Teraplast SA — Audit Report / Information 2019

Jan 29, 2020

Deloitte.

Deloitte Audit S.R.L Clădirea The Mark Tower Calea Griviţei nr. 82-98 Sector 1, 010735 București, România

Tel .: +40 21 222 16 61 Fax: +40 21 222 16 60 www.deloitte.ro

INDEPENDENT REPORT OF LIMITED ASSURANCE OVER THE INFORMATION INCLUDED IN THE CURRENT REPORTS ISSUED BY THE COMPANY IN ACCORDANCE WITH THE PROVISIONS OF LAW NO. 24 /2017 AND REGULATION NO. 5/2018

To the Board of Directors, TERAPLAST S.A.

1. We have been appointed by TERAPLAST S.A. ("the Company") to report on the information included in the annexed Current Report from August 27, 2019 and the Current Report from November 29, 2019 (herein after "the Current Reports") issued by the Company in accordance with the provisions of the Law no. 24/2017 on issuers of financial instruments and market operations (herein after "Law no.24/2017") and of the Regulation no. 5/2018 of the Financial Supervisory Authority (herein after "ASF"), as an independent conclusion of limited assurance according to which, based on the procedures performed, we obtain a proper level of assurance of whether the reported transactions included in the Current Reports are, in all material respects, in accordance with article 144, letter B, paragraph 4 of Regulation no. 5/2018.

The Current Reports have been prepared by the Company's management in order to report to the FSA and the Bucharest Stock Exchange in accordance with the provisions of article 82 of Law no. 24/2017 and FSA Regulation no. 5/2018 for the period July 1 - December 31, 2019.

Management's Responsibility

1. Management is responsible for the preparation of the Current Reports and of the transactions included in the Current Reports that are free of material misstatement, in accordance with art. 82 from Law no. 24/2017 and Regulation no. 5/2018, and for the information presented in these reports. This responsibility includes: designing, implementing and maintaining an internal control relevant to the preparation and presentation of the Current Reports that are free of material misstatement, due to fraud or error. Also, this responsibility includes compliance with the provisions of art. 82 from Law no. 24/2017 and Regulation no. 5/2018.

Management is responsible for maintaining adequate supporting documents regarding the Current Reports and for providing the auditor with complete an accurate documents and information.

Management is responsible for preventing and detecting fraud and ensuring the Company's compliance with the legislation and regulations in force.

Management is responsible for ensuring that the personnel involved in the preparation of the Current Reports is properly trained.

Auditor's Responsibility

1. Our responsibility is to analyse the reported transactions included by the Company in the Current Reports and to report in the form of an independent conclusion of limited assurance, based on the evidence obtained. We conducted the engagement in accordance with International Standard on Assurance Engagements ("ISAE") 3000 regarding assurance engagements other than Audits or Reviews of Historical Financial Information, as adopted by the Chamber of Financial Auditors of Romania. This standard requires that we plan and perform our procedures in order to obtain a corresponding assurance level of whether the transactions included in the Current Reports are in accordance, in all material respects, with article 144, letter B, paragraph 4 of Regulation no. 5/2018, as basis for our independent conclusion of limited assurance.

Deloitte.

• 1. We apply the International Standard on Quality Control 1 and, accordingly, maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
• 1. The selected procedures depend on our understanding of the Current Reports and of other circumstances of the engagement, as well as our considerations on areas where material misstatements may occur. In developing our understanding on the Current Reports and on the transactions reported in the Current Reports we took into consideration the Company's internal control relevant to the preparation and presentation of the Current Reports in accordance with the provisions of article 82 of Law no. 24/2017 and Regulation no. 5/2018 in order to establish the procedures that are appropriate in these circumstances, but not for the purpose of expressing a conclusion on the effectiveness of internal control for the preparation and fair presentation of the Company's Current Reports and the transactions reported in the Current Reports.
• 1. A limited assurance engagement is less in scope than an absolute or reasonable assurance engagement. The procedures for obtaining evidence for a limited assurance engagement are more restricted than in a reasonable assurance engagement, and therefore the level of assurance obtained is lower than in a reasonable assurance engagement.
• 1. As part of this engagement, we have not performed audit, review or verification procedures of the Current Reports and on the transactions reported in the Current Reports in accordance with the International Standards on Auditing or International Standards on Review Engagements adopted by the Chamber of Financial Auditors of Romania, nor on the sources from which the Current Reports and the transactions reported in the Current Reports were extracted. Our procedures were only performed in connection with the Current Reports as described at point 1. We have not performed other additional procedures to verify whether the Current Reports include all contracts with managers, employees, shareholders, as well as their affiliated entities, to be reported according to article 82 of Law no. 24/2017 as revised.
• As regards the Company's Current Reports, we have performed the following procedures: 8.
  • a) We have obtained from the Current Reports and checked for the contracts presented in the Current Reports whether the contractual information included in the Current Reports match the information necessary to be included in such reports as per article 82 of Law no. 24/2017;
  • b) We have verified whether the contracts included in the Current Reports have been signed by the management with the necessary authority, as per the authorised signature list provided to us:
  • c) We have verified for the contracts included in the Current Reports whether the information thereof included in the Current Reports matches in all material respects the information included in the signed contracts. We verified the following details:
    • the signing date of the contracts;
    • the nature of the contracts:
    • the description of the type of goods/services indicated in the contracts;
    • the total value of the contracts, either realised or estimated;
    • whether the documents have been signed by all of the stakeholders.
  • d) ・ To the extent that there is a market price for the goods or services provided by the Company's affiliates or provided by the Company to affiliates, we have discussed with the management on how such prices were determined and whether, on a case by case basis, the agreed-upon prices are in line with those used by other (third) parties for similar services or goods. If there are no market prices available, we have assessed whether such transactions were carried out in accordance with contracts approved and signed by the Company's management.

Deloitte.

1. Our conclusion was formed on the basis, and in connection with, the aspects presented in this Report. We believe that the evidence obtained is sufficient and appropriate to provide a basis for our conclusion with of limited assurance.

Conclusion

1. Based on the procedures performed, nothing came to our attention to make us believe that the transactions reported in the Current Reports are not in all material respects, with article 144, letter B, paragraph 4 of Regulation no. 5/2018.

Other Matters

1. Our report is solely issued for the purpose stated in the first paragraph of this report and is prepared to inform the Management of the Company as a whole. Our report should not be regarded as suitable for use by any party wishing to acquire rights against us other than the Company for any purpose or in any context. Any party other than the Company that obtains access to our report or a copy of the report and chooses to rely on our report (or part thereof), should do so at your own risk. Our engagement was performed in order to report to the Management of the Company on those aspects that need to be reported in an independent limited assurance report, and for no other purpose.

On behalf of: Deloitte Audit SRL

Alina Mirea

For signature, please refer to the original Romanian version.

Bucharest, Romania January 28, 2020

CURRENT REPORT

In accordance with Law no. 24/2017, and FSA Regulation nr.5/2018

1 S.	TERAPLAST S.A. Bistrița
	INTRARE / IEŞİRE
	Nr. 441 38 y
	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date of the report: January 28th 2020

Name of the issuing company: TERAPLAST S.A.

Registered office: village Saratel, Sieu-Magherus commune, DN 15A, km 45 + 500, county Bistrita-Nasaud

Phone number: 0263/238.202

Fax number: 0263/231.221

Trade Register No.: J06/735/1992

VAT number: RO3094980

Subscribed and paid-up share capital: RON 133,780,650.80

Regulated market for shares admitted to trading: Bucharest Stock Exchange, standard cat., symbol TRP

Important events to be reported: In complance with the provisions of art. 144 let. B, paragraph 4 of the F.S.A. Regarding lssuers of Financial Instruments and Market Operations, TERAPLAST S.A. submits for publication the Auditor Report regarding transactions, reported according to art. 82 from Law no. 24/2017 during the 2nd Semester of 2019.

TERA	TeraPlast	TeraStee	Till TeraGlass
PLAST				** TeraPiast Car a provima
GROUP	TeraPiast PORTORIV	TeraSteel Secret 33124	welceroces

TERAPLAST SA

Sarátel, comuna Sieu-Măgherus, DN 15A, km 45+500, jud. Bistrița Năsuud, 427301 CUI 3094980, J06/735/1992, Capital social subscris si vărsat: 133.780.650,80 lei Tel: 0374 461 529/ Fax: 0263 231 221/ office@teraplast.ro ww.teraplast.ro

Nr. Crt.	Persoana fizica/juridica cu care Societatea Teraplast a incheiat actul iuridic	Data incheierii actului	Natura actului	Obiectul actului	Valoarea actului	Creantele reciproce intre partile actului	Garantiile constituite	Termenele si modalitatile de plata
		Contract concluded by the Company Teraplast S.A., acting as assignor
1.	Politub S.A.	August 21st 2019	Debt assignment contract	Transfer by TeraPlast SA, as creditor of Teraplast Recycling SA, of the receivables in amount of RON 23,320,060, to Politub SA, in exchange for payment of the transfer price	The Assignment price is RON 23,320,060;	on August 21st 2019 Teraplast SA has receivables related to Politub SA: RON 2.905,894; Teraplast SA has debts related to Politub SA: RON 23,591,194*	NA	The payment term is August 21st 2019: The method of payment is compensation
		ton 27.08.2019, of the total receivables in connection with Politub, 2,01,886 in represent debts of Teraplast in connection with the Business Line Sales Contract concluded on 22.12.2017. **on 27.08.2019, the debt that Teraplash has in connection with Politics and the bransfer of the business line of PE pipe / fittings, aconting to the Business Line Sales Contract concluded on 22.12.2017, including the interest due until 20 August 2019. Contract concluded by the Company Teraplast S.A., acting as Owner
2.	Teraglass Bistrita SRL	November 25th 2019	Addendum No.2/25.11.201 9 to rental contract no. 372950/ 31.03.2015	Increase of the monthly rent value, including retroactively starting with 01.01.2018 until the expiry of the contract's validity, respectively until 01.04.2026	The total value of the addendum is 1,369,720 euros excluding VAT, representing the value of the rent for the period 01.11.2019- 01.04.2026 and the difference between the rent paid monthly and the rent	On November 29th 2019: Teraplast SA has receivables related to Teraglass Bistrita SRL: RON 11,908,475*; Teraplast SA has debts related to Teraglass Bistrita SRL: RON 2,703 **	NA	The monthly rent is paid within 30 days from the date of issue of the invoice, by bank transfer. The difference between the rent paid monthly and the rent renegotiated for the period 01.01.2018-
						TERAPLAST SA

TERA - TERA TeraPlast		TeraSteel	TT TeraGiass
PLAST GROUP -	TeraPlast Hungary	TeraSteel Sant 5 22 20	weccerbesc	Securing

Sārāţel, comuna Șieu-Măgheruș, DN 15A, km 45+500, jud. Bistrița Năsaud, 427301 CUI 3094980, J06/735/1992, Capital social subscris și vărsat: 133.780.650,80 lei Tel: 0374 461 529/ Fax: 0263 231 221/ office@teraplast.ro www.teraplast.ro

		31.10.2019 will be
	renegotiated for the period 01.01.2018-	paid in installments, until
	31.10.2019
from 2015	l'on 211.2019, of the total receivables that Teragias Bistria SRL, 2.822.66 lei epresent annunts in be collected in the account of the business line tract

7 Director General Stanean Alexandru SOCIETATEA TERAPLAST Director Financiar Birta loana

				1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1
IERA	TeraPlast	TeraSteel	TeraGlass
PLAST		ী TeraSteel	**************************	TeraPlast Perville
GROUP	TelaPlast Hungary	Section an	WEECEPDESC

TERAPLAST SA
						Saratel, comuna Șieu-Măgheruș, DN 15A, km 45+500, jud. Bistrița Năsăud, 427301
						CUI 3094980, 106/755/1992, Capital social subscris si vársat: 133.780.650,80 lei
				Tel: 0374 461 529/ Fax: 0263 231 221/ office@teraplast.ro
	WWW.TOP909 BBC ATS