Ne t a t m ou n	G t ro ss am ou n	Cu la iv t m u e de ia io t p re c n	Ne t a t m ou n
As la d he t r te to t se e ig h he la d t to t r u se n in fo he M t te r a na nc e in i H Ia an g ar ș	1. 8 8 8	( 1 4 4 )	1. 7 4 4	1. 8 8 8	( ) 1 1 5	1. 7 7 3
To l ta	1. 8 8 8	( 1 4 4 )	1. 4 4 7	1. 8 8 8	( 1 1 ) 5	1. 3 7 7

	Ne t a t o m ou n n 1 2 0 2 2 Ja nu ar y	io Re lu t -ev a a ns in Q 3 2 0 2 2	ia io in De du t p re c n r g io he d t p er	Ne t a t o m ou n n 3 0 Se 2 0 2 2 be te p m r
As la d he t r te to t se e ig h he la d t to t r se n u fo O he M R H t r an g ar in i Ia ș	1. 3 7 7	-	( ) 2 9	1. 7 4 4
To l ta	1. 7 7 3	-	( 2 9 )	1. 7 4 4

NOTE 33 - EVENTS AFTER THE REPORTING PERIOD

After the reporting date AEROSTAR S.A. has not identified any events likely to have an impact on the financial statements for 9 months of 2023.

These company financial statements that comprise the statement of financial position, statement of profit or loss, other comprehensive income, statement of changes in equity, statement of cash flows and explanatory notes to the financial statements were approved by the Board of Directors on 09 November 2023 and signed on its behalf by:

Grigore FILIP, President & General Director

Doru DAMASCHIN, Vicepresident & Financial Director

AI Terminal

Aerostar S.A.

2323_10-q_2023-11-10_5c6b3770-b124-4a10-941f-af22472d9c5e.pdf

R E P O R T O F T H E B O A R D O F D i r e c t o r S j a n u a ry 1 - 3 0 S E P T E M B e r 2 0 2 3

GENERAL INFORMATION

Date when the company was founded: APRIL 17, 1953;

The company's main field of activity is production;

Applicable accounting standards:

REPORTING PERIOD 1 JANUARY - 30 SEPTEMBER 2023

GENERALASPECTS

Significant events in the reporting period ended 30 September 2023

24 Mach

17 April

28 April

17 May

7 June

7th June

Events after the reporting date

KEY FIGURES

2023 vs 2022

SALES RESULTS

Percentage of sales from turnover by sales market

BUSINESS LINES

MRO Civil Aviation

Defence Systems

EXTERNAL ENVIRONMENT

Perspectives

OUR EMPLOYEES

BOARD OF DIRECTORS

EXECUTIVE MANAGEMENT

The Executive Management is composed of:

SHAREHOLDERS OF AEROSTAR

RELATIONS WITH SHAREHOLDERS AND THE CAPITAL MARKET

ASPECTS RELATED TO THE COMPANY'S EQUITY AND MANAGEMENT

AEROSTAR'S RELATIONS WITH ITS PARENT COMPANY, OTHER SHAREHOLDERS AND COMPANIES IN WHICH IT HAS EQUITY HOLDINGS

AEROSTAR SHARES

AFFILIATED PARTIES

BUSINESS MODEL

TANGIBLE ASSETS

INVESTMENTS FOR SUSTAINABILITY

QUALITY AND ENVIRONMENT

CERTIFICATIONS AND AUTHORIZATIONS

RISKS AND UNCERTAINTIES

SUMMARISED FINANCIAL STATEMENTS

AEROSTAR S.A. BACĂU

SEPARATE FINANCIAL STATEMENTS FOR 30 SEPTEMBER 2023

TABLE OF CONTENTS

COMPANY STATEMENT OF PROFIT OR LOSS

OTHER COMPREHENSIVE INCOME

COMPANY STATEMENT OF FINANCIAL POSITION

COMPANY STATEMENT OF CASH FLOWS

COMPANY STATEMENT CHANGES IN EQUITY

NOTES TO THE COMPANY FINANCIAL STATEMENTS

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF PROFIT OR LOSS FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF OTHER COMPREHENSIVE INCOME FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF FINANCIAL POSITION FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF CASH FLOWS (DIRECT METHOD) FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF CHANGES IN EQUITY FOR 30 SEPTEMBER 2023 (unless specified otherwise, all amounts are stated in thousand lei)

AEROSTAR S.A. BACĂU COMPANY STATEMENT OF CHANGES IN EQUITY FOR 30 SEPTEMBER 2022 (unless specified otherwise, all amounts are stated in thousand lei)

NOTE 1 - DESCRIPTION OF THE COMPANY

NOTE 2 - ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS

2.1. Estimates

Disclosure of information

2.2. Errors

2.3. Changes in the accounting policies

Disclosure of information

NOTE 3 - ACCOUNTING AND EVALUATION PRINCIPLES

3.1. Bases for the preparation and presentation of financial statements

3.2. Applied Accounting Policies

NOTE 4 – TRANSACTIONS IN FOREIGN CURRENCIES

NOTE 5 - INTANGIBLE ASSETS: reporting period 30 September 2023

COMPARATIVE FIGURES - INTANGIBLE ASSETS: reporting period 30 September 2022

Net accounting value

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT: reporting period 30 September 2023

COMPARATIVE FIGURES: PROPERTY, PLANT AND EQUIPMENT: reporting period 30 September 2022

AEROSTAR S.A. BACĂU NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR 30 SEPTEMBER 2023

(unless specified otherwise, all amounts are stated in thousand lei)

NOTE 7- FIXED FINANCIAL ASSETS

B) Investments in equity instruments through other elements of global result:

C) Contribution in cash to setting up the original patrimony of the Association "Education cluster for sustainable development C-EDD"