Turbomecanica S.A.

PREPARED IN ACCORDANCE WITH MINISTER OF FINANCE ORDER NO. 2844/2016, FOR THE APPROVAL OF ACCOUNTING REGULATIONS IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS, with subsequent amendments and clarifications

FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2024

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 20244
STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 20245
STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED AS AT DECEMBER 31, 2024 6
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 20247
NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 8 2024
MANAGEMENT DECLARATION

STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2024

	Note	December 31, 2024
		RON
Revenues from contracts with clients	4	139,985,852
Changes in inventories of finished goods and work in progress		21,936,210
Raw materials, consumables and utilities	5	(48,692,696)
Employee benefits and salaries	6	(63,132,796)
Depreciation and amortization expenses	11, 12	(11,719,922)
Other operating expenses	7	(11,619,499)
Other operating income	7	1,101,953
Financial expenses	8	(3,521,397)
Finance income	8	1,085,866
Other gains and losses, net	9	(4,638,655)
Profit before taxation		20,784,916
Income tax	10	(4,626,285)
Profit for the year		16,158,631
Other comprehensive income, net of taxation: Items which will not be reclassified to profit and loss: Revaluation of tangible assets, net of tax	20	-
Actuarial gain/ (loss) on defined benefits plan, net of tax	22	(700,030)
Other comprehensive income for the year		(700,030)
Total comprehensive income		15,458,601
Result per share:	27
(RON / share)		0.0437

The accompanying notes are an integral part of these financial statements.

The financial statements were approved by the Board of Administration and authorized for issuance on March 27, 2025.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

CLAUDIA ANGHEL, RADU VIEHMANN,

STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2024

		December 31,
	Note	2024
ASSETS		RON
Long-term assets
Property, plant and equipment	11	92,747,057
Intangible assets	12	1,358,776
Other assets		6,000
Total long-term assets		94,111,833
Current assets
Inventories	13	99,918,514
Trade receivables	15	11,732,347
Contract assets	14	22,903,501
Other receivables	16	1,274,625
Other current assets*	17	2,898,353
Term deposits	18	22,000,000
Cash and cash equivalents	18	3,451,958
Total current assets		164,179,298

Total assets		258,291,131
EQUITY AND LIABILITIES
Capital and reserves
Issued capital	19	36,944,248
Reserves	20	83,652,595
Retained earnings		32,479,818
Losses related to the free disposal of equity
instruments		(599,408)
Total equity		152,477,253

Long-term liabilities
Leases	21	9,921,058
Deferred tax liabilities	10	4,900,287
Provisions	22	856,666
Other financial liabilities	21	4,371,367
Total long-term liabilities		20,049,378
Current liabilities
Trade and other liabilities	23	7,568,121
Contract liabilities	14	31,209,570
Borrowing & leases	21	31,930,103
Current income tax		1,369,210
Provisions	22	4,502,845
Other current liabilities	24	9,184,651
Total current liabilities		85,764,500

Total liabilities		105,813,878
Total equity and liabilities		258,291,131

The accompanying notes are an integral part of these financial statements.

Financial & Commercial Director CEO

The financial statements were approved by the Board of Administration and authorized for issuance on March 27, 2025.

CLAUDIA ANGHEL, RADU VIEHMANN,

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED AS AT DECEMBER 31, 2024

		December 31, 2024
Cash flow from operations:		RON
Net profit / (loss) of the year		16,158,631
Adjustments for:
Income tax	10	4,626,285
Depreciation and amortization expenses	11, 12	11,719,975
Revaluation impact through profit and loss	9, 11
Reversal of provision for receivables	15	(139,963)
Charge of provision for inventories and onerous contracts	13	3,972,366
Movements in other provisions	22	(80,127)
Net loss on the disposal of tangible assets	11, 12	1,105,235
Financial expenses	8	3,521,397
Financial income	8	(1,085,866)
Net gains / loss from exchange rate differences
Changes in working capital:		39,949,730
(Increase) decrease in trade and other receivables		19,022,196
(Increase) / decrease in contract assets		(11,206,394)
Increase / (decrease) in contract liabilities		(1,486,169)
Increase of inventories		(23,140,575)
Increase / (Decrease) in trade and other liabilities		(3,757,994)
Net cash generated by operating activities		19,380,794
Income tax paid		(5,912,246)
Interest received		1,085,865
Interest paid	26	(3,140,906)
Net cash (used in) operating activities		11,413,507

Cash flows from investment activities
Purchase of tangible assets, including advances for tangible assets		(3,265,026)
Purchase of intangible assets		(1,230,892)
Proceeds from the liquidation of financial assets
Variation in term deposits		(4,000,000)
Generated net cash used in investment activities		(8,495,918)
Net cash from financing activities:
Net movement of borrowings	26	9,084,661
Payments related to lease obligations	26	(4,222846)
Collections from other financial institutions	26	3,283,896
Dividends paid	26	(8,394,256)
Net cash generated from / (used in) financing activities		(248,545)
Net increase / (decrease) of cash and cash equivalents		2,669,044
Cash and cash equivalents at the beginning of the period	18
	18
Cash and cash equivalents at the end of the period		3,451,958

The accompanying notes are an integral part of these financial statements.

Financial & Commercial Director CEO

The financial statements were approved by the Board of Administration and authorized for issuance on March 27, 2025

CLAUDIA ANGHEL, RADU VIEHMANN,

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE

FINANCIAL YEAR ENDED DECEMBER 31, 2024

(all amounts are expressed in RON)

	Share capital	Reserves	Revaluation
Balance on January 1, 2024	36,944,248	21,483,811	67,118,186
Profit of the year	-	-
Other comprehensive income: Actuarial gains related to the determined benefits plan, net of deferred tax (Note 22)
Other comprehensive income
Total comprehensive income
Dividend distribution in year (Note 27)
Revaluation reserves			(4,949,400)
Balance on December 31, 2023	36,944,248	21,483,811	62,168,784


	Share		Revaluation
	capital	Reserves
Balance on January 1, 2023	36,944,248	21,483,811
Profit of the year
Other comprehensive income: Actuarial gains related to the determined benefits plan, net of deferred tax	-	-
(Note 22)
Tangible asset evaluation, net of tax (Note 20)	-	-
Other comprehensive income	-	-	20,602,623
Total comprehensive income	-	-	20,602,623
Dividend distribution in year (Note 27)	-	-	20,602,623
Other reserves distribution to retained earnings (Note 20)	-	-
Realized evaluation reserves	-	-
Balance on December 31, 2023	36,944,248	21,483,811

The accompanying notes form an integral part of these financial statements.

The financial statements were approved by the Board of Administration and authorized for issuance on March 27, 2025.

CLAUDIA ANGHEL,	RADU VIEHMANN,
Financial & Commercial Director	CEO

Losses related to the free disposal of equity

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2024

1. GENERAL INFORMATION

TURBOMECANICA SA ("Turbomecanica" or the "Company") is a joint-stock company, incorporated in 1975, with the main activity the manufacturing of engines, mechanical assemblies and equipment for aircraft. It is a privately owned company whose shares are listed on the Bucharest Stock Exchange.

The main shareholders as of 31 December 2024 are as follows:

Viehmann Radu – shareholding of 25.92%

Ciorapciu Dana Maria – shareholding of 15.16%

Romanian State through the Authority for the Administration of State Assets - 150 shares, shareholding of 0.00004% Other shareholders – shareholding of 58.92%.

The evolution of the Company is as follows: 1975-1977- Engine production company Bucharest; 1978-1990 - Turbomecanica Bucuresti; from 20.11.1990, through GD no. 1213, the joint stock company "Compania Comerciala Turbomecanica SA" was incorporated. After 1991, from Turbomecanica SA two companies were formed: Aeroteh SA and Micron-Turboteh SA.

The company has the following revenue streams:

a. MRO services for engines and mechanical assemblies for aircrafts and helicopters. The main products serviced by the Company are: Turbo engines, Viper engines, modernization of Puma helicopters, spare parts for Viper, and Turbo engines, spare parts and engines for Rolls-Royce. Turbomecanica is the only producer and approved MRO service provider of gas turbine engines and mechanical assemblies for aircrafts on the Romanian market.

b. Revenues from production of customer build to print components and spare parts under de above mentioned licenses - the entity provides: components for aircraft and rotorcraft engines and/or mechanical assemblies by using client's technical documentation and spare parts for base maintenance activities to the Ministry of Defense

c. Income from the sale of materials - the sale of materials that the company has in stock.

For more details on revenue recognition policies, see Note 3.

The main clients of the Company are on the domestic market - the Ministry of Defense and IAR Brasov, but the company also has transactions with clients located in Europe.

The average number of employees is as follows:

2024 2023

Average number of employees 475 466

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

2.1 Changes in accounting policies and adoption of revised/amended IFRS accounting standards

The accounting policies adopted are consistent with those of the previous financial year except for the following amended IFRS accounting standards which have been adopted by the Company as of 1 January 2024:

IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (amendments),
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier finance arrangements (Amendments)

The adopted amendments to the IFRS accounting standards have had no material impact on the Company accounting policies.

2.2 Standards issued, but not yet effective, and not early adopted

The standards/amendments that are not yet effective, but they have been endorsed by the European Union

• IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments). The amendments are effective for annual reporting periods beginning on or after 1 January 2025, with early adoption permitted. Management estimates the amendments will have no impact on the Company's financial statements during the initial application period.

IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures – Classification and Measurement of Financial Instruments (Amendments). In May 2024, the IASB issued amendments to Classification and Measurement of Financial Instruments, amending IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures, and these are effective for annual periods beginning on or after 1 January 2026, with early adoption permitted. Management has assessed that the amendment will have no impact on the Company's financial statements.

IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures – Contracts referencing nature-dependent electricity. In December 2024, the IASB issued targeted amendments for better disclosure of nature-dependent electricity contracts, amending IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures; they are effective for annual reporting periods beginning on or after 1 January 2026, with early adoption permitted. Management has assessed that the amendment will have no impact on the Company's financial statements.

IFRS 18 – Presentation and Disclosure in Financial Statements. In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements, replacing IAS 1 Presentation of Financial Statements; they are effective for annual reporting periods beginning on or after 1 January 2027, with early adoption permitted. Management has assessed that the amendment will have no impact on the Company's financial statements.

IFRS 19 – Subsidiaries without Public Accountability: Disclosures. In May 2024, the IASB issued IFRS 19 Subsidiaries without Public Accountability: Disclosures, effective for annual reporting periods beginning on or after 1 January 2027, with early adoption permitted. IFRS 18 introduces new requirements regarding the presentation of information in the profit or loss account. It requires an entity to classify all items of income and expenses in the profit or loss account into one of five categories: operating, investing, financing, income taxes and discontinued operations. These categories are complemented by the requirement to present subtotals and totals for "operating profit or loss," "profit or loss before financing and income taxes" and "profit or loss". The standard also requires also requires disclosure of managementdefined performance measures and includes new requirements for aggregation and disaggregation of financial information based on the identified "roles" of the primary financial statements and the notes. In addition, there are consequential amendments to other accounting standards. IFRS 18 becomes effective for reporting periods beginning on or after 1 January 2027, with early adoption permitted. Retrospective application is required for both annual and interim financial statements. In the following reporting periods, management will analyze the requirements of this newly issued standard and assess its impact.

Annual Improvements to IFRS Accounting Standards - Volume 11. In July 2024, the IASB issued the Annual Improvements to IFRS Accounting Standards - Volume 11; An entity must adopt these amendments for annual reporting periods beginning on or after 1 January 2026. Early adoption is permitted. Management has assessed that the amendment will have no impact on the Company's financial statements.

Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture. In December 2015, the IASB deferred indefinitely the effective date of this

amendment will have no impact on the Company's financial statements

amendment, waiting on the outcome of its research project on the equity method of accounting. Management has assessed that the

3. MATERIAL ACCOUNTING POLICIES

The material accounting policies are presented below:

The material accounting policies applied in preparing these financial statements are presented below. These policies have been applied consistently throughout all the years disclosed, unless otherwise presented.

Statement of compliance

The individual financial statements have been prepared in accordance with the Order of the Minister of Public Finance no. 2844/2016 for the approval of the Accounting Regulations compliant with the International Financial Reporting Standards, with the subsequent modifications and clarifications.

Minister of Finance no. 2844/2016, with subsequent amendments, is in accordance with the International Financial Reporting Standards (IFRS accounting standards) adopted by the European Union, with the exception of IAS 21 The effects of the variation of exchange rates regarding the functional currency, the provisions of IAS 20 Accounting for government subsidies regarding to the recognition of revenues from green certificates, with the exception of IFRS 15 Revenues from contracts with customers regarding revenues from connection fees to the distribution network.

These exceptions have no impact on the financial statements of the Company.

Basis of preparation

The individual financial statements have been prepared on the historical cost basis, except for tangible assets, which are measured at revalued amount, as described in the accounting policies below. The historical cost is generally based on the fair value of the consideration given in exchange for the assets.

The financial statements are presented in Romanian lei ("RON") and all values are rounded to the nearest RON, unless otherwise indicated.

Going concern

The Company's financial statements were drawn up based on the going concern principle, which assumes that the Company will be able to carry out its current activity in the future. The year 2024 was dominated by the conflict between Russia and Ukraine. In this context, the Company was not directly affected by the conflict, but indirectly, as a result of the price increases for raw materials and materials, energy and gas. In order to evaluate the applicability of this hypothesis, the Company's Management analyzed the forecasts regarding the cash flows resulting from the translation of existing and future commercial relationships. Based on this analysis, which also took into account the current economic context, the management considers that the Company will be able to continue its activity in the future and, therefore, the application of the principle of continuity of activity in the preparation of the financial statements is justified.

In 2024, the Company registered a net profit RON 16,158,631 (2023: RON 11,146,661). The company is currently dependent on the activity with two main local customers. The turnover with these customers for 2024 represents 71.09% of the total turnover of the Company (2023: 64%). However, the management of the Company considers that this aspect does not constitute an impediment, given the specialised nature of the services provided and also having orders concluded with these partners for the following periods, which ensure sufficient income. Also, the Company intends to start developing its activity in the civil industry, and in this sense it is considering a series of significant investments in the coming periods.

Fair value measurement

liability occurs either:

The Company measures and recognizes at fair value certain non-financial assets such land, buildings, other types of buildings, technical machinery, equipment, vehicles (including right of use for these assets) and furniture, office equipment and protection equipment. Also, fair values of financial instruments measured at amortized cost are estimated for disclosure purposes.

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

in the absence of a main market, on the most advantageous market for the asset or liability.
on the main market for the asset or liability, or

The principal or most advantageous market must be accessible to the Company.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

at the measurement date. Fair value measurement is based on the presumption that the sale transaction of the asset or the transfer of the

Fair value measurement (continued)

The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants are acting in their own economic self-interest. A fair value measurement of a non-financial asset takes into account the ability of a market participant to generate economic benefits by using the asset in its best use or by selling it to another market participant who would use the asset in its best use.

All assets and liabilities for which fair value is measured or presented in the financial statements are classified within the fair value hierarchy, described as follows, based on the lowest input level that is significant to the fair value measurement as a whole:

Level 1: market prices in active markets for identical assets or liabilities
Level 2: inputs other than quoted market prices included in level 1, which are observable for the asset or liability, directly or indirectly.
Level 3: inputs are unobservable for the asset or liability.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing the categorization (based on the input data from the lowest level that is significant to the fair value assessment as whole) at the end of each reporting period.

The Company's management determines the policies and procedures for both recurring fair value measurement, such as land, buildings, and equipment, and non-recurring measurement.

External valuers are involved in the valuation of significant assets such as land, buildings and equipment. The involvement of external evaluators is decided annually by management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

At each reporting date, management analyzes movements in the values of assets and liabilities that need to be revalued according to the Company's policies, verifying the main inputs applied in the most recent valuation and evaluating changes from the previous valuation.

For the purpose of fair value disclosure, the Company has established classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

Revenue recognition

In accordance with IFRS 15 "Revenue from contracts with customers", the Company recognizes revenue when the customer acquires control of the goods or services provided, at an amount that reflects the price it expects to receive in exchange for those goods or services.

The information regarding the reasoning, estimates and significant accounting assumptions regarding the revenues from the contracts with clients are presented in the section Reasoning, estimates and significant accounting assumptions at the end of this note.

The company has the following revenue streams:

various clients and are satisfied as the services are preset.

the customer as promised under the sales order.

a. The manufacture of parts, components and assemblies for plains and helicopters

The main products produced by the Company are: Turmo engines, Viper engines, modernization of Puma helicopters, spare parts for Turmo and Viper engines, parts and engines for Rolls-Royce. Turbomecanica is the only manufacturer of gas turbine engines and mechanical assemblies for aircraft in the Romanian industry.

Revenue is recorded on the basis of an agreed order between the parties, the parties being committed to fulfill their respective obligations. The rights and payment terms of each party can be easily identified. Payment terms are from 30-120 days after the delivery of the goods. Orders have commercial substance and it is likely that the entity will collect the consideration to which it is entitled in exchange for the goods or services transferred to the customer.

Performance obligations refer to distinct performance obligations represented by the manufacture of parts, components and assemblies for

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for the transfer of promised goods to a customer, excluding those amounts collected on behalf of third parties (for example, some sales taxes). These include fixed amounts as agreed between the parties. Both the terms of the order and the entity's usual business practices must be considered in determining the transaction price. The orders clearly mention the price for each delivered component. It is also assumed that the goods will be transferred to

IFRS 15 requires that the transaction price be allocated to each performance obligation identified in the order on the relative basis of the standalone selling price. There is no difficulty in allocating the price as it is clearly attributable and negotiated at the conclusion of the contract.

For orders with a fixed price, the Company recognizes revenues as production is completed, evaluating the completion stage of the projects. The Company transfers control of a good or service over time and therefore fulfills a performance obligation and recognizes revenue over time because the Company's performance creates or improves an asset that the customer controls as the asset is created or improved. The stage of completion is determined, using the method based on input, depending on the contractual costs incurred until the end of the reporting period, in the form of a percentage of the estimated total cost for each contract.

In case the outcome of an order cannot be estimated reliably, the revenue of the order is recognized only in line with the costs of the order that are likely to be recoverable. When the result of a production order can be reliably estimated and it is likely that the said order will be profitable, the predicted profit is recorded proportionally to the degree of execution during the duration of the order. If it is likely that the total costs of the order will exceed the total revenues of the order, the estimated loss is recorded as an expense, in accordance with IAS 37 Provisions, contingent liabilities and contingent assets.

The company presents as contractual assets the gross amounts owed by customers, related to ongoing contracts, for which the costs incurred and recognized profits (minus recognized losses) exceed the total invoiced value of the respective contract. If the invoices issued exceed the costs incurred plus the recognized profits (less the recognized losses), the gross amounts owed to the customers are presented as liabilities related to the contracts.

b. Revenues from MRO services of engines and mechanical assemblies for aircrafts and helicopters - the entity provides MRO services sold to Ministry of Defense.

The revenues are recorded based on approved contract between parties, parties being committed to perform their respective obligations. Each party's rights and payment terms can be easily identified. The payment terms range from 10 days after the services will be provided. The contracts have commercial substance and it is probable that the entity will collect the consideration to which will be entitled in exchange for the goods or services transferred to the customer.

The performance obligations relate to distinct performance obligations represented by MRO services satisfied over time.

Revenue recognition (continued)

as debts related to contracts.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised services to a customer, excluding those amounts collected on behalf of third parties .

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for the provision of repair services. This includes fixed amounts as agreed between the parties. Both the terms of the contract and the entity's usual business practices must be considered in determining the transaction price. The contracts clearly mention the price for each repair. It is also assumed that the goods will be transferred to the customer as promised under the sales contract.

IFRS 15 requires the transaction price to be allocated to each performance obligation identified in the contract on a relative stand-alone selling price basis. There are no difficulties in allocating the price as they are clearly attributable and negotiated at the contract settlement.

For fixed price contracts, the Company recognizes the revenues as the services are provided, evaluating the completion stage of the projects. The Company transfers control over a good or service over time and, therefore, fulfills an obligation to execute and recognizes revenue over time, as the Company's execution creates or improves an asset that the client controls as the asset is created or improved. The completion stage is determined using the input method, based on the contractual costs incurred up to the end of the reporting period, as a percentage of the total estimated cost for each contract. If the outcome of a contract cannot be estimated reliably, the revenue of the contract is recognized only in line with the costs of the contract which are likely to be recoverable. When the result of a service contract can be estimated reliably and the contract is likely to be profitable, the expected profit is recorded in proportion to the degree of performance over the term of the contract. If the total costs of the contract are likely to exceed the total revenues of the contract, the estimated loss is recorded as an expense, in accordance

with IAS 37 Provisions, contingent liabilities and contingent assets

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

The Company presents as contractual assets the gross amounts owed by customers, related to the ongoing contracts, for which the costs incurred and the recognized profits (minus the recognized losses) exceed the total invoiced value of the respective contract. If the invoices issued exceed the costs incurred plus the recognized profits (less the recognized losses), the gross amounts due to customers are presented

c. Revenues from the sale of materials, waste materials and other services provided

The performance obligations relate to distinct performance obligations represented by sales of materials and are satisfied at point in time, when the delivery takes place.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised materials to a customer, excluding those amounts collected on behalf of third parties (e.g. some sales taxes).

They include fixed amounts, as agreed between the parties. Both the terms of the contract and the entity's customary business practices need to be considered in order to determine the transaction price. The Company has distinct transaction price for each material sold. It is also assumed that the materials will be transferred to the customer as promised in accordance with exiting contract.

IFRS 15 requires that the transaction price be allocated to each performance obligation identified in the contract on the basis of the relative independent selling price. There are no difficulties in allocating the price, as these are clearly attributable and negotiated at the conclusion of the contract. The entity recognizes revenue in accordance with the arrangements established at the time of delivery.

For the activities performed, mentioned above in points a and b, the Company grants to its clients guarantees of good execution for a period that varies between 12 and 18 months. These fall within the scope of IAS 37 as:

a. the guarantees according to the contract offer the customer the assurance that the product will work;

b. the guarantees do not provide additional services other than the assurance that the good will work according to the agreed specifications;

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

c. customers do not have the option to purchase the warranty separately.

Therefore, these guarantees do not constitute separate performance obligations, but should be recognized as provisions in accordance with IAS 37.

Revenue recognition (continued)

Trade Receivables

Trade receivables are recognized at the transaction price determined in accordance with IFRS 15. They are subsequently measured at amortised cost using the effective interest method, less loss allowance. The Company assesses at each balance-sheet date the requirement for an allowance for impairment in trade receivables. When measuring expected credit loss (hereinafter "ECL") the Company uses reasonable and supportable forward looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.

Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are presented in the statement of financial position at fair value ar revaluation date, less any accumulated depreciation and impairment losses and adjusted for any re-measurement of lease liabilities. The initial cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

The right of use of asset relates to rented cars which are depreciated over 3 years, as well as leased equipment amortised over a period between 3 to 20 years.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in note 3 Impairment of non-financial assets.

ii) Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company's exercising the option to terminate.

Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re measured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

are recognised as expense on a straight-line basis over the lease term.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets

Foreign currency transactions

Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in RON, which is functional currency of Turbomecanica SA and also the presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are generally recognised in profit or loss.

Foreign exchange gains and losses are presented in the statement of comprehensive income on a net basis within other net foreign exchange losses/(gains).

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

The exchange rates used are EUR 1 = RON 4.9741 and USD 1 = RON 4.7768, the 2024 average rate is EUR 1 = 4.9746 RON (2023: EUR 1 = RON 4.9746 and USD 1 = 4.4598, the average rate is EUR 1 = 4.9464).

Borrowing costs

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs. Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Employee benefits

In the normal course of business, the Company makes payments to the Romanian State on behalf of its employees, for pensions, health and unemployment fund. The cost of these payments is charged to the income statement in the same period as the related salary cost.

All employees of the Company are members of the Romanian State pension plan.

The Company rewards its employees with retirement benefits according to the collective labor contract. For such pension plan, the cost of benefits is determined using the projected unit credit method, and actuarial assessments are performed on each balance sheet date. The Company recognizes all actuarial gains and losses arising from defined benefit plans immediately in other comprehensive income and all expenses related to defined benefit plans in personnel expenses in profit or loss.

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of

benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate, the expected inflation rate

The Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Company considers the interest rates of high-quality government bonds that are denominated in the currency in which the

and the expected rate of salary increase. Any changes in these assumptions will impact the carrying amount of pension obligations.

Employee benefits (continued)

Benefits for termination of employment contract

Benefits for termination of the employment contract may be paid when the Company terminates the employment contract prior to the normal retirement date or any time the employee accepts voluntary redundancy in exchange for such benefits. The Company recognizes the benefits for termination of employment contract either when it clearly undertakes either to terminate the current employees' employment contracts according to an official plan without the realistic possibility to avoid it; or to offer benefits for terminating the employment contract further to an offer submitted to encourage voluntary redundancy. Benefits owed within more than 12 months from the reporting period are discounted on the reporting date.

Taxation

Income tax expenses consist of all current taxes payable, and deferred income taxes.

Current tax

The tax currently payable is based on the taxable income for the year. Taxable income differs from the income reported in the statement of comprehensive income due to items of revenues or expenses that are taxable or deductible in other years, and due to items that are never taxable or deductible. The Company's current income tax liability is determined by using the taxation rates enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognized based on temporary differences between the carrying value of assets and liabilities in the financial statements and the corresponding fiscal base used in calculating taxable income. Deferred tax liabilities are generally recognized for all taxable temporary differences.

Deferred tax receivables are generally recognized for all taxable temporary differences if the taxable profits against which the deferred tax receivable can be used are available.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the level of the taxes assumed to apply during the period set for the recovery of the debt or realization of the asset, considering the level of taxes (and tax laws) that are or will be in force until the end of the reporting period. The measurement of deferred assets and liabilities reflect the tax consequences that would arise from the manner in which the Company estimates, at the end of the reporting period, to recover or settle the carrying value of its assets and liabilities.

Current and deferred annual tax

Current and deferred tax are recognized in the profit or loss account, unless they refer to elements that are recognized in other comprehensive income or directly in equity, in which case current and deferred tax are also recognized in other comprehensive income, respectively, equity.

The income tax for the year ended December 31, 2024 was 16% (December 31, 2023: 16%).

Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits held with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value, as well as bank overdraft. The overdraft is presented under loans as short-term liabilities in the statement of financial position.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

Property, plant and equipment

Tangible assets used in production or to supply goods or services, or for administrative purposes, are presented in the statement of financial position at fair value at the date of reevaluation less depreciation and any impairment, subsequently accumulated. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the reporting date. The accumulated depreciation at the revaluation date is eliminated with the gross accounting value of the asset, and the net value of the asset is replaced by its revalued value.

Any revaluation surplus is recorded in other comprehensive income and is therefore credited to the reserve from the revaluation of equity assets, except to the extent that it includes a reduction in the revaluation of the same asset previously recognized in profit or loss and, in this case, the increase is recognized in the income statement. A revaluation deficit is recognized in the income statement, unless it offsets an existing surplus for the same asset, recognized in the asset revaluation reserve.

The revaluation surplus is transferred to retained earnings as the assets are written off / sold.

Tangible assets in progress that will be used in production or in administration are stated at cost less any impairment. Costs include professional fees and, in case of qualifying assets, borrowing costs capitalized in accordance with the Company's accounting policies. Such assets are classified under such categories of tangible assets when completed or ready for use for the purpose they were intended. The depreciation of such assets, on the same basis as other owned assets, commences when the assets are ready for use as intended by the management.

The depreciation periods for tangible assets are:

Buildings 10-50 years Installations and technological equipment 3-20 years Furniture and other office equipment 3-15 years

Land is not depreciated.

Depreciation is charged so as to systematically allocate the cost of the asset less the residual value over its estimated useful life, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

An item of property, plant and equipment is no longer recognized further to its assignment or when no future economic benefits are expected from the continued use of the asset. Any gain or loss resulting from the assignment or disposal of an item of property, plant and equipment is determined as the difference between proceeds from sales and the carrying value of the asset and is recognized in the Company's profit or loss.

Intangible assets

Intangible assets acquired separately

De-recognition of intangible assets

Intangible assets with determined useful lives and which are acquired separately are reported at cost less any subsequent accumulated amortization and any accumulated impairment losses. Amortization is charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with undetermined useful lives and which are acquired separately, are reported at cost less accumulated impairment losses.

Other intangible assets 1-10 years

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

An intangible asset is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. The gains or losses from the de-recognition of an intangible asset, measured as difference between net proceeds from sale and the asset's carrying value

The depreciation periods for intangible assets are:

are recognized in profit and loss when the asset is derecognized.

Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that that such assets have impaired. Should such indication exist, the Company estimates the recoverable value of the asset to determine the extent of the impairment (if any).

Where the recoverable value of a particular asset cannot be estimated, the Company estimates the recoverable value of the cash generating unit to which the asset belongs. Where there can be identified a reasonable and consistent basis of allocation, corporate assets will also be allocated to individual cash generating units or, if not, to the smallest company of cash generating units for which a reasonable and consistent basis of allocation can be identified.

Intangible assets with undetermined useful lives and intangible assets not yet available for use are tested at least annually for impairment or anytime there is an indication that the asset might be impaired.

The recoverable value means the highest of fair value minus sale costs and its value in use. When measuring the value in use, estimated future cash flows are discounted at their current value by using a discount rate determined prior to taxation, which reflects the current market assessments of the time value of money and the risks specific to the asset for which the estimates related to future cash flows have not been adjusted.

If the recoverable value of an asset (or cash-generating unit) is estimated to be lower than its carrying value, then the carrying value of the asset (or the cash-generating unit) is reduced to the level of the recoverable value. Impairment is recognized immediately in profit or loss, if

the relevant asset is not registered at a re-measured value, in which case the impairment is treated as reduction of re-measurement. Where the impairment is reversed, the carrying value of the asset (or the cash-generating unit) is increased at the level of its new estimated recoverable value, only that the increased carrying value must not exceed the carrying value that would have been established should the impairment for the asset (cash-generating unit) had not been recognized in previous years. A reversal of impairment is immediately recognized in profit or loss, except where the asset is accounted at revalued amount, in which case the reversal of the impairment is treated as increase of the revaluation.

Inventories

Inventories, which include raw materials, finished products, semi-finished products, work in progress, are valued at the lowest of cost and net realizable value.

The cost of inventories includes all the costs related to the acquisition and processing, as well as other costs incurred to bring the stocks in the form and in the place where they are found. The cost of finished products and production in progress includes the direct expenses related to production, namely: direct materials, energy consumed, direct labor and other direct production expenses, as well as the share of indirect production expenses rationally allocated as being related to manufacturing them.

Raw material inventory costs are determined using the weighted average cost method. The net realizable value represents the estimated sale price during the normal course of the activity, minus the estimated costs for completion and the estimated costs necessary to carry out the sale.

Provisions

Onerous contracts

Provisions are recognized when the Company has a present obligation (legal or implicit) as a result of a past event, and it is probable that an outflow of resources incorporating economic benefits will be required to settle that obligation and a reliable estimate of the value of the obligation may be made.

The value recognized as provision is the best estimate of the counter value required to settle the present obligation at the end of the reporting period, considering the risks and uncertainties related to the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, the carrying value thereof is the present value of such cash flows (if the effect of the time value of money is material).

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

Present obligations generated under onerous contracts are recognized and measured as provisions. A contract is onerous when the

When expected that some or all the economic benefits required to settle a provision will be recovered from third parties, then the receivable is

recognized as asset if it is almost certain that the repayment will be collected and the value of the receivable can be reliably assessed.

unavoidable costs of meeting the obligations under the contract exceeds the economic benefits expected to be received under it.

Provisions (continued)

Guarantees

Provisions for estimated costs of guarantee obligations according to local legislation concerning the sale of goods are recognized on the date when the relevant products are sold, at the best estimate made by the management as regards the expenses required to settle the Company's obligation.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. In this category are also included non-trade liabilities such as VAT and social securities recognized at the best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

Financial assets and liabilities

Financial assets and financial liabilities are recognized when the Company becomes a party in the contractual provisions of the instrument.

Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the entity's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the company has applied the practical expedient, the company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the company has applied the practical expedient are measured at the transaction price.

In order for a financial asset to be classified and measured at amortized cost or fair value through the OCI, it must give rise to cash flows that are "excluding principal and interest payments (SPPIs)" of the outstanding principal amount. This assessment is called the SPPI test and is performed at the instrument level. Non-SPPI cash-flow financial assets are classified and measured at fair value through profit or loss, regardless of business model.

Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest over the relevant period.

The Company's financial assets at amortised cost includes trade receivables, other receivables and contractual receivables, as well as other financial assets (State securities).

track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not

The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments measured at amortised cost. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to

The Company does not hold any financial assets at fair value through OCI or profit or loss.

receive, discounted at an approximation of the original effective interest rate.

Impairment

Financial assets and liabilities (continued)

The Company performed an assessment at year end and no material difference arise in applying ELC model and current accounting which sets allowances for receivables older than 270 days.

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date; for financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Company's understanding of the specific future financing needs of the debtors, and other relevant forward-looking information.

The Company recognises an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

In making the depreciation assessment, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort. Forward looking information considered includes the future prospects of the industries in which the Company's debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as the consideration of various external sources of actual and forecast economic information that relate to the Company's core operations.

Irrespective of the above analysis, the Company considers that there is limited probability of default for the existing clients, as mentioned above there is a high concentration of three state owned clients, the average number of collection days is 22 days, no default occurred in the last years and few chances to occur as the clients are stated owned acting in defence industry.

De-recognition of financial assets

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On de-recognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

The Company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade receivables, when the amounts are over three years past due, whichever occurs sooner. Financial assets written off may still be subject to enforcement activities under the Company's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss within other gains or losses line.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

Financial assets and liabilities (continued)

Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company's financial liabilities include trade and other payables and loans and borrowings including short term bank loans and loans from shareholders.

Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified in the category of financial liabilities at amortised cost (loans and borrowings).

Financial liabilities at amortised cost (loans and borrowings)

This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of comprehensive income. This category generally applies to interest-bearing loans and borrowings.

De-recognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, orthe terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

Segment reporting

A segment is a part of the Company that is involved in activity segments from which it can obtain revenues and register expenses (including revenues and expenses corresponding to transactions with other parts of the same entity), whose operating results are regularly followed by the Company's management in order to made decisions on the resources to be allocated to the segment and assess its performances and for which separate financial information is available. Segment information is disclosed regarding the company's activity segments and are established based on the Company's management and internal reporting structure.

Settlement prices among segments are set objectively.

The results, assets and liabilities related to a segment include elements that may be allocated directly to one segment, and elements that may be allocated on a reasonable basis.

Capital expenses related to a segment represent the total costs registered over the period for purchasing tangible and intangible assets.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

Critical accounting judgements, estimates and assumptions

In order to draw up the Company's financial statements, its management must use reasoning, estimates that influence the reported value of revenues, expenses, assets and liabilities, as well as the value of the amounts reported in the notes to the financial statements and the presentation of contingent liabilities. The related uncertainty of these assumptions and estimates may lead to significant adjustments of the accounting value of assets and liabilities in future periods.

Other information regarding the Group's exposure to risks and uncertainties is included in:

• Risk management policies (Note 26);

• Information on sensitivity analyzes (Note 26).

The following are the critical judgments that management made in the process of applying the Company's accounting policies and that have a significant effect on the accounting values recognized in the financial statements.

i) Recognition of contract revenues

As presented above, in the Revenue Recognition section, IFRS 15 has introduced a comprehensive model for revenue recognition and measurement, which requires critical reasoning as well as significant estimates. The critical reasonings made by the Company's management are

– on the one hand, related to the determination of the method of income recognition for the activities carried out.

Following a comprehensive analysis, the Company determined that the revenues related to the main activities consisting in the manufacture and repair services of engines and mechanical assemblies are recognized as the assumed obligations, is performed, fand forthe other activities recognition at the time of delivery of the obligation. The reasoning applied is presented in the section Revenue recognition IFRS 15. Also, as part of this analysis, the Company's management determined that the use of the input-based method in determining the degree of satisfaction of the assumed obligations is adequate, taking into account the specific activities.

– on the other hand, related to the identification of contracts that meet the criteria for recognizing IFRS 15.

Thus, based on the analysis performed, it was established that collaboration protocols and framework contracts concluded with the main clients do not meet, individually, the criteria and definitions of a contract according to IFRS 15, but only together with other subsequent agreements. The company also analyzed the accounting treatment applied to the activities carried out in anticipation of future contracts and the costs incurred with the manufacture or repair of mechanical assemblies until the contractual agreements meet the criteria established by IFRS 15. Based on this analysis, it was determined that these costs falls within the scope of the IAS 2 Inventories standard, and therefore the eligible costs mentioned in the Inventories section are capitalized in the production in progress until the beginning of the contract. At the beginning of the contract, these costs are recognized in income on a cumulative basis, thus reflecting the work already performed.

The following describes significant estimates and assumptions about future events and other sources of uncertainty at the reporting date, which present a major risk of leading to significant adjustments to the carrying amount of assets or liabilities during the next financial year. The company bases its estimates and assumptions on the parameters available at the date of preparation of the financial statements. However, existing circumstances and assumptions regarding future periods may be subject to change in the context of changes in market conditions or other factors beyond the Company's control. Such changes are reflected in the assumptions as they occur. The basic estimates and assumptions are constantly reviewed. Revisions to accounting estimates are recognized prospectively.

In the process of applying the Company's accounting policies, the management used the following significant estimates and assumptions:

ii) Revenue recognition - the degree of fulfillment of the obligations assumed in the contracts with the clients

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

assumed by the individual contracts. The degree of fulfillment of the assumed obligations is determined by reporting the cost incurred until the end of the reporting period on each individual execution obligation to the estimated total cost of the project. Management's estimate of total budgeted costs is based primarily on pre-calculations performed by the technical department at the beginning of the project and subsequently revised, as appropriate, to the effect of significant changes indicated by the project managers. Given the nature of the activities carried out, the date on which the contractual activity begins and the date on which the activity is completed are usually within different accounting periods.

Critical accounting judgements, estimates and assumptions (continued)

Starting with 2021, the Company periodically analyzes and revises the estimation of contractual revenues and costs, both in the calculation prepared for each individual contract, as the contract progresses. In 2024, the Company recognized in revenue RON 6,576,230 (2023: RON 2,162,210) in correspondence with the contractual assets, including the net margin related to the contracts in progress on December 31, 2024, calculated based on the degree of fulfillment of the assumed obligations, as well as provisions for onerous contracts in the amount RON 736,899 (2023: RON 757,880).

iii) Useful life of tangible and intangible fixed assets

The Company reviews the estimated useful lives of tangible and intangible assets at the end of each annual reporting period. Lifespans are shown below. In 2024, there were no changes in the useful lives of tangible and intangible assets.

iv) The fair value of property, plant and equipment

The company reflects the land, buildings and equipment held at fair value. It is reviewed with sufficient regularity to ensure that the net carrying amount does not differ materially from the fair value of those assets. The valuation of tangible assets is usually performed with the help of independent experts, the last valuation taking place on December 31, 2023.

The fair value is determined using the market value method for real estate and movable property for which there is a market on which they can be traded, and the net replacement cost method for specialized assets for which there is no market on which they can be capitalized. For specialized real estate, two methods were considered, the determination of the new cost, adjusted with the related wear and tear, as well as the income approach. When applying the income approach, the value of the asset in question is determined by discounting the cash flows that could reasonably be obtained from the operation.

v) Inventory provisions

At the end of each reporting period, the Company considers whether the provisions for slow-moving stocks are sufficient. The policy for the provision of slow-moving stocks is detailed in Note 13. The assumptions and depreciation rates applied were determined by the company's management based on analyzes performed by the Company's technicians and engineers. Note 13 shows the movements in the value of provisions for inventories during the year.

vi) Obligations related to pensions

The present value of pension obligations depends on a number of factors established on an actuarial basis using a number of assumptions. Any modification of these assumptions, presented in detail in Note 22, will influence the book value of the pension obligations. Obligations related to pensions on December 31, 2024 amount to RON 1,483,504 (December 31, 2023: RON 879,870). The value was determined both on December 31, 2024 and on December 31, 2023 by Gelid Actuarial Company S.R.L. based on the consultancy and actuarial services contract concluded with it.

vii) Profit tax and deferred tax

The Company is subject to corporate income tax in one jurisdiction (Romania). There are many transactions and calculations for which the final determination of the tax is uncertain. The company records provisions, if any, for possible future consequences of tax inspections. If the final fiscal result of these aspects is different from the amounts initially registered, the respective differences will have an impact on the receivables and debts regarding the current and deferred profit tax in the period in which the respective difference appears.

The Company also calculates deferred tax, as set out in Note 10. The company has not recorded deferred tax in connection with value adjustments on inventories, considering, based on the analysis performed, that they do not generate a temporary difference, according to the standard.

The Company has old stocks of components, specific for helicopters and airplanes. These include special materials, whose scrapping / sale requires the observance of very strict procedures; these are difficult to acquire from the market, and considering the specific activity of the

Company, the management does not intend to capitalize on them by selling / scrapping and may need them in future works.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

4. INCOME FROM CONTRACTS WITH CLIENTS

Below, an analysis of the Company's income for the financial year:

	December 31, 2024
Recognised over the time
Income from the sale of finished products	22,971,644
Incomes from rendering of repair services	114,429,028
Recognised at delivery
Income from the sale of merchandise	744,059
Income from services provided	1,447,295
Income from other activities	1,513
Income from the sale of residual products	392,313
Total	139,985,852

The price allocated to the unfinished execution obligations (unsatisfied or partially unsatisfied) related to the revenues from the manufacturing and repair contracts at the end of the reporting period is RON 73,447,933 (2023: RON 44,976,268). The remaining performance obligation in respect of the provision of services is expected to be recognized within one year of the end of the reporting period.

5. RAW MATERIALS, CONSUMABLES AND UTILITIES

December 31, 2024
35,433,389
4,524,744
5,311,937
2,726,978
154,112
541,536
48,692,696

6. EMPLOYEE BENEFITS AND SALARIES

	December 31, 2024
Salaries	60,352,688
Social security contributions	2,552,784
Movements in provisions for employee benefits (Note 22)	227,324

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

7. OTHER OPERATING EXPENSES AND INCOME, NET

December 31, 2024
4,033,886
2,500,347
906,352
1,269,647
1,273,599
331,383
241,771
88,421
246,797
727,296
11,619,499
(1,101,953)
(1,101,953)
10,517,546

Other operating income includes revenues with utilities (water and energy) invoiced to neighboring companies that do not have separate connection.

8. NET FINANCIAL EXPENSES

	December 31, 2024
Interest expense related to loans	2,193,381
Interest expenses related to leasing contracts	947,525
Bank commissions	313,468
Other financial expenses	67,022
Financial expenses	3,521,396
Interest income	(1,085,865)
Financial income	(1,085,865)
Total	2,435,531

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

9. OTHER GAINS AND (LOSSES), NET

	December 31, 2024
Net gain/(loss) on foreign exchange Movement of provisions, for current assets, employee benefits, and other	(151,797)
provisions (Notes 13, 15)	(3,832,404)
Movements in provisions for guarantees and honorable contracts (Note 22)	307,451
Other gains	143,329
Losses from disposal of tangible assets (Note 11)	(1,105,235)
Expenses on tangible asset revaluation (Note 11)	-
Income from tangible asset revaluation (Note 11)	-
Total	(4,638,656)

10. INCOME TAX

In 2024 and 2023, the income tax rate was 16%.

The income tax recognized in profit or loss:

	December 31, 2024
Current income tax Deferred income tax	5,407,738 (781,453)
Total	4,626,285

Reconciliation of income tax:

20,784,916

3,325,587
2,359,027
(1,058,329)
4,626,285

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

10. INCOME TAX (continued)

The deferred income tax in 2024 and 2023 is as follows:

	Balance as at January 1, 2023	Recognized through profit or loss	Recognized through other comprehensive income
Tangible assets Provisions, including obligations	(2,918,347)	263,075	(3,924,309)
related to employee benefits	867,385	(99,347)	(3,445)
Net tax asset/(liability)	(2,050,962)	163,638	(3,927,755)

In 2024 and 2023, respectively, the Company recorded a deferred tax related to the earnings from pension provisions recorded through the comprehensive result and a deferred tax income related to the provisions for bonuses, unused vacations, guarantees and value assistance of clients. The deferred tax recognized in relation to tangible assets is related to temporary differences and is reduced as they are amortized. The increase recorded in 2023 is due to the revaluation made in as of December 31, 2023. No deferred tax was recognized for stock provisions, based on the rationale presented in Note 3.

Deferred tax consists of:

	Liabilities
31-Dec-24	31-Dec-23	31-Dec-24
-	-	(5,762,914)
862,627	764,502
862,627	764,502	(5,762,914)
		Assets

Net deferred tax liability is expected to be recovered over a period longer than 12 months from the end of the financial year on December 31, 2024 and December 31, 2023 respectively.

11. PROPERTY, PLANT AND EQUIPMENT

	Land	Buildings and other constructions	Technical installations and machinery
COST
January 1, 2023	16,642,911	13,739,711	41,931,720
Additions	-	-	2,972,757
Transfers	-	29,187	11,497,110
Disposals		-	(139,781)
Impact on revaluation reserve Revaluation impact on the profit and loss	10,487,811	732,553	13,231,575
account, net Cancellation of depreciation resulting from	-	949,350	(54,270)
revaluation	-	(1,752,027)	(24,151,766)
December 31, 2023	27,130,722	13,698,774	45,287,345
Additions
Transfers		171,667	7,400,068
Disposals			(1,437,247)
December 31, 2024	27,130,722	13,870,441	51,250,166

ACCUMULATED DEPRECIATION
January 1, 2023	-	1,173,660	18,133,507
Depreciation for the year	-	578,367	6,146,571
Cancellation of depreciation relating to outflows	-	-	(128,312)
Accumulated depreciation resulting from revaluation	-	(1,752,027)	(24,151,766)
December 31, 2023	-	-	-
Depreciation for the year	-	628,950	10,311,078
Accumulated depreciation related to outflows	-		(332,013)
December 31, 2024	-	628,950	9,976,065

NET BOOK VALUE
December 31, 2023	27,130,722	13,698,774	45,287,345
December 31, 2024	27,130,722	13,241,491	41,271,101

Furniture,

*During 2023, the Company received equipment for which it received financing from other financial institutions. **As at December 31, 2024, the Company has advances paid to suppliers for equipment, of which RON 3,283,896 has been received from other financial institutions during the current year and RON 1,087,471 in 2023 (2023: RON 4,656,223). This financing is disclosed under Other long-term financial liabilities; for further details see Note 21.

11. PROPERTY, PLANT AND EQUIPMENT (continued)

Fair value measurement of the Company's tangible assets

The Company's freehold land; buildings and other constructions; technical machinery, equipment, vehicles (including right of use for these assets); and furniture, office equipment and protection equipment are valued at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. As at 31 December 2023, a revaluation of these assets at fair value was performed by Neoconsult Valuation, independent valuation consultant not related to the Company, Neoconsult Valuation is member of the Institute of Valuers of Romania, and they have appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations. The valuation conforms to International Valuation Standards and, for land and buildings, it was based on recent market transactions on arm's length terms for similar properties.

The valuation report was prepared for the land, buildings, plant, equipment, vehicles, furniture and human and material protection equipment located in the same place. The valuation techniques used were market approach and for specialised properties where the market information available was insufficient, the Company used the net replacement cost method. To determine the final value, the valuer also used the cost and income approach.

The performed revaluation showed gains from revaluation amounting to RON 25,395,743 as follows:

gains related to land amounting to RON 10,487,811
gains related to buildings amounting to RON 1,681,903
gains related to technological equipment amounting to RON 9,753,273
gains related to measuring devices and installations amounting to RON 2,247,928
gains related to the revaluation of vehicles amounting to RON 1,176,104
gains related to the revaluation of furniture and of protective equipment for people and materials, amounting to RON 48,722

The total increase from revaluation was registered as follows: RON 24,526,932 revaluation reserves increase and RON 868,811 net revaluation impact on the profit and loss account (from which revenues from the revaluation of property, plant and equipment amounting to RON 1,073,687 and expenses with the revaluation of tangible assets amounting to RON 204,879).

The net book value of buildings, plant and machinery after revaluation is as follows:

Land RON 27,130,722
Buildings and other constructions RON 13,698,774;
Technical installations and machinery RON 43,184,546;
Equipment and vehicles RON 2,102,799.
Furniture and protective equipment for assets RON 302,004.

For land and buildings, the cost and income approach were used. For the cost approach, a gross replacement cost was estimated. The replacement cost was determined using the guidelines set out by Cornel Schiopu in the valuation guide "Reconstruction costs - replacement costs, industrial, commercial and agricultural buildings", Iorval, 2010 adjusted with indices discounted for August 2023- July 2024. The gross replacement cost was reduced with estimated accumulated depreciation.

The income approach involved estimating the gross operating income, the capitalisation rate for the net operating income, converting the gross operating income into the buildings value by using the following formula: gross operating income/capitalisation rate for the net operating income. The gross operating income was estimated as follows:

a monthly rent EUR 6/ sqm for Central Warehouses, EUR 7/ sqm for renovated general stores (office space), EUR 4.5 /sqm for heat treatment room and turbo engine testing stand, EUR 5/sqm for the storage area, for laminated product management and for light construction hall and EUR 4 /sqm for fuel and fuel oil warehouse were estimated;

The cost approach is based on the principle of substitution: a prudent buyer will not pay more for a property or car than the cost for buying another property or an equivalent car. The principle can be applied either to an individual asset, a piece of machinery or a whole complex installation. The method principle is to correct the replacement value (again) with the actual depreciation, the steps to be followed being as

the potential gross income was estimated as the rent collected for 12 months;
an occupancy rate of 90% was estimated and the actual gross income were estimated;
the owner's expenses were estimated.

Capitalisation rate for to actual net income: 8.50% was used.

Valuation of the Company's tangible assets at fair value

The cost approach was used for equipment.

follows:

11. PROPERTY, PLANT AND EQUIPMENT (continued)

Determining replacement value (according to the definition: the replacement value of a fixed asset, in an unaltered condition, at its place of use, ready for operation. It includes all the expenses that would have to be incurred as at the valuation date for replacing the equipment considered "as new", with similar technical and economic features, with the one to be valued) by one of the recommended methods (estimate, cost-capacity, index).

The replacement value was determined by assimilating the capacity costs again starting from the quotation and using the indexation method. For some of the equipment (for which a more active market exists) the quotations were taken from the offers attached to the report.

The categorization per level of fair value as per IFRS 13 is as follows:

Level 1 no asset can be included in this category, as there is no active market (transactions) for identical assets where unadjusted prices can be used and accessed by the entity and the appraiser at the valuation date
Level 2 not used, as it could be determined any inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 land, buildings and equipment's were valued using the market, income and cost approaches.

Details of the Company's freehold land and buildings and information about the fair value hierarchy as at the end of the reporting period are as follows:

	Level 3
Land •	27,130,722
Buildings •	13,241,491
Technical installations and equipment, • vehicles	41,271,101
Furniture, equipment, office supplies, • protective equipment	675,892

Pledged or mortgaged assets

As of December 31, 2024, the Company has pledged or mortgaged depreciable tangible assets in the net book value of RON 11,394,131 (December 31, 2023: RON 13,572,649) and land in the amount of RON 16,477,721 (December 31, 2023: RON 16,709,633).

The right to use certain assets

Included in the presented tangible assets above are also assets representing the right to use some equipment amounting to RON 18,425,035 (December 31, 2023: RON 14,177,626); the depreciation expense in 2024 was RON 2,246,704 (2023: RON 550,328). During 2024, the additions were in the amount RON 6,494,112 (2023: RON 11,628,833), out of which, RON 2,513,312 was transferred from Tangible assets in progress, and RON 3,980,800 are additions for which an advance payment was made during 2023 and for which there was a financing in return from a lease company.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

See Note 26 for movements in lease liabilities.

12. INTANGIBLE ASSETS

	Other intangible	Intangible assets
	assets	in progress
COST
As at December 31, 2022	22,521,969	-
Additions Disposals	- -	1,073,040 -
Transfers	1,073,040	(1,073,040)
As at December 31, 2023	23,595,009	-
Additions Disposals		1,230,892
Transfers	1,173,825	(1,173,825)
As at December 31, 2024	24,768,834	57,067
ACCUMULATED AMORTIZATION
As at December 31, 2022	22,086,812	-
Amortization for the year Accumulated amortization related to outflows	733,867	-
As at December 31, 2023	22,820,679	-

Amortization for the year Accumulated amortization related to outflows	646,447
As at December 31, 2024	23,467,125
NET BOOK VALUE
As at December 31, 2023	774,330	-
As at December 31, 2024	1,301,709	57,067

Intangible assets are represented by:

1. SAP-ERP software. The payback period for these software programs is 3 years. The net book value of ERP as of December 31, 2024 is RON 567,005 (December 31, 2023: RON 313,468).
1. IT licenses, value remaining on December 31, 2024: RON 734,704 (31 December 2023: RON 460,788) with useful lives of 12 36 months.

13. INVENTORIES

	December 31, 2024
Raw materials	72,531,040
Consumables	3,756,506
Packaging	48,938

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

Finished goods 8,828,315 3,609,129 Work in progress 19,972,965 16,962,672 Semi-finished goods 18,155,078 18,288,201 Residual products 218,521 169,813 Inventory allowances (23,592,849) (19,620,482) Total 99,918,514 80,750,305

13. INVENTORIES (continued)

Stocks without movement were adjusted: by 100% those without movement in the last 5 years (or more), by 70% those without movement in the last 4 years and by 50% those without movement in the last 3 years. Stocks without movement in the last 2 years were not adjusted because most manufactured products have a long cycle of use.

For the adjustments related to slow-moving stocks, only those materials that had outflows in 2024 were taken into account, and the stocks on December 31, 2024 and December 31, 2023 that were different from zero. A rate was calculated as a ratio between the average stocks (as of December 31, 2024 and December 31, 2023) and the outflows from 2024. The adjustments were calculated according to the size of the rate: 30% for a rate equal to 3, 70% for a rate equal to 4 and 100% for a rate equal to 5 (and higher).

Stocks of raw materials and materials from DPPV management – VIPER finished parts; DPRP – Repaired parts; DPMP - hazardous materials, intended exclusively for the manufacture of aircraft parts and the repair of VIPER 632-41 engines, were 100% provisioned.

The company also evaluated and recorded, if necessary, any adjustments to determine the net realizable value in accordance with IAS 2.

The movement of allowances for inventory impairment (excluding production in progress) is as follow:

	December 31, 2024
Balance at the beginning of the year	(15,317,631)
Increase in provision recognized in profit and loss	(3,050,256)
Balance at the end of the year	(18,367,887)

The increase in allowance per types of inventories can be presented as follows for 2023:

Inventory type	Variation in allowance
Raw materials Consumables and chemicals Finished goods and Residuals products	(3,162,507) 112,492
Total	(3,050,256)

The movement within the adjustments for the depreciation of the stocks related to the production in progress is the following:

	December 31, 2024
Balance at the beginning of the year Increase in provision recognized in profit and loss	(4,302,851) (922,110)
Balance at the end of the year	(5,224,961)

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

14. CONTRACT ASSETS AND LIABILITIES

	December 31, 2024
Repairs and production contracts	22,903,501
Total	22,903,501
Non current Current	- 22,903,501

Amounts relating to contract assets are balances due from customers under repairs contracts that arise when the Company enters in repairs agreement with customers. Any amount previously recognized as a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer.

Payment for repairs services is not due from the customer until the repairs services are complete and therefore a contract asset is recognized over the period in which the repairs services are performed to represent the entity's right to consideration for the services transferred to date.

The loss allowance related to contract assets is recognized at an amount equal to lifetime ECL, simplified approach and taking into account historical default experience.

Based on historical experience, taking into account the specialized nature of the services offered, the limited number of clients and the fact that the main clients are state companies or multinationals with good reputation, the related credit risk is very low, therefore the related impairment is considered insignificant. Following the analysis performed by the Company's management, there was no impairment of these contractual receivables both on December 31, 2024 and on December 31, 2023.

As at December 31, 2024, the Company had contract liabilities amounting to RON 31,209,570 (2023: RON 32,695,740) as advance payments from IAS SA for the current contracts in progress.

15. TRADE RECEIVABLES

	December 31, 2024
Trade receivables	11,631,179
Clients - invoices to be issued	133,075
Allowance for doubtful debts	(31,907)
Total	11,732,347

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

312,031 Increase in provision recognized in profit and loss (139,962) (140,162)

Balance at the end of the year 31,907 171,869

The movement of allowances for impairment of trade receivables is as follows:

December 31,
2024

December 31,

2023

15. TRADE RECEIVABLES (continued)

The Company set provisions in proportion of 100% the receivables which exceed 270 days because the historical experience indicated that these receivables are generally not recoverable.

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have been written off is subject to enforcement activities.

The Company operates in the defense industry, where the main customers are state-owned companies that do not have problems with payments, The remaining balances are in relation with multinational with solid reputation, which did not presented delays for payments. The increase in the balance of receivables at the end of the year is due to the completion of a large number of orders towards the end of the year that were invoiced in the last month.

16. OTHER RECEIVABLES

	December 31, 2024
Other receivables	- 1,274,625
Total	1,274,625

Other receivables include mainly contributions for medical leave and other short-term receivables.

17. OTHER CURRENT ASSETS

	December 31, 2024
Prepaid expenses	416,467
Prepayments - leases	311,674
Advances to suppliers	2,170,212
Total	2,898,353

On December 31, 2024, the Company paid the advance for one financial lease for a piece of equipment for the production capacity (e.g. GLEASON gear cutting or gear grinding correction equipment) to be delivered in the following period.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

18. CASH AND CASH EQUIVALENTS, TERM DEPOSITS AND FINANCIAL ASSETS

CASH AND CASH EQUIVALENTS

	December 31, 2024
Cash at banks	3,403,713
Petty cash	12,746
Other cash available	35,499
Total	3,451,958
TERM DEPOSITS
	December 31, 2024
Bank deposits	22,000,000

On December 31, 2024, the Company set time bank deposits in the following amounts:

RON 6,000,000, from September 2, 2024 for 180 days' term, for an interest of 5.05% p.a. through BRD,
RON 3,000,000, from November 28, 2024 for 90 days' term, for an interest of 5.15% p.a. through BRD,
RON 7,000,000, from December 10, 2024 for 90 days' term, for an interest of 5.20% p.a. through BRD,
RON 3,000,000, from December 18, 2024 for 90 days' term, for an interest of 5.10% p.a. through BRD,
RON 3,000,000, from December 20, 2024 for 180 days' term, for an interest of 5.15% p.a. through BRD.

These deposits are disclosed separately from cash and cash equivalents considering the period for which they were set and that they are not held for the purpose of meeting short-term cash commitments.

19. SHARE CAPITAL

The share capital is fully paid in:	No. of shares
Share capital paid in as at January 1, 2023	369,442,475
Share capital as at December 31, 2023	369,442,475
Share capital as at December 31, 2024	369,442,475

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

In 2024, the Company recorded no changes in share capital.

20. RESERVES

	December 31, 2024
Legal reserves	7,388,850
Revaluation reserves	62,168,786
Other reserves	14,094,961
Total	83,652,596

In 2024 and 2023, respectively, the Company did not set an additional legal reserve, since it was already set in 2017 in the amount of 20% of the share capital in accordance with the minimum threshold as stipulated in the Trading Companies Law no. 31/1990 with its subsequent amendments.

The change in revaluation reserves as at December 31, 2024 and December 31, 2023, respectively, is detailed below:

	December 31, 2024
Balance at the beginning of the financial year	67,118,186
Realized revaluation reserve during the year	(4,949,400)
Increase in revaluation reserve due to the revaluation of property, plant and equipment (Note 11)
Deferred income on the revaluation reserve (Note 10)
Increase in revaluation reserve due to the valuation, net of tax	62,168,786
Balance at the end of the financial year	62,168,786

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

21. LOANS, LEASE LIABILITIES AND OTHER FINANCIAL LIABILITIES

	December 31, 2024
a) Short-term debts to shareholders	4,880,000
Loans from shareholders (Note 28)	4,880,000
b) Loans from banking institutions, lease entities and other financial liabilities
Secured loans
Short-term bank loans	23,198,478
Short-term lease liabilities	3,851,625
Long-term lease liabilities	9,921,058
Other long-term financial liabilities	4,371,367
Total loans from banking institutions, lease entities and other secured
financial liabilities	41,342,528
Total loans, lease liabilities and other financial liabilities (a + b) Of which:	46,222,528
Short-term loans and lease liabilities	31,930,103

a) Amounts owed to shareholders

At the end of March 2009, the Company concluded loan contracts with shareholders to finance its operating activity as follows:

➢ Viehmann Radu: RON 4,580,000 of which RON 4,500,000 according to Contract 178/2009 and the subsequent addenda and RON 80,000 according to short-term contract no. 538/2011, non-interest bearing.
➢ Ciorapciu Dana Maria: RON 300,000 according to Contract 867/2012 and the subsequent addenda.

These are extended annually, through addenda, and the interest related to these contracts is paid during the year.

In February 2024, the two loan contracts with the shareholders were extended and addenda were concluded as follows: AA 16 /07.02.2024 to contract 178/2009 and AA 12 / 07.02.2024 to contract 867/2012; these addenda did not change the interest rate of 8.8%/year, which includes the percentage related to the investment income tax, which currently, according to the Fiscal Code, is 10%.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

21. LOANS, LEASE LIABILITIES AND OTHER FINANCIAL LIABILITIES (continued)

b) Amounts owed to credit institutions

Contract	Balance at December 31, 2024
(A) BRD – Credit facility no. 103 BIS/28.04.2006 (D) Banca Transilvania	13,891,023
– Loan Contract no.186/24.06.2009	9,307,455
	23,198,478

(A) BRD – Credit facility no. 103 BIS/28.04.2006

The Company has a credit line and a SGB issuance facility and the opening of letters of credit with BRD which has been extended over time through addendums.

Addendum no. 65 / 29.08.2023 extended the validity period of the global financing ceiling of facility A, multi-options, non-binding, until 31.08.2024, and for facility B, the SGB value cannot exceed 12 months from issue/opening. The contract provides a series of special fees (SGB amendment commission, SGB analysis commission, L\C (letter of credit) issuing commission, letter of credit modification commission, letter of credit non-utilization/cancellation commission). The interest for the used amounts is floating, the rate is ROBOR 3M + 3,5% margin p.a. On 31.12.2023, the loan balance is RON 6,019,635.

Addendum no. 66 / 27.08.2024 extended the validity period of the global financing ceiling of facility A, multi-options, non-binding, until 30.08.2025, and for facility B, the SGB value cannot exceed 12 months from issue/opening. The contract provides a series of special fees (SGB amendment commission, SGB analysis commission, L\C (letter of credit) issuing commission, letter of credit modification commission, letter of credit non-utilization/cancellation commission). The interest for the used amounts is floating, the rate is ROBOR 3M + 2.5% margin p.a...On 31.12.2024, the loan balance is RON 13,891,023.

The value of the Bank Letters of Guarantee issued through the loan ceiling and valid on 31.12.2023 is RON 1,931,866, as follows: a Bank Letter of Guarantee was issued for the return of the advance in favor of the client, the Executive Unit for the Financing of Higher Education, Research and Innovation (UEFISCDI) in the amount of RON 283,668 with maturity date 25.01.2024. On 22.12.2023 a Performance Bank Letter of Guarantee was issued in favor of the client UM01836 in the amount of RON 1,648,198 with maturity date 20.12.2024.

The value of the Bank Letters of Guarantee issued through the loan ceiling and valid on 31.12.2024 is RON 1,748,698, as follows: a Bank Letter of Guarantee was issued in favor of client UM01836 in the amount of RON 1,648,198 with maturity date 28.02.2025. On 31.12.2024, a Performance Bank Letter of Guarantee was issued in favor of the client UM01836 in the amount of RON 100,500 with maturity date 31.03.2025.

On 31.12.2023, the approved limit is RON 19,365,000, of which RON 6,019,635 was used through the credit line and RON 1,931,866 through Bank Letters of Guarantee, the available limit being RON 11,413,499.

On 31.12.2024, the approved limit is RON 19,365,000, of which RON 13,891,023 was used through the credit line and RON 1,748,698 through Bank Letters of Guranatee, the available limit being RON 3,725,279.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

21. LOANS, LEASE LIABILITIES AND OTHER FINANCIAL LIABILITIES (continued)

(B) Banca Transilvania – Loan contract no. 186/24.06.2009

On 12.05.2023, Addendum no. 38/186 was concluded, the purpose of which is to modify the following conditions: credit facility extension until 16.05.2024; the amount of the loan RON 9,400,000; Multiple drawings. Credit use until 16.05.2024. The interest is maintained at 2.5% plus ROBOR 6M calculated on the last working day of the previous calendar quarter. Credit use until 16.05.2024.

On 14.05.2024, Addendum no. 35/186 was concluded, the purpose of which is to modify the following conditions: credit facility extension until 16.05.2024; the amount of the loan RON 9,400,000; Multiple drawings. Credit use until 14.05.2025. The annual interest rate is floating and it consists of the ROBOR 6M index to be computed in the last business day of the prior calendar trimester, to which the bank's 2.3% margin is added. Credit use until 14.05.2025. Credit balance as at 31.12.2024 is of RON 9,307,455 (31.12.2023 : RON 8,094,182).

Guarantees:

real estate mortgage over: 3,349 sqm of land inside the built-up area, 583 sqm of unfenced land, 684 sqm of free land located inside the built up area, 167 sqm of land inside the built-up area, 1,322 sqm of land inside the built-up area and movable collateral on the receipts and on the balance of the current account and of the sub-accounts opened with BT, under no. 186 / CES / 02 / 06.06.2012, amended and supplemented by AA 01/186 / CES / 02 / 21.05.2019.

According to the standard contractual clauses, the client undertakes to submit to the bank for analysis all the documents necessary to extend the credit facility at least 45 days before the maturity of the facility.

Turbomecanica has the obligation to perform a turnover through BT of min. 33% of the turnover achieved. The turnover condition was met. The special terms of the facility are maintained and remain unchanged.

b) Amounts owed to lease institutions and other financial liabilities

In 2024, the Company concluded a new lease with BT Leasing, for the purchase of equipment to increase the production activity, i.e., a multifunctional equipment with numerical command OKUMA MULTUS U3000, to be received during 2025. The total contract value is RON 2,773,198, and, as at 31 December 2024, the lease liability and the asset are commitments not recorded on the balance sheet, and the Company paid no advance or installment in relation to this agreement.

In 2023, the Company signed five new lease agreements for the purchase of equipment to increase production capacity, their balance as at 31 December 2023 being RON 4,962,161.

The Company has financial leases in progress for equipment, which were concluded in previous years, the balance of which is RON 13,772,683 as at December 31, 2024 (2023: the Company had financial leases in progress for equipment, which were concluded in previous years, the balance of which was RON 6,951,309).

The assets related to these leases are presented in the Note 11. All lease liabilities are due within a period until 5 years.

The Company has concluded a sale and leaseback contract for the Gleason gear cutting or gear grinding correction equipment with a financed value of Euro 990,000, with an estimated reception date during the first half of 2025. By December 31, 2024, the Company paid advances in the amount RON 4,683,041 (2023: RON 4,656,223) to equipment suppliers, out of which, RON 3,283,896 was paid in 2024, as presented in Note 11. In return for these advances paid, financing was obtained from the lease company, presented in the other financial liabilities line. According to the contractual terms, these assets will be received during the following period. Starting with the reception date, the Company will obtain a right of use and, in return for it, a financial lease liability, based on the concluded contracts.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

22. PROVISIONS

	Provisions for post employment benefits	Other provisions related to personnel	Provisions for Guarantees
Balance as of 01.01.2024	879,870	1,952,415	1,016,104
Additions	188,672	2,409,474	-
Used	(418,407)	-	-
Reversal through profit and loss Actuarial loss – other comprehensive income	- 833,369	(1,952,415) -	(286,470) -
Balance as of 31.12.2024	1,483,504	2,409,474	729,634

As at December 31, 2024, all provisions except the provision "Provisions for post-employment benefits" are presented as current provisions. From the total "Provision for post-employment benefits" the amount of RON 626,838 is disclosed as a short-term provision, while the difference of RON 856,666 is presented as a long-term provision (2023: the amount of RON 80,771 is disclosed as a short-term provision, while the difference of RON 799,099 is presented as a long-term provision).

Other personnel-related provisions

The following are included in "Other personnel-related provisions": provision for performance bonuses for the current year that will be paid in the following year, and a provision for vacations not taken at the end of year. The expenditure with these contributions registered in the current year is disclosed in Note 6 together with the reversal of the related provision. The amounts presented as additions mainly comprise the provision for performance bonuses for 2024, and those presented for use, consist in the reversal of the provision for performance bonuses together with the granting of these bonuses.

Post-employment benefit provisions

The Company provides the following benefits to its employees:

years;

Rate of dismissals

a) Retirement benefits in the amount of two basic salaries in the month preceding retirement;

b) Assistance in case of death of the employee: 5 minimum salaries per company plus 25% of this amount of each dependent child; c) Upon termination of the activity from the company's initiative as a result of the restriction of its activity, compensatory payments of up to 6 individual salaries, representing 20% of the individual salary of the month preceding the termination of the collaboration, for each year worked in the company, but not less than one salary, in addition to the rights due to the day, without affecting the salary rights of the remaining staff.

The most recent actuarial valuation of the provision for post-employment benefits was performed on December 31, 2024, by GELID ACTUARIAL COMPANY. The present value of the benefit obligation determined the costs related to the current services and the cost of the past service, were measured using the Projected Credit Factor Method (MFCP). These benefits will be paid in large in the next 5-15 years. The main assumptions used for the purposes of the actuarial valuations were as follows:

1) Demographic assumptions on the future characteristics of employees eligible for receiving benefits:

Mortality of employees and their family members,	Romanian Mortality Table for 2018 (for men and women) issued by the National Institute of Statistics,
Rate of employee turnover	In 2024, the employee turnover rate was 14.2%. For this exercise, the average of the last three years was considered to be 11.9% p.a. Based on the age structure of the staff, the staff turnover rate model takes into account the number of years remaining until retirement and results in a number of employees who would leave and be replaced equal to 11.9% of the total number of employees. The employee turnover rate is: - 29.0% p.a. for employees who have more than 35 years until retirement

Mortality of
employees and
their family
members,

Romanian Mortality Table for 2018 (for men and women) issued by the National Institute of Statistics,

Rate of employee
turnover

In 2024, the
employee turnover rate was 14.2%. For this exercise, the average of the last three years was
considered to be 11.9% p.a. Based on the age structure of the staff, the staff turnover rate model takes into
account the number of years remaining until retirement and results in a number of employees who would leave
and be replaced equal to 11.9% of the total number of employees. The employee turnover rate is:
- 29.0% p.a. for employees who have more than 35 years until retirement

On a linear basis - decreasing to 0% for employees with a number of years until retirement between 35 and 5

For the last 5 years until retirement, we considered that employees are no longer looking to change jobs and

that they have gained enough experience not to be replaced for disciplinary reasons.

For the period after December 31, 2024, no personnel redundancy plan was communicated.

22. PROVISIONS (continued)

2) Financial assumptions

Discount	As regards the discount rate, the Company took into account the yields of bonds on the active market at the end
rate	of December 2024. The available residual terms until maturity were 1 - 11 years and 13 years. For the other
	terms, the Company estimated the discount rate using the Smith-Wilson method. The long-term assumptions
	were:
	– estimated long-term inflation rate 2% p.a.
	– estimated long-term real yield of government bonds 1.3% p.a.
	– liquidity premium for Romania 0%,

	Thus, a balancing forward rate of 3.30% pa was considered,
	The method ensures compatibility between the discount rate and inflation rate,
	The weighted average discount rate is 6.6% p,a,

Inflation rate Based on the statistics issued by INSSE and the NBR forecast as of November 2023, the Company estimated an inflation rate of:

3.8% in 2025
2.9% in 2026
2.7% in 2027
3.0% in 2026
2.5% for 2028 2031 and following a declining trend in the following years The weighted average rate of inflation is 2.6 p.a.

Wage growth rate The Company estimates an average growth of maximum 4.0% in 2025-2027. For 2028 and the following years, the Company estimated that salaries will increase by an average of the annual rate of inflation. The weighted average rate of salary increases is 2.9% pa.

The components of defined benefit costs recognized in profit or loss are as follows:

879,870 49,360


139,312
(418,407)
833,369
-
1,483,504

Calculation for the period:	December 31, 2024
Interest cost	49,360
Current service cost	139,312
Past service cost	-
Total expenses for the period, charged to the profit and loss account	188,672

*in the Statement of Comprehensive Income, the amount is presented net of the deferred tax impact.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

**Other comprehensive income*:**

Amount of actuarial (gain)/loss during the reporting period 833,369 (21,534)

2023

22. PROVISIONS (continued)

Change in provision	December 31, 2024
Opening trial balance – January 1st	879,870
Movement related to the period	1,022,042
Payments	(418,407)
Total provision	1,483,504

Significant actuarial assumptions for determining the defined obligation are the following: discount rate, projected salary increases and mortality,

Benefit Payment Maturity Analysis 2024

Projection of benefit payments (RON)

2023

Maturity of obligations with defined benefits	Retirement benefits	Employee death benefits
Pana la 1 year	580,971	45,867
1 – 2 years	72,220	44,521
2 – 5 years	412,154	125,696
5 – 10 years	1,046,896	144,643
Above 10 years	973,064	123,083

Sensitivity analysis 2024

Hypotheses	December, 31 2024
	Post-employment benefits	Post-employment benefits
PVDBO at 31.12.2024 (RON)	1,483,504
Discount rate +1%	1,421,448
Discount rate -1%	1,551,424
Wage growth rate +1%	1,553,399
Wage growth rate -1%	1,418,682
Increased longevity by 1 year	1,475,134

Warrantee provisions

As mentioned in Note 3, in contract revenues, the Company offers its customers a warranty between 12-18 months. The Company management makes an analysis of the historical costs with the repairs under warranty and, based on this analysis, a warranty provision is recorded. In 2024, the warrantee provision amounts to RON 729,634 (2023: RON 1,016,104).

Provisions for onerous contracts

For the concluded fabrication contracts, where the Company estimates losses, a provision for onerous contracts was recorded.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

Trade liabilities 6,397,568 7,958,652 Liabilities on invoices to be received 1,170,553 1,148,345

Total 7,568,121 9,106,997

23. TRADE AND OTHER LIABILITIES

December 31,

24. OTHER CURRENT LIABILITIES

Other current liabilities	December 31, 2024
Salaries	2,218,398
Salary taxes	3,241,542
VAT payable	1,362,339
Other creditors	56,955
Other taxes	298,748
Dividends payable	2,006,669
Total	9,184,651

25. SEGMENT REPORTING

Operating segments of the Company are driven by the main products and services delivered, as it is shown below: manufacturing of aircraft parts, repairs of engines and other. The geographical segmentation of the operations derives from the country of origin for the main customers

of the Company, The Company's management does not monitor the business at the level of these segments, only the registered revenues, Owned assets serve all segments presented. Therefore, the Company cannot present profitability and CAPEX at the individual segment level.

Segment revenues

Segment	31-Dec-2024

Manufacturing of aircraft parts	31,431,591
Repairs of engines	99,557,689
Other revenues	8,996,572
Total	139,985,852

Geographic information

The Company revenue form external customers and information about its segment assets (non-current assets excluding financial instruments, deferred tax assets and other financial assets by geographical location are detailed below:

Location	31-Dec-2024
EUROPE	139,920,479
- out of which: in Romania	115,757,100
SUA	-
ASIA	65,373
TOTAL	139,985,852

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

26. FINANCIAL INSTRUMENTS

a) Capital risk management

The Company manages its capital so as to make sure that it will continue its business along time with the maximization of the shareholders' wealth, by optimizing the balance of liabilities and equity.

The Company's capital consists of debts, which include the borrowings disclosed in Note 21, cash and cash equivalents and term bank deposits, presented in Note 18, as well as equity.

Own equity comprises share capital, reserves and retained earnings, as disclosed in Notes 19 and 20.

The Company monitors capital based on the gearing ratio. Such ratio is calculated as ratio between the net debt and total capital. The net debt is calculated as total borrowings (including both long and short-term loans) less cash and cash equivalents.

The total capital is calculated as "capital and reserves" as reported in the balance sheet.

The gearing ratio as at December 31, 2024 and December 31, 2023 is as follows:

	December 31, 2024
Total borrowings and lease liabilities	41,851,161
Cash and cash equivalents and term deposits	(25,451,958)
Net debt	16,399,203
Total capital and reserves	152,477,253
Gearing ratio	11%

b) Credit risk management

Top 3 clients

The company is subject to a credit risk due to its trade receivables and other types of receivables. The Company has policies designed to ensure that sales are made to customers with appropriate references regarding their creditworthiness.

The maturity date of the debts is closely monitored and the amounts due after the deadline are promptly tracked. Trade receivables (customers) are presented net of adjustments for impairment of uncertain receivables.

The Company develops policies that limit the value of credit exposure to any financial institution.

The Company does not request collateral deposits but in some limited cases, it requires advances from customers.

The concentration of trade receivables and revenue from contracts is as follows:

The top 3 clients according to sales fall into a low-risk category.

Trade receivables as of 31 December 2024	Contractual assets as of 31 December 2024	Revenue from contracts with customers 2024	Trade receivables as of 31 December 2023
3,361,523	19,829,373	117,196,803	24,087,151

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

Others 8,370,824 3,074,128 22,789,049 5,895,035 4,630,052 20,950,379

Total 11,732,347 22,903,501 139,985,852 29,982,186 11,697,107 131,363,429

2023

Cash, including term deposits, is held in financial institutions that are valued at minimal risk of default. These are BRD and Banca Transilvania.

The book values present the maximum exposure of the Company to the credit risk related to the existing receivables,

On this basis, the provision for loss on December 31, 2024, December 31, 2023 was determined by the provision of receivables older than 270 days.

c) Foreign currency risk management

The Company is exposed to foreign currency fluctuations in commercial and financing transactions. Foreign currency risk arises from recognized trade assets and liabilities, borrowings inclusively, expressed in foreign currency. Due to high associated costs, the Company's policy is not to use financial derivatives to mitigate such risk.

The carrying amounts of the Company's currencies expressed in monetary assets and liabilities as at the reporting date are the following:

2024	EUR EUR 1 = RON 4.9741	USD USD 1 = RON 4.7768	GBP 1 = RON	GBP 5.9951	CHF CHF 1 = RON 5.2806	RON RON 1 = RON	December 31,
	RON	RON		RON	RON	RON
ASSETS Cash and cash equivalents	2,880,048	65,871		9,230	7,940	488,869	3,451,958
Term deposits						22,000,000	22,000,000
Trade receivables	8,106,215	44,842		-	-	3,581,290	11,732,347
Contract assets						22,903,501	22,903,501
LIABILITIES
Trade and other liabilities	2,426,416	2,575,947		88,775	34,139	2,442,844	7,568,121
Short and long-term loans and leases	13,772,683					28,078,478	41,851,161
Contract liabilities						31,209,570	31,209,570
Other financial liabilities	4,371,367
Net balance exposure (assets - liabilities)	(9,584,203)	(2,465,233)	(79,546)		(26,199)	(12,757,232)	(24,912,413)

2024

2023
	EUR	USD
	EUR 1 = RON 4.9474	USD 1 = RON 4.6346
	RON	RON
ASSETS
Cash and cash equivalents	427,935	51,005
Financial investments
Trade receivables	5,590,927	-
Contract assets	-	-
LIABILITIES
Trade and other liabilities	5,430,530	735,215
Short and long-term loans and leases	11,913,464	-
Other financial liabilities	-	-
	4,656,223	-
Net balance exposure (assets - liabilities)	(15,981,356)	(684,210)

2023

c) Foreign currency risk management (continued)

Sensitivity analysis

The Company is mainly exposed in respect of the exchange rate of the EUR vs. RON. The following table details the Company's sensitivity to a 10% increase in the main currencies the company has monetary items.

10% is the sensitivity rate used when reporting foreign currency risk internally to senior management and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

A negative number below indicates a decrease in profit, when there is a 10% weakening of the RON. For a 10% strengthening of RON against the currencies the company has the monetary items denominated there would be an equal and opposite impact on the profit and equity and the balance would be positive.

	10% strengthening of RON against EUR
	December 31, 2024
EUR	(958,420)
USD	(7,955)
GBP	(2,620)
CHF	(246,523)

d) Liquidity and interest risk management

A prudent liquidity risk management requires maintaining sufficient cash and available credit lines, by continually monitoring the estimated and actual cash flow and by correlating the maturities of financial assets and liabilities.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's operating cash flows are impacted mainly by the changes in interest rates, due to the borrowings with variable interest rates contracted from internal credit institutions.

The Company has significant borrowings with variable interest rates that expose the Company to significant cash flow risk. The Company is on ongoing negotiation process with the bank to renegotiate repayment terms and interest.

Sensitivity analysis – interest

The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the reporting date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the reporting date was outstanding for the whole year.

Part of interest the Company pays to lease companies, where the interest is fixed, thus no impact on fluctuations of interest rates.

Assuming a 2% increase, which historically is an increase in ROBOR rates, the impact on the profit and loss account will be insignificant.

For short-term loans, the interest has a volatile component (ROBOR) and is about 8-9% per month.

d) Liquidity and interest risk management (continued)

2024	Interest rate	Less than 1 month	Less than 1 year	1 to 5 years
Trade and other liabilities		1,412,332	6,155,789	-
Long and short term borrowings (of which):		-	34,468,899	9,921,058
Short term loans in RON - BRD	ROBOR 3M+3.5%		13,891,023
Interest - BRD			1,225,188
RON credit limit from Banca Transilvania	ROBOR 6M+3.5%		9,307,455
Interest Banca Transilvania			884,208
Lease BTRL			3,851,625	9,921,058
Shareholder loans			4,880,000
Interest - Shareholder loans	8.8%		429,440
Other long-term financial liabilities				4,371,367
Total liabilities		1,412,332	40,624,688	14,292,425

d) Liquidity and interest risk management (continued)

2023	Interest rate	Less than 1 month	Less than 1 year	1 to 5 years
Trade and other liabilities		3,646,892	5,460,105
Long and short term borrowings (of which):		-	22,445,862	10,140,582
Short term loans in RON - BRD	ROBOR 3M +3.50%		6,019,635
Interest - BRD			575,477
Short term loans Banca Transilvania	ROBOR 6M+2.25%		8,094,182
Interest Banca Transilvania			674,245
Lease BTRL			1,772,883	10,140,582
Shareholder loans	8.80%		4,880,000
Interest - Shareholder loans			429,440
Other long-term financial liabilities				4,656,223
Total liabilities		3,646,892	27,905,967	14,796,805

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

e) Changes in liabilities arising from financing activities

	Collections/ New				Interest	Dividends
	1-Jan-2024	contracts	Payments	Transfers*	during the year	paid
Borrowings	18,993,817	9,084,661			2,193,381	(2,193,381)
Leases	11,913,465	2,513,312	(4,222,846)	3,568,752	947,525	(947,525)
Other financial
liabilities	4,656,223	3,283,896		(3,568,752)
Dividends	1,400,924		(8,394,256)				9,000,000
Total financial
liabilities	36,964,429	14,881,870	(12,617,102)	-	3,140,906	(3,140,906)	9,000,000

*other variations represent advances paid for a sale and lease back contract that was completed during 2024 and transferred as a finance lease liability.

	1-Jan- 2023	Collectio ns/ New contracts	Payments	Transfers*	Interest during the year	Interest paid	Dividends granted
	26,171,93
Borrowings	6	-	7,152,794		1,677,337	1,677,337
Leases Other financial	2,803,128	6,117,746	2,095,854	5,088,445*	537,729	537,729
liabilities	4,627,544	5,117,124	-	(5,088,445)	-	-
Dividends	828,073	-	7,927,149	-	-	-	8,500,000
Total financial liabilities	34,430,681	11,234,869	17,175,797	-	2,215,066	2,215,066	8,500,000

*other variations are advances paid for sale and leaseback agreements that were finalized during 2023 and transferred as a financial lease liability.

f) Fair value of financial instruments

1. Financial assets and liabilities carried at fair value

As at December 31, 2024 and December 31, 2023, the Company does not hold any financial instruments carried at fair value.

2. Non-financial assets carried at fair value

The table below analyses the Company's assets and liabilities carried at fair value, by valuation method. As of 31 December 2024, 31 December 2023 there have been no transfers between fair value levels.

31-Dec-2023

The different levels are defined as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2);
Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs) (Level 3).

31-Dec-2024
Assets	Level 1	Level 2
Land	-
Buildings	-
Equipment	-


31-Dec-2023

Assets	Level 1	Level 2
Land	-
Buildings	-
Equipment	-

3. Assets and liabilities not carried at fair value but for which fair value is disclosed

The assets and liabilities of the Company are carried at amortized cost; their carrying values are a reasonable approximation of fair value. Trade receivables include the contractual amounts for settlement of trades and other obligations due to the Company. Trade and other payables and borrowings represent contract amounts and obligations due by the Company.

27. EARNINGS PER SHARE

(a) Basic

(b) Diluted

shares that may adjust the weighted average number of shares.

The basic result per share is calculated by dividing the shareholders' profit to the weighted average number of ordinary shares issued during the year, except for ordinary shares purchased by the Company and kept as treasury shares (own shares).

	2024	2023
Company shareholders result	16,158,631	11,146,661
Weighted average number of ordinary shares issued	369,442,475	369,442,475
Basic earnings per share	0.04373	0.0302**

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

The diluted result per share is calculated by adjusting the weighted average of existing shares to take into account the translation of all potentially diluted shares, The Company did not register convertible debts or share issuance options which may be converted to ordinary

During 2024, based on the OGSM Decision no. 1 of April 29, 2024, it was decided to distribute dividends in an amount RON 9,000,000 from the profit related to the financial year ended on December 31, 2023 in an amount RON 11,146,661, the difference amounting to RON 2,146,661 representing the profit not appropriated on other destinations representing own source for financing of investments (2023: RON 8,500,000).

At December 31, 2024, the Company has dividends payable in an amount RON 2,006,669 (2023: RON 1,400,924) out of which RON 717,183 (2023: RON 744,239) related to the year 2021, RON 604,929 (2023: RON 656,685) related to 2022 and RON 684,556, related to 2023.

28. RELATED PARTIES

The Company has loans received from related parties as per below illustration:

	December 31, 2024
Total	4,880,000
Radu Viehmann Maria Ciorapciu	4,580,000 300,000

Terms and conditions of transactions with related parties:

The terms and conditions related to the loans presented above are described in Note 21. No guarantees were provided for the loans with the affiliated entities. There have been no guarantees provided or received for any related party loans.

Key management employees

Please see below for an overview of the benefits granted to members of management. In the years ended December 31, 2024 and December 31, 2023 there were no transactions concluded between the company and key management members.

During 2024, the Company paid benefits to the key management members consisting of the members of the Board of Directors ("C.A.") of Turbomecanica SA and the CEO, as follows:

31 December 2024

52

31 December

2023

Board of Directors and CEO 2,593,481 2,736,164

As of December 31, 2024 and December 31, 2023, the Company has granted advances for settlement to the directors / members of the board of directors.

At 2024 and 2023 year end, there were no guarantees or future obligations assumed by the Company on behalf of the directors.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

29. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has commitments in the amount RON 11,943,629 related to the purchase of tangible or intangible assets on December 31, 2024 (December 31, 2023: RON 11,913,465).

The Company issued letters of bank guarantee in favor of business partners on December 31, 2024 in an amount RON 1,931,866 (December 31, 2023: RON 1,931,866) (Note 21).

Commitments related to leasing liabilities are presented in Note 21.

Contingencies

Taxation

Taxation system in Romania is still developing trying to consolidate and harmonize with the European legislation. In this respect, there still are various interpretations of the tax laws. In certain cases, tax authorities may treat differently certain aspects and calculate supplementary taxes and levies and related interests and penalties.

In 2024, the interest value is 0.02% for each day of delay; the delay penalties are 0.01% for each day of delay.

In Romania, the fiscal year stays open for verifications for 5 years. In the last 5 years there have been no tax inspections on the profit tax. The management estimates that the tax liabilities included in these financial statements are adequate.

In accordance with the provisions issued by the Ministry of Public Finance, which regulate the tax regime of items of equity which have not been subject to income tax as at their accounting registration, due to their nature, should the Company change the destination of revaluation reserves (by covering losses or allocation to shareholders), it will incur additional income tax liabilities.

Environmental matters

2024.

Environmental regulations are developing in Romania, and the Company did not register any liabilities as at December 31, 2024 or December 31, 2023 for any estimated costs, including legal and consulting fees, site surveys, the design and implementation of recovery plans as regards the environment. The Company's management believes that provisions regarding environmental obligations are not necessary.

Mitigating climate change by improving environmental performance and preventing pollution

The Company is constantly concerned with protecting the environment, being focused on optimizing the performance of resource allocation and consumption processes and is engaged in identifying solutions to reduce the impact on the environment, by replacing some hazardous substances, increasing air quality and last but not least, recycling.

Through the monitoring and measurement program of the environmental management system, all existing pollution installations on the site are monitored weekly and checked periodically through the predictive preventive maintenance program for technological equipment, regarding their functionality under normal conditions.

The Company is in the process of modernizing the production sections, replacing old and unproductive machine tools with the latest generation industrial centers, with the aim of reducing the amount of hazardous waste. Thus, in 2022, the filter system was installed to capture the emissions of heavy metals and powders on the Copper, Cadmium and Chromation lines, which led to a reduction in the concentration of heavy metals and powders. In addition, the Company decided to purchase and install a system of filters with the efficiency of capturing heavy metal emissions (Phosphating, Pickling, Viper Pickling) and dusts removed in special processes.

The Company, through the prism of the activity carried out, uses organic solvents with volatile organic compounds, which fall under the scope of the legal provisions. Volatile organic compounds, VOCs, are an important category of atmospheric pollutants, frequently encountered in the atmosphere as a result of human activities. The main activity of the company that generates emissions with volatile

the process of painting parts, leading to a decrease in the concentration of VOC emissions.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

organic compounds is the process of degreasing parts, the organic solvent used being tetrachloroethylene. At the beginning of 2023, the exhaust chimney related to the paint shop was cleaned, thus eliminating the excess powder with VOC content retained on the piping during

On December 31, 2024, based on the available information, the Company analyzed the potential impact of climate change on the financial situation and the results of the Company's operations and concluded that there is no impact on the financial position from December 31,

29. COMMITMENTS AND CONTINGENCIES (continued)

Other information

The war in Ukraine and the related sanctions against the Russian Federation have a continuous impact on European and global economies. The entity has no significant direct exposure in Ukraine, Russia or Belarus. However, the impact on the general economic situation may require the periodic review of certain assumptions and estimates (cost of energy, cost of raw materials and general impact of inflationary pressure). On December 31, 2024, based on the available information, the Company analyzed the potential impact of the change in micro and macroeconomic conditions on the financial situation and the results of the Company's operations and concluded that there is no impact on the financial position as of December 31, 2024.

30. AUDIT FEES

Starting with 2021, the auditor of the Company is Ernst&Young Assurance Services SRL. The fees for audit services of the financial statements on December 31, 2024 prepared in accordance with the Order of the Ministry of Public Finances 2844/2016, approving the accounting regulations in accordance with the International Financial Reporting Standards, with the subsequent modifications and clarifications were in an amount EURO 62,000, excluding TVA.

31. SUBSEQUENT EVENTS

In January 2025, the two loan contracts with associates were extended and additional documents were concluded as follows: AA17 /31.01.2025 to contract 178/2009 and AA 13/317.12.2025 to contract 867/2012, respectively.

No other events occurred subsequent to the balance sheet date which could have an impact on the financial statements at December 31, 2023.

The financial statements were approved by the Board of Administration and authorized for issuance on March 27, 2025.

The English version of the financial statements represents a translation of the original financial statements issued in Romanian language

MANAGEMENT DECLARATION

I the undersigned, Eng. Radu Viehmann, Chairman of the Board of Directors and CEO, hereby assume responsibility for the preparation of accounting reports on 31.12.2024.

We declare that all accounting policies used by TURBOMECANICA S.A. for the preparation of accounting reports on 31.12.2024 are in accordance with Accounting Law 82/1991 republished, with subsequent changes and additions, with O.M.F.P. no. 2844/2016 for the approval of the Accounting Regulations in accordance with the International Financial Reporting Standards and Order no. 85/2022 regarding the main aspects related to the preparation and submission of annual financial statements and annual accounting reports of economic operators to the territorial units of the Ministry of Public Finance and for the regulation of some accounting aspects.

We confirm that during the year 2024 there were no cases of violations or possible cases of non-compliance with laws or regulations that could significantly influence the accounting reports.

We declare that the accounting reports on December 31, 2024 of TURBOMECANICA S.A. give a true view of the financial position, financial performance and other information related to the activity carried out between 01.01.2024 - 31.12.2024.

We declare that TURBOMECANICA S.A. carries out its activity under conditions of continuity, it does not intend and does not need to liquidate or significantly reduce the volume of its activity as a result of:

the loss of important clients,
the application of a restructuring plan,
outstanding payments,
liquidity problems, litigation as defendant and plaintiff with shareholders, debtors, significant creditors, state bodies, claims,
sector, market risk,
other factors.

We declare that the management members are not aware of significant uncertainties related to events or conditions that may cause significant doubts on the company's ability to continue its activity.

Date: March 27, 2025

AI Terminal

2324_10-k_2025-04-30_1872a3dd-3dda-4d05-b009-b0e1d410ad14.pdf

TABLE OF CONTENTS

STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2024

STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2024

STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED AS AT DECEMBER 31, 2024

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2024

1. GENERAL INFORMATION

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

2.1 Changes in accounting policies and adoption of revised/amended IFRS accounting standards

2.2 Standards issued, but not yet effective, and not early adopted

The standards/amendments that are not yet effective, but they have been endorsed by the European Union

3. MATERIAL ACCOUNTING POLICIES

Statement of compliance

Basis of preparation

Going concern

Fair value measurement

Fair value measurement (continued)

Revenue recognition

a. The manufacture of parts, components and assemblies for plains and helicopters

b. Revenues from MRO services of engines and mechanical assemblies for aircrafts and helicopters - the entity provides MRO services sold to Ministry of Defense.

Revenue recognition (continued)

c. Revenues from the sale of materials, waste materials and other services provided

Revenue recognition (continued)

Trade Receivables

Leases

Company as a lessee

i) Right-of-use assets

Foreign currency transactions

Functional and presentation currency

Transactions and balances

Borrowing costs

Employee benefits

Employee benefits (continued)

Benefits for termination of employment contract

Taxation

Current tax

Deferred tax

Current and deferred annual tax

Cash and cash equivalents

Property, plant and equipment

Intangible assets

Intangible assets acquired separately

Impairment of tangible and intangible assets other than goodwill

Inventories

Provisions

Provisions (continued)

Guarantees

Trade and other payables

Financial assets and liabilities

Financial assets

Initial recognition and measurement

Financial assets at amortised cost (debt instruments)

Financial assets and liabilities (continued)

De-recognition of financial assets

Financial assets and liabilities (continued)

Financial liabilities

Initial recognition and measurement

Subsequent measurement

Financial liabilities at amortised cost (loans and borrowings)

De-recognition

Segment reporting

Critical accounting judgements, estimates and assumptions

Critical accounting judgements, estimates and assumptions (continued)

v) Inventory provisions

4. INCOME FROM CONTRACTS WITH CLIENTS

5. RAW MATERIALS, CONSUMABLES AND UTILITIES

6. EMPLOYEE BENEFITS AND SALARIES

7. OTHER OPERATING EXPENSES AND INCOME, NET

8. NET FINANCIAL EXPENSES

9. OTHER GAINS AND (LOSSES), NET

10. INCOME TAX

10. INCOME TAX (continued)

11. PROPERTY, PLANT AND EQUIPMENT

11. PROPERTY, PLANT AND EQUIPMENT (continued)

Fair value measurement of the Company's tangible assets

Valuation of the Company's tangible assets at fair value

11. PROPERTY, PLANT AND EQUIPMENT (continued)

**Other comprehensive income*:**