Turbomecanica S.A.

Quarterly Report • Nov 14, 2018

Bd. Iuliu Maniu Nr. 244 District 6 Zip Code 061126 Bucharest - Romania Tel .: (+4) 021 434 32 06; (+4) 021 434 07 41 Fax: (+4) 021 434 07 94 European Unique Identifier (EUID) ROONRC.J40/533/1991 Commerce Registry Code J40/533/1991 Tax Code RO3156315 Unique Registration Code 3156315 Subscribed share fully paid capital 36,944,247.50 RON www.turbomecanica.ro; e-mail: office@turbomecanica.ro

No.: 17 Date: 12/11/2018

QUARTERLY REPORT OF THE BOARD OF ADMINISTRATION AS OF SEPTEMBER 30TH 2018

TURBOMECANICA SA is a Romanian entity having the legal form of open a joint stock Company according to the Constitutive Act and applicable regulations, privately owned, whose shares are listed on the Bucharest Stock Exchange.

Its field of activity is exclusively manufacturing and according to the classification of activities in the national economy, its main object of activity is the Manufacturing of engines, mechanical assemblies and equipment for aircraft – NACE CODE 3030.

The Company carries out its activity in a highly competitive environment according to the widely recognised principles of corporate governance, in accordance with Romanian legislation, the legislation of the European Union and international practices, supplying on domestic and foreign markets products and services both in the field of defence and civil aviation.

The Company has a long history of start-ups; it has experienced diversification and developments, but also restructures, falls, searches, new beginnings. However, throughout all this time, it has never stopped operating in the aviation and defence industry.

The financial results will be included in the financial statements of the year 2018, prepared in accordance with International Financial Reporting Standards (IFRS). Some of the elements are listed below:

	30 SEPTEMBER 2018	30 SEPTEMBER 2017
Revenues	65.487.127	- 75.537.647
Other gains and loss	3.492.554	- 5.618.039
Change in inventories of finished goods and work in progress	4.840.777	- 3.477.054
Raw materials and consumables used	(20.371.869)	- (28.016.168)
Employee benefits expense	(24.264.506)	- (23.022.741)
Depreciation and amortisation expense	(6.512.750)	- (4.963.380)
Finance cost, net	(2.279.145)	- (2.683.732)
Othe operating expenses	(4.651.373)	- (2.749.301)
Gross profit/Profit before tax	15.740.816	21.197.420
Income tax expense/ benefit	2.567.311	3.328.959
Net profit	13.173.505	17.868.461

1. Statement of profit and loss:

The Company recorded operating revenues in amount of Lei 77.201.748 and operating expenses in amount of Lei 59.374.040.

The largest share of this revenue was made through specific activities related to the production profile of the Company.

The Company recorded net profit in amount of Lei 13.173.505, at the end third Quarter.

2. Statement of financial position:

	30 SEPTEMBER 2018	31 DECEMBER 2017
Assets
Fixed assets
Property, plant and equipment, net	57.123.095	59.961.955
Intangible assets, net	5.109.149	6.784.610
Other assets	1.000	1.000
Total fixed assets	62.233.244	66.747.565

Current assets
Inventory	45.872.863	36.947.781
Trade receivables	5.447.239	2.632.790
Other receivables and prepayments	2.313.786	1.711.184
Cash and bank balances	1.878.685	9.636.856
Non current assets classified as held
for sale	0	6.966.252
Total current assets	55.512.573	57.894.863
Total assets	117.745.816	124.642.427
Shareholder equity and liabilities
Shareholder equity
Share Capital	1.024.571.055	1.024.571.055
Reserves	88.342.121	88.372.743
Retained earnings	(1.048.567.523)	(1.052.231.734)
Own shares	-	(599.408)
Total shareholder equity	64.345.653	60.112.656
Long term liabilities
Borrowings LT	4.312.628	5.670.250
Deferred tax liabilities	3.659.565	3.659.565
Provisions LT	993.582	1.259.764
Other liabilities LT	0	0
Total liabilities TL	8.965.775	10.589.580
Current liabilities
Short term loans	4.710.217	5.817.305
Borrowings ST	34.119.106	37.168.913
Income tax expense/benefit	290.610	1.517.497
Provisions ST	624.110	3.597.787
Defferend income	179.414	868.861
Other liabilities ST	4.510.931	4.969.829
Total current liabilities	44.434.388	53.940.192
Total liabilities	53.400.164	64.529.773
Total shareholder equity and liabilities	117.745.816	124.642.427

The share capital of the Company is in amount of Lei 64.345.653.

The accounting activity was conducted in accordance with the OMFP no. 2844/2016 for the approval of accounting regulations, in accordance with the International Financial Reporting Standards applicable to

companies whose securities are admitted to trading on a regulated market and in accordance with the Accounting Law no. 82/1991 with all its subsequent amendments.

All documents regarding economic and financial operations have been recorded correctly every day. Economic and financial operations have been recorded based on financial documents. All accounting information has been posted in the correct accounting statement (assets, liabilities and equity) and corresponds to the real situation of the Companies patrimony.

The debt towards the State Budget has been correctly registered, paid and reflected in the balance sheet. We state that the Financial Statements at 30 September 2018 are unaudited financial.

PRESIDENT OF THE BOARD OF DIRECTORS

RADU VIEHMANN

STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2018

	30 SEPTEMBER 2018	31 DECEMBER 2017
Assets
Fixed assets
Property, plant and equipment, net	57.123.095	59.961.955
Intangible assets, net	5.109.149	6.784.610
Other assets	1.000	1.000
Total fixed assets	62.233.244	66.747.565
Current assets
Inventory	45.872.863	36.947.781
Trade receivables	5.447.239	2.632.790
Other receivables and prepayments	2.313.786	1.711.184
Cash and bank balances	1.878.685	9.636.856
Non current assets classified as held for sale	0	6.966.252
Total current assets	55.512.573	57.894.863
Total assets	117.745.816	124.642.427
Shareholder equity and liabilities
Shareholder equity
Share Capital	1.024.571.055	1.024.571.055
Reserves	88.342.121	88.372.743
Retained earnings	(1.048.567.523)	(1.052.231.734)
Own shares	-	(599.408)
Total shareholder equity	64.345.653	60.112.656
Long term liabilities
Borrowings LT	4.312.628	5.670.250
Deferred tax liabilities	3.659.565	3.659.565
Provisions LT	993.582	1.259.764
Other liabilities LT	0	0
Total liabilities TL	8.965.775	10.589.580
Current liabilities
Short term loans	4.710.217	5.817.305

Total shareholder equity and liabilities	117.745.816	124.642.427
Total liabilities	53.400.164	64.529.773
Total current liabilities	44.434.388	53.940.192
Other liabilities ST	4.510.931	4.969.829
Defferend income	179.414	868.861
Provisions ST	624.110	3.597.787
Income tax expense/benefit	290.610	1.517.497
Borrowings ST	34.119.106	37.168.913

GENERAL MANAGER,

RADU VIEHMANN ECONOMIC-COMMERCIAL MANAGER, ION DINCA

STATEMENT OF PROFIT AND LOSS
AS OF 30 SEPTEMBER 2018

	30 SEPTEMBER 2018		30 SEPTEMBER 2017
Revenues	65.487.127	-	73.537.647
Other gains and loss	3.492.554	-	5.618.039
Change in inventories of finished goods and work in progress	4.840.777	-	3.477.054
Raw materials and consumables used	(20.371.869)	-	(28.016.168)
Employee benefits expense	(24.264.506)	-	(23.022.741)
Depreciation and amortisation expense	(6.512.750)	-	(4.963.380)
Finance cost, net	(2.279.145)	-	(2.683.732)
Othe operating expenses	(4.651.373)	-	(2.749.301)
Gross profit/Profit before tax	15.740.816		21.197.420
Income tax expense/ benefit	2.567.311		3.328.959
Net profit	13.173.505		17.868.461

GENERAL MANAGER,

RADU VIEHMANN ECONOMIC-COMMERCIAL MANAGER, ION DINCA

FINANCIAL-ECONOMIC INDICATORS AS OF 30 SEPTEMBER 2018

No.	Economic indicators	Formula	30 SEPTEMBER 2018	30 SEPTEMBER 2017
1	Current liquidity ratio	current assets / current liabilities	1,25	1,16
2	Total debt ratio	(Borrowed capital-Deferred tax liabilities /Share Capital )*100	6,70	13,45
3	Receivable turnover ratio	( Accounts Receivable / Turnover ) * 270 days	16,66	19,39
4	Fixed assets turnover ratio	Turnover / Fixed assets	1,05	1,13

GENERAL MANAGER,

RADU VIEHMANN ECONOMIC- COMMERCIAL MANAGER, ION DINCA