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Armatura S.A.

Quarterly Report Nov 14, 2022

2333_10-q_2022-11-14_2a3959cf-ecb2-4cb2-9569-19cefff6956f.pdf

Quarterly Report

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ARMATURA SA

FINANCIAL STATEMENTS FOR QUARTER ENDED SEPTEMBER 30,2022

PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED BY THE EUROPEAN UNION

FINANCIAL POSITION SITUATION 3 -
4
REVENUE AND EXPENDITURE SITUATION 5
SITUATION OF THE GLOBAL RESULT 6
STATEMENT OF CHANGES IN EQUITY 7
CASH FLOW SITUATION 8
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS 9-19
INDICATORS REPORT 20-22

ÄRMATURA SA SITUATION OF THE FINANCIAL POSITION FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless othenvise specified)

January 1
___2022
September 30th
_____
2022
Active
Fixed assets
Tangible assets
Intangible assets
247,525
294
113,648
Real estate Investments
Total
fixed
assets
1,189,098
1.436.917
785,737
899.385
Current assets
Inventories
Customers and other
receivables
1,484
11,812,855
0
8,149,238
Cash and equivalents
of
cash
Receivables tax deferred profit
658,444
176,823
621,174
176,823
Total current assets 12.649.606 8.947.235
Total active 14.086.523 9.846.620
Equity and liabilities
Social Capital
reserves
including the result ofthe
The carried forward result
18,110,957
1,304,075
period-10.479.552
18,110,957
1,304,075
-11.129.565
Total equity 8.935.480 8.285.467
Long-term debt
Loans
Debts related to financial leasing
Tax liabilities
392,431 392,431
put off 0 0

The attached notes are part ofthese financial Statements.

ARMATURA SA SITUATION OF THE FINANCIAL POSITION FOR THE QUARTER ENDED SEPTEMBER 30, 2022 (in lei, unless otherwise specified)

January 1
2022
September
30th
2022
Current
iiabilities
Suppliers and other
debts
3,649,154 550,442
Settlements with shareholders regarding
social Capital 100 100
Loans 0 0
Provisions for risks
and expenses 312,691 212,659
Debts from leasing operations 796,667 405,621
Total current
Iiabilities
4.758.612 1,168.722
Total
debts
5.151.043 1.561.153
Total
equity and
Iiabilities
14,086.523 9.846.620

The attached notes are part ofthese financial Statements

ITS ARMOR REVENUE AND EXPENDITURE SITUATION FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless otherwise specified)

SEPTEMBER
30TH
2021 SEPTEMBER
30TH
2022
Income 2,069,939 1,634,419
Other operating revenues 49,309 1,092
Variation in Stocks offinished
products
and production in progress -1,211,523 54,210
Raw materials and materials -147,985 -89,885
Cost of
goods
-542,155 -55,252
Staff
costs
-779,204 -735,977
Utility expenses -194,175 -327,297
Services provided by third parties -254,040 -343,419
Amortization and depreciation
fixed assets -306,476 -364,454
The net movement in the Provision for other
risks and expenses 8,500 100,032
Other operating expenses -940.095 -15.859
Other income /
(losses), net
1.366.314 -170.763
Operational
result
-911,591 -626,692
Financial income 0 12.267
Financial costs - net -801.779 -35.018
result
Net financial
-801.779 -22.751
Profit/Loss before tax -1,714,046 -650,013
Income /
(Expense) with profit
tax
current and deferred
- -
/
loss for
profit
the
Net
exercise
-1.714.046 -650.013
ofshares
Number
issued
40,000,000 40,000,000
per
and
diluted
earnings
share
Basic
-0.0428 -0.016250

The attached notes are part ofthese financial Statements

ITS ARMOR SITUATION OF THE GLOBAL RESULT FOR THE QUARTER ENDED SEPTEMBER 30, 2022 (in lei, unless othenvise specified

SEPTEMBER 30TH
_____
2021
SEPTEMBER 30TH
_____
2022
Profit/Loss related to the exercise _-1,714,046 __
-650,013
Other elements of
the overall result:
Gain/(Loss) on revaluation
the buildings
Deferred tax impact on
Reserves from revaluation
____; ____-
Other elements ofthe
overall result
related to the year, net oftax
___ : _____
:
Total global result related to the exercise _-1,714,046 __
-650,013

Administrator, Haidelr

Prepared, Ras Dana

The attached notes are part of diese financial Statements

ITS ARMOR SITUATION OF CHANGES IN OWNER'S CAPITAL FOR THE QUARTER ENDED SEPTEMBER 30, 2022 (in lei, unless otherwise specified)

Social capital from revaluation
Reserves
reservations
Other
Reported result Total
Balance on January 1, 2022 18,110,957 1,304,075 $-10,479,552$ 8,935,480
Other elements of the result
Profit / (Loss) for the year
$-650,013$ $-650,013$
Overall overall result $-650,013$ $-650,013$
Balance as of September 30, 202 18,110,957 اد 1,304,075 $-11,129,565$ 8,285,467

The attached notes are part of these financial Statements

ARMÄTURA SA THE INDIVIDUAL SITUATION OF CASH FLOWS FOR THE QUARTER ENDED SEPTEMBER 30, 2022 (in lei, unless otherwise specified)

January 1
2022
September 30th
2022
Cash flows from activities
exploitation
Cash generated from operations
Interest paid 472,444 ____ -24,519
- -
Net cash generated from operating activities 472,444 -24,519
Cash flows from Investment activities
Purchases oftangible
assets
0 0
from the sale of
Net
proceeds
tangible assets 93,406 3,430
Interest received 0 9,320
Net cash used in Investment activities 93,406 12,749
Cash flows from financing activities
Repayments of
leasing loans
Settlements from associates
Net cash used in financing activities
The net change in cash and
cash equivalents
-379,037 -37,269
Cash and cash equivalents
at the beginning ofthe
year
1,037,481 658,443
Increases /
- Decreases
-379,037 -37,269
Cash and cash equivalents
at the end ofthe
Semester
658,444 621,174

Admir i Haide itrator, (aithias

Prepared, Rus Dana

The attached notes are an integral part ofthese Financial Statements.

ITS ARMOR NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless othenvise specified)

1 GENERAL INFORMATION

ARMATURA SA ("the Company") was registered at the beginning of 1991 at the Cluj Trade Registry as a joint-stock Company, and at the end of 1996 it completed the privatization process, being currently a Company with full private Capital. The Company has its headquarters in Cluj Napoca, Garii Street, no. 19, where it also carries out its production activity.

The company's object of activity is "Manufacturing offaucet articles", CAEN code 2814 and it operates in the field ofmetal fittings with experience in the production offittings for thermal installations and water and gas supply, including today in the product portfolio over 1,500 dimensional items. The Company's clients are national and international Companies.

The Company's shares are listed in the Standard category ofthe Bucharest Stock Exchange since 1997.

The Company has no open branches, is not in association with other Companies and does not hold participation titles

The Company has subscribed and paid-up Capital in the amount of4,000,000 lei consisting of 40,000,000 shares with a nominal value of 0.1 lei per share.

2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The main accounting policies applied to the preparation ofthese financial Statements are presented below. These policies have been applied consistently in all the years presented, unless otherwise specified

2.1 Basis of drafting

The financial Statements ofthe Company were drawn up in accordance with the provisions of the Order ofthe Minister of Public Finance no. 2844/2016, for the approval ofthe Accounting Regulations in accordance with the International Financial Reporting Standards, applicable to commercial Companies whose securities are admitted to trading on a regulated market, with subsequent amendments and clarifications.

These provisions correspond to the requirements ofthe International Financial Reporting Standards (IFRS), adopted by the European Union (EU). The effects of changes in exchange rates, regarding the functional cunency. For the purpose ofpreparing these financial Statements in accordance with the legislative requirements in Romania, the functional currency ofthe Company is considered to be RON ("Romanian leu").

1.2 New accounting regulations

Thefollowing amendments to existmg Standards and new mterpretations issued by the International Accounting Standards Board (MSB) and adopted by the EU are inforcefor the currentperiod-

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless otherwise specified)

Amendments to IFRS 9 Financial instruments, IAS 39Financial instruments: recognition and measurement and IFRS 7 Financial instruments: disclosures -Interest rate benchmark reform - Phase 2. They were adopted by the EU on 15 January 2020, and are applicable for periods beginning on or after 1 Januaiy 2021.

Amendments to IFRS 4 Insurance contracts - Extension ofthe temporary exemption from the application ofIFRS 9.The expiry date ofthe temporary exemption from applying IFRS 9 has been extended for annual periods beginning on or after 1 January 2023.

Amendments to IFRS 16 Leases Adoptedofthe EU on August 30,2021 and are applicable after June 30,2021.

Starting with January 1,2018, the Company applied the IFRS 15 Revenue from contracts with customers Standard. IFRS 15 establishes a five-stage model that will be applied for the recognition of revenues from a contract concluded with a customer (with limited exceptions), regardless ofthe type of transaction or industry. Also, the requirements ofthe Standard will apply for the recognition and evaluation of gains and losses from the sale of certain assets of a different nature than the operational one that are not the result ofthe entity's usual activity (e.g.: sale oftangible and intangible assets). The presentation will be provided extensive information, including the disaggregation oftotal income, information about performance obligations,

The societyobteam income from renting some spaces to other commercial Companies, and the income is measured at the fair value ofthe net collected amounts. The income obtained from renting the premises is recognized when there is an Obligation to register a contract, respectively ifthe following conditions have been met:

  • The parties to the contract have approved the contract in writing

  • > The Company can identify the rights of each party regarding the Services that will be transferred
  • The Company can identify the payment terms for rent

  • The contract has commercial content

  • > As of 31.09.2022, the Company has a number of 38 tenants
  • • The Company extended the contracts for an indefinite period

The Company charges a reasonable level ofrents as evidence ofthe increase in the number of tenants compared to 2021.

ARMÄTURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless othenvise specified)

Based on the internal evaluation ofthe possible impact resulting from the application ofIFRS 15, we consider thatthe continuity ofthe activity supported by the two aspects mentioned above is clear, namely the increase in the number oftenants and the extension oftheir existing contracts; no significant effect was identified in these financial Statements.

New Standards, amendments and interpretations issued by the MSB and adopted by the EU, but not applicablefor thefinancialyear ended on September 31, 2022, therefore not adopted:

Amendments to IFRS 3 Business Combinations; IAS 16 Tangible assets; IAS 37 Provisions, contingent liabilities and contingent assets; and 2018-2020 Annual Improvements(all issued on 14 May 2020) - applicablefor periods beginning on or after January 1,2022.

IFRS 17 Insurance contracts(issued on May 18, 2017);including Amendments to IFRS 17(issued on June 25,2020)-applicable for periods beginning on or after January 1, 2023.

Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition ofAccounting Estimates(published on February 12,2021)-applicable for periods beginning on or after January 1,2023.

Amendments to IAS 1 Presentation offinancial Statements and Statement ofPractice 2 IFRS:Presentation of accounting policies(published 12 February 2021) - applicable for periods beginning on or after 1 January 2021.

The Company anticipates thatthe adoption ofthese Standards and amendments to the existing Standards will not have a significant impact on the Company's financial Statements during the period of initial application.

There are no other IFRS or IFRIC implementations that have not entered into force yet and that could have a significant impact on the Company's financial Statements.

2.2 Segment Reporting

A segment is a distinct component ofthe Company that provides certain products or Services (activity segment) or provides products and Services in a certain geographic environment (geographic segment) and which is subject to risks and benefits different from those ofthe other segments. From the point of view ofthe activity segments, the Company does not identify distinct components from the point of view ofrisks and benefits

IFRS 8 Business segments must be applied to the Company's Financial Statements because its eqmty Instruments are traded on apublic market (BVB)

The presentation ofinformation regarding the products and Services, as well as the geographical areas in which the Company operates is mandatory, even for those entities that identify a single reportable activity segment, taking into accountthe quantitative thresholds and the aggregation criteria provided by the Standard. Taking into accountthe quantitative thresholds and the aggregation criteria provided by the Standard, from the point ofview ofthe activity segments, the Company does not identify distinct components from the perspective of associated risks and benefits.

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless otherwise specified)

2.3 Foreign Currency Conversion

(a) Fmctional andpresentation currency

The financial Statements are presented in lei (RON), the national currency ofRomania. The Company keeps accounting records in lei, prepares and presents its financial Statements in accordance with the specific legislation on the subject and with the Regulations on accounting and financial-accounting reports issued by the Ministry of Public Finance

(b) Transactions and Balances

Transactions in foreign currency are converted into functional currency using the exchange rate valid on the date ofthe transactions. The gains and losses resulting from exchange rate differences following the conclusion ofthese transactions and from the conversion at the end ofthe financial year, at the year-end exchange rate ofmonetary assets and liabilities denominated in foreign currency are reflected in the profit and loss account.

Exchange rate gains and losses relating to borrowings and cash and cash equivalents are presented in the income Statement under 'financial income or expenses'. All other gains and losses from the exchange rate are presented in the profit and loss account under "other (losses)/gains - net".

Monetary assets and liabilities denominated in foreign currency are expressed in lei at the balance sheet date. On January 1,2022, the exchange rate used to convert foreign currency balances is 1 EUR = 4.9481 RON (30 September 2022 1 EUR = 4.9490 RON). Gains and losses resulting from the conversion ofmonetary assets and liabilities are reflected in the profit and loss account during the year.

2.4 Tangible assets

Decreases that compensate for increases related to the same asset are recorded alongside other reserves directly in equity; all other reductions are recorded in the profit and loss account. Amounts recorded in revaluation reserves are transferred to retained earnings when the asset is derecognised.

Repair and maintenance expenses are recorded in the Statement of income and expenses in the financial period in which they are made. The costs ofreplacing major components of property, plant and equipment are capitalized and the replaced components are retired.

Gains and losses from disposals determined by comparing receipts with book values are recognized in profit or loss.

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless otherwise specified)

The residual value of an asset is the estimated value that could be obtained by the Company from the sale ofthe respective asset minus the estimated costs ofthe sale, ifthe asset is already old and corresponds to the conditions related to the end of its useful life. The residual value of an asset is zero ifthe Company estimates the use ofthe asset until the end of its physical life. Asset residual values and useful lives are reviewed, and adjusted accordingly, at each balance sheet date.

Gains and losses from the sale are determined by comparing the amounts obtained from the sale with the accounting value, and are recognized under "Other (losses)/net gains" in the Statement ofincome and expenses.

When selling revalued assets, the amounts included in other reserves are transferred to retained earnings.

Real estate investments

Real estate investments are real estate properties (buildings) owned by the Company for the purpose of renting or for increasing the value or both, and not for:

- to be used in the production or supply of goods or Services or for administrative purposes; or

  • to be sold during the normal course of business

A real estate Investment is initially valued at fair value. The Company's accounting policy regarding the subsequent evaluation ofreal estate investments is based on the fair value model. This policy is uniformly applied to all real estate investments held. The evaluation ofthe fair value ofreal estate investments is carried out by evaluators who are members ofthe National Association of Appraisers from Romania (ANEVAR). Thus, the depreciation expense is no longer recognized, and the real estate Investment is subject to revaluation with sufficient regularity in order to recognize it at fair value. Gains or losses resulting from changes in the fair value ofreal estate investments are recognized in the profit or loss account ofthe period in which they occur.

2.5 Intangible assets

Computerprograms

Purchased licenses related to the rights to use Computer programs are capitalized based on the costs recorded with the purchase and commissioning ofthe respective Computer programs. These costs are amortized over their estimated useful life (three years). The costs related to the development or maintenance ofComputer programs are recognized as expenses in the period in which they are carried out.

Other intangible assets

Under other intangible assets are registered the Computer programs created by the entity or purchased from third parties for its own use needs, as well as other intangible assets owned by the Company.

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 2022 (in lei, unless otherwise specified)

Expenditures that allow intangible assets to generate future economic benefits beyond the initially foreseen performance are added to their original cost. These expenses are capitalized as intangible assets, ifthey are not an integral part oftangible assets.

Intangible assets are presented in the financial Statements at acquisition costs minus accumulated depreciation.

2.6 Impairment of non-financial assets

Assets subject to depreciation are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable. The impairment loss is represented by the difference between the accounting value and the recoverable value ofthe respective asset. The recoverable amount is the maximum between the fair value ofthe asset less costs to seil and the value in use.

2.7 Financial assets

Loam and receivables

Classification

Loans and receivables are non-derivative financial assets with fixed or determinable payments and which are not quoted on an active market. They are included in current assets, except for those that have a maturity period greaterthan 12 months from the date ofthe balance sheet. They are classified as fixed assets

Recognition and evaluation

Regular purchases and sales offinancial assets are recognized on the transaction date -the date on which the Company undertakes to buy or seil the respective asset.

Financial assets cease to be recognized when the right to collect cash flows from Investments expires or is transferred, and the Company transfers all the risks and benefits related to the right of ownership.

Loans and receivables are recorded at amortized cost based on the effective interest method. The Company's loans and receivables are classified as "cash and cash equivalents", respectively as "customers and other receivables" in the balance sheet.

2.8 Clearing offinancial Instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet only when there is an applicable legal right to offset the recognized amounts and there is an Intention to offset on a net basis or to realize the asset and offset the liability at the same time.

ARMATURÄ SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless othenvise specified)

2.9 Claims

Receivables are recorded at nominal value minus adjustments for their depreciation. Trade receivables are amounts owed by customers for products, goods sold or Services rendered in the normal course of business.

The Provision for the depreciation of commercial receivables is established when there is objective evidence that the Company will not be able to collect all the amounts owed to it according to the initial conditions ofthe receivables. The significant difficulties faced by the debtor, the probability that the debtor enters bankruptcy or financial reorganization proceedings, non-payment or non-compliance with payment conditions are considered indicators ofthe impairment oftrade receivables.

The accounting value ofthe asset is reduced by using a provision account, and the value ofthe loss is recognized in the Statement ofincome and expenses under "other gains/(losses) - net" in the profit and loss account. When a trade receivable cannot be recovered, it is expensed, with the corresponding reversal ofthe provision for trade receivables. Subsequent recoveries of previously amortized amounts are credited to the profit and loss account.

2.10 Cash and Cash Equivalents

For the cash flow Statement, cash and cash equivalents include cash on hand, bank accounts, bank demand deposits, other short-term financial Investments, overdraft facilities, and the short-term portion ofrestricted bank accounts.

2.11 Share Capital and reserves

The social Capital composed of common shares is registered at the value established on the basis ofthe articles ofincorporation and additional documents, as the case may be, as well as the supporting documents regarding the Capital payments.

Own shares redeemed, according to the law, are presented in the Statement of assets, liabilities and equity as a correction of equity.

Gains or losses related to the issuance, redemption, sale, free transfer or cancellation ofthe entity's equity Instruments are recognized directly in equity in the lines of "Gains / or Losses related to equity instruments".

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless otherwise specified)

2.12 Trade Debts

Trade payables are recognized at fair value.

Trade payables are obligations to pay for goods or Services that were purchased in the normal course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less than one year (or later in the normal course of business). Otherwise, they will be presented as long-term liabilities.

2.13 Loans

Short-term and long-term loans are initially recorded at the amount received, net ofthe costs related to obtaining the loans. In subsequent periods, loans are recorded at amortized cost using the effective return method, the differences between the amounts received (net of acquisition costs) and the normal redemption value being recognized in the profit and loss account during the term ofthe loan contract.

The short-term portion of long-term loans is classified under "Liabilities; Amounts to be paid within a period of up to one year" and included together with the accrued interest at the balance sheet date under "Amounts owed to credit institutions" within liabilities currents.

2.14 Uncertain fiscal positions

The uncertain fiscal positions ofthe Company are analyzed by the management at each balance sheet date. Liabilities are recorded for tax positions for which management believes that additional taxes are likely to be applied ifthese positions were to be audited by the tax authorities. The assessment is based on the interpretation ofthe tax laws that were adopted at the balance sheet date. Liabilities related to penalties, interest and taxes, other than income tax, are recognized based on management's best estimates necessary to settle the obligations at the balance sheet date.

2.15 Employee Benefits

During the financial year, the Company makes payments to the Social Insurance budget on behalf of its employees, because they are all included in the public pension System.

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, uniess othemise specified)

The societydoQS, not contribute to any other pension plan or post-retirement benefits and does not have any other obligations ofthe kind mentioned, for its employees.

Bemfits upon terminatwn ofemployment

In the coliective labor contract ofthe Company, valid for the previous period, it was stipulated that the employees ofthe Company receive, on the occasion ofretirement, a prize equivalent to one/two basic salaries earned in the month before retirement.

Also, in the coliective labor contract ofthe Company, valid for the previous period, it was stipulated that the Company's employees receive compensatory payments in the event oftermination ofthe individual labor contract for reasons related to the Company.

2.16 Revenue recognition

Revenues are recorded when the significant risks and advantages of ownership ofthe goods are transferred to the customer. The amounts representing the income do not include the sales tax (VAT), but include the commeicial discounts granted. Financial discounts granted to customers (discounts) reduce the value ofthe Company's revenues.

The Company recognizes revenues when their value can be reliably estimated, when it is likely to pioduce future economic benefits for the entity, and when specific criteria have been met for each of the Company's activities as described below.

The amount ofrevenue is not considered reliably assessable until all sales contingencies have been resolved. The Company bases its estimates on historical results, taking into account the type of dient, the type oftransaction and the specific elements of each contract.

Revenues from the provision of Services are recognized in the period in which they were provided and in correspondence with the stage of execution.

Interest income is recognized periodically, proportionally, as the respective income is generated, based on accrual accounting.

Revenues from the collection ofrents and/or rights to use assets are recognized on the basis of accrual accounting, according to the contract.

Dividends distributed to shareholders, proposed or declared after the date ofthe financial Statements, are recognized as dividend income when the shareholder's right to collect them is established

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30,2022 (in lei, unless othemise specifled)

2.17 Leases

Leasing is a contract, or part of a contract, that grants the Company the right to use an asset (the underlying asset) for a certain period oftime in exchange for a consideration. The Company, as lessee, obtains the right to use a supporting asset for a certain period oftime in exchange for a consideration.

At the Start date of development, the Company evaluates the asset related to the right of use at cost

The cost ofthe right-of-use asset includes:

-The value ofthe initial assessment ofthe debt arising from the leasing contract

-Any leasing payment made on or before the Start date, minus any leasing incentives received.

  • Any initial direct costs borne by the Company;

  • An estimate ofthe costs to be borne by the Company as lessee for the dismantling and removal ofthe supporting asset, for the restoration ofthe place where it is located or for bringing the supporting asset to the condition imposed by the terms and conditions ofthe leasing contract, with except for the case in which these costs are borne for the production of Stocks.

The lessee assumes the Obligation towards these costs either at the Start ofthe development, or as a result ofthe use ofthe supporting asset during a certain period.

The Company will choose notto apply the provisions of IFRS16 for short-term leasing contracts (<12 months) and for leasing contracts for which the underlying asset has a low value.

Depreciation ofthe supporting asset is determined as follows:

  • If at the end ofthe leasing contract the ownership is transferred, then depreciation will be recognized as an expense during the useful life ofthe asset

-Otherwise, depreciation will be recognized on the shortest period between the useful life ofthe asset and the period ofthe leasing contract.

In the third quarter of2022, the Company had an operational leasing contract in progress for which it lecorded an intangible asset related to the right to use the leased asset, namely buildings.

ARMATURA SA NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 2022 (in lei, unless othervvise specified)

3 THE RUSSIAN-UKRAINIAN MILITARY CONFLICT

In the context ofthe Invasion of Ukraine by the Russian Federation, our Company has no direct exposure to Russia or Ukraine, nor does it have any Customers, suppliers or operations in these countries. Our Company closely monitors the events inside Ukraine, and the outbreak ofthis war naturally generated an important stock market correction that spread globally. At the time of drawing up these financial Statements, the Company is not in a position to reliably estimate the impact, because the events are constantly changing from one day to the next.

Prepared, Rus Dana

QUARTERLY REPORT 30.09.2022* SC ARMATURA SACLUJ-NAPOCA

Social 400267 Cluj-Napoca Str. StationsNo. 19

Phone:
Fax:
E-mail:
Website

+40 264435 367 +40 264435 368 office@armatura,ro www.armatura.ro

Unique registration code: RO 199001 Serial number in the Trade Register: J12/13/1991 Subscribed and paid-up Capital: 4,000,000

The regulated market on which the issued securities are traded:

SC ARMÄTURA SA shares are traded in the Standard category ofthe Bucharest Stock Exchange.

The main characteristics ofthe securities issued by the Company:

  • &gt; Number ofshares: 40,000,000
  • Nominal value: 0.1 RON/share

  • Registered shares, issued in dematerialized form, registered in the independent registry SC Depozitaml Central SA, according to contract no. 1958 of 19.01.2007

Date ofthe report: 20.10.2022

* Drawn up according to Regulation no. 5/2018 ofthe Financial Supervision Authority.

* The financial Statements as of 30.09.2022 have not been audited.

Economic - financial indicators:

1. Current liquidity indicator (Indicator ofworking Capital = current assets: debts under 1 year):

1LC = Current Assets / Current Liabilities

30.09.2022 1LC = 9,849,560 / 871.754 = 11.29

30.09.2021 ILC =1,591,859 / 36,538,072 = 0.044

  • the recommended value is around 2;

  • Highlights the extent to which current liabilities can be covered by current assets.

2.1ndebtedness indicator:

1GI = Borrowed Capital / equity capital * 100

30.09.2022 IGI =0 / 8,288,978 * 100 = 0%

30.09.2021 IGI =2,755,530/- 8,971,440 * 100 = -30.71%

expresses the effectiveness of credit risk management, indicating potential financing and liquidity Problems, with influences in honoring assumed commitments.

Borrowed capital = credits over one year

3. Receivables turnover rate:

VRC = [(receivables at the bcginning ofthe period + receivables at the end ofthe period) / 2] / CA * 270 days

30.09.2022 HRV = [(11,981,399+ 8,317,482) / 2] / 1,544,325 * 270 = 1,774 days

30.09.2021 VRC = [(284,984+ 1,064,285) / 2] / 2,069,939 * 270 = 88 days

  • expresses the company's effectiveness in collecting its debts;

  • expresses the number of days until the date when the debtors pay their debts to the Company;

30.09.2022 VRAI =1,544,325 / 899,385 = 1.72 30.09.2021 VRAI =2,069,939 / 28,762,410 = 0.07

> expresses the effectiveness offixed asset management, by examining the turnover generated by a certain amount offixed assets.

Prepared Rus Dana

Statement

In accordance with Art. 30 ofthe Accounting Law no. 82/1991

The financial Statements were drawn up on 30.09.2022 for: SC Armatura SA, County: 12-Cluj Address: Cluj Napoca, Str. Stations, No. 19 Trade Register number: J12/13/1991 Form of ownership: 34 -Joint-stock Companies Main activity (CAEN code and dass name): 2814 - Manufacture offaucets Fiscal Identification code: RO 199001

The undersigned Matthias Haider as Administrator of SC Armatura SA, assume responsibility for the preparation of the financial Statements on 30.09.2022 and confirm that:

  • a) The financial Statements as of 30.09.2022 were prepared in accordance with the International Financial Reporting Standards (IFRS) and OMF 2844/2016.
  • b) The accounting policies used to prepare the quarterly financial Statements are in accordance with the applicable accounting regulations.
  • c) The quarterly financial Statements provide a true picture of the financial position, financial performance and other Information related to the activity carried out.
  • d) The legal entity carries out its activity under conditions of continuity.

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