MED LIFE S.A. MED LIFE S.A.
AUDITED SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31st, 2023
PREPARED IN ACCORDANCE WITH ORDER OF THE MINISTRY OF PUBLIC FINANCE NO.
2844/2016 APPROVING THE ACCOUNTING REGULATIONS COMPLIANT WITH THE
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The English version of the separate financial statements represents a translation of the original separate financial statements issued in Romanian language
Name of the issuing company: Med Life S.A.
Registered Office: Bucharest, 365 Calea Griviței, District 1, Romania
Fax no.: 0040 374 180 470
Unique Registration Code at the National Office of Trade Registry: 8422035
Order number on the Trade Registry: J40/3709/1996
Subscribed and paid-in share capital: RON 132,870,492
Regulated market on which the issued securities are traded: Bucharest Stock Exchange
CONTENTS: | PAGE: |
STATEMENT OF FINANCIAL POSITION | 2 |
STATEMENT OF COMPREHENSIVE INCOME | 3 |
STATEMENT OF CASH FLOWS | 4 |
STATEMENT OF CHANGES IN EQUITY | 5 - 6 |
NOTES TO THE SEPARATE FINANCIAL STATEMENTS | 7 - 56 |
The English version of the separate financial statements represents a translation of the original separate financial statements issued in Romanian language
MED LIFE S.A.
STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2023 (all amounts are expressed in RON, unless otherwise specified)
December 31, | December 31, | |||
ASSETS | Note | 2023 | 2022 | |
Non-current Assets | ||||
Intangible assets | 5 | 19,166,955 | 14,665,892 | |
Property, plant and equipment | 5 | 356,486,820 | 342,815,667 | |
Right-of-use asset | 13, 14 | 52,406,445 | 71,911,269 | |
Investment in subsidiaries | 4.1 | 488,124,810 | 398,886,091 | |
Other financial assets | 4.2 | 15,825,680 | 14,945,160 | |
Total Non-Current Assets | 932,010,711 | 843,224,079 | ||
Current Assets | ||||
Inventories | 6 | 14,382,019 | 12,513,597 | |
Trade Receivables | 7.1 | 87,202,024 | 66,525,981 | |
Loans granted to related parties | 23 | 161,747,816 | 162,430,816 | |
Other assets | 7.2 | 27,118,812 | 18,251,900 | |
Cash and cash equivalents | 8 | 10,201,516 | 15,141,431 | |
Prepayments | 9 | 1,228,014 | 2,674,932 | |
Total Current Assets | 301,880,201 | 277,538,657 | ||
TOTAL ASSETS | 1,233,890,912 | 1,120,762,736 | ||
LIABILITIES & SHAREHOLDER'S EQUITY | ||||
Non-Current Liabilities | ||||
Lease liability | 13, 14 | 30,921,580 | 50,184,177 | |
Other long term debt | 14 | - | 12,651,217 | |
Interest-bearing loans and borrowings | 14 | 593,857,396 | 508,264,032 | |
Deferred tax liability | 24 | 16,905,872 | 19,052,772 | |
Total Non-Current Liabilities | 641,684,848 | 590,152,198 | ||
Current Liabilities | ||||
Trade and other payables | 10 | 160,343,456 | 122,505,239 | |
Overdraft | 14 | 9,949,200 | 9,894,800 | |
Current portion of lease liability | 13 | 24,607,775 | 26,229,711 | |
Current portion of interest-bearing loans and | 14 | 45,140,930 | 31,933,045 | |
borrowings | ||||
Loans received from related parties | 23 | 10,538,675 | 12,632,124 | |
Current tax liabilities | 24 | 97,549 | 980,993 | |
Provisions | 12 | 2,790,424 | 3,480,319 | |
Other liabilities | 11 | 14,497,795 | 17,677,023 | |
Total Current Liabilities | 267,965,804 | 225,333,254 | ||
TOTAL LIABILITIES | 909,650,652 | 815,485,452 | ||
SHAREHOLDER'S EQUITY | ||||
Share capital and Share premium | 15 | 132,562,337 | 83,812,556 | |
Treasury shares | 15 | (681,894) | (3,219,221) | |
Reserves | 16 | 141,691,848 | 141,003,106 | |
Retained earnings | 50,667,968 | 83,680,844 | ||
TOTAL EQUITY | 324,240,259 | 305,277,285 | ||
TOTAL LIABILITIES AND EQUITY | 1,233,890,911 | 1,120,762,736 |
Mihail Marcu, | Alina Irinoiu, | |
CEO | CFO |
The accompanying notes are an integral part of the separate financial statements. | page 2
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
MED LIFE S.A.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2023
(all amounts are expressed in RON, unless otherwise specified)
12 months ended December 31, | ||||
Note | 2023 | 2022 | ||
Revenue from contracts with customers | 17 | 636,435,030 | 586,566,266 | |
Other operating income | 18.1 | 8,166,567 | 6,826,511 | |
Dividend income | 18.2 | 24,503,878 | - | |
Operating Income | 669,105,475 | 593,392,777 | ||
Consumable materials and repair materials | (88,422,209) | (81,748,854) | ||
Third party expenses | 19 | (236,076,062) | (205,746,479) | |
Salaries and related expenses | 21 | (184,464,871) | (173,443,751) | |
Social contributions | 21 | (7,097,321) | (6,090,747) | |
Depreciation and amortization | 5, 13 | (62,185,124) | (57,865,833) | |
Impairment losses and gains (including | (949,607) | (889,139) | ||
reversals of impairment losses) | 7 | |||
Other operating expenses | 20 | (44,352,874) | (44,119,711) | |
Operating expenses | (623,548,068) | (569,904,514) | ||
Operating Profit | 45,557,407 | 23,488,263 | ||
Finance income | 22 | 12,904,228 | 6,922,660 | |
Finance cost | 22 | (39,774,586) | (21,855,297) | |
Other financial expenses | 22 | (4,100,145) | (2,752,063) | |
Financial result | (30,970,503) | (17,684,700) | ||
Profit Before Tax | 14,586,903 | 5,803,563 | ||
Income tax credit/(expense) | 24 | 2,146,900 | (2,196,569) | |
Profit After Tax | 16,733,803 | 3,606,994 | ||
Other comprehensive income items that | ||||
will not be reclassified to profit or loss | ||||
Revaluation of land and buildings | 16 | - | 47,470,993 | |
Deferred tax on other comprehensive income | 24 | - | (7,595,359) | |
components | ||||
TOTAL OTHER COMPREHENSIVE INCOME | - | 39,875,634 | ||
TOTAL COMPREHENSIVE INCOME | 16,733,803 | 43,482,628 | ||
MihailMarcu, | Alina Irinoiu, | |||
CEO | CFO |
The accompanying notes are an integral part of the separate financial statements. | page 3
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
MED LIFE S.A.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2023
(all amounts are expressed in RON, unless otherwise specified)
12 months ended December 31, | ||||||
Note | 2023 | 2022 | ||||
Profit before tax | 14,586,903 | 5,803,563 | ||||
Adjustments for | ||||||
Depreciation and amortization | 5, 13 | 62,185,124 | 57,865,833 | |||
Interest expense | 22 | 39,774,586 | 21,855,297 | |||
Dividends | 18.2 | (24,503,878) | - | |||
Net Gain on disposal of business and investments | 18.1 | 6,193,794 | - | |||
Allowance for expected credit losses and receivables written-off | 7 | 949,607 | 889,139 | |||
Reverse of provision for other current assets | (201,679) | - | ||||
Provisions for liabilities and charges | 12 | (689,895) | 335,184 | |||
Other non-monetary gains | 18 | (4,909,682) | (3,612,057) | |||
Unrealised exchange loss | 22 | 4,100,145 | 2,752,063 | |||
Interest income | 22 | (12,904,228) | (6,922,660) | |||
Operating cash flow before working capital changes | 84,580,797 | 78,966,362 | ||||
(Increase) in accounts receivable | (24,389,508) | (3,501,026) | ||||
(Increase) in inventories | (1,666,743) | (2,474,681) | ||||
Decrease in prepayments | 1,446,918 | (66,582) | ||||
Decrease in accounts payable | 14,104,928 | 43,553,889 | ||||
Cash generated from working capital changes | (10,504,405) | 37,511,600 | ||||
Cash generated from operations | ||||||
74,076,393 | 116,477,962 | |||||
Income tax paid | 24 | (883,444) | (1,337,691) | |||
Dividends received from subsidiaries | 18.2 | 23,784,034 | - | |||
Interest received | 585,939 | - | ||||
Interest paid | 14 | (30,796,601) | (17,016,867) | |||
Net cash from operating activities | ||||||
66,766,320 | 98,123,404 | |||||
Purchase of investments | 4 | (84,701,318) | (149,251,414) | |||
Payment of loans assigned from former shareholders | - | (16,746,241) | ||||
Purchase of intangible assets | 5 | (5,116,781) | (10,712,880) | |||
Purchase of property, plant and equipment | 5 | (41,209,359) | (70,010,600) | |||
Proceeds from the transfer of business under common control | 7.2 | 741,285 | - | |||
(sale of Stomatology Division) | ||||||
Loans granted to intercompany | 23 | (298,922) | (20,271,938) | |||
Net cash used in investing activities | (131,138,166) | (266,993,073) | ||||
Payment of loans | 14 | (31,952,047) | (32,704,054) | |||
Lease payments (IFRS 16) | 14 | (28,814,599) | (27,431,784) | |||
Proceeds from loans | 14 | 123,249,867 | 204,845,867 | |||
Payments for purchase of treasury shares | 15 | (488,718) | (7,851,828) | |||
Increase/ (Decrease) from loans obtained from Group | 23 | (3,115,644) | 8,523,000 | |||
Companies | ||||||
Net cash from/(used in) financing activities | 58,878,859 | 145,381,201 | ||||
Net change in cash and cash equivalents | (4,939,915) | (23,488,469) | ||||
Cash and cash equivalents beginning of the period | 8 | 15,141,431 | 38,629,900 | |||
Cash and cash equivalents end of the period | 10,201,516 | 15,141,431 |
Mihail Marcu, | Alina Irinoiu, | |
CEO | CFO |
The accompanying notes are an integral part of the separate financial statements. | page 4
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
MED LIFE S.A.
STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2023
(all amounts are expressed in RON, unless otherwise specified)
Balance at December 31, 2022
Profit of the year
Total comprehensive income
Recognition of other reserves for fiscal purposes (legal reserves) (Note 16)
Increase of social capital through the issue of shares (Note 15)
Increase from own shares acquisition (Note 15)
Net release of own shares used for investing in subsidiaries (Note 15) Increase in premiums due to difference between fair value and cost of own shares when the exchange was made (Note 15)
Balance as at December 31, 2023
General | ||||||
Share Capital | Treasury | Share reserves and | Revaluation | Accumulated | Total Equity | |
shares | premium | other | Reserve | Results | ||
reserves | ||||||
33,217,623 | (3,219,221) | 50,594,933 | 34,538,597 | 106,464,509 | 83,680,844 | 305,277,284 |
- | - | - | - | - | 16,733,803 | 16,733,803 |
- | - | - | - | - | 16,733,803 | 16,733,803 |
- | - | - | 688,742 | - | (688,742) | - |
99,652,869 | - | (50,594,933) | - | - | (49,057,936) | - |
- | (488,718) | - | - | - | - | (488,718) |
- | 3,026,045 | - | - | - | - | 3,026,045 |
- | - | (308,155) | - | - | - | (308,155) |
132,870,492 | (681,894) | (308,155) | 35,227,339 | 106,464,509 | 50,667,969 | 324,240,260 |
Mihail Marcu, | Alina Irinoiu, | |
CEO | CFO |
The accompanying notes are an integral part of the separate financial statements. | page 5
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
MED LIFE S.A.
STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2023
(all amounts are expressed in RON, unless otherwise specified)
Balance at December 31, 2021
Profit of the year
Revaluation of land and buildings (Note 16)
Deferred tax related to other comprehensive income (Note 24)
Total comprehensive income
Increase from own shares acquisition (Note 15)
Net release of own shares used for investing in subsidiaries (Note 15)
Increase in premiums due to difference between fair value and cost of own shares when the exchange was made (Note 15)
Balance as at December 31, 2022
Treasury | General | Revaluation | Accumulated | |||
Share Capital | Share premium | reserves and | Total Equity | |||
shares | other reserves | Reserve | Results | |||
33,217,623 | (4,015,977) | 49,177,468 | 34,538,597 | 66,588,874 | 80,073,849 | 259,580,434 |
- | - | - | - | - | 3,606,995 | 3,606,995 |
- | - | - | - | 47,470,993 | - | 47,470,993 |
- | - | - | - | (7,595,358) | - | (7,595,358) |
- | - | - | - | 39,875,635 | 3,606,995 | 43,482,630 |
- | (7,851,828) | - | - | - | - | (7,851,828) |
- | 8,648,583 | - | - | - | - | 8,648,583 |
- | - | 1,417,465 | - | - | - | 1,417,465 |
33,217,623 | (3,219,221) | 50,594,933 | 34,538,597 | 106,464,509 | 83,680,844 | 305,277,284 |
Mihail Marcu, | Alina Irinoiu, | |
CEO | CFO |
The accompanying notes are an integral part of the separate financial statements. | page 6
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
MED LIFE S.A.
NOTES TO THE AUDITED SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2023
(all amounts are expressed in RON, unless otherwise specified)
1. DESCRIPTION OF THE BUSINESS
Med Life S.A. ("Med Life" or the "Company") is a joint-stock company incorporated in 1996, in accordance with the laws and regulations of Romania. The Company's activity resides in the performance of healthcare services activities (detailed under 3.17 and Note 17) through medical centres located in Bucharest, Cluj, Braila, Timisoara, Iasi, Galati, Ploiesti, Constanta and Targu Mures.
Med Life is one of the leading health care services providers in Romania, having a significant market share at a national level. The registered office of Med Life is located in Bucharest, Calea Grivitei, no. 365. The ultimate parent of the Med Life Group is Med Life SA.
2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)
2.1 Changes in accounting policy and disclosures
The accounting policies adopted are consistent with those of the previous financial year except for the following IFRS and amendments to IFRS which have been adopted by the Company as of 1 January 2023:
- IFRS 17 insurance contracts,
- IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (Amendments),
- IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (Amendments),
- IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments),
- IAS 12 Income taxes: International Tax Reform - Pillar Two Model Rules (Amendments)
The newly adopted IFRS and amendments to IFRS did not have a material impact on the Company's accounting policies.
- IFRS 17: Insurance Contracts
The standard is effective for annual periods beginning on or after 1 January 2023. This is a comprehensive new accounting standard for insurance contracts, covering recognition and measurement, presentation and disclosure. IFRS 17 applies to all types of insurance contracts issued, as well as to certain guarantees and financial instruments with discretional participation contracts.
The Company does not issue contracts in scope of IFRS 17; therefore, its application does not have an impact on the company's financial performance, financial position or cash flows.
- IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (Amendments)
The Amendments are effective for annual periods beginning on or after January 1, 2023. The amendments provide guidance on the application of materiality judgements to accounting policy disclosures. In particular, the amendments to IAS 1 replace the requirement to disclose 'significant' accounting policies with a requirement to disclose 'material' accounting policies. Also, guidance and illustrative examples are added in the Practice Statement to assist in the application of the materiality concept when making judgements about accounting policy disclosures. The Company assessed its accounting policies are already being disclosed using judgement and the financial statements accounting policies section has been disclosed by using qualitative and quantitative factors. There will be changes in wording, by replacing "significant" with "material" and if necessary, other wording or exclusion of certain paragraphs.
The amendments have had an impact on the Company's disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Company's financial statements.
- IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (Amendments)
The amendments become effective for annual reporting periods beginning on or after January 1, 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. The amendments introduce a new definition of accounting estimates, defined as monetary amounts in financial statements that are subject to measurement uncertainty, if they do not result from a correction of prior period error. Also, the amendments clarify what changes in accounting estimates are and how these differ from changes in accounting policies and corrections of errors.
The new amendments had no material impact on the Company's financial position and performance.
- IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments)
The amendments are effective for annual periods beginning on or after January 1, 2023. The amendments narrow the scope of and provide further clarity on the initial recognition exception under IAS 12 and specify how companies should account for deferred tax related to assets and liabilities arising from a single transaction, such as leases and decommissioning obligations. The amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of judgement, having considered the applicable tax law, whether such deductions are attributable for tax purposes to the liability or to the related asset component. Under the amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable and
The accompanying notes are an integral part of the separate financial statements. | page 7
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
MED LIFE S.A.
NOTES TO THE AUDITED SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2023
(all amounts are expressed in RON, unless otherwise specified)
deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal. The new amendments had no significant impact on the Company's financial position and performance.
- IAS 12 Income taxes: International Tax Reform - Pillar Two Model Rules (Amendments)
The amendments are effective immediately upon issuance, but certain disclosure requirements are effective later. The Organisation for Economic Co-operation and Development's (OECD) published the Pillar Two model rules in December 2021 to ensure that large multinational companies would be subject to a minimum 15% tax rate. On 23 May 2023, the IASB issued International Tax Reform-Pillar Two Model Rules - Amendments to IAS 12. The amendments introduce a mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules and disclosure requirements for affected entities on the potential exposure to Pillar Two income taxes. The Amendments require, for periods in which Pillar Two legislation is (substantively) enacted but not yet effective, disclosure of known or reasonably estimable information that helps users of financial statements understand the entity's exposure arising from Pillar Two income taxes. To comply with these requirements, an entity is required to disclose qualitative and quantitative information about its exposure to Pillar Two income taxes at the end of the reporting period. The disclosure of the current tax expense related to Pillar Two income taxes and the disclosures in relation to periods before the legislation is effective are required for annual
reporting periods beginning on or after 1 January 2023, but are not required for any interim period ending on or before 31 December 2023.
The amendments had no impact on the Company's financial statements as the Company is not in scope of the Pillar Two model rules as its revenue is less that EUR 750 million/year.
2.2 Standards issued but not yet effective and not early adopted
- IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application permitted, and will need to be applied retrospectively in accordance with IAS 8. The objective of the amendments is to clarify the principles in IAS 1 for the classification of liabilities as either current or non-current. The amendments clarify the meaning of a right to defer settlement, the requirement for this right to exist at the end of the reporting period, that management intent does not affect current or non-current classification, that options by the counterparty that could result in settlement by the transfer of the entity's own equity instruments do not affect current or non-current classification. Also, the amendments specify that only covenants with which an entity must comply on or before the reporting date will affect a liability's classification. Additional disclosures are also required for non-current liabilities arising from loan arrangements that are subject to covenants to be complied with within twelve months after the reporting period.
The amendment will not have a material impact on the Company's financial statements.
- IFRS 16 Leases: Lease Liability in a Sale and Leaseback (amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application permitted. The amendments are intended to improve the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction in IFRS 16, while it does not change the accounting for leases unrelated to sale and leaseback transactions. In particular, the seller-lessee determines 'lease payments' or 'revised lease payments' in such a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use it retains. Applying these requirements does not prevent the seller-lessee from recognising, in profit or loss, any gain or loss relating to the partial or full termination of a lease. A seller-lessee applies the amendment retrospectively in accordance with IAS 8 to sale and leaseback transactions entered into after the date of initial application, being the beginning of the annual reporting period in which an entity first applied IFRS 16.
The amendment is not applicable for the company as it does not issue transactions of sale and leaseback.
2.3 Standards that are not yet effective and they have not yet been endorsed by the European Union
- IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure - Supplier Finance Arrangements (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application permitted. The amendments supplement requirements already in IFRS and require an entity to disclose the terms and conditions of supplier finance arrangements. Additionally, entities are required to disclose at the beginning and end of reporting period the carrying amounts of supplier finance arrangement financial liabilities and the line items in which those liabilities are presented as well as the carrying amounts of financial liabilities and line items, for which the finance providers have already settled the corresponding trade payables. Entities should also disclose the type and effect of non-cash changes in the carrying amounts of supplier finance arrangement financial liabilities, which prevent the carrying amounts of the financial liabilities from being comparable. Furthermore, the amendments require an entity to disclose at the beginning and end of the reporting period the range of payment due dates for financial liabilities owed to the finance providers and for comparable trade payables that are not part of those arrangements.
The accompanying notes are an integral part of the separate financial statements. | page 8
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
MED LIFE S.A.
NOTES TO THE AUDITED SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2023
(all amounts are expressed in RON, unless otherwise specified)
The amendments have not yet been endorsed by the European Union, however when and if there will be mandatory for application, management will prepare the Statement of Cash Flows accordingly. There will be no material impact on the financial statements.
- IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments) The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with earlier application permitted. The amendments specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. A currency is considered to be exchangeable into another currency when an entity is able to obtain the other currency within a time frame that allows for a normal administrative delay and through a market or exchange mechanism in which an exchange transaction would create enforceable rights and obligations. If a currency is not exchangeable into another currency, an entity is required to estimate the spot exchange rate at the measurement date. An entity's objective in estimating the spot exchange rate is to reflect the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing economic conditions. The amendments note that an entity can use an observable exchange rate without adjustment or another estimation technique.
The amendments have not yet been endorsed by the European Union, however management anticipates that there will not be a material impact, considering the company mainly uses in majority of transactions, the national currency RON and reports in this certain currency as well.
- Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture
The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. In December 2015 the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting.
The amendments have not yet been endorsed by the European Union, however the Company anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact on the financial statements of the Company in the period of initial application.
3. MATERIAL ACCOUNTING POLICIES
The separate financial statements ("financial statements") of the Company have been prepared in accordance with the provisions of Ministry of Finance Order no. 2844/2016 approving the accounting regulations compliant with the International Financial Reporting Standards, with all subsequent modifications and clarifications.
The Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, is in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union (EU), except for IAS 21 The effects of changes in foreign exchange rates regarding functional currency, except for the provisions of IAS 20 Accounting for Government Grants regarding the recognition of revenue from green certificates, except for the provisions of IFRS 15 Revenue from contracts with customers regarding the revenue from taxes of connection to the distribution grid. These exceptions do not affect the compliance of the financial statements of the Company with IFRS adopted by the EU.
The Company also prepares consolidated financial statements in accordance with IFRS as endorsed by the EU, which are available on the Company's website.
The accounting policies applied in these financial statements are the same as those applied in the Company's annual separate financial statements as at and for the year ended 31 December 2022, except for the adoption of new standards effective as of January 1st 2023.
The financial year corresponds to the calendar year.
3.1 Basis of preparation
The financial statements of the Company are presented in RON ("Romanian Leu"), using going concern principles. The financial statements have been prepared on the historical cost basis, except for certain items that have been measured at fair value, such as certain non-current assets and financial instruments, as presented in the notes to the financial statements.
3.2 Going Concern
These financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company will continue its activity according to the normal course of business in the foreseeable future without encountering the impossibility of continuing its activity or without the significant decrease of its activity.
For the purposes of assessing liquidity and going concern, the Company has modelled scenarios reflecting suitable assumptions over the next 12-month period that serve to inform the decisions the Company takes regarding future cost
The accompanying notes are an integral part of the separate financial statements. | page 9
The English version of the separate financial statements represents a translation of the original separate financial statemetns issued in Romanian language
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Med Life SA published this content on 29 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2024 19:49:22 UTC.
