Biofarm S A : 2022-09-30 Administrator’s Report – Individual Financial Statements

3rd Quarter 2022 Report

Translation of the Company's 3 rd quarter 2022 report issued in the Romanian language

99 Logofătul Tăutu street, Bucharest 3, 031212, Romania

T: [phone]; F: [phone]; Email: [e-mail]; biofarm.ro

Share capital 98.537.535 lei, fully subscribed and paid-up, RO341563, J40/199/5.02.1991

Account RO26 BRDE 441 SV 28095 174410 BRD Decebal Branch

Table of Contents

DIRECTORS' REPORT ................................................................................................................	5
1.	Analysis of the Commercial Company Activity................................................................	5
	1.1. General Assessment Elements:............................................................................................................	6
	1.2. Assessment of the Technical Level of the Commercial Company ......................................................	8
	1.3. Evaluation of the Technical-Material Supply Activity (Indigenous Sources, Import Sources)...........	9
	1.4. Evaluation of the Sales Activity ........................................................................................................	10
	1.5. Assessing the aspects related to the employees/personnel of the commercial company ...................	11
	1.6. Evaluation of the aspects related to the impact of the basic activity of the issuer on the environment
	15
	1.7. Evaluation of the Research and Development Activity.....................................................................	18
	1.8. Evaluation of the Activity of the Commercial Company regarding Risk Management ....................	19
	1.9. Elements of Perspective regarding the Activity of the Commercial Company .................................	20
2.	Tangible Assets of the Commercial Company ................................................................	22

2.1. Specifying the location and characteristics of the main production capacities in the property of the commercial company. Description and analysis of the degree of wear of the properties of the commercial

company. ........................................................................................................................................................	22
2.2. Specifying the potential issues related to the property right over the tangible assets of the company	...23
3.	Market of Securities Issued by the Commercial Company ...........................................	23
4.	Management of the Commercial Company ....................................................................	24
5.	Financial - Accounting Statement ...................................................................................	28
5.1.	Assets, Liabilities and Equity Statement ...........................................................................................	28
5.2.	Income and Expenses Statement .......................................................................................................	29
5.3.	Cash flow: .........................................................................................................................................	29
6.	Quarterly Report on Corporate Governance .................................................................	30
6.1. Corporate Governance Structures......................................................................................................	30
6.1.1.	General Meetings of Shareholders .......................................................................................	30
6.1.2.	Board of Directors ................................................................................................................	30
6.2. Rights of Shareholders ......................................................................................................................	38
INDIVIDUAL FINANCIAL STATEMENTS.............................................................................	40
Statement of Comprehensive Income ..........................................................................................	41
Financial Position Statement ........................................................................................................	42
Cash Flows Statement ...................................................................................................................	44
Statement of Changes in Equities ................................................................................................	45
Explanatory Notes to the Financial Statements: ........................................................................	46
1.	General Information .........................................................................................................	46
1.1.	Company Presentation......................................................................................................	46
1.2.	Corporate Governance Structures...................................................................................	46
2.	Accounting Policies............................................................................................................	47
2.1.	Bases of Assessment .........................................................................................................................	48
2.2.	Functional and Presentation Currency...............................................................................................	48
2.3.	Significant Accounting Valuations and Estimates ............................................................................	48
2.4.	Presentation of Financial Statements.................................................................................................	50

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99 Logofătul Tăutu street, Bucharest 3, 031212, Romania

T: [phone]; F: [phone]; Email: [e-mail]; biofarm.ro

Share capital 98.537.535 lei, fully subscribed and paid-up, RO341563, J40/199/5.02.1991

Account RO26 BRDE 441 SV 28095 174410 BRD Decebal Branch

2.5. Going Concern Principle ...................................................................................................................	50
2.6. Intangible Assets ...............................................................................................................................	50
2.7. Tangible Assets .................................................................................................................................	51
2.8. Real Estate Investments - IAS 40 .....................................................................................................	54
2.9. Inventories .........................................................................................................................................	54
2.10.Receivables........................................................................................................................................	55
2.11.Financial Debts..................................................................................................................................	56
2.12.Recognition of Income and Expenses ...............................................................................................	56
2.12.1.	Recognition of Income .............................................................................................................	56
2.12.2.	Recognition of Expenses ..........................................................................................................	57
2.13.Depreciation of Non-Financial Assets (Excluding Inventories, Real Estate Investments And Assets
On Deferred Tax) - IAS 36 "Depreciation of Assets"...............................................................................	57
2.14.Provisions - IAS37 "Provisions, Contingent Liabilities and Contingent Assets" .............................	57
2.15.Employees Benefits - IAS 19 Employees Benefits...........................................................................	58
2.16.Deferred Tax - IAS 12.......................................................................................................................	59
2.17.Dividends ..........................................................................................................................................	59
2.18.Capital and Reserves .........................................................................................................................	59
2.19.Financing Costs .................................................................................................................................	60
2.20.Earnings per Share.............................................................................................................................	60
2.21.Reporting on Segments .....................................................................................................................	60
2.22.Affiliated Parties ...............................................................................................................................	60
2.23.Modifications brought to the Accounting Policies ............................................................................	61
3.	Financial Instruments and Risks Management ..............................................................	65
4.	Income from Contracts with Clients................................................................................	68
5.	Raw Materials and Consumable Materials.....................................................................	69
6.	Personnel Expenses ...........................................................................................................	69
7.	Other Operating Expenses................................................................................................	70
8.	Net Financial Income ........................................................................................................	70
9.	Corporate Tax Expenses...................................................................................................	70
10.	Earnings per Share............................................................................................................	71
11.	Tangible Assets ..................................................................................................................	73
12.	Real Estate Investments ....................................................................................................	75
13.	Intangible Assets................................................................................................................	76
14.	Inventories..........................................................................................................................	76
15.	Trade and Other Receivables ...........................................................................................	76
16.	Cash and Cash Equivalents ..............................................................................................	77
17.	Commercial Debts and Other Debts................................................................................	78
18.	Deferred Corporate tax.....................................................................................................	78
19.	Long-Term Debts...............................................................................................................	79
20.	Share capital ......................................................................................................................	80
21.	Information on the Repurchase of Own Shares .............................................................	80
22.	Reserves ..............................................................................................................................	80
23.	Retained Earnings .............................................................................................................	81
24.	Current Profit Distribution for 2022 ...............................................................................	81

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99 Logofătul Tăutu street, Bucharest 3, 031212, Romania

T: [phone]; F: [phone]; Email: [e-mail]; biofarm.ro

Share capital 98.537.535 lei, fully subscribed and paid-up, RO341563, J40/199/5.02.1991

Account RO26 BRDE 441 SV 28095 174410 BRD Decebal Branch

25.	Contingent Liabilities ........................................................................................................	82
26.	Commitments.....................................................................................................................	82
27.	Information on the Audit of Financial Statements.........................................................	82
28.	Reporting on Segments .....................................................................................................	82
29.	Affiliated Parties................................................................................................................	82
30.	Subsequent Events.............................................................................................................	82

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99 Logofătul Tăutu street, Bucharest 3, 031212, Romania

T: [phone]; F: [phone]; Email: [e-mail]; biofarm.ro

Share capital 98.537.535 lei, fully subscribed and paid-up, RO341563, J40/199/5.02.1991

Account RO26 BRDE 441 SV 28095 174410 BRD Decebal Branch

DIRECTORS' REPORT

BIOFARM SA for the 3rd quarter of 2022

Report according to: F.S.A. Regulation No. 5/2018 - Annex 15

For the first nine months of the year: 2022

Date of the report: 30.09.2022

Name of the commercial company: Biofarm S.A.

Registered office: 99 Logofătul Tăutu street, Bucharest 3

Telephone/fax number: 021.301.06.21 / 021.301.06.24

Unique registration code at the Trade Register Office: RO 341563

Order number with the Trade Register: J40/199/1991 din 05.02.1991

Regulated market on which the issued securities are traded: BSE

Subscribed and paid-up share capital: lei 98,537,535

The main characteristics of the securities issued by the commercial company: dematerialised registered shares

1. Analysis of the Commercial Company Activity

Description of the basic activity of the commercial company:

BIOFARM S.A. has its registered office in Bucharest, str. Logofătul Tăutu nr. 99, sector 3 and has as a main activity object the production and marketing of medicines for human use, NACE code 2120 "Manufacture of pharmaceutical preparations".

Biofarm S.A. holds the Certificate on compliance with good manufacturing practice issued by the National Agency for Medicines and Medical Devices of Romania for the manufacturing site located in Bucharest, str. Logofătul Tăutu nr. 99, sector 3:

• non-sterileproducts - soft capsules, liquids for external use, liquids for internal use, tablets, other solid dosage forms: sugar-coated tablets, film-coated tablets;
• herbal products;
• tests for physicochemical quality control.

Biofarm SA holds the Certificate on compliance with good manufacturing practice issued by the National Agency for Medicines and Medical Devices of Romania for the manufacturing site located in Bucharest, str. Drumul Gura Bădicului, nr. 202-232:

• non-sterileproducts - soft capsules, tablets, other solid dosage forms: sugar- coated tablets, film-coated tablets;
• herbal products;
• tests for quality control (microbiological - without sterility and physicochemical tests).

At the same time, since 2013, Biofarm company is certified in compliance with the requirements of the ISO 9001 standard and of the Guide on good manufacturing practice (GMP) for all the production lines. Recertification of the manufacturing site located in Bucharest, str. Logofătul Tăutu nr. 99, sector 3 from the point of view of the Guide on good manufacturing practice was performed in February 2020.

In June 2021, the new manufacturing site of Bucharest, str. Drumul Gura Bădicului, nr. 202-232, sector 3, was inspected by ANMDMR (National Agency for Medicines and Medical Devices of Romania) and the Certificate on compliance with good

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99 Logofătul Tăutu street, Bucharest 3, 031212, Romania

T: [phone]; F: [phone]; Email: [e-mail]; biofarm.ro

Share capital 98.537.535 lei, fully subscribed and paid-up, RO341563, J40/199/5.02.1991

Account RO26 BRDE 441 SV 28095 174410 BRD Decebal Branch