Teraplast SA — Audit Report / Information 2020

Jul 29, 2020

CURRENT REPORT

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

Date of the report: 29 th July 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 133,780,501.8 Regulated market for shares admitted to trading: Bucharest Stock Exchange, standard cat., symbol TRP

Important events to be reported: In compliance with the provisions of art. 144 let. B, paragraph 4 of the F.S.A. Regulation no. 5/2018 regarding Issuers 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 1st Semester of 2020.

Please access the attached file to view the full report.

General Manager

Stanean Alexandru

If you need any further information feel free to contact us on Tel. +4 0741 270 439 or e-mail: investor.relations@teraplast.ro Contact person Alexandra Sica – PR Manager & IRO

TER A	TeraPlast	TeraSteel	TeraGlass	P TeraPlast
PLAST	TeraPlast	TeraSteel	wetterheat.	Recycling
GROUP		Serbia

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

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

INDEPENDENT LIMITED ASSURANCE REPORT ON 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. In accordance with the provisions of art. 144.B, point 4 from Regulation no. 5/2018 issued by the Financial Supervisory Authority ("the FSA"), and further to your request, we have been engaged by ABC SA/SRL ("the Company"), to report as an independent conclusion of limited assurance on the information included in the current reports prepared by the Company and sent on February 27, 2020 and March 4, 2020, to the Bucharest Stock Exchange ("the BSE") and the FSA (thereafter Current reports).

The Current reports have been prepared by the Company's management in order to report to the FSA pursuant to the requirements of Law no. 24/2017 art. 82 (1) - (4) and Regulation no. 5/2018 art. 144.B (1) - (3) of ASF, for the period January 1 – June 30, 2020.

Management's Responsibility

1. Management is responsible for the preparation and fair presentation of the Current reports and of the transactions included in the Current reports that are free of material misstatement, in accordance with article 82 of Law no. 24/2017 and Regulation no. 5/2018, art 144.B (1) – (3), and for the information presented in therein. This responsibility includes: designing, implementing and maintaining an internal control relevant to the preparation and presentation of the Current reports that is free of material misstatement, due to fraud or error. Also, this responsibility includes compliance with the provisions of article 82 of Law no. 24/2017 and Regulation no. 5/2018, art 144.B (1) – (3).

Management is responsible for maintaining adequate supporting documents regarding the Current reports and for providing the auditor with complete and 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.

Auditor's Responsibility

• 1. Our responsibility is to analyse the reported transactions included by the Company in the Current reports as included in Appendix A 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. This standard requires that we plan and perform our procedures in order to obtain a limited assurance whether the transactions included in the Current reports are in accordance, in all material respects, with the provisions of article 82 of Law no. 24/2017 and Regulation no. 5/2018, art 144.B (1) – (3), as basis for our independent conclusion.
• 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.

Numele Deloitte se referă la organizația Deloitte Touche Tohmatsu Limited, o companie cu răspundere limitată din Marea Britanie, la firmele membre ale acesteia, în cadrul căreia fiecare firmă membră este o persoană juridică independentă. Pentru o descriere amănunțită a structurii legale a Deloitte Touche Tohmatsu Limited și a firmelor membre, vă rugăm să accesați www.deloitte.com/ro/despre.

• 1. The selected procedures depend on our understanding of the Current reports and of other circumstances of the engagement, as well as on our judgment of the areas that may show significant misstatements. In developing our understanding on the transactions included in 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, art 144.B (1) – (3), 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 in carrying out the reported transactions.
• 1. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, an absolute or reasonable assurance. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had an absolute or reasonable assurance engagement been performed. This report does not constitute a legal opinion. Accordingly, we do not express a reasonable assurance opinion about whether the Current reports has been prepared, in all material respects, in accordance with the requirements specified in the first paragraph hereof.
• 1. We formed our conclusion based on, and in connection with, the aspects revealed herein. In our opinion, the evidence we have obtained is sufficient and adequate to form a basis for our limited assurance conclusion.

Summary of work performed

• 1. Our procedures have been conducted only on the transactions included in the Current reports related to the transactions concluded by the Company, as follows:
• a) We obtained from the Company the Current reports, signed by the management, as included in Appendix A;
• b) For the transactions presented in the Current reports we compared the information included in the Current reports to the information necessary to be included in such report / reports as per article 82 of Law no. 24/2017 and Regulation no. 5/2018, art 144.B (1) – (3): parties, date of conclusion and nature of the document, description of the object thereof, total value or his estimation, mutual receivables, guarantees established, payment terms and methods;
• c) For the transactions included in the Current reports we observed that the reports have been signed by the management with the necessary authority, as per the authorised signature list provided to us;
• d) For the transactions included in the Current reports, we compared the information included in the Current reports matches the information included in the signed documents. We observed the material aspects of the following details:
  • the signing date of the documents;
  • the nature of the documents;
  • the description of the type of goods/services indicated in the documents;
  • the total value of the transaction, either realised or estimated;
  • whether the documents have been signed by all of the parties
  • the mutual receivables;
  • guarantees established;
  • payment terms and methods.
• e) To the extent that there is an observable market price for the goods or services included in the transactions presented in the Current Reports, we have discussed with the management on how such prices were determined and whether, on a case by case basis, the determined prices are in line with observable market prices used by other (third) parties for similar services or goods. If there are no observable market prices available, we have assessed whether such transactions were carried out in accordance with other transactions approved and signed by the Company's management as detailed in procedure d).

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 compliance, in all material respects, with the requirements of Law no. 24/2017 art. 82 and Regulation no. 5/2018, art 144.B (1) – (3).

Other Matters

1. This report is solely for the purpose set forth in the first paragraph hereof and for your information and for the information of the BSE and the FSA and it is not to be used for any other purpose. Our report should not be deemed adequate for use by any party wishing to acquire rights over us, other than the Company, for any purpose or in any circumstances. Any party except the Company, which is granted access to our report or a copy hereof and choses to rely on our report (or a part thereof), shall do so on their own account. Our engagement was undertaken so as to report to the Board of Directors, those aspects that we are required to report in a limited independent assurance report, and not for other purposes. This report relates only to the items specified above and does not extend to any financial statements of the Company taken as a whole.

On behalf of: Deloitte Audit S.R.L.

Ioana-Alina Mirea

Bucharest, Romania July 28, 2020

Annex

CURRENT REPORT

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

Date of the report: July 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 133,780,501.80

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

Important events to be reported: In compliance with the provisions of art. 144 let. B, paragraph 4 of the F.S.A. Regulation no. 5/2018 regarding Issuers 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 1^st Semester of 2020.

TERA PLAST	TeraPlast	TeraSteel	TeraGlass	P TeraPlast
GROUP	TeraPlast Hungary	TeraSteel Serbia	wetterbest	Recycling

TERAPLAST SA

Sărățel, comuna Șieu-Măgheruș, DN15A, km 45+500, jud. Bistrița Năsăud, 427301 CUI 3094980, J06/735/1992, Capital social subscris si vărsat: 133.780.501.80 lei Tel: 0374 461 529/ Fax: 0263 231 221/office@teraplast.ro www.teraplast.ro

No.	Individual / legal entity signing legal documents with Teraplast company	Date of concluding the document	Nature of the document	Subject of the document	Estimated value of the document	Mutual claims between the parties of the document	Constituted guarantees	Interest rate	Deadlines and payment terms
Acte aditionale incheiate de Societatea Teraplast S.A. in calitate de Imprumutator

The loan is interest- Additional Act year, bearing,					. . . . .
at the liabilities: 0,00 lei TERAPLAST HUNGARIA extension of the the Loan validity of the loan the contract is reference 24.02.2020 Гeraplast's NA K.F.T. contract. Contract with 12 months, until of EUR interest rate receivables: Payment no.401770/ 21.02 2021 200,000 of the 1,897,028,00RON* ways: via 21.02.2017 Romanian bank transfer National Bank		to	Extending the	Total value of	Teraplast's		starting from the

* On 24.02.2020, of the total receivables to be collected from Teraplast Hungaria Kft, 1,274,523 RON is the principal plus the interest on the account of the loan agreement in force;

uite	Nr. Crt.	Persoana fizica/juridica cu care Societatea Feraplast a incheiat actul juridic	Data incheierii actului	Natura actului	Obiectul actului	Valoarea estimata a actului	Creantele reciproce intre partile actului	Garanti ile constit	Termenele si modalitatile de plata
------	----------	-----------------------------------------------------------------------------------------	--------------------------------------	--------------------------	------------------	--------------------------------	-------------------------------------------------	---------------------------	-------------------------------------------------

Acte aditionale incheiate de Societatea Teraplast S.A. in calitate de Furnizor/Vanzator

TERAGLASS BISTRITA SRL	28.02.2020	Addendum No.11 to Sales contract No.5622/ 10.06 2015	Extension of validity of the Sales contract No.5622 / 10.06.2015 until 28.02.2021	The estimated value of the contract for 2020 is 7.500.000 lei VAT excluded.	Total receivables of Teraplast: 10,595,396 lei** Total liabilities of Teraplast: 0 lei	No guarant ees	120 days from date of invoice, via bank transfer, payment instruments or compensation
TERAPLAST HUNGARIA K.F.T.	28.02.2020	Addendum No.10 to Sales contract No. 7001/ 24.04 2017	Extension of validity of the Sales contract No. 7001/24.04.2017 until 28.02.2021	The estimated value of the contract for 2020 is 2.500,000 lei VAT excluded	Total receivables of Teraplast: 1,953,831 $fei***$ Total liabilities of Teraplast: 0 lei	No guarant ees	90 days from date of invoice, via bank transfer

PLAST	TeraPlast	TeraSteel	TeraGlass	3 TeraPlast
GROUP	TeraPlast Hungary	TeraSteel Serbia	wetterbest	* Recycling

TERAPLAST SA

Säräţel, comuna Şieu-Mägheruş, DN15A, km 45+500, jud. Bistriţa Näsäud, 427301 CUI 3094980, J06/735/1992, Capital social subscris și vărsat: 133.780.501,80 lei Tel: 0374 461 529/ Fax: 0263 231 221/office@teraplast.ro www.teraplast.ro

** On 04.03.2020, of the total receivables to be collected from Teraglass Bistrita SRL, 2,822,668 lei represent amounts to be collected in the account of the business line transfer contract from 2015; *** On 04.03.2020, of the total receivables to be collected from Teraplast Hungaria KFT, 1,274,523 lei is the principal plus interest on the loan contract account;

Contracte incheiate de Societatea Teraplast S.A. in calitate de Cumparator

	TERASTEEL SA	28.02.2020	Addendum No.1 to Sales contract No. 424029 / 01.03.2019	Extension of validity of the Sales contract No. 424029 / 01.03.2019 until 28.02.2021	The estimated value of the contract for 2020 is 100,000 euro VAT excluded	Total receivables of Teraplast: 185,891 Total liabilities of Teraplast: 244,887 lei	No guarant ees	60 days from date of invoice, via bank transfer or compensation
--	--------------	------------	---------------------------------------------------------------------	--------------------------------------------------------------------------------------------	------------------------------------------------------------------------------------	-------------------------------------------------------------------------------------------------	-----------------------------	--------------------------------------------------------------------------

TERA	TeraPlast	TeraSteel	TeraGlass
PLAST GROUP	TeraPlast	TeraSteel Serbia	wetterbest	TeraPlast Recycling

TERAPLAST SA

Sărățel, comuna Șieu-Măgheruș, DN15A, km 45+500, jud. Bistrița Năsăud, 427301 CUI 3094980, J06/735/1992, Capital social subscris și vărsat: 133.780.501,80 lei Tel: 0374 461 529/ Fax: 0263 231 221/office@teraplast.ro www.teraplast.ro