Annual report 2025 (Item 2 on the agenda)

AEROSTAR S.A.

R E P O R T

Message from the President of the Board of Directors Statement of Purpose and Vision of the Board of Directors

Explanatory Note

Message from the CEO of AEROSTAR S.A.

1. Presentation of General Information

2. Governance

3. Strategy

4. SUSTAINABILITY Statement

   1. ENVIRONMENTAL Information

   2. SOCIAL Information

   3. Value Chain Workers

   4. Affected Communities

   5. End-Users

   6. Professional Conduct

   7. Additional Topics

   8. Taxonomy

Annexes

Abbreviations

MESSAGE FROM THE PRESIDENT OF THE BOARD OF DIRECTORS OF AEROSTAR S.A.

The year 2025 represented another year of consolidation, adaptation and strategic progress for AEROSTAR, in an industrial and geopolitical environment that continues to evolve. Through our collective effort and firm commitment to performance, the Company succeeded in achieving its key objectives and maintaining its position in the aerospace and defence industry.

Throughout the year, we continued to invest in our production capabilities and in the development of our employees' professional skills. The financial results for 2025 reflect solid performance, supported by rigorous operational discipline and a strategy focused on efficiency and sustainability. In this context, the executive team ensured the maintenance of a coherent strategic direction and the consistent implementation of the Company's priorities, thereby providing stability and continuity in the process of sustainable transformation.

Year after year, we reaffirm our commitment to the principles of transparency and sustainability, which we consider fundamental to the Company's long-term development. In our view, organisational performance is measured not only by financial results, but also by the manner in which we manage the non-financial matters that shape our strategic evolution.

We would like to express our appreciation for the professionalism and dedication of the entire AEROSTAR team, as well as for the trust placed in us by our commercial and institutional partners.

STATEMENT OF PURPOSE AND VISION OF THE BOARD OF DIRECTORS

The purpose of the Board of Directors is to ensure the long-term success and sustainability of Aerostar S.A., in the interest of the Company and its shareholders, while also taking into account the interests of all stakeholders: employees, customers, suppliers, the local community, etc.

In pursuing this purpose, the vision of the Board of Directors focuses on leveraging the know-how accumulated by the Company in the aviation and defence industry and places professionalism at the core of the Company's values. Performance through professionalism is not merely our slogan, but essentially represents the vision of the Board of Directors for achieving this purpose

For us, performance means:

• a stronger Aerostar company, firmly anchored in the real economy, with a resilience that allows us to look confidently towards its long-term future;

• full satisfaction of our customers' needs;

• full confidence for our suppliers regarding the resilience of their position within our supply chains;

• a better life for our employees through good working conditions and good and secure long-term salaries;

• increased confidence for investors in Aerostar shares regarding the long-, medium- and short-term results of their investments;

• an enhanced contribution to the needs of the local community by promoting a clean environment and by supporting community development, culture, health and sport.

  These are the objectives that Aerostar has achieved and which the Board of Directors intends to continue pursuing by promoting professionalism across all areas and activities of the Company.

  For this reason, preserving and developing the accumulated know-how, as well as the ongoing process of selection and continuous training of the Company's employees, represent a key priority on which we base our success.

  President of the Board of Directors Eng. Grigore FILIP

  EXPLANATORY NOTE

• All members of the Board of Directors have up-to-date Management Contracts and have signed declarations regarding Conflicts of Interest, from which it results that none of the members of the Board of Directors is independent, but none is in a conflict of interest as defined by the law and/or the regulations of ASF/BVB.

• All members of the Board of Directors have also adhered to the Code of Conduct and Ethics of Aerostar S.A.

• During 2025, the members of the Board of Directors allocated the necessary time to participate in the Board's activities and to review matters submitted for analysis and express their vote.

• The education and experience of the members of the Board of Directors are adequate, and the structure of the Board is well-suited from this perspective; they also enjoy an excellent reputation and integrity.

• The executive management, consisting of the Chief Executive Officer and the Financial Director, possesses strong professional expertise both in the Company's operational field and in management.

MESSAGE FROM THE CEO OF AEROSTAR S.A.

OC

In 2025, AEROSTAR took another significant step in strengthening its strategic position in the aerospace industry. The year unfolded in a global environment marked by volatility and accelerated transformation. Despite the pressures generated by the international context, AEROSTAR demonstrated agility and capitalised on market opportunities, achieving strong financial and operational performance in line with previous years.

Across our business lines, in the Manufacture of Aeronautical Products, we continued to expand our presence in the supply chains of international customers and to increase the technological level of both the products delivered and the production capabilities employed.

With regard to the Defence Systems business line, we consolidated our role as a strategic supplier to the Ministry of National Defence, further developing capabilities for the maintenance of F-16 aircraft while maintaining the portfolio of services provided to the Ministry of National Defence.

In the civil aircraft MRO business line, 2025 further strengthened AEROSTAR's position as a regional leader in the provision of maintenance services. By maintaining high technical standards and fostering long-term relationships with airline operators, AEROSTAR reaffirmed its role as a trusted partner.

The results achieved in 2025 confirm AEROSTAR's ability to transform challenges into opportunities, demonstrating stability, adaptability and a consistent focus on performance. The Company's evolution reflects the professionalism of our employees and the effectiveness of the investments made. This solid trajectory gives us confidence in AEROSTAR's ability to continue building a competitive and sustainable future.

I PRESENTATION OF GENERAL INFORMATION

BASIS OF PREPARATION

BP-1, BP-2

The company AEROSTAR S.A. was established on 17 April 1953 by Decision No. 1165 of the Council of Ministers. It has successively been named URA-1953, IRAv ('Aircraft Repair Enterprise') - 1970, IAv ('Aircraft Repair Enterprise') - 1978, and AEROSTAR since 1991, when it was registered as a joint-stock company at the Trade Register Office in Bacău.

The Annual Report of AEROSTAR S.A. for the period 1 January 2025 - 31 December 2025 was prepared in accordance with the applicable reporting regulations, including EU Delegated Regulation 2023/2772 supplementing Directive 2013/34/EU of the European Parliament and of the Council with regard to sustainability reporting standards (CSRD), in order to provide additional information to all stakeholders on the company's sustainable strategy and progress in its corporate processes, and to transparently reinforce its commitment to sustainable development. The Report is also prepared in compliance with the provisions of Law 24/2017 on issuers of financial instruments and market operations and ASF Regulation No. 5/2018 concerning issuers of financial instruments and market operations.

The Sustainability Statement was prepared based on a double materiality analysis and in accordance with the CSRD Directive and the EFRAG IG - Materiality Assessment Guidelines. In this context, material topics are presented and explained in the chapters Environmental Information, Social Information and Professional Conduct, in accordance with the requirements of the thematic standards ESRS E1-E5, ESRS S1-S4, and ESRS G1.

The materiality assessment includes sustainability matters considered relevant for our Company, such as climate change, environmental impacts (pollution, resource management, circular economy), working conditions, employee health and safety, safety of products and services, stakeholder relations, and professional conduct. Particular attention is also given to social performance, governance, community engagement, and additional topics such as cybersecurity.

The activities of the company's business lines have been analysed. Where applicable, certain information presented in accordance with the standards mentioned above is supplemented with additional data to facilitate the understanding of the analyses carried out or the context. AEROSTAR S.A. has not omitted any information relating to intellectual property, know-how, or to the innovation results of the Company.

Since January 2018, AEROSTAR has maintained a secondary registered office and branch within the perimeter of Iași International Airport. In 2023, a new secondary registered office and branch was opened in Fetești Municipality.

The Company financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, Accounting Law no. 82/1991, republished, as amended and supplemented, and are presented in compliance with IAS 1 and Order 2844/2016 approving accounting regulations in accordance with IFRS. The bases of preparation and presentation of the financial statements are presented in Note 3. The Company's financial statements prepared for 2025 are accompanied by the independent auditor's report.

AEROSTAR S.A. is listed on the Bucharest Stock Exchange under the code ARS, and the record of shares and shareholders is maintained, in accordance with the law, by S.C. Depozitarul Central S.A., Bucharest.

AEROSTAR ACTIVITIES AND PRODUCTS

Manufacture of civil aircraft and spacecraft - CAEN code 3031.

In the civil aviation sector, the Company has a consolidated role in the global supply chain, through the production and delivery of aerostructures, components and assemblies manufactured in compliance with international quality, safety, and performance standards.

AEROSTAR is authorised to perform maintenance work on Boeing 737 aircraft (all series) and Airbus A320 aircraft (ceo & neo), as well as maintenance of certain components related to these platforms.

In the defence sector, the Company has a strategic role, being:

• National Maintenance Centre for the F-16 aircraft of the Romanian Air Force;

• Maintenance Centre for the Black Hawk helicopters of the Ministry of Internal Affairs;

• Maintenance Centre for the rocket launcher systems used by the Ministry of National Defence.

AEROSTAR BUSINESS LINES

MANUFACTURE OF AERONAUTICAL PRODUCTS

The equipment, assemblies and parts produced by AEROSTAR are incorporated into a large number of commercial aircraft: Airbus A320, A321, A330, A350; Boeing B737, B767, B787; Gulfstream G650; Dassault F7X; Bombardier Challenger series 600; and Global series 5000/6000.

By adapting to new market requirements regarding production structure, as well as new quality and environmental protection standards, AEROSTAR maintains its position as a leader in Romania in the manufacture of aeronautical products and strengthens its role in the supply chain of major global companies in the aviation and aerospace sectors.

In 2025, in the manufacturing process, the Company successfully integrated landing gear components for the Airbus A320 family models. This consolidates the Company's position in the aerospace industry, demonstrating strong technological expertise, precision, and compliance with all regulations. At the same time, we continue to expand our product portfolio and reaffirm our commitment to partners in the sectors in which we operate.

In 2025, AEROSTAR celebrated a quarter of a century of collaboration with Safran Landing Systems, a partnership based on mutual commitment, product quality and safety, as well as timely delivery. Over the 25 years of collaboration, AEROSTAR has delivered hundreds of thousands of machined parts and hydraulic systems made from aluminium alloys, steel, bronze and titanium; fully equipped landing gears and retraction mechanisms for Daher TBM 960; kits for Airbus A320 family, SuperPuma, Falcon 7X; as well as kits for Boeing 787, Airbus 330/340, Airbus 350, including retraction, locking and steering actuators.

AEROSTAR has obtained the necessary qualifications following rigorous audit processes carried out together with Safran Landing Systems and the relevant certification bodies. These qualifications reflect the sustained effort to comply with the most demanding standards of the aerospace industry.

CIVIL AVIATION MAINTENANCE

AEROSTAR has a significant presence in terms of turnover in the Civil Aviation MRO sector, being an independent provider of industrial maintenance services for commercial aircraft from the Airbus A320 CEO & NEO family, all Boeing B737 series, and the Boeing 737 MAX. AEROSTAR is EASA Part-145 certified with a wide range of approvals obtained from civil aviation authorities.

In 2025, AEROSTAR celebrated the fifth anniversary of the inauguration of the maintenance hangar for civil aircraft located near the Iași International Airport. This anniversary represents an opportunity to take stock and reaffirm the Company's commitment to technological excellence, regional development, and professional training in the aeronautical field.

The Company has over 20 years of experience in civil aviation maintenance, accumulated through strong partnerships with international airlines and through the implementation of the highest technical and safety standards. This expertise has been essential in the development and efficient operation of the hangar in Iași. The year 2025 represented a period of growth and development, following the maintenance of approximately 1.300 AIRCRAFT RELEASED TO SERVICE since the establishment of this business line.

DEFENCE SYSTEMS

In the defence systems business line, AEROSTAR is a leading supplier to the Romanian Ministry of National Defence.

AEROSTAR serves as a Maintenance Centre for the F-16 aircraft of the Romanian Air Force. The Company has continuously developed the capabilities necessary to strengthen its position as a supplier, enhancing its expertise in the maintenance and modernisation of military aircraft, in ground-to-ground launch systems, and in radar communications systems, as part of command-and-control systems. AEROSTAR is an integral part of the national defence industry, in accordance with Law 232/2016, contributing to the strengthening of national security capabilities and to the sustainable development of this sector.

AEROSTAR PRESENCE IN THE GLOBAL MARKET

AEROSTAR operates in the global market for products and services in the aerospace and defence industry as an independent company. AEROSTAR's customers are located in Europe, Asia, Africa, the USA and Canada.

In Canada and the USA, we supply aviation products, and in Asia and Africa we provide civil aviation maintenance services. In Europe we provide maintenance services for civil aviation, aviation products (landing gear systems, mechanical parts, assemblies and sub-assemblies), electronic equipment and ground support equipment.

In Romania we provide repair services for military aircraft and repair 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.

Europe

~ 63,71%

366.705 k RON Romania

~ 15,31%

125,204 k RON

Canada + USA

~ 3,13%

14.886 k RON

Africa

~ 5,07%

15.119 k RON

Asia

~ 12,77%

62.090 k RON

Aviation products

Civil aviation maintenance

Defence systems

AEROSTAR'S PROGRESS IN 2025 BUSINESS CONTEXT 2025

In 2025, the aerospace industry operated in an environment characterized by high demand but also persistent operational tensions. Aircraft production and maintenance activities were influenced by supply chain disruptions, shortages of qualified personnel, financial volatility, and geopolitical pressures. Aircraft manufacturers have maintained record-level backlogs, generating not only high demand for suppliers but also significant delivery delays. These developments had direct implications for companies in the supply chain, which operated in a context marked by uncertainty, cost pressures, and increased requirements regarding sustainability and operational efficiency. Persistent inflation affected both manufacturers and suppliers.

At the macroeconomic level, inflation moderated compared to the peaks of previous years, yet remained above central bank targets in many developed economies, while interest rates remained relatively high compared to the pre-pandemic period. The average inflation rate in 2025 was 7,32%. The average EUR/RON exchange rate was 5,0415, and the average USD/RON exchange rate was 4,4705, influencing operational costs.

Despite persistent challenges, the global aerospace industry demonstrated an increased capacity to adapt, supported by steady demand and operational efficiency improvements. In 2025, Airbus did not fully achieve its delivery target, while Boeing showed an accelerated recovery towards the end of the year.

In the defence sector, ongoing geopolitical tensions maintained high demand for modernisation and procurement programmes, particularly for next-generation capabilities. In Romania, however, budgetary constraints generated by a high fiscal deficit exerted pressure on financial allocations, leading to more cautious implementation and, in some cases, the postponement of certain activities, making 2025 a more challenging year.

The company's activity in 2025 took place in a complex economic and geopolitical context, characterized by a combination of gradual stabilisation factors alongside persistent geopolitical risks, with direct impact on the company's operations.

Manufacture of Aeronautical Products

Issues and Trends in 2025

1. Production rate increase: Airbus and Boeing maintained plans to increase production rates for single-aisle aircraft (A320neo, 737 MAX) and twin-aisle aircraft (A350, 787), leading to higher demand for primary parts and requiring suppliers to invest in new capacities and automation;
2. Supply chains remained strained: industry reports indicate delays at Tier 1 and Tier 2 suppliers (structures, engines, electronics), influenced by workforce shortages, limited availability of raw materials, and logistical constraints. These factors affected delivery predictability and generated additional cost pressures;
3. Sustainability and ESG requirements: increased pressure to reduce the carbon footprint in production and to use composite materials and energy-efficient processes. Suppliers were required to accelerate investments in new technologies to meet these requirements

Implications in 2025:

1. Smaller players were pressured by high costs and investment requirements, which affected their capital needs;

2. Delivery delays constrained airlines' ability to respond to demand, increasing pressure on existing fleets and on MRO services;

3. A geographical reorientation phenomenon emerged: part of the investments of major companies (assembly lines or production centres) in the aerospace industry moved and expanded into Asia and the Middle East, due to the faster growth in demand in these regions.

Aerostar continued to improve its customer portfolio and to produce components and sub-assemblies for Western partners, while also attracting new work packages. During the reporting period, Aerostar continued the process of diversifying its customer portfolio, maintaining collaborations with existing partners while also taking on new work packages, in line with market demand and available capacities.

Civil Aircraft Maintenance (MRO)

Issues and trends identified in 2025

MRO demand was above pre-pandemic levels: market reports indicated robust growth in the MRO market, driven by intensive fleet utilisation and the postponement of the replacement of certain aircraft. Many MRO centres operated close to capacity, with longer waiting times and increasing costs due to the shortage of qualified technicians. The shortage of parts generated delays in major overhauls. At the same time, OEMs (Airbus, Boeing as well as engine manufacturers) expanded their MRO services and integrated packages, competing with independent providers. Regional MRO centres, particularly in Eastern Europe, can secure contracts mainly through competitive costs and proximity to hubs.

The most significant impacts in 2025

1. Due to delays in the delivery of new aircraft, many aircraft remained in service longer, thus increasing the volume of heavy checks and structural maintenance work;

2. In order to reduce risks in supply chains and aircraft downtime, airlines sought solutions closer to their bases, indicating a trend towards the regionalisation of MROs.

During the reporting period, Aerostar's MRO activities for civil aviation recorded an increase compared to the previous year, with the volume of work reflecting market demand and customer schedules, without changes in the structure of the services provided.

Defence Systems

Issues and Trends Identified in 2025

The year 2025 was marked by geopolitical tensions (Eastern Europe, Middle East), leading to increased defence budgets, with multi-year contracts providing greater visibility than the civil segment and helping to mitigate cyclical volatility.

However, 2025 also brought the following challenges:

1. A shortage of spare parts for older aircraft (C-130, older F-16 blocks);

2. Pressure on maintenance capacities in Europe, especially for NATO fleets;

3. Rising costs and aircraft downtime;

4. Extension of the service life of existing platforms;

5. Delays in modernisation programs.

Major impacts in 2025:

1. Supply chain reconfiguration: security and industrial sovereignty requirements led to the relocation of certain capacities and a preference for "trusted" suppliers.
2. Increased demand for military MRO: fleets heavily used in high-security contexts generated large volumes of maintenance and modernization work, while the shortage of spare parts remained a critical issue.

KEY FIGURES FOR 2025

* reported relative to the turnover of the current year

SALES OF THE COMPANY

From the turnover of 620.434 thousand RON achieved in 2025, the Company sold products and services worth 95.274 thousand RON on the domestic market, while sales on external markets reached the equivalent of 525.160 thousand RON. Compared with the previous year, the Company recorded a 6% increase in sales, driven by growth in the Manufacture of Aeronautical Products Manufacturing (+13%) and Civil Aircraft Maintenance (+10%), partially offset by a decrease in Defence Systems sales (-11%) and Other Products and Services (-28%).

301,241

265,462

YEAR 2025

YEAR 2024

199,145

180,703

107,272

120,187

12,776

17,652

350,000

300,000

250,000

200,000

150,000

100,000

50,000

-

Manufacture of Aeronautical Products

MRO Civil Aircraft Defense Systems - Air,

Land, and Naval

Other Products and Services

In terms of the distribution of sales by market, an increase in sales on the external market can be observed compared with the previous year. Sales increased by +8% in Europe, by +28% in Asia, by +108% in Africa and by +31% in other regions. In Romania, a decrease of -24% was recorded.

395,258

366,705

YEAR 2025

YEAR 2024

125,204

95,019

79,229 62,090

31,479

15,119 19,449 14,886

450,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

-

Romania Europe Asia Africa Canada+USA

In 2025 the turnover increased by 36.430 thousand RON (+6,24%) compared with the previous year, mainly driven by the core activity of manufacturing aerostructures and sub-assemblies, as well as by the production of landing gear and hydraulic systems.

FINANCIAL PERFORMANCE

The turnover increased in 2025 by 36.430 thousand RON (+6,24%) compared to the previous year, mainly driven by the core activity of manufacturing aerostructures and sub-assemblies, as well as the production of landing gear and hydraulic systems.

Operating revenue rose slightly by 0,13%, supported by the increase in turnover, but offset by a decrease in revenue from changes in inventories of finished goods and work in progress (-78,5%), following the slower growth of the inventories of finished goods and work in progress throughout 2025. Operating expenses decreased by -1,41% compared to the previous year, mainly influenced by external services. Expenses for external services decreased by -28,2%, significantly impacted by the reduction in the value of equipment repairs performed by third parties, especially under the F-16 military programme. This effect was partially offset by the increase in employee benefits expenses

Operating profit rose by 8.521 thousand RON, representing a 15,4% margin on operating revenue. This margin was influenced by the evolution of operating expenses mentioned above. Net profit at the end of 2025 amounted to 98.037 thousand RON.

The positive impact of other comprehensive income was mainly due to the appreciation of equity instruments recognised through other comprehensive income. Total comprehensive income for the financial year rose by 26%, reflecting the effect of net profit and other comprehensive income.

FINANCIAL POSITION

At the end of 2025, the Company's assets reached 898.864 thousand RON, representing a 10% increase compared to the end of the previous year. This growth was mainly driven by a 12% increase in current assets, supported by higher cash and cash equivalents as well as an increase in receivables.

Total liabilities amounted to 113.360 thousand RON, marking a 4% increase compared to the previous year, primarily due to the rise in deferred income tax liabilities resulting from the appreciation of equity instruments recognised through other comprehensive income.

Equity increased by 89.871 thousand RON, as a result of the allocation of a portion of the 2024 financial year profit to the Company's reserves, as well as the fair value revaluation of equity instruments recognised in other comprehensive income. This increase was partially offset by the distribution of dividends from the 2024 financial year profit.

The net profit margin in 2025 was 14,9% compared to 14,5% in the previous year, influenced by the changes in inventories of finished goods and work in progress, resulting in a slight 0,13% increase in operating revenue despite a 6,24% increase in turnover compared to 2024.

The cash and cash equivalents indicator increased by 20,33% compared to the previous year. Working capital needs increased by 12%, reaching 312 million RON. The net cash indicator rose by 38,72% compared to the previous year. The debt ratio stands at 0. The Company finances its operations solely through equity.

The current ratio reached 8,56, an increase compared to the previous year. This improvement is due to the growth of current assets alongside a decrease in current liabilities relative to the previous year.

The trade receivables turnover (average collection period of trade receivables) was 53 days compared to 47 days in the previous year.

The fixed assets turnover was 2,48, showing a slight increase compared to the previous year.

Despite market challenges, the Company continued to maintain a strong performance level in its economic and financial indicators.

KEY EVENTS OF 2025

During the period 1 January - 31 December 2025, the following main events took place:

MARCH 2025

AEROSTAR completed the annual negotiations between the Management of AEROSTAR S.A. and the Employees' Committee. Within the Collective Labour Agreement for 2025-2026, the main employee benefit packages were adopted as follows:

• Salary increases of 9,9% in 2025;

• Granting of annual holiday vouchers;

• End-of-financial-year, end-of-production-year, and performance bonuses;

• Partial reimbursement of intercity travel expenses incurred by employees;

• Annual leave of between 20 and 28 working days depending on seniority

  The provisions of the Collective Labour Agreement were applied starting with the salary rights for April 2025.

  APRIL 2025

  AEROSTAR S.A. celebrated 72 Years of Continuous Activity on 17 April!

  On 17 April, the first edition of "Investor Day" took place, attended by investors and analysts, the press, members of the Board of Directors, executive management, and a significant part of the operational management.

  On 24 April, the General Meeting of Shareholders was held to approve the financial statements for 2024. During the Ordinary General Meeting, AEROSTAR shareholders approved the following:

• The Board of Directors' Report and the financial statements for 2024;

• The auditor's report on the audit of the financial statements;

• Discharge from liability of the members of the Board of Directors and executive management;

• Allocation of the net profit for the 2024 financial year, amounting to 95.724.563,92 RON, as follows:

  Allocation to the legal reserve of retained earnings 18.730.570,38 RON;

  Allocation to other reserves 40.447.405,54 RON

  Distribution as dividends 36.546.588,00 RON

• Gross dividend per share 0, 24 RON;

• Payment date for dividends related to the 2024 financial year: 5 June 2025.

  MAY 2025

  Aerostar celebrated a quarter of a century of collaboration with Safran Landing Systems, a partnership built on shared commitment, product quality and safety, and on-time delivery.

  SEPTEMBER 2025

  Aerostar marked five years of operation at the Iași hangar, consolidating its position as a strategic

  maintenance centre for regional civil aviation.

  AEROSTAR obtained certification according to the SR EN ISO/IEC 27001:2023 standard, confirming the implementation of the Information Security Management System (SMSI).

  DECEMBER 2025

  The company acquired the remaining shares, becoming the sole shareholder of FOAR, with a 100% stake in the share capital.

• Events subsequent to the reporting date

  No events subsequent to the reporting date were recorded.

  CONSORTIA AND AFFILIATIONS

  AEROSTAR is part of several consortia, professional associations and institutional dialogue structures, as follows:

  REACH Consortia with applications in aviation and defence

  Regional Consortium for Dual Education and Sustainable Development Bacău

  "Education Cluster for Sustainable Development" Association (C-EDD), Bacău

  Social Dialogue Commission within the Prefect's Institution of Bacău County

  Local Committee for the Development of the Social Partnership (CLDSP), Bacău

  Local Committee for the Development of the Social Partnership (CLDSP), Iași

  Regional Committee for the Development of the Social Partnership (CRDPS)

  County Employers' Association of Small and Medium Enterprises - Rom. Abbreviations IMMs (PJIMM), Bacău

  Association of Aeronautical Companies in Romania (OPIAR)

  RO-NANDTB - The Romanian Aerospace Association for Non-Destructive Testing, of which AEROSTAR is a founding member

  ACTIVITIES CARRIED OUT BY OUR COMPANY FOR THE BENEFIT OF COMMUNITIES IN 2025

  Within the Company operates the Centre for the Assessment of Professional Competences Acquired through Non-formal Learning, authorised in accordance with the applicable legal provisions. Any applicant from the community who completes the assessment process at the Aerostar centre obtains a certificate of competences recognised by the Ministry of Education and Research as a qualification certificate.

  In addition, we are authorised to organise qualification courses in three occupations specific to the aviation industry. Any person from the community may participate in the qualification courses organised by Aerostar, and upon completion receives a qualification certificate recognised by the Ministry of Education and Research.

  Other actions carried out by the Company for the benefit of communities included:

  • Sponsorship of the seventh edition of the regional competition on economic topics "Ion Ionescu de la Brad", organised by "Vasile Alecsandri" University of Bacău;

  • Sponsorship of "Vasile Alecsandri" University of Bacău to support its participation in the national student conference and competition ZEM 2025 - Mechatronics Education Days;

  • Sponsorship of "Vasile Alecsandri" University of Bacău for the organisation of the international conference OPROTEH (Constructive and Technological Design Optimisation in the Machine Building Field), 20th edition;

  • Concluding and maintaining partnership agreements with five technical universities in Romania: Bucharest, Iași, Brașov, Suceava and Bacău, as well as with five technological high schools or technical colleges in Bacău and Iași, allowing their students and pupils to undertake internships within our Company and to have priority for employment within the Company upon completion of their studies;

  • Providing the opportunity for students from all five universities to address topics proposed by our Company for their bachelor's or master's thesis examinations, for which we support the research and preparation of the respective papers.

PRODUCT QUALITY AND CONTINUOUS DEVELOPMENT

We focus on our customers and end-users through the quality of the products and services provided and through on-time delivery, combining these efforts with continuous development in order to ensure that we meet the expectations of both customers and all stakeholders.

SYSTEM CERTIFICATIONS

The management system implemented within AEROSTAR is certified as follows:

• Quality management, in accordance with the requirements of the standards EN 9100/AS 9100, SR EN ISO/EN ISO 9001, and the NATO quality assurance publications AQAP 2110 and AQAP 2210;

• Environmental management, in accordance with the requirements of SR EN ISO/EN ISO 14001;

• Information security management, in accordance with the requirements of SR EN ISO/IEC/EN ISO/IEC 27001;

• Occupational health and safety management, in accordance with the requirements of SR EN ISO/EN ISO 45001.

AUTHORISATION

1. AEROSTAR holds an authorisation certificate (issued by the Romanian Civil Aeronautical Authority -AACR) as a production organisation complying with the requirements of Regulation (EU) - Part 21, Section A, Subpart G, being authorised to manufacture products, parts and appliances within the scope of approval.
2. AEROSTAR holds an authorisation certificate (issued by the Romanian Civil Aeronautical Authority -AACR) as a maintenance organisation complying with the requirements of Regulation (EU) - Part 145, Section A, authorised to maintain the products, parts and appliances specified in the scope of approval. In addition, AEROSTAR, as a maintenance organisation, is authorised by the civil aeronautical authorities of the United Kingdom, Turkey, Morocco, the United States and Bermuda.
3. AEROSTAR is authorised by the European Aviation Safety Agency (EASA) as a design organisation in accordance with the requirements of Regulation (EU) - Part 21, Section A, Subpart J.
4. AEROSTAR holds a Military Design Organisation Approval Certificate, granting the right to perform design activities under the provisions of RMAR 21, Section A, Part J, within the scope of approval.
5. AEROSTAR holds a Military Maintenance Organisation Approval Certificate (issued by the National Military Aeronautical Authority - AAMN) as a maintenance organisation complying with the requirements of RMAR 145, authorised to maintain the products, parts and appliances specified in the scope of approval.

   Since 2023, the scope of approval has been extended to include maintenance activities for Black Hawk S-70 helicopters.

6. AEROSTAR is authorised by the National Military Aeronautical Authority (AAMN) as a training organisation for military aircraft maintenance personnel, in accordance with RMAR 147, Section A, being authorised to provide training, conduct examinations within the approved scope and issue certificates of recognition to graduates.
   
   
7. AEROSTAR holds an authorisation certificate granted by the Romanian Civil Aeronautical Authority (AACR) for specialised testing in the field of civil aeronautics.
8. AEROSTAR holds an authorisation granted by the Romanian National Aerospace Association for Non-Destructive Testing (RO-NANDTB) for the NDT Personnel Training and Examination Centre in the aeronautical field, covering the non-destructive testing methods with penetrating radiation, ultrasonic testing, eddy current testing, liquid penetrant testing, magnetic particle testing and infrared radiation, as defined within the scope of approval.

   ACCREDITATIONS

   AEROSTAR holds accreditation certificates issued by the NADCAP Management Council (National Aerospace and Defence Contractors Accreditation Program) for special processes: heat treatment, shot peening, welding, chemical processes, and non-destructive testing conducted within the company.

   AEROSTAR holds an accreditation certificate issued by the Romanian Accreditation Association (RENAR).

   
   
   
   
   

   II GOVERNANCE

   ROLE OF THE ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES

   GOV -1

   Acting responsibly while pursuing sustainable development characterises the activity of our company, so that the sustainability information presented in this report reflects the company's commitment, values, and objectives, established both to ensure long-term economic success and orientation towards a safer future, and to maintain a balance between shareholders' expectations, the needs and concerns of employees, members of our community, as well as all other stakeholders.

   Our sustainability objectives, correlated with the business environment and global developments, are embedded in the company's overall strategy. The principles guiding our activity are: meeting customer requirements, ensuring full safety for the users of our products and services, continuous improvement, and enhancing environmental performance. Responsibility for sustainable development and the desire to align with the practices of our business partners lead us to consistently apply best practices in the field and to provide transparent information, explanations, and data across these financial and non-financial categories.

   Aerostar's corporate governance structures are organised on four levels:

   • Shareholders - The General Meeting of Shareholders

   • Board of Directors

   • Audit Committee

   • Executive Management

     GENERAL MEETING OF SHAREHOLDERS

     The General Meeting of Shareholders, the company's supreme governing body, is convened whenever necessary, in accordance with applicable laws and the provisions of the Constitutive Deed. The procedure for organising and conducting the general meetings of shareholders - published on the website https://www.aerostar.ro, under the "Investor Relations" section - ensures equal treatment and the full and fair exercise of the rights of all shareholders.

     Aerostar complies with the applicable legislation and undertakes all necessary steps to facilitate shareholders' participation in the General Meetings and the full exercise of their rights. Shareholders may choose to attend and vote in person at the General Meeting, or to exercise their voting rights by proxy or by correspondence.

     The company provides shareholders with all relevant information regarding the General Meetings of Shareholders and the resolutions adopted, both through regulated communication channels (national newspapers, reports to the ASF and BVB) and through publication in the "Investor Relations" section, easily identifiable and accessible on the company's website.

     The General Meetings of Shareholders are conducted in full compliance with the provisions of Law 31/1990 on companies, Law 24/2017 on issuers of financial instruments and market operations, regulations issued by the Financial Supervisory Authority, and any other applicable legal provisions.

     In 2025, as in previous years, when distributing the profit, the company equally considered both the distribution of dividends to shareholders and the allocation of resources for its long-term development.

     BOARD OF DIRECTORS

     The company is managed under a unitary system, with the delegation of executive management. The Board of Directors determines the strategic direction of the company and ensures its implementation, while also being responsible for ensuring compliance with all applicable legal provisions, internal regulations, as well as for the proper management and control of risks. Furthermore, the Board of Directors is responsible for the accounting and financial management system, the budget of revenues and expenses, and adopts the financial plan for the current year.

     In accordance with the company's Constitutive Deed, the Board of Directors meets at the company's head office whenever necessary, but at least once every three months. The Board acts in accordance with the Internal Regulation of the Board of Directors, and the agenda of the meetings and all its activities comply with legal provisions and the Constitutive Deed regarding the role and obligations of the Board.

     The current Board of Directors, elected by secret ballot on 4 July 2024, for a 4-year mandate starting from 11.07.2024, comprises five members:

     The Board of Directors comprises five members
     NAME	POSITION	EXPERIENCE	APPOINTMENT DATE	MANDATE EXPIRY DATE	POLITICAL AFFILIATION
     FILIP GRIGORE	President	Aerospace Engineer	11.07.2024	10.07.2028	None
     DAMASCHIN DORU	Vice-president	Economist	11.07.2024	10.07.2028	None
     FILIP ALEXANDRU	Member	Aerospace Engineer	11.07.2024	10.07.2028	None
     TONCEA RADU-TUDOR	Member	Aerospace Engineer	11.07.2024	10.07.2028	None
     DOROȘ LIVIU-CLAUDIU	Member	Economist	11.07.2024	10.07.2028	None

     During 2025, two members of the Board of Directors also held executive positions within the company, while the remaining three were non-executive members.

     The Board of Directors is responsible for determining major operations and development directions of the company, including sustainability matters. It oversees the preparation and approves the company strategy, ensuring that it integrates sustainability considerations, including social and environmental matters, as well as climate-related risks and opportunities.

     The Board pays particular attention to adherence to corporate governance principles to ensure:

   • the company's performance under conditions of sustainable development;

   • the accuracy and transparency of the company's decision-making process;

   • ensuring the rights and equitable treatment of shareholders through the protection and enforcement of their prerogatives;

   • transparency and access to information by periodically publishing relevant financial and operational data.

The "Statement of Purpose and Vision of the Board of Directors", an integral part of the Aerostar S.A. Business Strategy for 2025-2029, explains that the Board's purpose is to ensure the long-term success and sustainability of Aerostar, in the interest of the company and its shareholders, while also considering the interests of all stakeholders: employees, customers, suppliers, and the community. In line with this objective, the Board of Directors approves the Sustainability Report, delegates the achievement of

sustainability objectives and targets to the executive management, and closely monitors the performance of these activities.

AUDIT COMMITTEE

The Audit Committee, established on 4 July 2024, pursuant to the provisions of the Corporate Governance Code in conjunction with Law no. 162/2017, consists of two members appointed by the General Meeting of Shareholders, as follows:

The responsibilities of the Audit Committee are stipulated in its own Rules of Procedure, approved by the Board of Directors, supplemented by the provisions of Law no. 162/2017 and EU Regulation no. 537/2014. The Audit Committee's Rules of Procedure are published on the company's website, in the Investors Relations section.

Since 2018, Aerostar has operated an Audit Committee in accordance with Law no. 162/2017 regarding statutory audit of the annual and consolidated financial statements. The Audit Committee meets periodically, at least four times per year, and exceptionally when necessary.

EXECUTIVE MANAGEMENT

As of 11 July 2024, the company's executive management is ensured by two natural persons holding the positions of Chief Executive Officer and Financial Director, appointed by the Board of Directors in accordance with its responsibilities, as follows:

In 2025, the direct participation of executive management in the company's share capital remained

below 1%.

With regard to the organisational structure and management system of Aerostar S.A., executive management is supported by an operational management structure that oversees activities based on management centres from the manufacturing area and cost centres in the functional activity domain.

OPERATIONAL MANAGEMENT

Operational management is ensured by the division and directorate managers as follows:

The divisions are structured to carry out operational activities related to the technical and manufacturing function, as well as the commercial function, while the directorates are organised to perform functional activities related to the financial-accounting domain, quality (development) domain, and human resources domain.

INFORMATION PROVIDED TO THE COMPANY'S ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND THE SUSTAINABILITY MATTERS ADDRESSED BY THEM

GOV-2

The Board of Directors maintains constant contact with the executive management and operational management, so that it is up to date with all relevant company data. Furthermore, due to the fact that two of the Board members hold positions in the executive management, the administration has unrestricted and direct access to company information.

Starting in March 2025, a new position was established, namely "risk management officer," in accordance with the provisions of the Bucharest Stock Exchange Corporate Governance Code. This officer ensures direct communication and functional reporting to the Board of Directors and the Audit Committee and is responsible for the accurate, complete, and timely identification of risks, ensuring that appropriate and feasible risk control measures are in place and monitoring risk management procedures, including those related to sustainability matters.

Accordingly, the Board of Directors receives periodic reports covering financial and operational matters, as well as health, safety, and workplace security, human resources, procurement, development and investment, community relations, and philanthropic activities.

In this way, when overseeing compliance with the company's strategy, the Board considers impacts, risks, and opportunities, and can make direct and informed decisions regarding major transactions and its risk management processes.

INTEGRATION OF SUSTAINABILITY PERFORMANCE INTO INCENTIVE SYSTEMS

GOV-3

The remuneration policy of Aerostar's management structure, which governs the remuneration of the company's Directors and executive officers, approved at the Ordinary General Meeting of Shareholders (OGMS) for the period 24.04.2025-23.04.2029, is based on the following key principles:

1. To contribute to the successful implementation of Aerostar S.A.'s strategy in the short, medium,

   and long term;

2. To ensure the appropriate involvement of shareholders in establishing the remuneration policy and monitoring its implementation;

3. To contribute to promoting the mission and values of Aerostar S.A.;

4. To prevent situations of conflict of interest;

5. To provide the necessary and flexible tools to remunerate Directors appropriately for their responsibilities, competencies, and performance;

6. To ensure compliance with applicable legal requirements.

The remuneration policy is published on Aerostar S.A.'s website (https://www.aerostar.ro) and remains publicly available throughout its period of applicability.

In accordance with this policy, for activities carried out within the Board of Directors, each Director is entitled to a fixed monthly remuneration, the net amount of which is approved by the AGOA upon appointment and subsequently, annually, alongside the approval of the income and expenditure budget.

Furthermore, the effective net fixed monthly remuneration allocated to each of the Chief Executive Officer and Financial Director is determined by the Board of Directors, respecting the maximum cap approved by the AGOA, which is limited to ten times the net fixed monthly remuneration of the Board members.

Therefore, the remuneration for persons in Aerostar's management structure is linked to their entire scope of duties and responsibilities, with no incentive systems or remuneration policies specifically related to sustainability matters.

RISK MANAGEMENT AND INTERNAL CONTROLS RELATED TO SUSTAINABILITY REPORTING

GOV-5

Our company has adopted a risk management policy that takes into account the strategy, nature, and complexity of processes and activities, establishing a framework in which risks are identified, assessed, and addressed in order to make decisions based on the level of risk.

At Aerostar, an Integrated Management System is documented, implemented, maintained, and continuously improved, based on risk management in the areas of quality, environment, aviation safety, information security, as well as financial risks. The general methodology for risk management is documented in an internal procedure. The overall objectives regarding risk management are:

• To ensure a coherent framework for risk management;;

• To improve decision-making by taking risks into account;

• To increase the stakeholders' confidence in the organisation.

  The risks presented in the chapter "Managing Impacts, Risks and Opportunities", detailed at the level of each thematic sustainability standard, are the result of a double materiality analysis in accordance with ESRS/CSDR standards.

  Aerostar's internal control system includes the following components:

• Management control

• Budgetary control

• Controlling

• Internal audit

  MANAGEMENT CONTROL

  At Aerostar, there is a department responsible for management control tasks. It carries out management controls within the company and ensures the inventory of all assets, liabilities, and equity recorded by the company, checks the legality and accuracy of the recording of incoming and outgoing transactions, and verifies the use of values, as well as checking how values are stored, establishing and adjusting any differences identified.

  In 2025, as in previous periods, the inventory activities were carried out in compliance with legal provisions and the company's internal regulations. The results of the inventories were recorded in the company's accounting records. No significant differences were identified compared with the accounting records.

  BUDGET CONTROL

  Within the company, budgets are defined based on activity programmes corresponding to the enterprise functions. From a budgeting perspective, the company is organised into:

• profit centres;

• cost centres.

  A "budget officer" is designated for each organisational structure to perform budget control. Budget control ensures:

• that each budgeted indicator remains within the forecast values;

• that any corrective actions are substantiated

Through periodic management reports, both profit centres and cost centres report quarterly to the executive management on the fulfilment of budgetary provisions, as well as on the necessity, opportunity, efficiency, effectiveness, and legality of the expenses incurred by the company.

CONTROLLING

In AEROSTAR, the controlling concept has been implemented and is continuously developed, both as a tool for monitoring and regulating the processes that ensure alignment with the company's mission and strategic objectives, and as an advanced stage of budget control.

Controlling activities are carried out by a compartment subordinated to the Chief Executive Officer, which ensures the monitoring and control of management processes with the aim of continuously improving management performance and the effectiveness of the activities carried out.

INTERNAL AUDIT

Internal audit activities within Aerostar are organised in accordance with the law, within a distinct compartment of the organisational structure, staffed with personnel registered with the Chamber of Financial Auditors of Romania. In 2025, a new Internal Audit Charter for Aerostar was approved by the Board of Directors and the function of "Internal Audit Coordinator" was established, responsible for ensuring the compliance of the internal audit function with the Global Internal Audit Standards.

The Internal Audit compartment reports directly to the Board of Directors and represents an independent and objective assurance and advisory activity designed to evaluate and improve the company's operations. The Internal Audit compartment periodically presents internal audit reports at the meetings of the Board of Directors and to the Audit Committee.

The internal audit activity is carried out based on the Annual Activity Programme approved by the Board of Directors. The internal audit engagements conducted in 2025 confirmed the positive impact of internal audit on Aerostar's operations.

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A:

MANAGEMENT BODIES

A:

MANAGEMENT BODIES

A:

MANAGEMENT BODIES

A:

MANAGEMENT BODIES

A.2. The Board shall have an appropriate balance of skills, experience, gender diversity, knowledge, and independence to carry out its duties and responsibilities effectively.

A.2. The Board shall have an appropriate balance of skills, experience, gender diversity, knowledge, and independence to carry out its duties and responsibilities effectively.

A.2., 2

A.2., 3

A.2., 4

The Board shall establish an Audit Committee to enhance its oversight of financial reporting, the internal control framework, internal and external audit processes, and compliance with applicable laws and regulations. Where not legally required or where a dedicated risk management committee has not already been established, the Audit Committee shall also include responsibilities for monitoring the effectiveness of the risk management framework.

A:

MANAGEMENT BODIES

It is recommended that the Audit Committee be composed solely of non-executive Board members. It is also recommended that the majority of the Committee members be independent, including the President of the Committee. The Audit Committee must collectively possess relevant expertise in the area in which the Company operates. The Committee and its members shall comply with all applicable national and the European legislation.

An Audit

Committee has been established in accordance with the applicable legal provisions, composed of external and independent members. They comply with all applicable legal regulations, both national and European.

A:

MANAGEMENT BODIES

A.4., 3

The Boards of companies listed in the Premium Category shall establish a Nomination and Remuneration Committee composed of non-executive Board members. It is recommended that the majority of the Committee members be independent, including the President of the Committee. The Board may also establish separate Nomination and Remuneration Committees, where the Board's composition allows and where this is justified, taking into account the size and complexity of the business and the Company's governance structures.

Not

applicable

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