Mecanica Ceahlau

Quarterly Report • Nov 11, 2024

MECANICA CEAHLAU SA

INVIDUAL FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED AT SEPTEMBER 30, 2024

PREPARED IN ACCORDANCE WITH ORDER 2844/2016 FOR THE APPROVAL OF ACCOUNTING REGULATIONS IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED BY THE EUROPEAN UNION

CONTENTS: PAGE:

STATEMENT OF FINANCIAL POSITION	2 – 3
STATEMENT OF GLOBAL RESULT	4 – 5
STATEMENT OF CHANGES IN OWNER'S CAPITAL	6 – 7
STATEMENT OF CASH FLOWS	8
EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS	9 – 57

MECANICA CEAHLAU SA STATEMENT OF FINANCIAL POSITION FOR THE FINANCIAL YEAR ENDED September 30, 2024 (all amounts are expressed in "Lei", unless otherwise specified)

	Note	September 30, 2024	December 31, 2023
Assets
Non-current assets
Land and land improvements		8,006,192	8,007,866
Construction		6,852,242	7,828,561
Technical installations and means of transport		2,444,890	2,848,278
Other property, plant and equipment		302,566	353,674
Property, plant and equipment in progress		-	-
Property, plant and equipment	13	17,605,890	19,038,380
Intangible assets
Other intangible assets		88,291	110,538
Intangible assets	14	88,291	110,538
Investment properties	15	595,604	595,604
Assets representing rights of use of underlying assets in leases	13	1,913,052	2,508,188
Total non-current assets		20,202,837	22,252,709
Current assets
Inventories	17	36,866,303	46,357,720
Trade receivables	18	2,451,550	4,180,898
Other receivables	19	357,611	158,532
Prepaid expenses		140,358	89,051
Financial assets measured at fair value through the profit and
loss	20	293,041	282,658
Financial assets at amortised cost	20	-	-
Cash, current accounts and deposits with banks	20	1,830,913	1,631,599
Assets classified as held for sale	16	-	-
Total current assets		41,939,776	52,700,457
Total assets		62,142,613	74,953,166
Equity
Share capital	21a	23,990,846	23,990,846
Legal reserves	21c	2,983,701	2,983,701
Revaluation reserves		9,446,745	10,093,223
Retained earnings	21b	10,761,576	14,524,976
Total equity		47,182,868	51,592,747

MECANICA CEAHLAU SA STATEMENT OF FINANCIAL POSITION FOR THE FINANCIAL YEAR ENDED September 30, 2024 (all amounts are expressed in "Lei", unless otherwise specified)

	Note	September 30, 2024	December 31, 2023
Liabilities
Non-current liabilities
Long-term loans	22	-	2,981,883
Lease liabilities	23	1,422,756	1,938,378
Provision for pensions	24	83,970	96,962
Deferred tax liabilities	12	2,164,735	2,282,121
Total non-current liabilities		3,671,461	7,299,344
Current liabilities
Short-term loans	22	7,908,343	5,124,525
Lease liabilities	23	553,574	603,578
Trade payables	25	1,784,544	9,148,315
Other payables	26	897,456	1,120,374
Deferred income		103,213	23,131
Provisions for risks and charges	24	41,153	41,153
Total current liabilities		11,288,284	16,061,075
Total liabilities		14,959,745	23,360,419
Total equity and liabilities		62,142,613	74,953,166

The financial statements were authorized for approval by the Board of Directors on November 11, 2024 and were signed on its behalf by:

ION SORIN MOLESAG, GABRIELA PEPENE CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

MECANICA CEAHLAU SA STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED September 30, 2024 (all amounts are expressed in "Lei", unless otherwise specified)

	Note	Year ended September 30, 2024	Year ended September 30, 2023
Turnover	5	17,431,023	22,663,744
Expenses with stocks		(11,207,053)	(13,260,250)
		6,223,970	9,403,495
Other operating income	6	441,730	323,040
Utility expenses		(478,321)	(825,833)
Expenses with salaries, contributions and other similar
charges	7	(5,644,921)	(6,457,854)
Other administrative expenses	8	(1,988,507)	(2,245,496)
Other operating expenses	9	(527,530)	(448,043)
Amortization/Depreciation and impairment expenses for
fixed assets and depreciation expenses for assets related to the rights of use of leased assets	13, 14	(1,938,729)	(1,766,923)
Gains/(losses) from the revaluation of assets held for sale		-	-
Gains/(losses) from the revaluation of investment
properties		-	-
Gains/(losses) from disposal of non-current assets		-	166,081
Gains/(losses) from the revaluation of property, plant and
equipment		-	-
Adjustment of the value of current assets	17	(24,398)	651,674
Adjustments of provisions	24	12,992	17,610
Total operating expenses		(10,147,684)	(10,908,784)
Result of operating activities		(3,923,714)	(1,182,249)
Interest income Gain from the revaluation of financial assets measured at		60,726	151,031
fair value through profit or loss		11,603	11,702
Expenses with interest and discounts granted		(668,396)	(216,596)
Foreign exchange losses		(7,484)	(118,375)
Net financial result	10	(603,551)	(172,238)
Pre-tax result		(4,527,265)	(1,354,487)
Current and deferred income tax expense	11	(5,753)	(214,778)
Results from continued operations		(4,533,017)	(1,569,265)

MECANICA CEAHLAU SA STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED September 30, 2024 (all amounts are expressed in "Lei", unless otherwise specified)

	Note	Year ended September 30, 2024	Year ended September 30, 2023
Other comprehensive income
Items that will not be reclassified later into profit or loss
Deferred tax capital		123,139	72,983
Increases/ (Decreases) of revaluation reserves, net		-	-
Other comprehensive income, after tax		123,139	72,983
Total comprehensive income for the period		(4,409,879)	(1,496,281)
Profit/(loss) attributable		(4,533,017)	(1,569,264)
Number of shares		239,908,460	239,908,460
Earnings per share – basic and dilluted		(0.0189)	(0.0065)

The financial statements were authorized for approval by the Board of Directors on November 11, 2024 and were signed on its behalf by:

ION SORIN MOLESAG, GABRIELA PEPENE CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

MECANICA CEAHLAU SA STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED September 30, 2024 (all amounts are expressed in "Lei", unless otherwise specified)

	Revaluation reserves,
	Share capital	Legal reserves	net of deferred tax	Retained earnings	Total equity
Balance at December 31, 2023	23,990,846	2,983,701	10,093,223	14,524,976	51,592,747
Transfer to retained earnings corresponding to the surplus realised from revaluation reserves	-	-	(769,617)	769,617	-
Transactions with shareholders	-	-	(769,617)	769,617	-
Other comprehensive income
Net (loss)/profit for the year	-	-	-	(4,533,017)	(4,533,017)
Increases / (decreases) of revaluation reserves, net	-	-	-	-	-
Deferred income tax on account of equity, net changes	-	-	123,139	-	123,139
Total other comprehensive income	-	-	123,139	(4,533,017)	(4,409,879)
Annulment of dividends with overdue collection period	-	-	-	-	-
Balance at September 30, 2024	23,990,846	2,983,701	9,446,745	10,761,576	47,182,868

Details of revaluation reserves are included in Note 21b, and those for legal reserves in note 21c.

The financial statements were authorized for approval by the Board of Directors on November 11, 2024 and were signed on its behalf by:

ION SORIN MOLESAG, GABRIELA PEPENE CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

The attached notes are an integral part of the financial statements.

MECANICA CEAHLAU SA STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED September 30, 2024 (all amounts are expressed in "Lei", unless otherwise specified)

	Revaluation reserves,
	Share capital	Legal reserves	net of deferred tax	Retained earnings	Total equity
Balance at December 31, 2022	23,990,846	2,983,701	8,887,985	17,650,295	53,512,826
Establishment of legal reserves from the profit in the period Transfer to retained earnings corresponding to the surplus realised from	-	-	-	-	-
revaluation reserves	-	-	(456,145)	456,145	-
Transactions with shareholders	-	-	(456,145)	456,145	-
Other comprehensive income
Net (loss)/profit for the year	-	-	-	(1,569,264)	(1,569,264)
Increases / (decreases) of revaluation reserves, net	-	-	-	-	-
Deferred income tax on account of equity, net changes	-	-	72,983	-	72,983
Total other comprehensive income	-	-	72,983	(1,569,264)	(1,496,281)
Annulment of dividends with overdue collection period	-	-	-	355,150	355,150
Balance at September 30, 2023	23,990,846	2,983,701	8,504,824	16,892,324	52,371,695

Details of revaluation reserves are included in Note 21b, and those for legal reserves in note 21c.

The financial statements were authorized for approval by the Board of Directors on November 11, 2024 and were signed on its behalf by:

ION SORIN MOLESAG, GABRIELA PEPENE CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

The attached notes are an integral part of the financial statements.

MECANICA CEAHLAU SA STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED September 30, 2024 (all amounts are expressed in "Lei", unless otherwise specified)

Direct method	Year ended September 30, 2024	Year ended September 30, 2023
Cash flows from operating activities:	23,875,833	32,239,249
Receipts from customers	85,014	148,154
Receipts from other debtors	(14,159,593)	(32,539,386)
Payments to suppliers	(3,187,109)	(3,984,033)
Payments to employees	(4,780,121)	(5,249,805)
Payments to the State budget	(125,409)	(114,311)
Payments to sundry lenders	1,708,615	(10,500,133)
Cash generated by / (used in) operating activities	-	-
Income tax paid	1,708,615	(10,500,133)
Net cash generated by operations
Cash flows from investing activities	67,222	260,049
Interest received	-	-
Collections from sale of assets held for sale	(292,130)	(471,338)
Acquisitions of property, plant and equipment	-	5,000,000
Short-term investments	-	-
Net cash generated by /(used in) investments	(224,908)	4,788,711
Cash flows from financing activities
Short-/long-term loan receipts	(91,657)	3,000,000
Repayment of loans	(124,559)	(222,685)
Interest paid	(496,790)	(99,305)
Payment of financial lease liabilities	(565,055)	(588,135)
Payments of dividends approved for distribution in previous years, but not received	-	69,741
Net cash used in financing activities	(1,278,062)	2,159,616
Net increase/(decrease) of cash and cash equivalents	205,645	(3,551,806)
Cash and cash equivalents at the beginning of the period	1,631,599	5,421,355
Foreign exchange differences	(6,058)	(45,517)
Adjustments of current accounts and deposits	(214)	-
Cash and cash equivalents at the end of the period	1,830,913	1,824,033

The financial statements were authorized for approval by the Board of Directors on November 11, 2024 and were signed on its behalf by:

ION SORIN MOLESAG, GABRIELA PEPENE CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

1. REPORTING ENTITY

Mecanica Ceahlau SA ("the Company") is a company based in Romania. The company has its registered office in Piatra Neamt, 6 Dumbravei St., Neamt county, Romania.

The company operates in accordance with the provisions of Law 31/1990 on commercial companies, with subsequent additions and amendments.

According to the statute, the main field of activity of the Company is the manufacture of machinery and equipment for agriculture and forestry.

The Company is managed by the Board of Directors consisting of 3 members.

The Company's shares are registered on the Bucharest Stock Exchange, standard category, with the MECF symbol.

The shareholding structure at September 30, 2024 is:

	Number
September 30, 2024	of shares	Amount (lei)	%
Evergent Investments SA	175,857,653	17,585,765	73.3020
New Carpathian Fund	48,477,938	4,847,794	20.2068
Other shareholders, of which:
- legal persons	722,117	72,212	0.3010
- natural persons	14,850,752	1,485,075	6.1902
TOTAL	239,908,460	23,990,846	100.00

The records of the shares and shareholders are kept in accordance with the law by Depozitarul Central SA Bucharest.

2. THE BASES OF PREPARATION

a. Statement of compliance

The financial statements shall be prepared by the Company in accordance with:

• International Financial Reporting Standards adopted by the European Union ('IFRS' Accounting Standards);
• Accounting Law 82/1991, republished and revised;
• the provisions of Order of the Minister of Public Finance no. 2844/2016, for the approval of accounting regulations in accordance with International Financial Reporting Standards, applicable to companies whose securities are admitted to trading on a regulated market, as revised;

The financial statements for the financial year ended September 30, 2024 include the statement of financial position, the statement of comprehensive income, the statement of cash flows, the statement of changes in equity and explanatory notes.

The comparative financial information is presented at December 31, 2023 for the statement of financial position and at September 30, 2023 for the individual statement of changes in equity, the statement of comprehensive income and the statement of cash flows.

The accounting records of the Company are maintained in lei (symbol of the national currency "RON").

The financial statements were authorized for issuance by the Board of Directors on November 11, 2024.

2. BASIS FOR PREPARATION (continued)

b. Presentation of financial statements

The financial statements are presented in accordance with the requirements of IAS 1 "Presentation of Financial Statements".

The Company has adopted a presentation based on the nature of assets and liabilities in the statement of financial position and a presentation of income and expenses according to their nature in the statement of comprehensive income, considering that these methods of presentation provide information that is reliable and more relevant than that which would have been presented under other methods permitted by the IAS.

For consistency with the information in the current period, the Company may reclassify certain items for the comparative period in the Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows and in the related Notes.

These financial statements were drawn up on the basis of the going concern principle, which implies that the Company will continue its activity in the foreseeable future. The Management of the Company believes that the Company will normally continue its activity in the future and, consequently, the financial statements have been drawn up on this basis.

c. Bases of measurement

The financial statements were prepared at historical cost, except for land and buildings that are held at revalued amount and investment properties that are held at fair value.

These financial statements have been prepared for the use of people who know the provisions of the International Financial Reporting Standards, applicable to commercial companies whose securities are admitted to trading on a regulated market, approved by OMFP 2844/2016.

The attached financial statements are not intended to present the financial position in accordance with regulations and accounting principles accepted in countries and jurisdictions other than Romania. Also, the financial statements are not intended to present the result of operations, cash flows and a complete set of notes to the financial statements in accordance with regulations and accounting principles accepted in countries and jurisdictions other than Romania.

Consequently, these financial statements should not be considered as the sole source of information by a potential investor or by another user.

d. Functional and presentation currency

The Company's management considers that the functional currency, as defined by IAS 21 "Effects of the change in the exchange rate", is the Romanian leu ("RON"). The separate financial statements are presented in lei, rounded to the nearest leu, the functional currency of the Company.

Transactions in foreign currency are expressed in RON by applying the exchange rate from the transaction date. Monetary assets and liabilities expressed in foreign currency at the end of the period are expressed in lei at the exchange rate of that date. Gains and losses from exchange rate differences, realized or not realized, are recorded in the statement of comprehensive income of the respective period.

e. Use of professional estimates and judgements

The preparation of financial statements in accordance with International Financial Reporting Standards ("IFRS") requires the Company's management to use estimates, professional judgments and assumptions that affect the application of accounting policies and the reported value of assets, liabilities, income and expenses. The estimates and assumptions associated with these estimates are based on historical experience, as well as other factors considered reasonable in the context of these estimates. The results of these estimates are based on professional judgments regarding the carrying amounts of assets and liabilities when those values cannot be obtained from other sources of information. Actual results may differ from estimated values.

The assumptions underlying the estimates are periodically reviewed by the Company. The effect of these revisions is recognized in the period in which the estimates are revised, if the revisions affect only that period, or in the period in which the estimates are revised and future periods if the revisions affect both the current period and future periods.

2. BASIS FOR PREPARATION (continued)

e. Use of professional estimates and judgements (continued)

The information and rationale related to the application of accounting policies with the greatest degree of estimation uncertainty, which have a significant impact on the amounts recognised in these annual financial statements, are included in the following notes:

• Note 18 - Trade receivables

For trade receivables, the Company uses the simplified method to measure ECLs and relies upon an allowance matrix based on historical loss rates. Thus, the estimates and assumptions associated with these estimates are based on historical experience, as well as on other factors considered reasonable in the context of these estimates. The results of these estimates and assumptions form the basis of judgments regarding the book values of assets that cannot be obtained from other sources of information.

f. Information on material accounting policies

The Company also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023. Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements.

The amendments require the disclosure of 'material', rather than 'significant', accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies.

Management reviewed the accounting policies and made updates to the information disclosed in Note 3 Material accounting policies (2022: Significant accounting policies) in certain instances in line with the amendments.

g. The impact of the military conflict in Ukraine on the position and financial performance of the Company

The Company operates in the field of production and sale of machines and equipment for agriculture.

The agricultural machinery market is still characterized by volatility. The investment appetite of farmers in new equipment will be continuously influenced by the annual rainfall amounts, the lack of an efficient irrigation system at national level, the unpredictable price increases for inputs, lack of predictability for subsidies, government aid and European funds.

Other elements of risk and uncertainty are represented by the crisis of raw materials and the permanent fluctuation of prices (including energy, gas and fuel), very long delivery times.

(See Note 5 - Income).

In the context of te military conflict in Ukraine, it is expected that, further, there will be a degree of uncertainty in the field in which the Company operates. The Company's management does not estimate difficulties in honoring the commitments towards the shareholders and the obligations towards third parties, the availability of present and future liquidity being in line with the limits imposed by the regulations and sufficient to cover the payments in the next period.

The Company's management has as permanent objectives the analysis of the future impact of the military conflict in Ukraine on the financial performance and taking appropriate measures to reduce the related risks.

3. MATERIAL ACCOUNTING POLICIES

The accounting policies have been consistently applied over all periods presented in the separate financial statements drawn up by the Company.

The Company also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023. The amendments require the disclosure of 'material', rather than 'significant', accounting policies.

Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements (see Note 2 (f) for further information).

a. Transactions in foreign currency

The operations expressed in foreign currency are recorded in RON at the official exchange rate communicated by the National Bank of Romania ("NBR") for the date of transactions. The balances in foreign currency are converted into lei at the exchange rates communicated by the National Bank of Romania at September 30, 2024.

Gains and losses resulting from the settlement of transactions in a foreign currency and from the conversion of monetary assets and liabilities denominated in a foreign currency are recognised in the separate statement of comprehensive income within the financial result.

Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are valued at historical cost in a foreign currency are converted using the exchange rate at the transaction date.

The exchange rates of the main foreign currencies according to the NBR reporting are as follows:

Currency	September 30, 2024	September 30, 2023	Variation
Euro (EUR)	EUR 1: LEU 4.9756	EUR 1: LEU 4.9746	1.00%
US dollar (USD)	USD 1: LEU 4.4451	USD 1: LEU 4.6864	1.05%

b. Cash and cash equivalents

Cash and cash equivalents include: actual cash, current accounts, deposits set up with banks with maturity up to 3 months and values to be collected (cheques and trade notes receivables).

c. Financial assets and financial liabilities

(i) Classification of financial assets

IFRS 9 provides an approach to the classification and measurement of financial assets that reflects the business model in which financial assets and cash flow characteristics are managed.

The business models used by the Company to manage its financial assets are:

• To collect contractual cash flows:

The financial assets that are held under this business model are managed to obtain cash flows by collecting contractual payments over the life of the instrument. This means that the Company manages the assets held in the portfolio to collect those contractual cash flows (rather than managing the overall return of the portfolio by both holding and selling the assets).

The assets held within this business model are not necessarily held until they reach maturity, sales are also possible with "rare frequency", when the credit risk of the respective instruments has increased.

c. Financial assets and financial liabilities

(i) Classification of financial assets (continued)

• To collect contractual cash flows and for sale:

The financial assets that are held under this business model are managed both for the collection of contractual cash flows and for the sale of financial assets.

• Other business models:

Other business models include maximizing cash flows through sale, trading, asset management based on fair value, financial instruments bought for sale or trading and measured at fair value through profit or loss.

The management of this portfolio is based on the evolution of the market value of the respective assets and includes frequent sales and purchases for profit maximization purposes.

Analysis of the characteristics of cash flow (SPPI test)

The SPPI test means the analysis of the contractual terms of the financial assets for the purpose of identifying whether cash flows represent solely payments of principal and interest corresponding to the princpal.

IFRS 9 includes three categories for classifying financial assets: measured at amortised cost, measured at fair value through comprehensive income and measured at fair value through profit or loss.

The Company classified financial assets in one of the following categories:

• Financial assets at fair value through profit or loss ("FVTPL"):
  • investments in managed funds (fund units);
  • participations in subsidiaries and associated entities (shares in Transport Ceahlau SRL).
• Financial assets at amortised cost:
  • trade receivables
  • bank deposits

After initial recognition, a financial asset is classified as measured at amortised cost only if two conditions are simultaneously met: the asset is held under a business model whose objective is to hold financial assets in order to receive the contractual cash flows; the contractual terms of the financial asset give rise, on specified dates, to cash flows representing exclusively payments of principal and interest.

The Company classifies the financial instruments held in the following categories:

Financial assets at fair value through profit or loss ("FVTPL"):

An investment in a security is measured at fair value through profit or loss, unless the management makes an irrevocable option, at the time of initial recognition, for measurement at fair value through other comprehensive income ("FVOCI"). Management has not chosen to measure financial assets at FVOCI.

Financial assets are classified in this category if they are acquired for trading purposes.

Financial assets measured at amortised cost ("AC"):

After initial recognition, a financial asset is classified as measured at amortised cost only if two of the following conditions are simultaneously met:

3. MATERIAL ACCOUNTING POLICIES (continued)

c. Financial assets and financial liabilities (continued)

(i) Classification of financial assets (continued)

• the asset is held in a business model whose objective is to keep financial assets for the collection of contractual cash flows;
• the contractual conditions of the financial assets generate at certain dates, cash flows representing solely payments of principal and interest

An asset is held for trading if it cumulatively meets the following conditions:

• it is owned for sale and redemption purposes in the near future;
• the initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a real recent pattern of short-term profit tracking.

This category includes financial assets or financial liabilities held for trading and financial instruments designated at fair value through profit or loss at the time of initial recognition and includes investments in managed funds. These assets are acquired mainly to generate profit from short-term price fluctuations.

Financial assets at fair value through profit or loss are recorded in the statement of financial position at fair value.

A gain or loss on these instruments is recognised directly in profit or loss.

Receivables

Receivables represent financial assets held within a business model whose objective is to keep those assets in order to collect the contractual cash flows and whose contractual terms give rise, on specified dates, to cash flows representing solely payments of principal and interest.

Receivables include trade and other receivables. They are mainly made up of clients and assimilated accounts that include invoices issued at face value and estimated receivables related to the services provided, but invoiced in the period after the end of the period.

Final losses may vary from current estimates. Due to the inherent lack of information related to the financial position of the clients and the lack of legal collection mechanisms, the estimates regarding probable losses are uncertain. However, the management of the Company has made the best estimate of the losses and considers that this estimate is reasonable in the given circumstances. In estimating the losses, the Company also took into account previous experience, in view of both individual and collective estimates, as presented in Note 3.i.(i).

Trade receivables are registered at the invoiced value. Subsequently, the Company recognises the expected credit losses as required by IFRS 9, and are classified as being measured at amortized cost.

Financial liabilities

Financial liabilities are recognized on the date on which the Company becomes a part of the contractual provisions of the instrument (transaction date). Financial liabilities are measured at the time of initial recognition at fair value, less, in the case of financial liabilities that are not at fair value through profit or loss, the transaction costs directly attributable to the acquisition of those financial liabilities.

After initial recognition, these financial liabilities are valued at amortised cost.

Liabilities to suppliers and other liabilities, initially recorded at fair value and subsequently measured using the effective interest method, include the equivalent value of invoices issued by suppliers of products, works performed and services rendered.

(ii) Recognition

Financial assets and liabilities are recognized on the date on which the Company becomes a contractual party to the terms of that instrument.

c. Financial assets and financial liabilities (continued)

(iii) Offsets

Financial assets and liabilities are set off and the net result is presented in the statement of financial position only when there is a legal right to set off and if there is an intention to settle them on a net basis or if the Company intends to realise the asset and settle the liability simultaneously.

Income and expenses are presented net only when permitted by accounting standards, or for profit and loss resulting from a group of similar transactions such as those from the trading activity of the Company.

(iv) Measurement at amortised cost

The amortised cost of an asset or financial liability is the amount at which the financial asset or liability is measured at initial recognition, less principal payments plus or minus the accumulated depreciation up to that point using the effective interest method, less write-downs due to impairment.

(v) Fair value measurement

Fair value is the price that would be received as a result of the sale of an asset or the price that would be paid to transfer a liability through an orderly transaction between market participants at the measurement date, (i.e. an exit price.)

(vi) Identification and evaluation of expected credit loss

Financial assets measured at amortised cost

The carrying amount of an asset may be reduced by the Company by using a provision account for any expected credit loss. Expected credit losses are recognised in the profit or loss account.

Classification: The intention of Mecanica Ceahlau is to hold the receivables in order to collect the contractual cash flows. They are therefore classified as carried at amortised cost. Other financial assets at amortised cost are bank deposits with an initial maturity of more than 3 months, cash and bank accounts.

Measurement: The Company performs both an individual and a collective analysis for the recovery of trade and other receivables.

Individual analysis: The Company individually performs analyses of the degree of recovery of trade receivables and other receivables, based on the litigation status and the delays reported on the due date according to the invoices / other documents. For all clients in dispute and for receivables overdue for more than 180 days, a provision of 100% of the gross value is recorded.

Collective analysis: The management analyzes the list of all invoices issued in 2023, as well as all the Company's receipts during that period. The collective analysis targeted the categories of customers that each exceed 2% of the total sales; thus, the categories "final customer", "distributor", "parts distributor" were analyzed.

Thus:

• Stage 1: includes (i) newly recognised exposures, with the exception of those that have not been purchased or issued and impaired; (ii) exposures for which the credit risk has not deteriorated significantly since the initial recognition; (iii) low credit risk exposures (low credit risk exemption).
• Stage 2: includes exposures that, while performing, have experienced a significant deterioration in credit risk since initial recognition.
• Stage 3: includes impaired credit exposures.

The expected credit loss is the difference between all the contractual cash flows that are due to the Company and all the cash flows that the Company expects to receive, discounted at the initial effective interest rate.

c. Financial assets and financial liabilities (continued)

For Stage 1 exposures, expected credit loss is equal to the calculated expected loss on a time horizon of up to a year. For Stage 2 or Stage 3 exposures, expected credit loss is equal to the expected loss calculated over a time horizon corresponding to the entire duration of exposure.

The total annual receivables of the Company for 2023 have been calculated. Also, the receipts for the 2023 sales were calculated and the delay with which they were collected was calculated.

The receipts were divided into time categories – receipts without exceeded maturity (without delay), late receipts of 1-30 days, late receipts of 31-60 days, late receipts of 61-90 days, receipts with more than 90 days delay. According to the accounting policy, all receivables older than 180 days are fully provisioned.

The calculation process was applied to each time interval. The expected loss for each time frame reflects the percentage of sales that the Company expects to receive based on the expected loss rate.

Role of macroeconomic factors for the adaptation of historical losses with expected losses.

The Company analyzed the impact of the evolution of the GDP growth estimate in 2024, taking into account 3 scenarios for the evolution: pessimistic, baseline and optimistic.

The Company derecognises an impairment of receivables previously set up at the time of recovery in whole or in proportion to the recovered part.

The Company uses the simplified approach applicable to other receivables recorded at "other financial assets at amortized cost" because they do not have a significant financing component. Under this approach, the Company measures the loss allowance for these receivables at an amount equal to the lifetime expected credit losses (i.e., eliminates the need to calculate stage 1 credit risk expected losses at an amount equal to the expected credit losses per 12 months and the need to assess the occurrence of a significant increase in credit risk).

(vii) Derecognition

The Company derecognises a financial asset when contractual rights to the cash flows generated by the asset expire, or when the rights to receive the contractual cash flows of the financial asset are transferred through a transaction through which the risks and benefits of ownership of the financial asset are materially transferred.

An entity derecognizes a financial liability (or part of a financial liability) from the statement of financial position when and only when it is settled, that is, when the obligation specified in the contract is extinguished or canceled or expires.

d. Property, plant and equipment

(i) Recognition and evaluation

Property, plant and equipment recognised as assets are initially valued at cost by the Company. The cost of an item of property, plant and equipment consists of the purchase price, including non-recoverable taxes, after deducting any price reductions of a commercial nature plus any cost that can be directly attributed to bringing the asset to the location and under the conditions necessary for it to be used for the purpose of management, such as for example: expenses with employees arising directly from the construction or acquisition of the asset, the costs of arranging the site, the initial costs with delivery and handling, the costs of installation and assembly, professional fees.

Property, plant and equipment are initially recognized at the cost of production if they are made by the Company.

The value of the Company's property, plant and equipment at September 30, 2024 and September 30, 2023 is detailed in Note 13.

d. Property, plant and equipment (continued)

(i) Recognition and evaluation (continued)

Property, plant and equipment are classified by the Company into the following classes of assets of the same nature and with similar uses:

• land and land improvements;
• buildings;
• technical installations and vehicles;
• furniture, office equipment;
• • Tangible assets under construction;

Land and buildings are presented at revalued amount, which is the fair value at the date of revaluation less any accumulated depreciation thereafter and any accumulated impairment losses.

Fair value is based on market price quotes adjusted, where appropriate, to reflect differences in the nature, location or conditions of that asset.

Revaluations are carried out by specialized valuers, members of ANEVAR. The frequency of revaluations is dictated by the dynamics of the markets to which the land and buildings owned by the Company belong.

The other categories of property, plant and equipment are shown at cost, less accumulated depreciation and the provision for impairment of value.

In the case of revaluation, the difference between fair value and historical cost value is presented in the revaluation reserve. If the result of the revaluation is an increase compared to the net carrying amount, then it is treated as follows:

• as an increase in the revaluation reserve if there has been no previous decrease recognised as an expense on that asset; or
• as an income to compensate for the expense with the decrease previously recognized to that asset.

If the result of the revaluation is a decrease in the net carrying amount, it shall be treated as follows:

• as an expense with the full amount of depreciation, when an amount relating to that asset (revaluation surplus) is not recorded in the revaluation reserve;
• as a decrease in the revaluation reserve by the minimum between the value of that reserve and the amount of the decrease, and any difference remaining uncovered shall be recorded as an expense.

(ii) Reclassification in investment property

The Company reclassifies property, plant and equipment as investment property if and only if there is a change in use, as evidenced by:

• (a) commencement of use by the entity for a transfer from investment property to owner-occupied property;
• (b) the start of the improvement process in view of sale, for a transfer from the category of investment property to the category of stocks;
• (c) termination of use by the holder for a transfer from the category of real estate used by the holder to the category of investment property;

d. Property, plant and equipment (continued)

(iii) Subsequent costs

The expenses with the maintenance and repair of property, plant and equipment are recorded by the Company in the statement of comprehensive income as they occur, and the significant improvements made to property, plant and equipment, which increase their value or lifespan, or which significantly increase their capacity to generate economic benefits, are capitalized.

(iv) Depreciation of property, plant and equipment

Depreciation is calculated using the straight-line method over the estimated useful life of the assets.

The estimated durations on the main groups of property, plant and equipment are as follows:

Assets	Years
Buildings	10 - 50
Technical installations and machinery	2 - 28
Other installations, motor vehicles, tools and furniture	5 - 15

Land and buildings are presented at revalued amount, which is the fair value at the revaluation date. The determination of fair values and revaluation is performed at the end of each reporting period.

(v) Sale /disposal of property, plant and equipment

Property, plant and equipment that is scrapped or sold is removed from the balance sheet together with the corresponding accumulated depreciation. Any profit or loss arising from such an operation is included in the current profit or loss account.

e. Intangible assets

(i) Recognition and evaluation

Intangible assets that meet the recognition criteria of International Financial Reporting Standards are recorded at cost less the accumulated depreciation and loss of value.

(ii) Subsequent costs

Subsequent costs with intangible assets are capitalised only when they increase the future economic benefits generated by the asset to which they relate. Expenses which do not meet these criteria are recognised as expense when they are incurred.

(iii) Amortisation of intangible assets

Amorisation is recognised in the statement of comprehensive income on a straight-line basis over the estimated lifetime of the intangible asset. Most of the intangible assets registered by the Company are represented by software. They are amortised on a straight-linebasis over a period of no more than 5 years.

f. Investment properties

Investment properties are real estate (land, buildings or parts of a building) owned by the Company for the purpose of renting or increasing the value or both, and not:

• to be used in the production or supply of goods or services or for administrative purposes; or
• to be sold during the normal course of business.

f. Investment property (continued)

Certain properties include a part that is held for rent or for the purpose of increasing value and another part that is held for the purpose of producing goods, providing services or administrative purposes.

If these parts can be sold separately (or leased separately under finance leases), then they are accounted for separately. If the parts cannot be sold separately, the property is treated as investment property only if the part used for the production of goods, the provision of services or for administrative purposes is insignificant.

(i) Recognition

An investment property is recognised as an asset if, and only if:

• it is likely that a future economic benefit associated with the element will enter the Company;
• the cost of the asset can be determined reliably.

(ii) Valuation

Initial valuation

An investment property is initially valued at cost, including transaction costs. The cost of a purchased investment property consists of its purchase price plus any directly attributable expenses (e.g. professional fees for the provision of legal services, transfer fees of the property and other transaction costs).

The value of the Company's investment properties at September 30, 2024 and December 31, 2023 is detailed in Note 15.

Subsequent valuation

The Company's accounting policy regarding the subsequent valuation of investment property is based on the fair value model. This policy is applied uniformly to all investment property. The fair value of investment propertiesis assessed by valuers who are members of the National Association of Valuers in Romania (ANEVAR). Fair value is based on market price quotes adjusted, where appropriate, to reflect differences in the nature, location or conditions of that asset. These valuations are periodically reviewed by the Company's management.

Gains or losses resulting from changes in the fair value of investment property are recognised in the profit or loss of the period in which they occur.

The fair value of investment property reflects market conditions at the balance sheet date.

(iii) Transfers

Transfers to or from investment property are made when and only when there is a change in the use of that asset.

For the transfer of an investment property measured at fair value to property, plant and equipment, the implicit cost of the asset for the purpose of accounting for its subsequent accounting will be its fair value from the date of the change in use.

If a property used by the Company becomes an investment property that will be recognised at fair value, the Company applies IAS 16 Property, plant and equipment until the date of the change in use. The Company treats any difference from that date in the carrying amount of the property in accordance with IAS 16 and its fair value in the same way as a revaluation in accordance with IAS 16.

(iv) Derecognition

The carrying amount of an investment property is derecognised upon disposal or when the investment is permanently retired and no future economic benefits are expected from its disposal.

Gains or losses arising from the disposal or sale of an investment property are recognised to profit or loss when it is scrapped or sold.

3. MATERIAL ACCOUNTING POLICIES (continued)

g. Assets held for sale

The Company classifies a non-current asset as held for sale if its carrying amount will be recovered primarily through a sale transaction and not through its continuous use.

In this case, the asset must be available for immediate sale as it stands at the time, subject only to the usual terms in the case of sales of such assets, and its sale must have a high probability.

For the probability of sale to be high, managers at an appropriate level must be committed to implementing a plan to sell the asset and an active program to find a buyer and complete the plan must have been launched.

The company evaluates an immovable asset classified as held for sale at the lower of the accounting value and the fair value minus the costs generated by the sale

h. Inventories

Inventories are declared at the minimum value between cost and net realisable value.

The cost is determined using the first-in-first-out ("FIFO") method.

The net realisable value represents the estimated sale value less the estimated costs of completion and the expenses occasioned by the sale.

The costs of finished products and semi-finished products include materials, direct work, other direct costs and overhead costs related to production (based on operating activity). Net realisable value is the estimated selling price in ordinary transactions. Impairment allowances for stocks of materials are recognised for those stocks that are slow-moving or worn out. Those stocks for which it has been possible to estimate whether they will be released for consumption in the period immediately following, or whether those stocks represent back-up stocks for certain installations, are not subject to impairment.

i. Impairment

The accounting values of the Company's non-financial assets, other than inventories and deferred tax assets, are revised at each reporting date to determine if there is evidence of impairment. If there is evidence of impairment, the recoverable value of the asset (or cash-generating unit) is estimated. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit exceeds the estimated recoverable amount.

The recoverable value of a cash-generating asset or unit is the higher of its value in use and fair value less costs of sale. When determining the value in use, expected future cash flows are discounted to determine the present value, using a pre-tax discount rate that reflects current market valuations of the time value of money and asset-specific risks. For impairment testing, assets that cannot be tested individually are grouped at the level of the smallest group of assets that generate cash inflows and that are largely independent of cash inflows generated by other assets or groups of assets ("cash-generating unit").

Impairment losses are recognized in the separate statement of comprehensive income. Impairment losses recognised in relation to the units generating pro rata cash in order to reduce the carrying amount of the other assets within the unit (group of units).

Impairment losses recognised in previous periods are assessed at each reporting date to determine whether there is evidence that the loss has been reduced or no longer exists. An impairment loss is reversed if there have been changes in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount that could have been determined, net of depreciation, if no impairment had been recognised.

(i) Non-financial assets

Property, plant and equipment and other long-term assets are revised to identify impairment losses whenever events or changes in circumstances indicate that the carrying amount can no longer be recovered.

Impairment losses on non-financial assets are recognised in the statement of comprehensive income.

j. Employee benefits

(i) Defined contribution plans

The Company makes payments on behalf of its own employees to the pension system of the Romanian state, health insurance and the unemployment fund, during the normal course of business.

All employees of the Company are members and also have the legal obligation to contribute (through social contributions) to the pension system of the Romanian State (a defined contribution plan of the State). All related contributions are recognised in the profit or loss account of the period when they are made. The Company has no other additional obligations.

The Company is not committed in any independent pension scheme and therefore has no other obligations in this respect. According to the collective labour agreement, the Company is not obliged to provide post-retirement benefits to former or current employees.

(ii) Short-term benefits

Liabilities with short-term benefits granted to employees are not discounted and are recognized in the statement of comprehensive income as the related service is provided.

The short-term benefits of employees include salaries and bonuses. The short-term benefits of the employees and the social security contributions are recognized in the financial statements of the Company when the services are provided. The Company recognizes a provision for amounts expected to be paid as short-term cash premiums under the conditions in which the Company currently has.

The Company has a legal or implicit obligation to pay those amounts as a result of past services rendered by employees and whether that obligation can be reliably estimated.

(iii) Benefits for termination of employment contracts

In accordance with the Collective Employment Contract, upon the fulfillment of the legal conditions for retirement, respectively for uninterrupted seniority within the Company, the employees are entitled to receive a monetary allowance.

The Company offers employees the following benefits in case of termination of the employment contract as a result of retirement, as follows:

• Employees who retire for old age, disability, partial or full early retirement will receive a career-end reward as follows:
  • those with more than 15 years of experience in the Company, two basic salaries negotiated at Company level;
  • those with seniority in the Company between 5 and 15 years, one basic salary negotiated at Company level;
• Employees who retire as a result of an accident or an event related to work and who have a seniority in the Company between 0 and 5 years will benefit from one basic salary negotiated at Company level.

j. Provisions for risks and charges

Provisions are recognised when the Company has a legal or constructive obligation arising from a past event, when the settlement of the obligation is likely to require an outflow of resources and when a reliable estimate of the amount of the obligation can be made.

(i) Guarantees

The provision for guarantees granted to customers are estimated by the Company on the basis of the costs incurred in repairs made during the guarantee period in relation to the amount of turnover in the preceding financial year.

(ii) Employee benefits

The Company makes provision for employee benefits granted upon termination of the employment contract upon retirement. The determination of the amount of the provision to be constituted is made taking into account the provisions of the collective employment contract of the Company valid on the date the provision is set up.

The method used was the projected credit unit method, according to the provisions of IAS 19. The actuarial assumption included the analysis of the mortality, retirement age, labor force, salary increase, salary taxes, interest rate tables.

(iii) Litigation

The Company makes provision for disputes in the event of a legal or constructive obligation arising from an ongoing dispute. The amount of the provision to be set up is determined on the basis of the estimates made by the law firm.

(iv) Other provisions

The Company constitutes any other provisions when the Company has a legal or constructive obligation arising from a past event, when the settlement of the obligation is likely to require an outflow of resources and when a reliable estimate of the amount of the obligation can be made.

No provisions are recognized for future operating losses.

k. Revenues from contracts with customers

The Company recognises revenues from contracts with customers when (or as) it fulfills a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer acquires control of that asset.

For each performance obligation identified, the Company determines at the beginning of the contract whether it will fulfill the performance obligation in time or whether it will fulfill it at a specific point in time. If the Company does not fulfill a performance obligation in time, the performance obligation is fulfilled at a specific point in time.

The Company analyzed the main types of income by applying the 5-step method within IFRS 15:

Step 1: Identify contracts with customers;

Step 2: Identify the obligations resulting from these contracts;

Step 3: Determine the transaction price;

Step 4: Assign the transaction price to the obligations to be fulfilled;

Step 5: Recognize the revenues at the completion of contractual obligations / as the contractual obligations are fulfilled.

3. MATERIAL ACCOUNTING POLICIES (continued)

k. Revenues from contracts with customers (continued)

The table below provides information on the nature and timing of the performance obligation, including significant payment terms for the main categories of revenue from contracts with customers:

Type of product / service	Nature and timing of the performance obligation, including significant payment terms	Accounting policies for income recognition
Agricultural machinery and equipment (produced or distributed)	The customer obtains control over the product at the time of receipt of the product or its acceptance (representing the date on which the customer obtains the ability to determine the use of the products and obtains all the benefits from them). The Company recognizes a claim because they represent the moment when the right to consideration becomes unconditional. In general, the direct customer (or distributor) pays an advance of 10-15%, the payment of the difference being made in installments (for a period of less than 1 year). Payment terms are generally 90-180 days from the date of issuing the invoice. The obligation of enforcement is fulfilled at a specific point in time. The trade discounts granted to customers are based on their fulfilment of certain annual sales values. Returns are usually accepted only in exceptional cases and usually returns involve the exchange of a product purchased by the customer with another.	Income is recognised on the date of dispatch to the customer (or purchase of the product from the Company's premises) and acceptance of the product. The income comprises the amount invoiced for the sale of the products, excluding VAT), less the trade reductions granted to customers. The Company applies the practical exemption in IFRS 15 para. 63 according to which it does not adjust the price of transactions with a financial component. As a practical solution, if the Company collects short-term advances from customers, or for recognized revenues, it does not adjust the amounts collected or the income to the effects of a significant financing component, given that at the beginning of the contract it expects that the period elapsed from the transfer of goods to collection will be less than 1 year. Trade discounts granted to customers (including expenses with provisions related thereto) are deducted from the income from the sale of products.
Income from provision of services	The services provided by the Company are generally related to the products supplied (for example, repair services of agricultural machinery after the expiry of the warranty period). Invoices for services are issued on the date of provision of the services. Invoices are generally paid within 30 days from the date of their receipt by the customer. The obligation to perform is fulfilled at a specific point in time (the duration of the provision of the service does not generally exceed 20 days).	The income is recognised during the period when the service is provided.

3. MATERIAL ACCOUNTING POLICIES (continuation)

l. Rental income

Type of product / service	Contract description	Accounting policies for income recognition
Income from rental of investment properties	The Company, as a lessor, rents its premises to third parties, the service is prestart as the rental contract is carried out. Invoices are generally paid within 30 days from the date of their receipt by the customer. The performance obligation is fulfilled during the performance of the rental agreement.	The rental income is generated by the investment properties rented by the Company and are recognized in the statement of comprehensive income on a straight-line basis, throughout the contract period.

The Company, as lessor, must classify each of its leases as either operating lease or finance lease. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards of ownership of an underlying asset.

Rental income is generated by investment properties rented by the Company in the form of operating leases and is recognized in profit or loss on a straight-line basis throughout the contract period.

The Company, as lessor, does not have leases classified as finance leases.

m. Government subsidies

Government subsidies for the purchase of non-current assets are recognised as deferred income and allocated as systematic and rational income over the life of the asset.

n. Suppliers and assimilated accounts

Liabilities to suppliers and other liabilities, initially recorded as fair value and subsequently measured using the effective interest rate method, include the equivalent value of invoices issued by suppliers of products, works performed and services rendered.

o. Interest income and expenses

Interest income and expenses are recognised in the statement of comprehensive income using the effective interest method. The effective interest rate is the rate that accurately discounts the expected future cash payments and receipts over the expected life of the financial asset or liability (or, where applicable, for a shorter duration) to the carrying amount of the financial asset or liability.

p. Gains and losses on exchange rate differences

Transactions in foreign currency are recorded in the functional currency (leu), by converting the amount into foreign currency at the official exchange rate communicated by the National Bank of Romania, valid on the transaction date.

At the reporting date, monetary items denominated in a foreign currency are converted using the closing exchange rate.

Exchange rate differences which occur when the monetary items are settled or the monetary items are converted at rates different from those at which they were converted to initial recognition (during the period) or into the prevous financial statements are recognised as a loss or gain in the profit or loss account in the period in which they arise.

3. MATERIAL ACCOUNTING POLICIES (continued)

q. Leases in which the Company is lessor

Initial recognition and evaluation

At the time of initiating a contract, the Company assesses whether that contract is, or includes, a lease. A contract is or contains a lease if that contract grants the right to control the use of an identified asset for a certain period of time in exchange for consideration.

At the commencement date, the Company, as a lessee, recognises a right-of-use asset and a liability arising from the lease.

Initial evaluation of the right-of-use asset

At the date of commencement of the contract, the Company evaluates at cost the right-of-use asset.

Initial evaluation of the lease liability

At the commencement date, the Company assesses the liability arising from the lease at the present value of the lease payments that are not paid at that date. Lease payments are updated using interest rate implicit in the lease whether that rate can be determined immediately. If this rate cannot be determined immediately, the Company uses its incremental borrowing rate.

The Company's marginal lending rate is the interest rate that the Company should pay to borrow for a similar period, with a similar guarantee, the funds needed to obtain an asset of an amount similar to that of the right-of-use asset in a similar economic environment.

Subsequent evaluation of the right-of-use asset

After the commencement date, the Company assesses the right-of-use asset by applying the cost-based model, i.e. it values the rightof-use asset at cost, minus any accumulated depreciation and impairment losses.

Subsequent evaluation of the lease liability

After the commencement date, the Company assesses the liability arising from the lease by increasing the carrying amount to reflect the interest associated with the liability arising from the lease and write-down to reflect lease payments made, reflecting, where appropriate, any changes to the lease.

The interest on the lease liability for each period over the term of the contract is the amount that produces a constant periodic interest rate on the balance of the lease liability.

After the commencement date, the interest on the lease liability is reflected in profit or loss.

Derogations from recognition

The Company, as a lessee, chooses to apply the derogations permitted by IFRS 16:

• o short-term leases; and
• o leases for which the underlying asset has a small value.

Consequently, in the case of short-term leases and leases where the underlying asset has a low value, the Company recognises the lease payments associated with those leases as an expense, on a straight-line basis throughout the lease term.

r. Contingent liabilities

Contingent liabilities are not recognised in the accompanying financial statements. They are presented if there is a possibility of an outflow of resources that represent possible but not probable economic benefits, and/or the value can be estimated reliably. A contingent asset is not recognised in the accompanying financial statements, but is presented when an entry of economic benefits is probable.

s. Income tax

The income tax comprises the current tax and the deferred tax.

The current tax represents the tax that is expected to be paid or received for the taxable income or loss realized in the year, using tax rates adopted or largely adopted on the reporting date, as well as any adjustment to the corporate tax payment obligations related to the previous years. The current tax payable also includes any tax receivable arising from the declaration of dividends.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:

• initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
• differences regarding investments in subsidiaries or joint arrangements to the extent that they will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset only if there is a legal right to compensate current tax assets and liabilities, and if they refer to taxes levied by the same tax authority to the same entity, or a different taxable entity, but which intends to conclude a convention on current tax assets and liabilities on a net basis or whose assets and liabilities from taxation will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that taxable profits will be made that will be available in the future and will be used. Deferred tax assets are reviewed at each reporting date and are diminished to the extent that it is no longer likely that a tax benefit will be realized. The effect of changes in tax rates on the deferred tax is recognised in the statement of comprehensive income, unless it relates to previously recognised positions directly in equity.

Income tax is recognised in the separate statement of comprehensive income or in other comprehensive income if the tax is related to capital items.

Current tax is the tax paid on the profit made in the current period, determined on the basis of the percentages applied at the reporting date and all adjustments related to the previous periods.

The current corporate tax rate in Romania is 16%.

Deferred tax is calculated on the basis of the tax percentages that are expected to be applicable to temporary differences upon reversal, based on the legislation in force at the reporting date.

t. Earnings per share

The Company presents the earnings per share for ordinary shares. The earnings per share are determined by dividing the profit or loss attributable to the ordinary shareholders of the Company by the number of ordinary shares for the reporting period.

u. Share capital

Ordinary shares are classified as part of equity. The Company recognizes the changes to the share capital under the conditions stipulated by the legislation in force and only after their approval by the General Meeting of Shareholders and the registration with the Trade Register. Additional costs directly attributable to the issuance of shares are recognized as a deduction from equity, net of the effects of taxation.

v. Dividends

Dividends are treated as a distribution of profit during the period in which they were declared and approved by the General Meeting of Shareholders. Dividends, until prescription, may be requested for payment by the shareholders.

w. Dividends prescribed

Dividends payable not collected within 3 years from the date of declaration are prescribed according to the law. Prescribed dividends are transactions with shareholders and are recognized in equity, in retained earnings.

x. The going concern principle

The financial statements were drawn up on the basis of the going concern principle, which implies that the Company will normally continue its operation in the foreseeable future, without entering into the impossibility to continue the activity or without its significant reduction. To assess the applicability of this assumption, management looks at forecasts of future cash inflows. Based on these analyses, the management believes that the Company will be able to continue its activity in the foreseeable future and therefore the application of the going concern principle in the preparation of financial statements is justified.

y. Associated entities

Associated entities are those companies in which the Company can exercise significant influence, but not control over financial and operational policies.

The Company owns at September 30, 2024 24.28% in Transport Ceahlau SRL. It is not consolidated because Transport Ceahlau SRL is an immaterial company, being dormant.

The Company has identified the following related parties:

Entity	The nature of the relationship
Evergent Investments SA	Parent company

NEW CARPATHIAN FUND Significant shareholder Transport Ceahlau SRL Associated entity

z. Segment reporting

A segment is a part of the Company that engages in segments of activity from which it can obtain income and record expenses (including income and expenses corresponding to transactions with other parts of the same entity), whose operational results are regularly monitored by the Company's management in order to make decisions regarding the resources to be allocated to the segment and to evaluate its performance and for which separate financial information is available. The Company does not have significant geographic or activity segments according to IFRS 8, "Operational segments" and does not have an internal management and reporting structure divided into segments.

The main income described in Note 3 is all related to the main objects of activity of the Company (the income from the sale of finished products, goods and services represents the main activity of the Company and is analyzed together by its management).

3. MATERIAL ACCOUNTING POLICIES (continued)

aa. Applicable accounting policies

Standards and interpretations that have entered into force in the current year

The amendments to the existing standards issued by the International Accounting Standard Board ('IASB') and adopted by the European Union ('EU') presented in the table below are in force for the current reporting period, and are mandatorily effective for reporting period that begins on or after 1 January 2023.

Their adoption, where they were applicable to the Company, has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Standard	Title
IFRS 17 Insurance Contracts	New standard IFRS 17 "Insurance Contracts" including the June 2020 and December 2021 Amendments to IFRS 17
Amendments to IAS 1	Disclosure of Accounting Policies
Amendments to IAS 8	Definition of Accounting Estimates
Amendments to IAS 12	Deferred Tax related to Assets and Liabilities arising from a Single Transaction
Amendments to IAS 12	International Tax Reform — Pillar Two Model Rules*

Standards and amendments to existing standards issued by the IASB and adopted by the EU, but not yet effective

At the date of authorisation of these financial statements, the amendments to the existing standards issued by the IASB and adopted by the EU presented in the table below were not in force, therefore the Company has not applied them.

Standard	Title	Effective date
Amendments to IFRS 16	Lease Liability in a Sale and Leaseback	1 January 2024
Amendments to IAS 1	Classification of Liabilities as Current or Non-Current and Non-current Liabilities with Covenants	1 January 2024

The Company considers that the adoption of these new amendments to the existing standards, where they are applicable to the Company, will not have a significant impact on its financial statements in the upcoming periods.

Standards and interpretations issued by the IASB, but not yet adopted by the EU

At present, IFRS as adopted by the EU do not significantly differ from IFRS adopted by the International Accounting Standards Board (IASB) except for the following new standards and amendments to the existing standards, which were not adopted by the EU as at the date of authorisation of these financial statements:

Standard	Title	EU adoption status
Amendments to IAS 7	Supplier Finance Arrangements	Not yet adopted by EU
and IFRS 7	(IASB effective date: 1 January 2024)
Amendments to IAS 21	Lack of Exchangeability	Not yet adopted by EU
	(IASB effective date: 1 January 2025)
IFRS 14	Regulatory Deferral Accounts	the European Commission has decided not to
	(IASB effective date: 1 January 2016)	launch the endorsement process of this interim
		standard and to wait for the final standard
Amendments to IFRS 10	Sale or Contribution of Assets between an Investor	Endorsement process postponed indefinitely
and IAS 28	and its Associate or Joint Venture and further	until the research project on the equity method
	amendments (effective date deferred by IASB	has been concluded
	indefinitely but earlier application permitted)

The Company estimates that the adoption of these amendments to the existing standards will not have a significant impact on its annual financial statements in the year in which they are first applied.

4. FAIR VALUE MEASUREMENT

Certain accounting policies of the Company and disclosure requirements require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for the purpose of measuring and/or presenting information using the methods described below. Where applicable, additional information about the assumptions used in determining fair value is disclosed in the notes specific to that asset or liability.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is observable or estimated using a direct valuation technique. In estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset or liability that market participants would take into account in determining the price of the asset or liability at the measurement date. Fair value for valuation purposes and/or presentation in financial statements is determined on such a basis, except for measurements that are similar to fair value but do not represent fair value, such as net realisable value in IAS 2 or value in use in IAS 36.

In addition, for financial reporting purposes, fair value measurements are classified in Tier 1, 2 or 3, depending on the degree to which the information necessary to determine fair value is observable and the importance of this information for the Company, as follows:

• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
• Level 2 information, other than the quoted prices included in Level 1, which is observable for the asset or liability valued, directly or indirectly; and
• Level 3 unobservable information for the asset or liability.

At September 30, 2024 the Company determined the fair values of land, buildings and special constructions, investment properties and assets held for sale. The fair value measurement was made by external, independent real estate valuers, members of the National Association of Valuers in Romania (ANEVAR) with recognised professional qualifications and experience in evaluating all real estate segments. The methods used by the valuer in determining fair value were: the market value method by comparison for land and assets held for sale.

The outbreak of the military conflict against Ukraine on February 24, 2022 has had a significant impact on global financial markets. Market activity is affected in many sectors. At the time of the evaluation, it was considered possible to grant a lower share of previous offers on the market for comparison purposes in order to formulate an opinion on the value of the assets. Indeed, the current response to the military conflict against Ukraine actually means that we are facing an unprecedented set of circumstances on which to base our views. Therefore, the valuation carried out at December 31, 2023 is affected by the conditions of material uncertainty of the valuation.

5. INCOME

	The exercise ended on September 30, 2024	The exercise ended on September 30, 2023
Net income from the sale of goods	17,210,673	22,480,571
Income from the sale of residual products	41,122	76,738
Provision of services	179,228	106,435
Total net turnover	17,431,023	22,663,744

The gross turnover of the Company registered at September 30, 2024 is 17,824,154 LEI (at September 30, 2023 is 22,745,481 LEI), of which 1,856,772 LEI from exports (at September 30, 2023: 475,912 LEI) and 15,967,382 LEI obtained internally (September 30, 2023: 22,269,569 LEI).

5. INCOME (continued)

In order to achieve this volume of sales, trade discounts were granted in the form of bonuses according to the contracts in force in amount of 613,481 LEI at September 30, 2024 and 264,910 LEI at September 30, 2023 resulting in a net turnover in amount of 17,210,673 LEI at September 30, 2024 and 22,480,571 LEI at September 30, 2023. The commercial bonus granted to distributors according to the contracts in force represents a variable consideration that the Company has estimated and recognized in the transaction price at 30.09.2024 and 30.09.2023.

Compared to the same period of the previous year, the net turnover of the Company registered a decrease of 23%.

The products sold by the Company are intended for both the domestic and foreign markets.

In 2024, the domestic market was the main sales market, with the sales volume on this market representing 90% of the turnover.

On the domestic market, the Company collaborated with 4 distributors from across the entire country, the most important being located in predominantly agricultural areas.

On the foreign market, the sales volume accounted for 10% of the turnover. On this market, the connection is maintained with the traditional customers who know and promote the Company's products.

The causes of the decrease in turnover are represented by three main factors that led to the unprecedented decrease in farmers' ability to invest in new agricultural machinery:

- geo-political factors

• climate factors
• economic factors (price of grains and inputs)

1. Geo-political factors

• The war in Ukraine and its military, economic, political and social consequences at the European and global level;
• The agreement regarding the transit of Ukrainian grains through Romania favored the development of a prolific "black market", with major implications on prices; The lack of effective means of sealing the means of transport upon entering the country, as well as effective controls on the route to the seaports, further favored the remaining in the country of significant quantities of grain that Romanian processors could purchase at low prices low. In these conditions, Romanian farmers were put in the situation of selling their products at very low prices, often insufficient to cover the costs of establishing, maintaining and harvesting crops.
• The lack of prohibitive taxes on the import of grain from Belarus and Russia into the European Union put additional pressure on their stock market prices. (these taxes will come into force only in the second half of 2024)
• In general, subsidies and state aid for farmers were paid late in the first half of 2024, and some of them remained at the project level with no methodological rules for application (eg: the rabla program for tractors)
• For the new session of the non-reimbursable European funds for farmers (equipment purchases), the file submission session will end in July, with low chances of completing the projects by the end of this year;

2. Climate factors

▪ • For about 7-8 years, climate change has been one of the biggest challenges for Romanian agriculture. Extreme weather phenomena, such as drought, heat (temperatures above 38 degrees Celsius) and floods, greatly affect agricultural production.

• • In the 2023-2024 agricultural year, the lack of precipitation and soil drought affected a large part of the country, since the beginning of the year and persisting until now. Fall crops have already had limited production, and spring crops face considerable uncertainty. In addition, the high volatility of grain prices has further complicated the situation for farmers. In April, extreme weather phenomena (such as hail in certain areas) hit hard, affecting both autumn and spring crops. These events caused significant damage, including the first total damage in the 2024 season. These incidents are just one aspect of the devastating impact climate change is having on agriculture. Fires, drought and other extreme weather events are becoming more frequent and more intense, putting farmers and agricultural production at risk
• • The hot weather installed as early as June 2024, the lack of significant precipitation from April onwards in large areas of the country, associated with the forecasts of hot/extremely dry weather in the months of July-August creates a gloomy picture of the future of autumn crops (in especially corn and sunflower)
• An aggravating situation is also the lack of water sources and related installations for proper irrigation at the national level. The consequences of the destruction of the national irrigation system, which was very well developed until 1989, can be easily seen now in all areas/regions of the country.

3. Economic factors (price of grains and inputs)

• Prices on the stock exchange for cereals are still relatively low (0.9 lei/kg for wheat, 0.86 lei/kg for corn);
• In parallel, the prices for inputs, fuel and utilities are still at high levels.
• Many farmers are still waiting for cereal prices to rise, which is why they store them in silos, assuming additional storage and logistics costs.

6. OTHER OPERATING INCOME

	Year ended September 30, 2024	Year ended September 30, 2023
Income from compensation and penalties	41,014	16,003
Income from rental of investment properties	337,382	274,429
Other operating income	63,334	32,609
Total other income	441,730	323,040

It mainly includes income from the rental of immovable properties, such as buildings and access spaces.

Building rental	2023	2024	2025
Rental income	391,062	449,820	27,520

The Company has seven lease agreements underway, as follows: one land lease, four contracts for renting of technical spaces and / or offices, two contracts for renting space for automated coffee machines.

7. EXPENSES WITH SALARIES, SOCIAL CONTRIBUTIONS AND OTHER BENEFITS

	The exercise ended on September 30, 2024	The exercise ended on September 30, 2023
Expenses with salaries	4,241,499	4,696,868
Expenses with salary contributions	194,086	215,341
Expenses with holidays not taken	(40,032)	-
Expenses related to vouchers granted	204,920	223,708
Other benefits granted to employees	-	-
Expenses related to the indemnity of the members of the Board of Directors	382,813	422,505
Expenses related to the executive management's allowance	661,635	899,432
Income from operating subsidies for the payment of staff	-	-
Total	5,644,921	6,457,854
Average number of employees	71	91

Expenses with salaries, allowances, contributions and other similar expenses includes expenses with salaries, allowances and other benefits, as well as related contributions, of employees, members of the Executive Management and of the Board of Directors.

Short-term employee benefits are recognized as an expense when services are rendered. The Company has established provisions for employee benefits granted at the end of the employment contract once the retirement contract according to the provisions of the Collective Employment Contract valid at 31.12.2023, the information is presented in Note 24 Provisions "Employee benefits".

8. OTHER ADMINISTRATIVE EXPENSES

	The exercise ended on September 30, 2024	The exercise ended on September 30, 2023
Maintenance and repair costs	180,701	242,541
Royalties, management leases and rentals	18,137	22,446
Insurance premiums	102,296	74,526
Studies and researches	2,585	3,130
Entertainment, advertising and publicity
expenses	145,370	193,977
Transport of goods and personnel	246,755	462,392
Travel, secondments and transfers	128,779	162,254
Postal expenses and telecommunication fees	48,317	44,727
Banking services and assimilated	130,516	81,894
Internal and external audit services	3,669	-
Other expenses with third-party services	561,382	957,309
Other expences with security	420,000	-
Fee expenses	-	300
Total	1,988,507	2,245,496

(i) Other expenses with third-party services include expenses with security, services at exhibitions and local and international fairs, expenses with software suppliers, etc.

9. OTHER OPERATING EXPENSES

	The exercise ended on September 30, 2024	The exercise ended on September 30, 2023
Expenses with taxes, fees and assimilated	195,166	205,631
Expenses with fines and penalties	202,598	12,765
Other operating expenses	129,766	229,647
Total	527,530	448,043

10. NET FINANCIAL RESULT

	The exercise ended on September 30, 2024	The exercise ended on September 30, 2023
Interest income	60,726	89,833
Net gains on financial assets	11,603	11,702
Total financial income	72,329	101,535
Interest expense	574,249	99,305
FX losses	7,484	118,375
Other financial expenses	94,148	56,093
Total financial expenses	675,880	273,773
Net financial result	(603,551)	(172,238)

Financial income is recognised in the statement of comprehensive income on the basis of accrual accounting using the effective interest rate method.

The net gain on financial assets held at fair value through profit or loss is the increase in value of the fund units held as a result of the measurement at September 30, 2024.

Financial expenses include interest, discounts or discounts granted and exchange rate differences. Foreign exchange gains and losses are reported on a net basis. The value of income from exchange rate differences at September 30, 2024 is 11,979 LEI and the value of expenses from exchange rate differences is 19,462 LEI.

Other financial expenses represent financial discounts granted to customers.

11. CURRENT AND DEFERRED INCOME TAX EXPENSES

The Company registers a tax loss from previous years, and registers only the profit at the balance sheet date in the profit and loss account.

Income tax	The exercise ended on September 30, 2024	The exercise ended on September 30, 2023
Current income tax	-	-
Deferred income tax expense	123,139	72,983
Total income tax expense	123,139	72,983

	The exercise ended on September 30,	The exercise ended on September 30,
INCOME tax	2024	2023
Profit before tax	(4,527,265)	(1,354,487)
Income tax expense calculated at the standard rate of 16%	(724,362)	(216,718)
The tax effect of:
- non-deductible tax expenses	356,651	228,846
- non-taxable income	(368,744)	(364,903)
- items similar to income	123,139	72,983
- items similar to expences	(26)	(572)
- impact of tax loss	613,343	280,364
- deferred income tax expense	123,139	72,983
Income tax	123,139	72,983

12. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax liabilities are represented by the amounts of income tax payable in future accounting periods in respect of taxable temporary differences. In determining the deferred income tax, the tax rate provided for in the tax regulations in force on the date of drawing up the financial statements, respectively 16%, is used.

At September 30, 2024, the elements of time differences are determined for the following components of the statement of financial position:

	ASSETS	LIABILITIES	NET
Property, plant and equipment	-	1,263,602	1,263,602
Provisions and adjustments	3,365,393	-	(3,365,393)
Revaluation reserves	-	15,278,253	15,278,253
Reserves from tax incentives	-	353,133	353,133
Total	3,365,393	16,894,988	13,529,595
Net temporary differences – 16% rate	-	-	13,529,595
Deferred tax liabilities	-	-	2,164,735

At December 31, 2023 deferred tax liabilities are attributed to the following items:

ASSETS	LIABILITIES	NET
		1,328,889
3,466,633	-	(3,466,633)
-	16,047,870	16,047,870
-	353,133	353,133
3,466,633	17,729,892	14,263,258
-	-	14,263,258
-	-	2,282,121
	-	1,328,889

13. PROPERTY, PLANT AND EQUIPMENT AND RIGHTS OF USE OF ASSETS

COST	Land, land improvement and buildings	Technical installations and vehicles	Other property, plant and equipment	Property, plant and equipment in progress	Right-of-use assets in leases	Total
Balance at December 31, 2023	15,925,795	16,224,412	622,153	-	3,530,604	36,302,964
Additions of fixed assets	53,167	5,472	923	-	-	59,563
Of which, transfers from non-current assets in progress	-	-	-	-	-	-
Revaluation increases	-	-	-	-	-	-
Disposals of fixed assets	-	(79,896)	-	-	(170,706)	(250,602)
Reclassifications to right-of-use assets of underlying
assets in leases	-	-	-	-	-	-
Revaluation decreases	-	-	-	-	-	-
Reversal of accumulated depreciation	-	-	-	-	-	-
Balance at September 30, 2024	15,978,962	16,149,989	623,077	-	3,359,898	36,111,925
ACCUMULATED DEPRECIATION
Balance at December 31, 2023	14	13,277,493	268,479	-	1,022,416	14,568,401
Depreciation charges	1,031,160	423,656	52,032	-	424,430	1,931,278
Reclassifications to right-of-use assets of underlying
assets in leases	-	-	-	-	-	-
Reversal of accumulated depreciation	-	-	-	-	-	-
Accumulated depreciation of disposals	-	(79,896)	-	-	-	(79,896)
Balance at September 30, 2024	1,031,174	13,621,253	320,510	-	1,446,846	16,419,782
IMPAIRMENT ALLOWANCES
Balance at December 31, 2023	89,354	98,641	-	-	-	187,995
Adjustments made during the year	-	-	-	-	-	-
Reversals of impairment allowances	-	(14,796)	-	-	-	(14,796)
Balance at September 30, 2024	89,354	83,845	-	-	-	173,199
CARRYING AMOUNT
Balance at December 31, 2023	15,836,427	2,848,278	353,674	-	2,508,188	21,546,567
Balance at September 30, 2024	14,858,434	2,444,890	302,566	-	1,913,052	19,518,944

13. PROPERTY, PLANT AND EQUIPMENT AND RIGHT OF USE OF ASSETS (continued)

	Land, land improvement	Technical installations	Other property, plant and	Property, plant and equipment	Right-of-use assets
COST	and buildings	and vehicles	equipment	in progress	in leases	Total
Balance at December 31, 2022	14,850,180	15,801,610	601,655	169,400	3,129,704	34,552,549
Additions of fixed assets	111,711	66,716	11,318	61,088	1,045,984	1,341,742
Of which, transfers from non-current assets in progress	-	-	-	-	-	-
Revaluation increases	-	-	-	-	-	-
Disposals of fixed assets	-	58,049	-	11,318	-	69,367
Reclassifications to right-of-use assets of underlying
assets in leases	-	269,970	-	-	(269,970)	-
Revaluation decreases	-	-	-	-	-	-
Reversal of accumulated depreciation	-	-	-	-	-	-
Balance at September 30, 2023	14,961,891	16,080,247	612,973	264,096	3,905,718	35,824,925
ACCUMULATED DEPRECIATION
Balance at December 31, 2022	-	12,476,739	189,884	-	858,492	13,525,115
Depreciation charges	793,601	458,263	58,732	-	441,074	1,751,670
Reclassifications to right-of-use assets of underlying
assets in leases	-	201,759	-	-	(201,759)	-
Reversal of accumulated depreciation	-	-	-	-	-	-
Accumulated depreciation of disposals	-	58,049	-	-	-	58,049
Balance at September 30, 2023	793,601	13,078,712	248,616	-	1,134,676	15,218,736
IMPAIRMENT ALLOWANCES
Balance at December 31, 2022	81,504	118,369	-	-	-	199,873
Adjustments made during the year	-	-	-	-	-	-
Reversals of impairment allowances	-	(9,864)	-	-	-	(14,796)
Balance at September 30, 2023	81,504	108,505	-	-	-	185,077
CARRYING AMOUNT
Balance at December 31, 2022	14,768,676	3,206,502	411,771	169,400	2,271,212	20,827,561
Balance at September 30, 2023	14,086,785	2,897,962	364,357	264,096	2,807,912	20,421,112

13. PROPERTY, PLANT AND EQUIPMENT AND RIGHT OF USE OF ASSETS (continued)

Impairment losses recognised in profit or loss were classified in depreciation and impairment expenses for fixed assets.

In 2024, acquisitions were reduced (only one office modernization being carried out during this period). During 2024, the Company scrapped 16 tangible assets. On September 30, 2024, the Company analyzed the existence of indicators of depreciation of fixed assets under management. As a result of the procedures carried out, the management of the Company believes that at this date there were no impairment indicators.

Revaluation

Land and buildings are stated at revalued amount, which is the fair value at the revaluation date less any amortization accumulated subsequently and any accumulated impairment losses.

The fair value is based on the adjusted market price quotations, where the case, in order to reflect the differences in the nature, location or conditions of such asset.

Revaluations are conducted by specialised valuers, members of ANEVAR. The frequency of revaluations is influenced by the dynamics of the markets where the land and buildings held by the Company are located.

The other categories of property, plant and equipment are carried at cost, less the accumulated amortization and the value of the impairment allowance, where the case.

At December 31, 2023 the property, plant and equipment – group: "Buildings" and "Land" was revalued based on a report prepared by an external, independent valuer, member of the National Association of Valuers in Romania (ANEVAR) with recognised professional qualifications and experience in evaluating all real estate segments. The valuation is in accordance with international valuation standards. The revaluation concerned the adjustment of the net carrying amounts of property, plant and equipment, land, buildings and special buildings at fair value. The methods used by the valuer in determining fair value were: the market value method by comparison for land and the income capitalization method (income approach) for buildings.

The revaluation surplus was recognised as a revaluation reserve in equity, i.e. as income if, as a result of a previous revaluation, a revaluation expense was recorded. The decrease that compensates for the previous increase of the same asset is reduced from the reserve previously constituted; all other decreases are recognised as cost in the Statement of Comprehensive Income.

14. INTANGIBLE ASSETS

	Patents, licenses and	Other
	trademarks	fixed assets	Total
COST
Balance at December 31, 2023	528,327	1,012,724	1,541,051
Purchases	-	-	-
Intangible assets outflows	-	(54,797)	(54,797)
Balance at September 30, 2024	528,327	957,928	1,486,255
ACCUMULATED AMORTISATION
Balance at December 31, 2023	528,327	902,187	1,430,514
Amortisation during the year	-	22,247	22,247
Impairment losses	-	-	-
Cumulative depreciation related to exits	-	(54,797)	(54,797)
Balance at September 30, 2024
	528,327	869,637	1,397,964
IMPAIRMENT ALLOWANCE
Balance at December 31, 2023	-	-	-
Reversal of impairment ajustments	-	-	-
Adjustments made during the year
Balance at September 30, 2024	-	-	-
CARRYING AMOUNT
Balance at December 31, 2023	-	103,032	103,032
Balance at September 30, 2024	-	119,049	119,049

The intangible assets as at September 30, 2024, in net amount of 88,291 LEI (September 30, 2023: 119,049 LEI), represent the unamortized part of the licenses, technological documentation and the software used,

During 2024, the Company did not scrap any intangible assets.

The value appreciations were recognized in profit or loss and were classified within the expenses with amortization and depreciation of fixed assets.

15. INVESTMENT PROPERTIES

	September 30, 2024	December 31, 2023
Net value	595,604	595,604
	September 30, 2024	December 31, 2023
Opening balance	595,604	898,905
Acquisitions / Reclassification of investment properties	-	148,841
Outflows/Reclassifications into assets held for sale	-	-
Changes in fair value	-	(452,142)
Final balance	595,604	595,604

Commercial properties are rented to third parties on the basis of contracts with a validity of 12 months with the possibility of extension.

The value of rental income as at September 30, 2024 was 337,382 LEI, and 391,062 LEI at December 31, 2023. The commercial properties owned by the Company are mainly rented to industrial companies (producing plastics and metal parts), companies that have not been significantly affected by the military conflict against Ukraine. The monthly rent was invoiced according to the contracts in force and there were no requests to postpone the payment of the rent.

The Company did not make significant repairs and had no other costs with investment properties at September 30, 2024 and December 31, 2023.

The fair value measurement of investment properties was carried out by an external, independent valuer member of the National Association of Valuers in Romania (ANEVAR) with recognized professional qualifications and experience in the valuation of all real estate segments. The measurement of the fair value of the investment property was made using the income capitalization method.

16. ASSETS HELD FOR SALE

-	362,419
- -	(148,841) (213,578)
	- -
	- -

At September 30, 2024 the Company does not own assets for sale.

At December 31, 2023, the fair value measurement was made by an external, independent valuer member of the National Association of Valuers in Romania (ANEVAR) with recognised professional qualifications and experience in evaluating all real estate segments. The revaluation concerned the adjustment of net carrying amounts of the assets held for sale at fair value. The method used by the valuer in determining fair value was: the market value method. The valuer took into account the potential impact of the military conflict against Ukraine.

17. INVENTORIES

	September 30, 2024	December 31, 2023
Raw materials and materials	2,023,564	2,248,442
Work in progress	1,258,740	1,960,425
Semi-finished goods	251,698	111,787
Finished products	21,996,375	22,351,040
Merchandise	11,335,926	19,686,027
Inventories at net value	36,866,303	46,357,720

The amount of any reduction in the carrying amount of inventories to net realisable value and all losses of inventories are recognised as an expense during the period in which the write-down or loss occurs.

In accordance with the policy of setting up the adjustment of the value of current assets, the value adjustments for stocks are made:

• global depending on seniority and dynamics;
• individually based on the findings of the stock-count committees.

At September 30, 2024, the value of the impairment allowance for inventoris is 863,061 LEI (December 31, 2023: 596,104 Lei).

	September 30, 2024	December 31, 2023
Opening balance at 1 January	(596,104)	(907,710)
Set-ups	(435,452)	(297,583)
Reversals	168,495	609,189
Closing balance	(863,061)	(596,104)

18. TRADE RECEIVABLES

	September 30, 2024	December 31, 2023
Trade receivables – less than 180 days overdue Impairment allowances for trade receivables – less than 180 days overdue	2,880,980 (429,430)	4,610,328 (429,430)
Net receivables – less than 180 days overdue	2,451,550	4,180,898
Trade receivables – more than 180 days overdue Impairment allowances for trade receivables — more than 180 days	1,562,045	1,800,067
overdue	(1,562,045)	(1,800,067)
Net receivables – more than 180 days overdue	-	-
Net, total trade receivables	2,451,550	4,180,898

The fair value of trade receivables reflects their value less impairment.

At September 30, 2024 net trade receivables in amount of 2,451,550 LEI (December 31, 2023: 4,180,898 Lei) are considered fully performing.

At September 30, 2024 the Company set up allowanced for the impariment of trade receivables in total amount of 1,991,475 LEI (December 31, 2023: 2,229,497 Lei).

Individual evaluation:

The Company performs individual analyses of the degree of recovery of trade receivables, based on the expected loss rate model and litigation status. For receivables with a maturity exceeding 180 days and for those in litigation, a provision of 100% of the gross value is recorded.

The seniority structure of trade receivables at the reporting date was:

	Expected average weighted loss rate at September 30, 2024	Impairment September 30, 2024	Gross value September 30, 2024	Expected average weighted loss rate at December 31, 2023	Impairment December 31, 2023	Gross value December 31, 2023
Overdue over 180 days	100%	1,562,046	1,562,046	100%	1,800,067	1,800,067

Collective evaluation:

	Expected average weighted loss rate at September 30, 2024	Impairment September 30, 2024	Gross value September 30, 2024	Expected average weighted loss rate at December 31, 2023	Impairment December 31, 2023	Gross value December 31, 2023
Not overdue	-	-	2,409,600	6%	111,731	1,696,200
Overdue between 0 and 30 days Overdue between 31 and 60	57%	54,791	96,741	11,1%	66,284	974,644
days	100%	287,581	287,581	33,3%	31,019	209,497
Overdue between 61 and 90				39,4%
days	100%	1,911	1,911		53,981	314,584
Overdue over 90 days	100%	85,147	85,147	40,5%	166,415	1,415,402
		429,430	4,443,025		429,430	6,410,394

19. OTHER RECEIVABLES

	September 30, 2024	December 31, 2023
Sundry debtors	452,797	145,796
Other receivables (bank interests, contributions and VAT)	18,631	126,554
Tax recoverable	-	-
Adjustment for other receivables – sundry debtors	(113,817)	(113,817)
Total	357,611	158,532

The fair value of other receivables reflects their value less impairment.

The Company performs individual analyses of the degree of recovery of sundry debtors based on expected loss rates and litigation status. For receivables with a maturity of over 180 days and in litigation, a provision of 100% of the gross value is recorded.

In order to cover the risk of non-recovery of certain categories of receivables – sundry debtors, the Company registered allowances for the impairment of sundry debtors in amount of 113,817 LEI.

	Impairment September 30, 2024	Gross value Septemb. 30, 2024	Impairment December 31, 2023	Gross value December 31, 2023
Overdue over 180 days	113,817	113,817	113,817	113,817

20. CASH, CURRENT ACCOUNTS, DEPOSITS WITH BANKS AND FINANCIAL ASSETS AT FAIR VALUE

(i) Cash, current accounts and cash equivalents

	September 30, 2024	December 31, 2023
Cash	3,934	1,276
Current accounts	817,356	114,643
Bank deposits with maturity up to 3 months	1,000,000	1,500,000
Interest attached	9,898	16,393
Expected credit loss	(274)	(714)
Cash and current accounts – gross amount	1,830,913	1,631,599

Current accounts opened with banks are permanently at the disposal of the Company.

(ii) Financial assets at fair value through profit or loss

	September 30, 2024	December 31, 2023
Financial assets – Fund units	293,041	282,658
Total	293,041	282,658

The Company owns at September 30, 2024 investments in fund units, at fair value, as follows:

Fund type	Fund management company	Number of fund units	Value of fund units
Open-end investment fund BT OBLIGATIUNI	BT Asset Management	13,591	293,041

In 2024, the fund units held at BT Asset Management valued at fair value through profit or loss recorded an increase (the change in fair value being upwards) of 10,383 LEI.

The shares of Transport Ceahlau SRL are fully adjusted.

21. CAPITAL AND RESERVES

a. Share capital

Share capital subscised and paid up at September 30, 2024	23,990,846 LEI
Number of shares subscribed and paid up at September 30, 2024	239,908,460 shares
Nominal value of a share	0.10 LEI
Characteristics of shares issued, subscribed and paid up	Ordinary, nominative, dematerialized

The Company's securities (shares) are registered and traded in the Standard category of the Bucharest Stock Exchange. All shares confer the same voting rights. At September 30, 2024, the share capital of the Company was not modified in the sense of increase or decrease.

The share capital registered at September 30, 2024 is 23,990,846 LEI.

The shareholding structure of the Company is:

	Number
September 30, 2024	of shares	Amount (lei)	%
Evergent Investments SA	175,857,653	17,585,765	73.3020
New Carpathian Fund	48,477,938	4,847,794	20.2068
Other shareholders, of which:
- legal persons	803,720	80,372	0.335
- natural persons	14,769,149	1,476,915	6.1562
TOTAL	239,908,460	23,990,846	100.00

	Number
September 30, 2023	of shares	Amount (lei)	%
Evergent Investments SA	175,857,653	17,585,765	73.3020
New Carpathian Fund	48,477,938	4,847,794	20.2068
Other shareholders, of which:
- legal persons	722,117	72,212	0.3010
- natural persons	14,850,752	1,485,075	6.1902
TOTAL	239,908,460	23,990,846	100.00

21.CAPITAL AND RESERVES (continue)

b. Reserves

	September 30, 2024	December 31, 2023
Reserves from the revaluation of property, plant and equipment	11,310,740	12,080,357
Deferred income tax recognised on account of reserves	(1,863,995)	(1,987,134)
TOTAL	9,446,745	10,093,223
	September 30, 2024	December 31, 2023
Retained earnings representing the surplus realised from gross revaluation
reserves	3,957,513	3,957,513
Deferred income tax related to realized and untaxed revaluation reserves	(634,802)	(634,802)
Retained earnings representing the surplus realised from net revaluation
reserves	8,701,408	7,931,791
Retained earnings representing unallocated profit / (uncovered loss)	(7,160,104)	(2,627,088)
Other reserves distributed from profit, non-taxable	5,059,940	5,059,940
Other taxable reserves	827,622	827,622

TOTAL 10,761,577 14,524,976

"Other reserves distributed from profit, non-taxable" – represents the distribution to other reserves of the net profit for the years 2013, 2014, 2015 and 2019.

c. Legal reserves

The Company distributes to legal reserves 5% of the profit before tax, up to the limit of 20% of the share capital. These amounts are deducted from the taxable amount when calculating corporate tax. The value of the legal reserve at September 30, 2024 is 2,983,701 LEI (December 31, 2023: 2,983,701 LEI).

Legal reserves cannot be distributed to shareholders.

d. Dividends

In 2024 and 2023, no dividends were allocated or distributed. According to the legislation in force, shareholders may request the payment of dividends for a period of 3 years since the payment date set in the General Meeting of Shareholders .

e. Earnings per share

The earnings per share are calculated by dividing the net loss attributable to the shareholders of the Company at September 30, 2024 in amount of (4,533,017) LEI (December 31, 2023: (3,903,049) LEI) by the number of ordinary outstanding shares of 239,908,460 shares (December 31, 2023: 239,908,460 shares).

September 30, 2024	December 31, 2023
	(3,903,049)
239,908,460	239,908,460
	(0.0163)
	(4,533,017) (0.0189)

22. LOANS

This note provides information on the contractual terms of the Company's interest-bearing loans, valued at amortised cost.

	September 30, 2024	December 31, 2023
Long-term bank loans	-	2,981,883
Short-term bank loans (up to 1 year)	7,908,343	5,124,525
Total bank loans	7,908,343	8,106,408

The tables below present detailed information on the loans contracted by the Company at September 30, 2024 and December 31, 2023:

September 30, 2024

Type of credit	Loan balance (LEI)	Account currency	Annual interest rate (%)	Final maturity of the loan
Credit line	2,908,343	RON	ROBOR 3M +1.5%	13/05/2025
Credit line	5,000,000	RON	ROBOR 3M + 2.5%	19/12/2024
Total	7,550,285
December 31, 2023 Type of credit	Loan balance (Lei)	Account currency	Annual interest rate (%)	Final maturity of the loan
Investment Credit line	124,525 2,981,883	EUR RON	EURIBOR 6M + 2.5% ROBOR 3M +1.5%	20/05/2024 13/05/2025
Credit line	5,000,000	RON	ROBOR 3M + 2.5%	19/12/2024
Total	8,106,408

At December 31, 2023, the Company has an ongoing investment loan worth 420,000 Euro for a period of 14 years in order to purchase a laser cutting equipment and 2 credit lines for working capital. The investment loan is secured by the security mortgage on the above-mentioned asset, at a net book value of 1,385,954 LEI at December 31, 2023 (December 31, 2022: LEI, 1,549,007). For the credit line worth LEI 5,000,000 guarantees in the form of inventories are set up, in net book value of LEI 12,186,765 at December 31, 2023 (December 31, 2022: 0 LEI).

23. LEASE LIABILITIES

Leasing contracts in which the Company is the lessee. The company rents land and office spaces. Leasing contracts usually take place over a period between 5 and 10 years. In addition, the Company rents transport vehicles. Leasing contracts usually run for a period of 5 years.

Leasing contracts do not transfer ownership of the underlying asset at the end of the lease term.

The renewal and extension of the term must be agreed upon by both parties by signing an additional act.

The Company determined the marginal loan rate based on the interest rate applied by financial institutions to similar entities for loans with the same characteristics as leases (in terms of currency and maturity).

The Company includes in the car lease payments the costs incurred in connection with the lease that are not part of the cost of the right-of-use underlying asset (such as maintenance or insurance).

Information is presented below regarding the leases where the Company acts as lessee.

(i) Right-of-use asset

The asset related to the right of use related to the leased properties (buildings) are presented as tangible fixed assets.

2024	Land and buildings	Equipment (transport vehicles)	Total
Balance at 1 January	1,991,627	516,560	2,508,187
Depreciation	(303,023)	(121,406)	(424,429)
Cumulative depreciation on outflows Additions of right-of-use assets	- -	- -	- -
Disposals of right-of-use assets Disposals of right-of-use assets (Reclassifications to	(170,706)	-	(170,706)
underlying assets to right-of-use assets in leases) Balance at 30 September	- 1,517,898	- 395,154	- 1,913,052

2023	Land and buildings	Equipment (transport vehicles)	Total
Balance at 1 January	1,895,940	377,142	2,271,212
Depreciation	(442,066)	(158,046)	(600,112)
Reclassification of underlying assets to right-of-use assets in leases	-	201,759	201,759
Cumulative depreciation on outflows Additions of right-of-use assets	234,428 678,439	- 367,545	234,428 1,045,984
Disposals of right-of-use assets	(375,115)	-	(375,115)
Disposals of right-of-use assets (Reclassifications to underlying assets to right-of-use assets in leases)	-	(269,970)	(269,970)
Balance at 31 December	1,991,627	516,560	2,508,187

23. LEASE LIABILITIES (continued)

(ii) Amounts recognised in profit or loss

	2024	2023
Interest on leases	77,458	58,191
(iii) Values recognised in the cash flow statement

	2024	2023
Cash outflows related to leases	565,055	806,807

The Company registers leases having as main object means of transport, showrooms and office spaces.

24. PROVISIONS FOR RISKS AND CHARGES

	Returns and other	Employee benefits -
	provisions	pensions	Total
Balance at December 31, 2023	41,153	96,962	138,115
Provisions established during the period	-	-	-
Provisions reversed during the period	-	12,992	12,992
Provisions reclassified to trade and other payables	-	-	-
Balance at September 30, 2024	41,153	83,970	125,123
Long-term	-	83,970	83,970
Current	41,153	-	41,153

24. PROVISIONS FOR RISKS AND CHARGES (continued)

	Returns and other provisions	Employee benefits - pensions	Total
Balance at December 31, 2022	60,335	127,083	187,418
Provisions established during the period	-	-	-
Provisions reversed during the period	-	17,610	17,610
Provisions reclassified to trade and other payables	-	-	-
Balance at September 30, 2023	60,335	109,473	169,808
Long-term	-	109,473	109,473
Current	60,335	-	60,335

Warranties

The provisions for warranties in amount of 41,153 LEI (60,335 LEI at September 30, 2023) were set up taking into account the expenses related to the service activity for agricultural machineery in the 2-year warranty period.

Employee benefits – pension provision

The provisions in amount of 83,970 LEI ( 109,473 LEI at September 30, 2023) are set up for the benefits granted to the employees at the end of the employment contract once they retire as a result of some provisions of the collective employment contract.

25. TRADE PAYABLES

	September 30, 2024	December 31, 2023
Internal and external suppliers	1,691,593	8,798,972
Payables for distributors' commissions	695	695
Investment providers	52,052	11,264
Suppliers – invoices not received	40,204	337,383
Total	1,784,544	9,148,315

26. OTHER PAYABLES

	September 30, 2024	December 31, 2023
Salaries and related social contributions	507,788	588,897
Other debts (VAT payment and guarantees)	352,435	440,469
Dividends to be paid	-	-
Advances received	37,234	91,008
Total	897,456	1,120,374

Other liabilities included in the balance on September 30, 2024 contain provisions for untaken vacations in the amount of 0 LEI (40,032 LEI on December 31, 2023), provisions for sales team commissions in the amount of 46,748 LEI (108,663 LEI on December 31, 2023).

Payment dividends not collected within 3 years from the date of declaration are prescribed according to the law, with the exception of the amounts seized by the tax authorities.

In the year 2024, respectively in the year 2023, no dividends were allocated or distributed.

27. CASH FLOW INFORMATION

The method used in presenting the Statement of Cash Flows is the direct method.

The statement of cash flows shows the cash and cash equivalents classified by operating, investing and financing activities, thus highlighting how the Company generates and uses cash and cash equivalents.

In the context of preparing the Statement of Cash Flows:

• cash flows are cash receipts and payments and cash equivalents;
• cash includes cash availability from banks and petty cash;
• cash equivalents include deposits set up with banks, cheques and promissory notes deposited with banks for collection.

The cash flows from the transactions performed in foreign currency are recorded in the functional currency by applying to the value in foreign currency the exchange rate between the functional currency (leu) and the currency from the date of production of the cash flow (the date of making payments and receipts).

Gains and losses arising from changes in foreign exchange rates are not cash flows. However, the effect of the change in the exchange rate on cash and cash equivalents held or owed in foreign currency is reported in the statement of cash flows, but separately from cash flows arising from operation, investments and financing, in order to reconcile cash and cash equivalents at the beginning and end of the reporting period.

The operating activity is the main cash generating activity of the Company.

The level of cash and cash equivalents recorded on September 30, 2024 is 1,830,913 LEI. The military aggression of the Russian Federation against Ukraine had a major impact on the European and international markets, especially on the grain and food market. The impossibility of Ukraine to export its products on traditional markets and the transit corridors offered by the riparian countries, including Romania, generated strong imbalances on the grain market and in general on the food market, with a major impact on farmers who saw forced to sell their products at prices very close to or even below the cost level, with a direct impact on their ability to invest in new agricultural machinery. The drastic decrease in the level of sales achieved by the Company in 2023 also led to an increase in stocks, delays in paying suppliers as well as the impossibility of honoring commitments to shareholders.

However, the management of the company continues to have reasonable expectations that the Company will recover in 2024 (as a result of the measures ordered in the last period) and have sufficient financial resources of its own to ensure its financial stability.

28. FINANCIAL INSTRUMENTS

Overview

The Company is exposed to the following risks from the use of financial instruments:

• credit risk
• liquidity risk
• market risk

These notes present information on the Company's exposure to each of the aforementioned risks, the Company's objectives for risk assessment and management, and the procedures used for capital management.

The Company's management has as permanent objectives the analysis of the future impact of the military conflict against Ukraine on the financial performance and taking appropriate measures to reduce the related risks.

General framework for risk management

The Company's risk management policies are defined in such a way as to ensure the identification and analysis of the risks faced by the Company, the establishment of appropriate limits and controls, as well as the monitoring of risks and compliance with established limits.

28. FINANCIAL INSTRUMENTS (continued)

The risk management policies and systems are regularly reviewed to reflect changes in market conditions and in the Company's activities. The Company, through its standards and procedures of training and management, wants to develop an orderly and constructive control environment, within which all employees understand their roles and obligations.

The Company's internal auditor shall carry out standard and ad-hoc tasks of reviewing the controls and risk management procedures, the results of which are presented to the Board of Directors.

i) Credit risk

The treatment of counterparty risk is based on internal and external success factors to the Company.

The financial assets, which may subject the Company to the risk of collection, are mainly trade receivables and cash availability. The Company has put into practice a series of policies (creditworthiness check, financial rating, payment incidents and obtaining checks and promissory notes) that ensure that the sale of products is made to customers with an appropriate collection. The value of the gross receivables represents the maximum amount exposed to the risk of collection. The situation of receivables by seniority is presented in Note 18, Receivables.

Credit risk is the risk that the Company incurs a financial loss as a result of the failure of a client or counterparty to a financial instrument to perform contractual obligations, and this risk results mainly from the Company's trade receivables.

The Company does not have a significant concentration of credit risk. The Company applies specific policies to ensure that the sale of products and services is carried out in such a way that the commercial credit granted is appropriate and continuously monitors the age of receivables. In this regard, measures have been taken to verify the creditworthiness of customers and the Company's exposure to credit risk, as well as to negotiate partnerships with non-banking financial institutions financing entities.

The Company considers the following are events of default for the purposes of internal credit risk management because historical experience indicates that financial assets that meet any of the following criteria are generally not recoverable:

• when there is a breach of financial agreements by the debtor;
• information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Company, in full (disregarding any collateral held by the Company).

Regardless of the above analysis, the group considers default to have occurred when a financial asset is more than 180 days past due, unless the group has reasonable and reliable information to prove that another delay criterion is more appropriate.

The company writes off a financial asset when there is information indicating that the debtor is in severe financial distress and there is no realistic prospect of recovery, e.g. when the debtor was placed in liquidation. Written off financial assets may still be subject to enforcement in accordance with the group's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss.

Cash and cash equivalents are placed only in leading banking institutions, considered to have a high solvency.

Exposure to credit risk

The carrying amount of financial assets is the maximum exposure to credit risk. The maximum exposure to credit risk at the reporting date was:

	September 30, 2024	December 31, 2023
Gross trade receivables	4,443,025	6,410,395
Expected credit losses for receivables	(1,991,475)	(2,229,497)
Net trade receivables	2,451,550	4,180,898
Other receivables	357,611	158,532
Investment securities	293,041	282,658
Cash, current accounts and deposits placed with banks	1,830,913	1,631,599
	4,933,115	6,253,686

28. FINANCIAL INSTRUMENTS (continued)

i) Credit risk (continued)

	2024 Stages 1 and 2	2024 Stage 3	2023 Stages 1 and 2	2023 Stage 3
Opening balance at 1 January	(429,430)	(1,800,067)	(451,716)	(2,071,359)
Set-ups	-	(1,566,195)	-	(348,581)
Reversals	248,477	1,555,740	22,286	619,873
Closing balance at 31 December	(180,953)	(1,810,522)	(429,430)	(1,800,067)

On the domestic market, the Company collaborated with as much as 4 distributors accross the country, the most important ones being located in predominantly agricultural areas.

On the foreign market, the sales volume accounted for less than 10% of turnover. In this market, the connection with traditional customers who know and promote the Company's products is maintained. Credit risk, including the country risk in which the client operates, is managed on each business partner. When it is considered necessary, specific instruments are required to mitigate the credit risk, respectively advance payments from customers, before the delivery of goods. These are presented in the financial statements as Other payables, advances received.

The Company has established a credit policy according to which each new customer is analyzed individually from the point of view of creditworthiness and in some cases it requires references provided by banks before firm sales contracts are concluded.

For the purpose of monitoring the credit risk related to customers, they are grouped according to the characteristics of the credit risk, taking into account their classification as legal or natural persons, internal or external customers, age, maturity and the existence of previous financial difficulties. Customers classified as having a high risk are monitored, and future sales are made on the basis of advance payments or using various banking instruments to guarantee receipts.

In order to prevent the impact of the military conflict against Ukraine on the clients' creditworthiness and to limit the exposure to clients who could be severely affected, the Company carefully monitors and periodically evaluates (with a higher frequency) their financial standing.

At September 30, 2024, the net carrying amounts of cash and cash equivalents, suppliers and customers, short-term commitments and liabilities approximated their fair values due to short-term maturities.

ii) Liquidity risk

Liquidity risk is the risk that the Company encounters difficulties in fulfilling the obligations associated with financial liabilities that are settled in cash. The Company's approach to liquidity risk is to ensure, as far as possible, that it has sufficient liquidity at all times to pay debts when they become due, both under normal and difficult conditions, without incurring significant losses or jeopardizing the reputation of the Company.

In general, the Company ensures that it has sufficient cash to cover the expected operating expenses, including the payment of financial obligations.

For the purpose of managing liquidity risk, cash flows are monitored and analysed weekly, monthly, quarterly and annually in order to establish the estimated level of net changes in liquidity.

28. FINANCIAL INSTRUMENTS (continued)

iii) Market risk

The Romanian economy is in continuous development, and there is a lot of uncertainty regarding the possible orientation of politics and economic development in the future. The Company's management cannot foresee the changes that will take place in Romania and their effects on the financial situation, on the operating results and the treasury flows of the company.

Currency risk

The Company is exposed to currency exchange risk through its sales, acquisitions, availability and loans that are denominated in currencies other than the Company's functional currency, however the currency in which most transactions are carried out is RON.

The currencies that expose the Company to this risk are mainly EUR. The resulting differences are included in the Statement of the overall result and do not affect the cash flow until the time of liquidation of the debt. As of September 30, 2024, the company has cash, trade receivables and trade debts in foreign currency, the rest of the financial assets and financial liabilities are denominated in lei.

	EUR	RON
September 30, 2024	(1EUR = 4.9756)	1 RON	TOTAL
Cash, current accounts and deposits with banks Financial assets measured at fair value through profit	2,388	1,828,525	1,830,913
or loss	-	293,041	293,041
Trade and other receivables	1,564	2,807,597	2,809,161
Total financial assets	3,952	4,929,163	4,933,115
September 30, 2024	EUR (1EUR = 4.9756)	RON	1 RON TOTAL
Bank loans	-	(7,908,343)	(7,908,343)
Lease loans	(1,976,330)	-	(1,976,330)
Trade and other payables	618,404	(3,300,405)	(2,682,001)
Total financial liabilities	(1,357,926)	(11,208,748)	(12,566,674)
December 31, 2023	EUR (1 EUR = 4.9746)	RON 1 RON	TOTAL
Cash, current accounts and deposits with banks	9,734	1,621,865	1,631,599
Investment securities	-	282,658	282,658
Trade and other receivables	27,494	4,311,935	4,339,429
Total financial assets	37,228	6,216,458	6,253,686
December 31, 2023	EUR (1 EUR = 4.9746)	RON	1 RON TOTAL
Bank loans	(124,525)	(7,981,883)	(8,106,408)

Total financial liabilities	(8,778,700)	(12,138,352)	(20,917,052)
Trade and other payables	(6,112,220)	(4,156,468)	(10,268,688)
Lease loans	(2,541,956)	-	(2,541,956)

28. FINANCIAL INSTRUMENTS (continued)

iii) Market risk (continued)

The Company has not concluded hedging contracts regarding obligations in foreign currency or exposure to interest rate risk.

The impact on the Company's profit of a change of ± 5% of the RON/EUR exchange rate, at September 30, 2024, all other variables remaining constant, is ±56,867 LEI (December 31, 2023: ±367,143 LEI).

Interest rate risk

The Company is exposed to interest rate risk (i.e. ROBOR 3M for credit lines in LEI, EURIBOR 6M for the investment loan). The change in the market interest rate directly affects the income and expenses of variable interest-bearing financial assets and liabilities, as well as the fair value of those bearing fixed interest rates.

At September 30, 2024 and December 31, 2023, most of the Company's assets and liabilities bear no interest. As a result, the Company is not significantly affected by the risk of interest rate fluctuations.

The Company does not use derivatives to protect itself from interest rate fluctuations, the interest rate risk being insignificant.

Sensitivity analysis

The impact on the Company's net profit of a +/- 100 BP change in the interest rate of floating interest rate bearing assets and liabilities and expressed in other currencies corroborated with a change of +/- 500 BP in the interest rate of floating interest rate bearing assets and liabilities and expressed in Lei is -/+ 332,150 LEI at September 30, 2024 (December 31, 2023: -/+ 336,285 LEI).

iv) Capital management

The Company's objectives in capital management are to ensure the protection and capability to reward its shareholders, to maintain an optimal capital structure to reduce capital costs.

The Company monitors the amount of capital raised based on the degree of indebtedness. This rate is calculated as the ratio between net liabilities and total capital. Net liabilities are calculated as total net cash liabilities. Total capital is calculated as equity to which net liabilities are added.

	September 30, 2024	December 31, 2023
Financial liabilities	12,566,674	20,917,052
Cash, current accounts and deposits with banks	1,830,913	1,631,599
Financial assets measured at fair value through profit or loss	293,041	282,658
Financial assets measured at amortised cost	-	-
Net financial liabilities	10,442,720	19,002,795
Equity	47,182,868	51,592,747
Net liability ratio	(0.22)	(0.37)

The Company's management does not estimate difficulties in honoring the commitments towards the shareholders and the obligations towards third parties, the availability of present and future liquidity being in line with the limits imposed by the regulations and sufficient to cover the payments in the next period.

29. COMMITMENTS AND CONTINGENCIES

(a) Taxation

The Romanian tax system is in a phase of consolidation and harmonization with the European legislation. However, there are still different interpretations of the tax law. In certain situations, the tax authorities may treat certain aspects differently, proceeding to the calculation of additional taxes and fees and the related interest and late payment penalties (0.05% per day). In Romania, the tax year remains open for tax verification for 5 years. The Company's management considers that the tax obligations included in these financial statements are appropriate.

(b) Commitments

At September 30, 2024, the Company has issued a letter of guarantee related to the main supplier of goods, CNHI International, as follows:

Bank	Beneficiary	Value	Currency	Date of issue	Due date
Banca Transilvania	CNHI International JSC	900,000	Euro	15.05.2023	29.05.2026

The bank letter of guarantee is secured by a movable mortgage over 2 properties (and and buildings), at a net book value of LEI 1,330,350 at September 30, 2024 (December 31, 2023: LEI 1,330,350).

(c) Insurances concluded

At September 30, 2024 the Company concluded insurance policies for property, plant and equipment.

(d) Court actions

The Company is the subject of a number of court actions resulting from the normal course of its activity, especially related to the recovery of receivables with clients.

In addition to the amounts already recorded in these financial statements, impairment allowances for receivables and described in the notes, the amounts related to other legal actions are recognized when a final and irrevocable decision is obtained or when payments are received.

The management estimates that the outcome of these lawsuits will not have an impact on the financial position of the Company.

(e) Quality - environment compliance program

The Company has implemented the "Quality-Environment" Integrated Management System certified by the external auditor TÜV THÜRINGEN for ISO 9001: 2015 and ISO 14001: 2015. The certificate is for the application of the requirements corresponding to the reference standards has been demonstrated and is certified, according to the certification procedures.

30. RELATED PARTIES

Evergent Investments SA is the majority shareholder of Mecanica Ceahlău SA, owning 73.3020 % of the total operations. The Company is part of the consolidation perimeter of Evergent Investments SA.

NEW CARPATHIAN FUND is a significant shareholder in Mecanica Ceahlau SA, owning 20.2068 % of the total shares.

Details about other parties affiliated with Mecanica Ceahlău SA: Transport Ceahlău SRL.

The related parties to the Company and the relationships therewith are presented below:

Entity The nature of the relationship

Evergent Investments SA Parent company New Carpathian Fund Significant shareholder Transport Ceahlau SRL Related party

30. RELATED PARTIES (continued)

No transactions, amounts due to and receivable from Evergent Investments SA have been identified.

No transactions, amounts due to and receivable from NEW CARPATHIAN FUND have been identified.

The participation interests that the Company holds at September 30, 2024 in Transport Ceahlau SRL are presented as follows:

	September 30, 2024	December 31, 2023
Unlisted shares at 1 January	51,000	51,000
Purchases	-	-
Disposals	-	-
Impairment allowances	51,000	51,000
Balance at 31 December	-	-

The main object of activity of Transport Ceahlău SRL is the road transport of goods, but the share of the activity carried out is represented by general mechanics operations.

The status of movements of shares at September 31, 2024, is as follows:

					Percentage of ownership
	Date of purchase	Date of sale	September 30, 2024	December 31, 2023
Transport Ceahlau SRL	2004	-	24.28%	24.28%

Information on transactions with related parties

During 2024, the Company had no transactions with Transport Ceahlau SRL.

The status of amounts receivable from and payable to Transport Ceahlau is as follows:

	September 30, 2024	December 31, 2023
Other receivables	113,817	113,817
Adjustment for other receivables	(113,817)	(113,817)
Other net receivables	-	-
Trade payables	4,951	4,951

The Company applies the same internal policies in contractual relations with related parties as in relations with other contractual partners with which the Company is not in special relations.

At the end of the reporting period, the following balances are related to transactions with related parties:

	September 30, 2024	December 31, 2023
EVER IMO SA – same majority shareholder
Lease liabilities	531,455	581,978
Trade payables	-	-
Other payables	-	-
Warranty granted	(20,430)	(20,430)

During the reporting period, the following transactions with related parties were carried out, mainly represented by rents.

30. RELATED PARTIES (continued)

Information on transactions with related parties (continued)

In LEI	2024	2023
EVER IMO SA
Interest expenses related to leases	10,590	14,095
Other operating expenses	35,142	44,438
Depreciation related to leases	53,767	71,689

Transactions with key management personnel

The key management staff is represented by:

• Mr. Sorin Molesag Chief Executive Officer
• Mrs. Gabriela Pepene Chief Financial Officer
• Mr. Ioan Moraru Sales Manager

Loans to key management personnel

The Company has not granted advances, credits or loans to the members of the administrative, management and supervisory bodies at September 30, 2024.

Benefits of key management personnel

The salary rights of the officers and managers are established by the Board of Directors in accordance with the legal provisions and the management contracts.

a) Salaries and social security

	September 30, 2024	September 30, 2023
Executive management	661,635	899,432
Members of the Board of Directors	382,813	422,505
Total	1,044,448	1,321,937

b) Salary and social security-related liabilities

	September 30, 2024	September 30, 2023
Executive management Members of the Board of Directors	27,338 24,884	10,038 -
Total	52,222	10,038

The financial statements were authorized for approval by the Board of Directors on November 11, 2024 and were signed on its behalf by:

ION SORIN MOLESAG, GABRIELA PEPENE CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER