Biofarm S A : 2023-03-31 IFRS Financial Statements

2023 1st Quarter Report

Translation of the Company's 1 st quarter report issued in the Romanian language

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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

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	9
	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
	14
	1.7. Evaluation of the Research and Development Activity	17
	1.8. Evaluation of the Activity of the Commercial Company regarding Risk Management	18
	1.9. Elements of Perspective regarding the Activity of the Commercial Company	19
2.	Tangible Assets of the Commercial Company	21

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

21

2.2. Specifying the potential issues related to the property right over the tangible assets of the

company	22
3.	Market of Securities Issued by the Commercial Company	22
Description of any activities of the commercial company for the purchase of own shares	23
4.	Management of the Commercial Company	23
5.	Financial - Accounting Statement	27
5.1.	Assets, Liabilities and Equity Statement	27
5.2.	Income and Expenses Statement	28
5.3.	Cash flow:	28
6.	Quarterly Report on Corporate Governance	29
6.1. Corporate Governance Structures	29
6.1.1.	General Meetings of Shareholders	29
6.1.2.	Board of Directors	29
6.2. Rights of Shareholders	37
INDIVIDUAL FINANCIAL STATEMENTS	39
Statement of Comprehensive Income	40
Statement of Financial Position	41
Cash Flows Statement	43
Statement of Changes in Equities	44
Explanatory Notes to the Financial Statements:	45
1.	General Information	45
1.1.	Company Presentation	45
1.2.	Corporate Governance Structures	45
2.	Accounting Policies	46
2.1.	Bases of Assessment	47
2.2.	Functional and Presentation Currency	47

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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

2.3. Significant Accounting Valuations and Estimates	47
2.4. Presentation of Financial Statements	49
2.5. Going Concern Principle	49
2.6. Intangible Assets	49
2.7. Tangible Assets	49
2.8. Real Estate Investments - IAS 40	53
2.9. Inventories	53
2.10.Receivables	54
2.11.Financial Debts	55
2.12.Recognition of Income and Expenses	55
2.12.1.	Recognition of Income	55
2.12.2.	Recognition of Expenses	56
2.13.Depreciation of Non-Financial Assets (Excluding Inventories, Real Estate Investments and Assets
on Deferred Tax) - IAS 36 "Depreciation of Assets"	56
2.14.Provisions - IAS37 "Provisions, Contingent Liabilities and Contingent Assets"	56
2.15.Employees Benefits - IAS 19 Employees Benefits	57
2.16.Deferred Tax - IAS 12	58
2.17.Dividends	58
2.18.Capital and Reserves	58
2.19.Financing Costs	59
2.20.Earnings per Share	59
2.21.Reporting on Segments	59
2.22.Affiliated Parties	59
2.23.Modifications brought to the Accounting Policies	60
3.	Financial Instruments and Risks Management	61
4.	Income from Contracts with Clients	65
5.	Raw Materials and Consumable Materials	66
6.	Personnel Expenses	66
7.	Other operating expenses	67
8.	Net Financial Income	67
9.	Corporate Tax Expenses	67
10.	Earnings per share	69
11.	Tangible Assets	70
12.	Real Estate Investments	72
13.	Intangible Assets	73
14.	Inventories	73
15.	Trade and Other Receivables	73
16.	Cash and Cash Equivalents	74
17.	Commercial Debts and Other Debts	75
18.	Deferred Profit Tax	76
19.	Other Provisions	77
20.	Share Capital	77
21.	Information on the Repurchase of Own Shares	77
22.	Reserves	77
23.	Retained Earnings	78

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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

24.	Current Profit Distribution for 2023	79
25.	Contingent Liabilities	79
26.	Commitments	79
27.	Information on the Audit of Financial Statements	79
28.	Reporting on Segments	79
29.	Affiliated Parties	79
30.	Subsequent Events	80

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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 1st quarter of 2023

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

For the first quarter of: 2023

Date of the report: 31.03.2023

Name of the commercial company: Biofarm S.A.

Registered office: Bucharest, Str. Logofătul Tăutu, Nr. 99, Sect. 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 quality control (microbiological - without sterility and physicochemical tests).

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).

BIOFARM is constantly concerned with implementing and improving the customer- oriented integrated quality and environmental management system, which complies with the requirements of the ISO 9001:2015, ISO 14001:2015 standards.

In the first quarter of 2023, Biofarm company, as a result of the audit carried out by the certification body SRAC - IQNet partner, obtained the certificate RO - 0187/17.03.2023, which proves once more that Biofarm has implemented and

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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