MedLife S.A. — Annual Report 2020

Apr 29, 2021

Annual Report 2020

CONTENTS

• PG. 2 MEDLIFE GROUP IN FIGURES
• PG. 3 CEO STATEMENT
• PG. 5 SIGNIFICANT EVENTS IN THE PAST TWELVE MONTHS
• PG. 6 MEDLIFE'S COMMITMENT
• PG. 7 COMPANY PRESENTATION
• PG. 13 BOARD OF DIRECTORS AND EXECUTIVE COMMITTEE
• PG. 19 MEDLIFE STRATEGIC OBJECTIVES AND DIRECTIONS
• PG. 22 STATUTE OF CORPORATE GOVERNANCE
• PG. 24 RISK MANAGEMENT AND INTERNAL CONTROL
• PG. 26 MEDLIFE SHARES
• PG. 27 DIVIDENDS POLICY

PG. 28 FINANCIAL ANALYSIS

• Analysis of the main elements of the Consolidated Statement of Profit or Loss
• Analysis of the main elements of the Consolidated Statement of Financial Position
• Liquidity and Capital Resources

PG. 56 SUBSEQUENT EVENTS

PG. 57 ANNEXES

• Pro-Forma financial information for the 12 months period ended as at 31 December 2020 Med Life Group
• Consolidated audited Financial Statements for the year ended 31 December 2020 Med Life Group
• Administrators' Report for the year ended 31 December 2020 Med life Group
• Standalone audited Financial Statements for the year ended 31 December 2020 Med Life S.A.
• Administrators' Report for the year ended 31 December 2020 Med Life S.A.
• Corporate Governance Statement

MEDLIFE GROUP IN FIGURES

Consolidated Statement of Financial Position

RON	44,196
Non-current assets	904,446,206
Current assets	279,047,657
TOTAL ASSETS	1,183,493,863
Current liabilities	314,328,004
Long term liabilities	579,913,515
Deferred tax liability	20,345,799
TOTAL LIABILITIES	914,587,319
Equity attributable to owners of the	241,273,524
Non-controlling interests	27,633,021
TOTAL EQUITY	268,906,545

Pro-Forma Consolidated Statement of Profit and Loss

RON	FY 2020
Sales	1,213,494,886
Other operating revenues	9,809,605
OPERATING INCOME	1,223,304,491
OPERATING EXPENSES	(1,103,890,258)
OPERATING PROFIT	119,414,233
FINANCIAL RESULT	(31,677,695)
RESULT BEFORE TAXES	87,736,538
Income tax expense	(16,183,530)
NET RESULT	71,553,008

Operational data for 2020 financial year

Description	For FY 2020
Clinics visits	1,815,055
Stomatology visits	89,172
Laboratory analyses	5,211,645
Health Prevention Packages	738,582
Hospitals patients	82,209
Pharmacies transactions	194,838

MIHAIL MARCU

Chairman of the Board of Directors and Chief Executive Officer of MedLife Group

Dear shareholders,

When it comes to 2020, we refer to a year full of challenges, a tense year, which marked many of us and which changed a lot the normal course of business, as we were used to.

Despite the pandemic context and the health crisis that impacted the entire world, MedLife continued to intensively operate. Being an innovative company, we quickly adapted to the new social context and properly calibrated our operational structure, which helped us to achieve a good performance last year and gradually improve its profitability in line with the strategy of recent years.

The development of the COVID-19 laboratories network in a record time was one of the most important achievements of the group last year. Thereby, MedLife was able to periodically test the medical and support staff, to keep the employees and the patients safe and to maintain functional the network of clinics and hospitals, thus ensuring a qualitative medical act. Moreover, MedLife group focused on helping patients and authorities, by conducting COVID-19 tests and relieving public hospitals by taking over chronic patients. At the same time, the company has run numerous support programs for vulnerable groups of people in the pandemic context.

MedLife was the first company to launch the online consultation platform, digitizing access to services, in order to limit contact between people as much as possible. Through all these measures we have protected first of all our staff and patients. Protection was our priority, and the fact that we acted quickly ensured great safety to patients and doctors. The special triage areas, the new circuits, the endowment of our institutions with sterilization devices, but also the regular testing of the medical staff are already a routine in our activity, a routine that helps us to keep the business healthy and ongoing. In fact, referring to the needs of the patient in a pandemic year, MedLife acted proactively and launched special medical programs, screening programs for chronic diseases, but also programs for COVID patients, all of these helping the society to return to normal more easily.

A very important segment of investment and development in 2020 was the group's research division. The company has conducted numerous research studies on the evolution of the new virus in Romania, managing to play an important role at national level in monitoring the pandemic. Medlife has conducted national premier studies on natural immunization for COVID-19, virus sequencing and the emergence of new strains in our country, but also studies on the dynamics of post-infection and post-vaccine antibodies.

The activity of the M&A department continued last year, even though at a slower pace, MedLife group adding five new companies to the group. Two of them were from the pharma sector - CED Pharma pharmacy chain and Pharmachem pharmaceutical distribution company, thus consolidating PharmaLife pharmacy division and ensuring continuity for the development strategy in this segment. The third acquisition is represented by Veridia Medical Center, with presence in Bucharest, a well-cohesive business that comes to complete the group's business line of clinics. The fourth acquisition is represented by Labor Marior in Bacau which comes to complete the presence of the second brand at national level, while the fifth acquisition, KronDent, strengthens the position of Dent Estet stomatology division at national level.

Looking ahead, for 2021, we will continue to be open and proactive to all that the pandemic brings, but we will also continue our post-COVID development and expansion plans. The priority objective remains the health and safety of our patients, and we will constantly adapt to their current needs. We also want to intensify the activity of the group's research division, to expand the SARS-CoV-2 virus sequencing program, but also to launch new studies to further support the authorities in fighting the pandemic.

From an operational point of view, we aim to consolidate our position on the Romanian market, which we consider very important and with great potential for development, and, depending on the opportunities, we aim to test the market in the region.

Mihail Marcu

President and CEO of MedLife Group

Significant events in the past twelve months 2020

Acquisitions completed in 2020

In 2020, MedLife Group increased its participation in certain subsidiary companies, and also signed share purchase agreements for the acquisition of the following companies:

• 100% shares in Labor Maricor SRL, the company performing the acquisition being Anima Specialty Medical Services SRL;
• 12% increase in the shareholding of Genesys Arad Group of companies; as a result of this increase, MedLife Medical System holds the 73% stake;
• 10% increase in the shareholding of Ghencea Medical Center, thus reaching full shareholding;
• 100% of the shares in Centrul Medical Matei Basarab SRL, the company performing the acquisition being Anima Specialty Medical Services SRL;
• 75% of the shares in Pharmachem Distributie SRL;
• 60% of the shares in KronDent SRL, the company performing the acquisition being Dent Estet Clinic SA;
• 100% of the shares in CED Pharma pharmacy chain, the company performing the acquisition being Pharmalife Med SRL;

Acquisition of Labor Maricor (indirect)

MedLife Medical System acquired the 100% shareholding package in Labor Maricor, Bacau. The company was acquired by Anima Specialy Medical Services SRL, part of MedLife Group, in order to consolidate the position of the second brand of MedLife (Sfanta Maria) at national level.

Increase in the shareholding of Genesys Arad Group of companies

MedLife Medical System increased in 2020 the shareholding of Genesys Arad Group of companies with 12%. It is one of the largest private medical service operators in western Romania. As a result of this increase, MedLife holds the shareholding package of 73%. Genesys Arad has been part of MedLife group since 2011, when the representatives announced the acquisition of the majority stake, and the value of the transaction amounted to approximately 3 million euros. MedLife Genesys includes a large hospital, maternity, outpatient unit and laboratory. Over the years, the group has developed several medical centers in the cities of Deva, Hunedoara, Petroșani, Drobeta Turnu Severin and Târgu-Jiu, the most recent inauguration being the center of radiology and medical imaging, the only center in Arad that has a digital radiology equipment.

Increase in the shareholding of Ghencea Medical Center

In 2020 MedLife took full shareholding of Ghencea Medical Center in Bucharest, completing its shareholding package with additional 10%. Ghencea Medical Center, with an activity of over 12 years on the market, has two clinics in Bucharest and Magurele, offering patients a diverse range of investigations for laboratory and imaging areas, specialized treatment in medical recovery and alternative medicine. At the same time, Ghencea Medical Center is one of the relevant providers of medical services under contract with the Health Insurance House of Bucharest (CASMB), covering over 20 specialties, including family medicine, pediatrics, rheumatology, gastroenterology, neurology, cardiology, psychiatry, urology, dermatology and ENT.

Acquisition of Matei Basarab Medical Center (indirect)

MedLife Medical System consolidated its position in Bucharest and announced the acquisition of the full package of shares of Veridia Medical Center, known as Matei Basarab Medical Center. Veridia Medical Center has been operating on the private medical services market for 17 years, being a traditional player in Bucharest. It started its activity with a

medical analysis laboratory and later consolidated its position by developing a large medical center that incorporates 20 medical offices and which provides specialized medical services, general medicine consultations and consultations of different specialties, paraclinical investigations, treatments and minor surgeries. Additionally, for blood sampling for laboratory testing, the medical center includes four sampling points, located in the neighborhoods of Berceni, Militari, Drumul Taberei and Pantelimon. Since the beginning of September 2020, Veridia Medical Center, through the molecular biology laboratory, is in partnership with the Public Health Directorate (DSP) for RT-PCR testing, designed to detect SARS-CoV-2 virus, with a capacity of 400 samples per day. At the same time, Veridia is one of the relevant providers of medical services under contract with the Health Insurance House of Bucharest, covering over 25 specialties, including allergology, ENT, endocrinology, obstetrics-gynecology, pediatrics, cardiology, pneumology, gastroenterology and neurology. For the corporate segment, the medical center plays an important role, as it also provides companies with occupational health services.

The acquisition was completed in February 2021, March being the first month of consolidation.

Acquisition of Pharmachem Distributie SRL

MedLife Medical System announced the signing of the acquisition for the 75% majority stake of Pharmachem Distributie SRL, being the group's largest acquisition this year. The transaction will help the group to strengthen the position in the pharma sector. Pharmachem has a history of pharma distribution services of 16 years, being an important player on the market, with a warehouses network in Bucharest and in the entire country. In 2019, the distribution company reached a turnover of RON 83.4 million, an increase by 30% compared to the previous year. The transaction is currently under approval by the Competition Council.

Acquisition of KronDent (indirect)

Dent Estet group of stomatology clinics, the market leader in the field of dentistry services in Romania, announced the acquisition of the majority stake of 60% of the shares of KronDent S.R.L, a periodontology -implantology and dentistry clinic, based in Brasov. KronDent S.R.L has been operating on the dental services market in Brașov since 2008, the clinic having 5 dental units and registering in 2019 a turnover of RON 4.6 million. Through this transaction, Dent Estet reached a portfolio of 11 clinics in 4 important cities in Romania.

The acquisition was completed in February 2021, March being the first month of consolidation.

Acquisition of CED Pharma pharmacy chain (indirect)

MedLife Medical System announced the signing of the transaction for the acquisition of the full package of shares of CED Pharma group of companies. CED Pharma pharmacy chain consists of 6 pharmacies, all located in Bucharest. At the level of 2019, the company registered a turnover of EUR 4 million, increasing by 6% compared to the previous year. This acquisition ensures continuity for the development strategy of MedLife group on the pharma segment which is based on the interdependence between medical units and pharmacies.

The transaction is currently under approval by the Competition Council.

MedLife Group commitment

MedLife is a group dedicating all its resources to provide every patient with professional healthcare services at the highest standards, based on state-of-the-art technological support, in impeccable safety and comfort conditions.

We have permanently evolved due to our desire to meet the most demanding and complex requests in the healthcare field. Healthcare is our profession and our passion, and our objective is to improve the quality of life for every patient coming through our doors. Access to our services is enabled by the integrated system we apply: outpatient units, hospital, test laboratory, pharmacy, imaging, stomatology and corporate packages.

To your benefit, we bring the experience of our over 26 years of activity (considering the companies consolidated within Medlife Group) on the private healthcare service market in Romania. We are committed to providing unique services due to the professionalism, care and responsibility of our medical staff, with the ultramodern equipment and facilities that we make available to every patient, every day.

COMPANY PRESENTATION

Founded in 1996, MedLife is the leading private healthcare provider in Romania. The company holds leadership positions in key metrics, including sales, number of outpatient units, number of hospital beds, and number of healthcare prevention packages ("HPP"). At the same time, it is one of the largest private healthcare companies in Central and Eastern Europe, based on the sales criterion, according to the Group's review of public data.

The Group is a market leader in its core business lines: Corporate (which offers HPP packages), Clinics, Hospitals and Laboratories. The Company has developed its Stomatology business line, opening a standalone clinic in 2015 and acquiring in 2016 the majority stake of Dent Estet group, the largest dental clinic network in Romania. The Group is also active in the Pharmacies business line, operating a number of pharmacies in or near their own clinics, but also next to state owned medical units.

MedLife's presence in all these core healthcare service areas is the basis of the Group's revenue capture model, offering patients a complete service from prevention to diagnosis to treatment.

The Group has the largest number of medical facilities in Romania. These include 50 medical facilities in Bucharest, making it the largest private healthcare network in the city, and a further 95 medical facilities in the rest of Romania including in cities such as Arad, Craiova, Ploiești, Cluj Napoca, Brașov, Galați, Iași, Bacau, Timișoara, Sibiu, Constanța, Targoviste, Braila, Pitesti, Oradea and Neamt, but also 2 units in Budapest, Hungary. The Group owns the real estate underlying its most significant hospital facilities in Bucharest as well as its hospitals in Arad, Brasov and Sibiu. Other facilities are used under long term leases.

The Group provides its services via the largest single pool of private doctors and nurses in Romania, totaling approximately 3,300 doctors and 2,000 nurses as of 31 December 2020. The Group employs full-time specialists for the vast majority of specialties offered, but also parttime, for specialties or specific functions, or works with medical staff under collaboration contracts. In addition, given its commitment to providing quality medical services, the Group has consistently invested in medical equipment, which has helped sustain its market leadership in diagnostic imaging technology.

In the Group's 26 years of activity on the Romanian market, over 5.5 million unique patients were provided services in the Group's medical facilities, which accounts for approx. one in four Romanians, based on the demographic data.

MedLife units as at 31 December 2020:

• 22 hyperclinics ;
• 53 clinics ;
• 10 hospitals;
• 33 laboratories;
• Approx. 180 sampling points;

7

• 12 dental offices;
• 14 pharmacies.

Business Model

MedLife's business model focuses on servicing corporations and individual clients. The Company seeks to capture the private healthcare spending of these clients throughout all stages of a medical condition: prevention, diagnosis and treatment, by offering a wide range of medical services delivered in modern, high quality facilities by professional teams of doctors, nurses and support personnel.

The Group divides its operations into six business lines:

Corporate: The Corporate business line offers HPP to corporate clients as part of their employee benefit packages. These programmes, which focus on prevention through regular check-ups and access to diagnostic services, complement the legally required occupational health services that corporate clients also contract from MedLife under the HPP offering. MedLife holds a portfolio of over 738,000 subscribers to its programmes from over 6,000 different companies. The Group has the largest base of individuals benefiting from HPP in Romania, according to publicly reported data.

Clinics: The Clinics business line includes the Group's ambulatory clinics and diagnostic imaging services. Clinics offer general practitioner and specialist consultations and include the Group's outpatient diagnostic imaging services. Some of its clinics also undertake day hospitalization services. As of 31 December 2020, MedLife group consisted of 75 outpatient units, out of which 22 are Hyperclinics and 53 are clinics.

Laboratories: Laboratories business line aims to perform biochemical, hematological, immunological, microbiological, toxicological, pathological anatomy (cytology and histology) and molecular biology and genetics analyzes. Within the Business Line of Laboratories, a total of 5.2 million laboratory analyzes were carried out in 2020. As at December 31, 2020, the Group processed the samples taken in 33 laboratories and operated approximately 180 sampling points throughout the country.

Hospitals: The Hospitals business line covers the Group's inpatient activities, which consist of a wide range of medical and surgical specializations. The Group holds 7 inpatient hospital licenses, which encompass the business line's activities. One of the licenses was issued for one hospital unit and 3 other external sections, accounting for the Group's 10 hospital locations. In addition to these, the Group was granted licenses for three additional day care units, which operate within Clinic locations and provide only day care services (i.e. Iași, Craiova and Timișoara). The financial results from these three day-care hospital services are accounted for in the Clinics division. The Group regards these units as functional parts of the hyperclinics located in Iași, Craiova and Timișoara.

The Group's 10 hospital locations and the additional three 1-day care units have a total of over 900 licensed beds and 32 operating theatres as of 31 December 2020, forming the largest chain of private hospitals in Romania.

Pharmacies: The Pharmacies business line offers prescription, over the counter and other related medical products in 14 pharmacies belonging to the Group as at 31 December 2020..

Stomatology: The Stomatology business line provides a wide range of dental services from simple check-ups to complicated surgeries. As of 31 December 2020, the 12 dental offices in operation included 4 clinics focused on children in Timisoara, Bucharest and Sibiu, a clinic focused on teens, and 7 clinics for adults.

The chart below shows the Group's simplified corporate structure, including the Group's material subsidiaries.

The acquisitions that that were not finalized as at 31 December 2020 were not included.

Brief description of the companies within the Group

Accipiens

Accipiens S.A. ("Accipiens") is a company active in Arad, which operates the Genesys hospital in Arad, through Genesys Medical Clinic S.R.L.("Genesys"), a company where it holds 99.83% of the share capital. In 2020, MedLife increased ownership in Accipiens to 73.00%, the remaining of 27.00% being held by minority shareholders that are former owners of Accipiens. Genesys owns a 99.95% stake in Bactro S.R.L. ("Bactro"), the remaining of 0.05% being held by Accipiens, and has a stake of 100% in Transilvania Imagistica - provider of diagnostic, imaging and radiology medical services, one of the most important players in the northwest of the country in this segment.

RUR Medical

RUR Medical S.A. ("RUR Medical") is a company carrying out hospital activities, which operates the Eva maternity and clinic in Brasov, Romania. MedLife was controlling 100% of the shares in RUR Medical (directly and indirectly through Bahtco) following an acquisition completed in October 2011. In 2020, RUR Medical was transfer to PDR Group of companies in Brasov.

PDR

Policlinica de Diagnostic Rapid S.A. ("PDR") is a company carrying out specialized medical activities, which operates, directly and through companies under its control, the Group's PDR Hospital – multidisciplinary hospital, PDR Hyperclinic, Livada Hyperclinic, a pediatric center, 6 outpatient units and 4 laboratories (Brasov and Sf. Gheorghe). In January 2019, MedLife increased ownership in PDR to 83.01%, with the remaining being held by minority shareholders that are former owners of PDR. Additionally, the group owns through PDR 60.00% in Histo S.R.L., 80.00% in the Policlinica de Diagnostic Rapid Medis S.R.L., 100% in Medapt S.R.L. and 100% in RUR Medical.

Bahtco

Bahtco Invest S.A. ("Bahtco") is a real estate development company and is acting also as holding company in connection with various other companies from the Group. MedLife controls 100% of the shares in Bahtco (directly and indirectly through PharmaLife Med) following the acquisition completed in 2011.

Centrul Medical SAMA

Centrul Medical SAMA S.A. ("CM Sama") is a company carrying out specialized medical activities, which operates, directly or through companies under its control, the Hyperclinic MedLife Craiova, which can provide day-hospitalization services, as well as the usual clinics services and a network of labs in Craiova and in other cities in the south-west of Romania. MedLife completed the acquisition of 55.00% of the share capital of CM Sama in February 2015, with the remaining 45.00% being held by minority shareholders that are former owners of CM Sama. In January 2019, MedLife acquired another 35% percent of Sama Group in Craiova, with the Company currently holding 90%.

CM Sama controls 60.00% of the share capital of Ultratest S.A. ("Ultratest"), a company that carries out laboratory activities, in which MedLife holds 22.00%, and the remaining of 18.00% is held by the minority shareholders of Ultratest.

Vital Test

Vital Test S.R.L. ("Vital Test") is a 100% controlled company owned by the Group, 60.00% owned by the Company and 40.00% by Bathco, that carries out laboratory activities.

Biotest Med S.R.L.

Biotest Med S.R.L. ("Biotest Med") is a 100% controlled company owned by the Group, 75.00% owned by the Company and 25.00% by Bathco, that carries out laboratory activities.

PharmaLife Med

PharmaLife Med S.R.L. ("PharmaLife") is a company carrying out pharmaceutical activities, which operates, together with Biofarm Farmec S.R.L. (95.00% owned by PharmaLife and 5.00% owned by Bahtco) the Group's pharmacies. MedLife set up PharmaLife and is sole shareholder with 100% of the share capital.

MedLife Broker de Asigurări

Med Life Broker de Asigurare și Reasigurare S.R.L. ("MedLife Insurance Broker") is a company carrying out insurance brokerage activities. MedLife Insurance Broker is fully controlled by MedLife, which holds a participation of 99.16% in MedLife Insurance Broker's share capital, with the remaining shareholding of 0.84% being held by Dorin Preda (who is a member of the Board of Directors of MedLife).

MedLife Ocupațional

Med Life Ocupațional S.R.L. ("MedLife Ocupational") is a company carrying out general medical assistance activities. MedLife Ocupational is fully controlled by MedLife, which holds a participation of 95.00% in MedLife Ocupational's share capital, with the remaining shareholding of 5.00% being held by PharmaLife.

Prima Medical

Prima Medical S.R.L. ("Prima Medical") operates an imagistic center in Craiova, Romania. MedLife completed the acquisition of 100% in the share capital of Prima Medical (held directly and indirectly, via Bahtco) in March 2016.

Diamed Center

Diamed Center S.R.L. ("Diamed Center") operates a laboratory network (including sampling points) in Bucharest and in various other cities in South-East Romania. MedLife completed the acquisition of 100% in the share capital of Diamed Center (held directly and indirectly, via Bahtco) in March 2016.

Stem Cells Bank

Stem Cells Bank S.A. ("Stem Cells Bank") operates a stem cells bank in Timisoara, Romania. MedLife completed the acquisition of 60.06% in the share capital of Stem Cells Bank in March 2016, with the remaining 39.94% being held by minority shareholders that are former owners in Stem Cells Bank. The company acquired, in June 2017, together with Bahtco Invest S.A., the remaining 39.94% of the share capital, owning 99.97% of the share capital of Stem Cells Bank, while Bahtco Invest S.A. holds the remaining 0.03% of the share capital of Stem Cells Bank S.A.

Dent Estet

Dent Estet Clinic S.A. ("Dent Estet") is a company active in the dental care business, which operates, directly and through companies where it holds a majority stake, 10 dental clinics in Bucharest, Timisoara and Sibiu and one dental laboratory. MedLife completed the acquisition of 60.00% of the share capital of Dent Estet in July 2016, with the remaining 40.00% being held by the founder of Dent Estet.

Dent Estet holds the majority stake in various companies which provide dental services, as follows: 75.00% in Aspen Laborator Dentar S.R.L., 51.61% in Dent A Porter S.R.L., 52.94% in Dentestet Kids S.R.L., 52.00% in Dentist 4 Kids S.R.L. and 51.00% in Green Dental Clinic S.R.L..

Centrul Medical Panduri

Centrul Medical Panduri S.A. ("CM Panduri") is a company providing specialized medical assistance in two clinics and a laboratory in Bucharest. MedLife completed the acquisition of 90.00% in the share capital of CM Panduri in October 2016, with the remaining 10.00% being held by a minority shareholder that is the former owner of CM Panduri.

Almina Trading

Almina Trading S.A. ("Almina") is a company offering integrated outpatient, imagistic and laboratory services, present on Dambovita and Ilfov markets with 7 medical centers (5 in Târgovişte and 2 in Pucioasa) and two laboratories (Târgovişte and Buftea). The seven units are equipped with state-of-the-art medical equipment and have a medical team with over 110 specialists. MedLife completed the acquisition of 80.00% of Almina's share capital in March 2017, the remaining of 20.00% being held by the minority founding shareholders of the company.

Anima Specialty Medical Services

Anima Specialty Medical Services S.R.L. ("Anima") is a healthcare provider, being one of the largest private outpatient services provider under the NHIH contract, covering over 15 specialties including family medicine, obstetrics - gynecology, ENT, endocrinology, ophthalmology, dermatology, cardiology, psychiatry, rheumatology, gastroenterology, allergy and clinical immunology. Anima has 8 polyclinics and a laboratory, over 350 employees, medical specialists and support staff, being the first private medicine network with its own family medicine network in Romania. MedLife completed the acquisition of 100% of the share capital of Anima in May 2017.

Anima Promovare si Vanzari

Anima Promovare și Vanzari S.R.L. ("Anima Promovare") is a rental and leasing company for companies in the medical and pharmaceutical industry, including sub-renting some locations to Anima clinics. MedLife completed the acquisition of 100% of the share capital of Anima Promovare in May 2017.

Valdi Medica

Valdi Medica S.R.L. ("Valdi") is a company that owns the Humanitas Hospital in Cluj. It offers a range of medical services mainly focused on surgical treatments, but it also holds outpatient specialties that support surgery through multidisciplinary preoperative consultations, treatments and postoperative follow-up. MedLife completed the acquisition of 55.22% of Valdi's share capital in September 2017, the remaining 44.78% being held by 3 minority shareholders who are Valdi's prior owners.

Polisano

In April 2018, MedLife completed the acquisition of the entire stake of Polisano medical services division, one of the largest private medical operators in Romania. Founded in the 1990s, Polisano is the first fully integrated medical group in Romania. It includes four clinics with its own laboratories located in Bucharest and Sibiu, a private hospital - Polisano European Hospital in Sibiu - recognized as one of the most modern and performing hospital units in Romania, one in vitro fertilization center and the largest private maternity in Transylvania.

Ghencea Medical Center

In May 2018, MedLife completed the acquisition of the 90.00% majority stake in Ghencea Medical Center in Bucharest. The medical services provider has two clinics in Bucharest and Magurele with 135 employees, medical staff and support employees, offering to its patients a wide range of investigations for laboratory and imaging areas, specialized treatment for medical recovery and alternative medicine. In 2020 MedLife acquired the remining 10% of the share capital, becoming the sole shareholder.

Solomed Clinic

In May 2018, MedLife completed the acquisition of the 80.00% majority stake in Solomed Clinic, a group of medical clinics present on Pitesti, Costesti and Curtea de Arges markets. The Solomed Group was founded in 1997 and is one of the leading local medical operators in the region. The group consists of five clinics - three in Pitesti, the other two in Costesti and Curtea de Arges - and a laboratory (Pitesti), offering to its patients a wide range of investigations from multidisciplinary consultations for a range of over 15 medical specialties and laboratory services, CT investigations, ultrasounds, medical recovery services and small laser interventions. All medical units are equipped with state-of-the-art medical equipment and have a medical team with over 110 specialists. Solomed Clinic has a stake of 100% in Solomed Plus.

Sfatul Medicului

In August 2018, Medlife completed the acquisition of 100% stake in the medical platform SfatulMedicului.ro, the largest medical information hub in Romania.

Rozsakert Medical Center, Hungary

In March 2019, Medlife completed the acquisition of 51% majority package of the Rozsakert Medical Center in Hungary. Rozsakert Medical Center is among the top 10 private medical services providers in Hungary. The company has a multidisciplinary clinic that includes a compartment equipped with a surgery room dedicated for small surgery interventions and a dental center.

Badea Medica

In May 2019, Medlife completed the acquisition of the 65% majority stake in the excellence center Badea Medica. The center provides a complex range of medical services, focused mainly on the segment of abdominal pathology, but which also covers many other types of conditions.

Onco Team

In October 2019, Medlife completed the acquisition of the 75% majority stake in Onco Team, thus adding to its acquisitions portfolio the first laboratory with a profile of pathological anatomy and molecular biology. The unit joins the group laboratories (MedLife Grivița, MedLife Brașov, Panduri Laboratory, etc.) that provide this segment of analyzes.

Lotus

In December 2019, Medlife completed the acquisition of 100% of the share capital of Spitalul Lotus SRL from Ploiesti, the most important provider of private medical services in Prahova County, which provides integrated outpatient services, imaging, laboratory, hospitalization and maternity.

Micromedica

In December 2019, Medlife completed the acquisition of 100% of the share capital of the group Micromedica, one of the most important providers of private medical services in the eastern part of the country. The group consists of six medical units located in Piatra Neamt, Bacau, Roman, bicaz, Roznov and Targu Neamt. . All medical units are equipped with stateof-the-art medical equipment.

Maricor

In April 2020, Medlife announced the acquisition of 100% of the share capital of Maricor Laboratory in Bacau, an acquisition made by Anima Specialty Medical Services.

BOARD OF DIRECTORS

MedLife is managed in a unitary system by the Board of Directors ("BoD") consisting of 7 members appointed by the Ordinary General Shareholders Meeting ("OGSM") for a 4-year mandate, with the possibility to be reelected.

Considering the expiration of the director mandates for the members of the Company's Board of Directors starting with the date of 20 December 2020, the OGSM for the appoinment of 7 members of the BoD was held on 15 December 2020. The duration of the newly appointed directors' mandate is of 4 years, starting with the date of 21 December 2020. Each of the chosen directors concluded a director agreement with the Company in the form approved by the Extraordinary General Meeting of the Shareholders no. 1 from 27 April 2017.

Of the 7 members of the BoD, 3 members are independent members. The BoD is responsible for the management of MedLife, acting in the interest of the company and protecting the general interests of its shareholders, by ensuring a sustainable development of the company. According to the Articles of Association, the BoD is responsible for all acts required and useful with a view to accomplish the scope of activity of MedLife, including the management of subsidiaries or investments of MedLife, except for the duties reserved by law to the GSM.

Structure of the Board of Directors

Mihail Marcu (1970) – Member and Chairman of the Board of Directors, Chief Executive Officer

Mihail Marcu has been the Chairman of the Board of Directors of MedLife since August 2006 and Chief Executive Officer since December 2016. Mihail Marcu is a graduate of Bucharest University, the Mathematics and Computer Science Faculty (1995), and has further graduated other postgraduate and advanced training courses delivered by the Romanian Banking Institute, the Open University, DC Gardner training or Codecs, both in Romania, and abroad. Prior to his position as a member of the Board of Directors of MedLife, Mihail Marcu was the Chief Executive Officer of MedLife between January 2004 and August 2006; before that, he held the office of Vice-Chairman of RoBank S.A. (currently, OTP Bank

Romania S.A.), being authorized in this capacity by the National Bank of Romania. Earlier, Mihail Marcu held various positions in Credit Bank Romania S.A. and RoBank S.A., including credit inspector, head of credit unit, manager of the credit department, and manager of the corporate department. Mihail Marcu is also the founder of the Romanian Business Leaders Foundation, a community of Romanian entrepreneurs, managers and professionals in various fields. Since 2018, Mihail Marcu is also a member of the Board of Directors of Prutul SA.

Nicolae Marcu (1968) – Member of the Board of Directors, Chief Healthcare and Operations Officer

Nicolae Marcu has been a member of the Board of Directors of MedLife and Chief Healthcare and Operations Officer since December 2016. Nicolae Marcu is a graduate of Carol Davila Medicine and Pharmacy University of Bucharest, Faculty of Medicine (1996), and has been a doctoral student in psychiatry since 2000. Nicolae Marcu graduated a number of postgraduate studies in psychiatry in the country and abroad. Prior to his position as a member of the Board of Directors of MedLife, Nicolae Marcu was the Chief Executive Officer of MedLife between August 2006 and December 2016, and prior to joining the MedLife team, Nicolae Marcu was a specialised physician in psychiatry with "Dr. Al Obregia" Psychiatric Hospital.

Dorin Preda (1976) – Member of the Board of Directors; Chief Finance and Treasury

Dorin Preda has been a member of the Board of Directors of MedLife since 2008. He is a graduate of the Academy of Economic Studies of Bucharest, Faculty of Finance, Insurance, Banks and Stock Exchanges (1998).

Before joining the MedLife team, Dorin Preda was the Chief Executive Officer (CEO) of Asilife Insurance Broker S.R.L. (2007-2008), Branch Manager of HVB –Țiriac Bank S.A. (2006-2007), HVB Bank S.A. (2005- 2006), Banca Comerciala Ion Țiriac (2004-2005) and Banca Comerciala RoBank S.A. (2003-2004).

Similarly, he used to hold the positions of Manager of Loans and Marketing Department of Banca Comerciala RoBank S.A. (2001-2002), credit analyst with the same bank (2000-2001), and Manager of the Loans Department of Banca Dacia Felix S.A. (1999-2000).

Dimitrie Pelinescu-Onciul (1947) - Member of the Board of Directors

Dimitrie Pelinescu-Onciul has been a member of the Board of Directors of MedLife since 2008. He is a graduate of the Carol Davila Medicine and Pharmacy University of Bucharest, Faculty of Medicine (1972), specialising in obstetrics and gynecology (residency 1978-1981), and became Doctor in Medical Sciences in 1994.

Dimitrie Pelinescu-Onciul is a member of 11 Romanian scientific societies in Romania and of 7 scientific societies abroad, and held among other the office of President of the Romanian Perinatal Medicine Association (2006-2008).

Before joining the MedLife team in 2004, Dimitrie Pelinescu-Onciul used to work for Filantropia Clinical Hospital of Bucharest (1994-2004), Titan Clinical Hospital of Bucharest (1986-1991), Brâncovenesc Clinical Hospital (1978-1981), and Sinești Rural Hospital, Vâlcea County (1972-1978), as primary care physician, obstetrics and gynecology, head of clinics or hospital director.

Voicu Cheța (1981) - Independent Member of the Board of Directors

Voicu Cheța is a newly appointed member of the Board of Directors of MedLife since December 2020.

He is a lawyer in Bucharest Bar with over 16 years of legal experience. His specialized practice covers various fields such as high value litigation, commercial arbitration, insolvency and restructuring, labor contracts, public procurement, administrative disputes, debt collection and company law.

In the field of legal advice and representation before the courts and arbitral tribunals, he has acquired comprehensive vision and proven skills of handling legal issues and their impact on corporate and economic needs of companies.

Ovidiu Fer (1983) - Independent Member of the Board of Directors

Ovidiu Fer is a newly appointed member of the Board of Directors of MedLife since December 2020.

He is a graduate of the Academy of Economic Studies in Bucharest, Faculty of Finance, Insurance, Banking and Stock Exchanges (2006) and holds an MBA from INSEAD (2014).

Starting with 2016, Ovidiu Fer founded the Alpha Quest Regional Investment Fund, as a founding member and is also a member of the Advisory Board of GapMinder VC Fund (since 2018). Previously, he was a member of the Investment Committee of the IJC Funds (2014- 2016) and held the position of external advisor to Elliott Advisors

(2013-2014). He also held the position of equity analyst, frontier markets expert and country manager at Wood & Company( 2007-2013) and was a financial analyst for KTD Invest (2005-2007).

Ana Maria Mihăescu (1955) – Independent Member of the Board of Directors

Ana Maria Mihăescu has been a member of the Board of Directors of MedLife since September 2017. In the last 20 years, Ana Maria Mihăescu has led the mission of the International Finance Corporation in Romania, a World Bank's Division and the largest private sector lender in emerging countries.

Between 2011 and 2016, Ana Maria Mihăescu had a decision-making role regarding the IFC projects in several European countries, including Romania. Previously, she held top management positions in the banking sector.

Since 2016, she has been a member of Raiffeisen Bank's Supervisory Board and member of the Board of Directors of Black Sea Oil and Gas and ICME.

EXECUTIVE COMMITTEE

The Company's senior management team isled by Mr. Mihail Marcu, in his capacity of Chairman of the Board of Directors and Chief Executive Officer, Mr. Nicolae Marcu, member of the Board of Directors and executive director responsible for Healthcare and Operations and Mr. Dorin Preda, member of the Board of Directors and executive director responsible for Finance and Treasury. Under the leadership of the key managers referred to above is a group of senior managers, many of whom have an extensive track record with the Group, who manage the central functions, business lines and units. These professionals operate with substantial independence and freedom in the implementation of agreed unit and business line budgets. The composition of the Executive Committee is detailed below:

Mihail Marcu, Chief Executive Officer

Nicolae Marcu, Chief Healthcare and Operations Officer

Dorin Preda, Chief Finance and Treasury

Adrian Lungu (1985), Chief Financial Officer

Adrian Lungu has been the chief financial officer of the Company since 2012. Adrian Lungu graduated in 2008 from the Academy of Economic Studies in Bucharest with a degree in business administration. He started working at MedLife in 2011 as Head of the Business Controlling Department. Previously, Adrian Lungu has worked at Ernst & Young Romania (2007-2010), in the Transactions and Advisory Services Department, as a senior consultant, and at KPMG Romania (2007) in the Financial Services Department (Audit) as a trainee. He has been appointed as a member of MedLife Executive Committee since December 16, 2016.

By decision of the Board of Directors adopted on 20 October 2020, the mandate was prolonged for a period of 4 years (namely for the period between 21 October 2020 to 21 October 2024).

Radu Petrescu (1980), Human Resources Director

Radu Petrescu is director of the Human Resources Department starting with September 2017. Radu Petrescu has extensive experience in the human resources field, coordinating large-scale projects of organizational development, performance management or talent management. Previously, he worked in the FMCG field and in the pharmaceutical field where he held the position of HR Operations Manager Europe at Pfizer, where he worked for a while at the headquarters in Berlin. In financial services, Radu Petrescu worked in the advisory team for PricewaterhouseCoopers (PWC). Graduate of the sociology faculty of the Bucharest University, Radu Petrescu also

attended a master program at the same institution. He has been appointed as a member of MedLife Executive Committee since September 13, 2017.

By decision of the Board of Directors adopted on 20 October 2020, the mandate was prolonged for a period of 4 years (namely for the period between 21 October 2020 to 21 October 2024).

Geanina Nicoleta Durigu (1978), Laboratory Manager

Geanina Nicoleta Durigu is the Manager of Retail Sales Department / Laboratories Division since 2008. Geanina Nicoleta Durigu graduated in 2004 from the University of Medicine and Pharmacy Gr. T. Popa of Iasi, Faculty of Medical Bioengineering and in 2005 from Carol Davila University of Medicine and Pharmacy of Bucharest, Faculty of General Medicine. Geanina also graduated in 2005 Master studies in biotechnology of the Polytechnic University of Bucharest and in 2008 Masters Programme in Business Administration (MBA) offered by Codecs. Geanina has been part of MedLife team since 2004 when she began working as a medical representative in the Company and from 2006 to 2008 she served as coordinating medical representative.

By decision of the Board of Directors adopted on 20 October 2020, the mandate was prolonged for a period of 4 years (namely for the period between 21 October 2020 to 21 October 2024).

Mariana Ilea-Brates (1967), Procurement Manager

Mariana Ilea-Brateş is the manager of the Procurement Department of the Company since November 2004. Mariana Ilea-Brates graduated in 1992 from the Polytechnic Institute of Bucharest, Faculty of Inorganic Chemical Technology. Mariana Ilea-Brates is a graduate of several training courses in areas such as sales, management and accounting. During university, she worked as a laboratory chemist at the National Institute of Wood (1986-1992), and after graduation she was a chemical engineer at the same institution (1992-2000). Before joining MedLife team in 2004, she served as manager of procurement and management within Medicover S.R.L. (2000-2004). She has been appointed as a member of MedLife Executive Committee since December 16, 2016.

By decision of the Board of Directors adopted on 20 October 2020, the mandate was prolonged for a period of 4 years (namely for the period between 21 October 2020 to 21 October 2024).

Mirela Dogaru (1977), Corporate Manager

Mirela Dogaru is the manager of the Corporate Division at Group level since 2014. Mirela Dogaru graduated the Polytechnic University of Bucharest, Faculty of Biochemistry (2003) and Executive Master program in Business Administration (EMBA) / ASEBUSS of Kenesaw University in Atlanta, Georgia, USA. Mirela joined MedLife team in 2005 as coordinator of the corporate sales team (Corporate Sales Manager), a position she held until 2011 when she was appointed New Business Sales Manager. Prior to joining MedLife, Mirela Dogaru held the position of sales manager within Petchim S.A. (2004-2005) and Key Account Manager within Freshtex Textile Finishing S.R.L. (2003-2004). She has been

appointed as a member of MedLife Executive Committee since December 16, 2016.

By decision of the Board of Directors adopted on 20 October 2020, the mandate was prolonged for a period of 4 years (namely for the period between 21 October 2020 to 21 October 2024).

Vera Firu (1959), Accounting and Tax Manager

Vera Firu is the Accounting and Tax Manager of the Company. Vera Firu graduated in 1985 the Academy of Economic Studies, Faculty of Industry, Construction and Transport Economics. Prior to joining MedLife team, Vera Firu served as Chief Financial Officer of Unicom Holding S.A. (1996- 2005) and previously, she was chief accountant within Romquartz S.A. She has been appointed as a member of MedLife Executive Committee since December 16, 2016.

By decision of the Board of Directors adopted on 20 October 2020, the mandate was prolonged for a period of 4 years (namely for the period between 21 October 2020 to 21 October 2024).

Larisa Chiriac (1969), Medical Director

Larisa Chiriac is the medical manager of the Group. Larisa graduated as a physician from Titu Maiorescu University of Bucharest, Faculty of Medicine and Pharmacy in 1998, being licensed as a doctor in 1998. Larisa worked at the Army Cardiovascular Diseases Emergency Center in Bucharest. Her professional experience includes the position of a specialist in family medicine with medical management and general ultrasound management capabilities, head of the triage office of the Army Cardiovascular Diseases Emergency Center in Bucharest, from May 2003 to June 2016. She has been appointed as a member of MedLife Executive Committee since May 1, 2018.

By decision of the Board of Directors adopted on 20 October 2020, the mandate was prolonged for a period of 4 years (namely for the period between 21 October 2020 to 21 October 2024).

COMPANY MANAGEMENT

The Group's management is structured on two pillars. Operational management is carried out by an experienced senior management team, acting below the executive directors of the Group, which is known as the "40+" group of managers. This body includes the functional heads of support departments, business line heads and managers of larger units. The 40+ group meets weekly as a broad management committee with the objective to identify and address emerging risks and opportunities in the business and review actual vs. budget performance. Members of the 40+ group outside Bucharest usually attend by conference call.

The Group manages its business based on an annual budget, agreed on a bottom-up basis with the 40+ group, initially, and subsequently confirmed by the Group's Executive Committee and by the Board of the Directors. The budget includes detailed operational key performance indicators as well as financial targets, represents the Group's operating and financial plan for a financial year, and sets the operational and financial targets at the unit level. Compensation of the members of the 40+ group is heavily linked to the achievement of the budget. Within their units, the managers have substantial autonomy to operate within the agreed budget framework.

Alongside the operational management, the Group implements a medical management system with the primary objective to ensure quality care and the management of medical risks. Medical management at Group level is led by the Group's medical director. Medical managers or coordinators at unit level meet regularly to review patient cases, identify current and

upcoming medical issues, as well as plan medical resources. Each medical unit has a medical coordinator and in the more complex hospital settings, the medical management structure includes a Medical Director, Medical Council and Ethics Council. Conducting new medical procedures or altering existing protocols is usually conditional upon approval of the medical management groups.

PEOPLE AND RESOURCES

The Group services patients through the largest private pool of doctors and nurses in Romania. As of 31 December 2020, the Group collaborated with a total of approximately 3,300 doctors and 2,000 qualified nurses across its business lines, including both employees working exclusively for the Group under individual employment contract and collaborators, providing services as independent contractors. Also, as at December 31, 2020, more than 1,700 full-time employees were operating as support staff and administrative staff.

The type of contractual arrangement between the Group and its medical staff depends on various criteria, such as the professional context or the time that the medical staff can allocate to services provided to the Group. Medical staff under services agreements are seen by the Group as commercial partners, providing services to the Group as independent contractors, in compliance with the applicable legislation.

The Group seeks to provide adequate compensation and incentives to doctors and other medical staff in exchange for quality medical care and commitment to promote the MedLife business model. The usual compensation package offered by the Group to its employees includes fixed remuneration, to which a variable remuneration is added, determined based on a revenue sharing mechanism connected to the number of appointments and consultations. Collaborators are compensated based on the number of appointments and consultations.

The Group does not operate pension plans or long-term incentive schemes.

As for the relationship with colleagues, the Group provides a safe working environment in which employees are treated fairly and with respect, and the differences between employees are accepted. The Group is committed to providing colleagues with the opportunity to excel and reach their full potential and reward them on a merit basis.

The group does not tolerate any discrimination, intimidation or harassment of colleagues or between them. The group encourages clear and open communication with and between colleagues. They can and must promptly express any concerns about any unethical or illegal behavior by presenting these concerns to the competent human resources department within the Group. The Group undertakes to investigate such concerns brought by good faith, maintaining the confidentiality of these steps.

MEDLIFE STRATEGIC OBJECTIVES AND DIRECTIONS

MedLife's strategy focuses on maintaining its leadership position. The Company seeks to grow its portfolio of facilities and services to profitably provide national coverage to the Group's existing and new clients.

MedLife seeks opportunities that provide additional revenue capture and synergies within its existing network and services. The Group will continue to achieve this objective through a combination of organic growth and acquisitions of smaller medical healthcare providers on the Romanian market, but also outside country boarders. At the same time, the Company remains committed to ensuring quality and safe medical treatment to its clients, balancing the medical risks and opportunities with the Group's commercial goals.

Competitive strengths

• The leader of the private healthcare market in Romania and one of the large providers of private healthcare services in Central and Eastern Europe;
• A balanced and robust business model, spanning all key private healthcare segments;
• A business model that generates significant revenue capture opportunities;
• Sales largely from cash-pay and HPP with low dependency on NHIH funding;
• The largest number of HPP clients in Romania;
• Experienced management able to create and handle growth both by organic development and acquisitions;
• Strong financials with an asset-rich balance sheet;
• Access to the financing required for expansion.

Development directions

Organic growth

The Company opened a number of new clinics and other facilities, particularly sampling points for its Laboratories business line. Many of these facilities are believed to still have the capacity to service greater numbers of patients, which should allow for the increase in their revenue and profit contribution, as they reach a higher utilization capacity. Further, the Group continues to optimize the mix of services offered at its other facilities to the specific local market conditions, seeking to improve the revenue and margins of each location. As a result, the continued and accelerated development of these facilities is expected to improve margins as well as deliver further sales growth. The Company often takes advantage of the base facilities resulting from an acquisition to further organically expand the business of the acquired company. For example, in 2016, the Group acquired Diamed Center, which operates a network of laboratories and sampling points, mainly in Bucharest. Based on this acquisition, the Group further developed the second brand of laboratories under the brand "Sfânta Maria", which provides FFS laboratory tests at lower prices than in MedLife branded labs. Further, the Group continued to build on the existing contracts of Diamed Center with the NHIH, which did not result into a significant change in the overall exposure of the Group to NHIH contracts as a percentage of its total sales. As

of 31 December 2020, the Group had approx. 40 sampling points opened under "Sfânta Maria" laboratories brand, thus adding organic growth to its acquisition.

Selective acquisitions and integration of other market players

The Group intends to continue to expand its service offering and geographical presence through strategic acquisitions. The Group's acquisition strategy is to target regional and other businesses that offer complementary geographic or service coverage to the Group's existing portfolio or provide the opportunity to access new healthcare specialties that provide synergy and revenue capture potential to the Group's existing activities. Post-acquisition, the Group generally

rolls-out MedLife specialties and services which are not currently offered or upgrades the services offered by the acquired business to the Group's standards. The Group often re-invests the cash flow of the acquired business, as well as additional resources, in expanding the new subsidiary's business.

The Group's acquisition strategy is based on encouraging the founding shareholders of the acquired business to remain active post-acquisition in the integrated business and also to hold a minority stake in the respective business. Although the Group has also made 100% acquisitions, the Group's management believes that this approach often matches the goals of the sellers and expands the negotiations beyond the topic of price, providing the Group an advantage over strategies focused on the 100% buy-out of targets. Minorities' rights are carefully negotiated to ensure alignment with the Group's overall governance framework.

The Group's acquisition strategy envisages the full integration of the acquired units into the MedLife system, ensuring uniformity of services, branding and other standards across the business. The Group's support functions such as human resource management, financial, marketing, public relations and purchasing are centralized, thus reducing the costs and increasing the efficiencies within such functions. The Group pays particular attention to its IT solutions, which are a critical part of increased client service, and seeks to transfer its accumulated know-how to the operation of the acquired business. The Group's 31 announced acquisitions so far provide a clear road map for further acquisitions.

By acquiring clinic and laboratory businesses, the Group is also able to service directly its HPP patients. The margins formerly flowing to NetLife partners servicing the Group's HPP patients in the acquisition target's service area are now captured by the Group directly. NetLife is a network of partner medical units with which the Group has negotiated tariffs for the servicing of its HPP clients.

In pursuit of the expansion strategy, but also vertical integration, during the 12-month period ended on December 31, 2020, the Company announced the following acquisitions: Labor Maricor in Bacau, Matei Basarab Medical Center in Bucharest, Pharmachem Distribution, CED Pharma pharmacy chain and KronDent in Brasov.

The Company maintains an active pipeline of potential acquisition targets and regularly scans the market for opportunities. Benefiting from a leading position and strong brand, the Company is also frequently approached by advisers and principals of potential target companies. As the consolidation of the market accelerates and with additional debt financing available, the Company expects to continue with acquisitions to complement its organic expansion.

Perspectives

The Group expects that its financial results will continue to grow as traffic in its facilities will continue to grow in the postpandemic period and the financial results of the recent acquisitions continue to be consolidated in the financial results of the Group. It expects to continue to consider the acquisition of potential businesses, which would result in an expansion of services in areas where it is present or allow the Group to enter into new geographic areas, both nationally and internationally. The Group is also developing potential organic expansion opportunities in the Hospitals business line, through expansion of existing medical units.

STATUTE OF CORPORATE GOVERNANCE

The Corporate Governance in Med Life S.A. operates according to the provisions of the Companies Law no. 31/1990, republished, with the subsequent modifications and complements, of the Law no. 297/2004 concerning the capital market, with the subsequent modifications and complements, and of the secondary legislation adopted by the Financial Supervision Authority ("FSA") for the application of the Law no. 297/2004, of the Code of Bucharest Stock Exchange ("BVB") and of the Bucharest Stock Exchange Code of Corporate Governance ("Applicable Law"), as well as in accordance with the provisions of the Articles of Association in force of MedLife and of the internal regulations applicable. The Statute of Corporate Governance was adopted by MedLife's Board of Directors in March 2017.

General Shareholders Meeting

The supreme managing body of MedLife is the General Shareholders Meeting ("GSM"). The ordinary and extraordinary duties of GSM are provided in the Articles of Association and in the Applicable Law. GSM is organized and operates in accordance with the relevant provisions of the Applicable Law, in the Articles of Association, and in the Procedure for the Organization and Activity of the General Meetings of MedLife Shareholders.

MedLife undertakes to respect all the rights of its shareholders and to ensure an equitable treatment for them and, for that purpose, it has created and has been implemented the following procedures, systems, and rules to facilitate the exercise by the shareholders of the rights conferred to them by the shares held within MedLife:

• it has created on its website, in the section Investor Relations, a system of effective and active communication with its shareholders;
• it has created an internal corporate structure, which is adequate for the relation with its shareholders and with the investors, in general;
• it has published on its website a Code for the Organization and Activity of the General Meetings of Shareholders which:
  • o facilitates the participation of the shareholders in the workings of GSM and the exercise of their rights related to GSM, including the participation by representation (by proxy) or by correspondence;
  • o indicates the set of documents that will be made available for the shareholders by MedLife for each individual GSM, including, without limitation to informative materials related to each item on the agenda of the GSM;
  • o presents in an exhaustive manner the shareholders' rights related to the GSM;
  • o present the voting procedure within GSM.

The Board of Directors

As aforementioned, MedLife is managed in a unitary system by the Board of Directors ("BoD") consisting of 7 members appointed by the ordinary GSM for a 4-year mandate, with the possibility to be reelected, last appointment being made

in December 2020. The BoD is responsible for the management of MedLife, acting in the interest of the company and protecting the general interests of its shareholders, by ensuring a sustainable development of the company. According to the Articles of Association, the BoD is responsible for all acts required and useful with a view to accomplish the scope of activity of MedLife, including with regard to the management of subsidiaries or investments of MedLife, except for the duties reserved by law to the GSM.

BoD convenes whenever necessary, but at least one every 3 months. In 2020, 4 BoD meetings were held.

BD approved and posted on the Company's website a Code of Ethics and Conduct, which sets forth behavior standards that must be observed within MedLife and its subsidiaries at all levels: administrator, executive directors, directors, employees, suppliers and subcontractors or consultants, irrespective of whether they are employees or work on a permanent or temporary basis.

Consultative Committees

According to the Articles of Association, the BoD may set up consultative committees made of at least 2 BoD members, who will formulate recommendations for the BoD in various fields.

Audit Committee

BoD created an Audit Committee which is made of 3 non-executive members of the BoD and approved the operating rules thereof. The Audit Committee has the following main duties:

• to examine and review the annual financial statements and the proposal for profit distribution (if the case);
• to make annual evaluations of the internal control system;
• to evaluate the effectiveness of the internal control system and of the risk management system;
• to monitor the application of the legal standards and of the generally accepted internal audit standards;
• to evaluate the conflicts of interests in the transactions made with related parties;
• to analyze and review the transactions made with related parties which exceed or may be expected to exceed 5% of the net assets of the Company in the previous financial year;
• to make recommendations for the BoD.

Three Audit Committe meetings were held in 2020.

The Remuneration Committee

BoD set up a Remuneration Committee made up of 3 non-executive members of the BoD. The remuneration committee has the following main duties:

• responsible for making decisions regarding the remuneration of Executive Committe members and other nonexecutive directors of the Company, according to the decision of the BoD;
• In making such decisions, the remuneration committee must consider the long-term interests of the shareholders, investors and other stakeholders of Med Life S.A;
• Implements the decisions of the BoD that fall within the scope of activity of the committee.

Executive Committee

BoD has delegated the management of MedLife to the directors thereof, and the delimitation of the duties between the BoD and the company's directors, including the value thresholds of competence for legal acts to be concluded by the company is included in the internal regulations of the BoD.

The BoD appoints a maximum number of 10 directors for a 4-year mandate and decides by its regulations or by decisions on the directors' competences and duties. The directors are, in general, responsible for the day-to-day activity of MedLife within the limits established by the BoD, by the Articles of Association, and by the Applicable Legislation.

The Directors of MedLife compose the Executive Committee. The decisions requiring a decision of the Executive Committee, the decisions that can be made by a director and the way of the organization and operation of the Executive Committee are set forth by the regulations of organization and operation of the Executive Committee approved by the BoD.

RISK MANAGEMENT AND INTERNAL CONTROL

Capital Risk Management

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The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Group consists of debt, which includes borrowings as disclosed in note 14 to the Annual Financial Statements, cash and cash equivalents as disclosed in note 8 and equity, comprising issued capital, reserves and retained earnings as disclosed in note 15 and note 16.

The Group's risk management reviews the capital structure regularly. As a part of this review, the management considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the management, the Group will balance its overall capital structure through the payment of dividends, new share issues and share buybacks as well as the issue of new debt or the redemption of existing debt.

Financial risk management objectives

The Group's Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Foreign Exchange Risk

The Group is primarily exposed to the volatility of RON against EUR. Other currencies have only a limited impact on its cash flow and results. The effect of foreign exchange risk on cash flows is regularly monitored. For a detailed discussion of foreign exchange risk management, including sensitivity analysis, please refer to Note 28 (h) to the Annual Financial Statements.

Operational Risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to perform, operational risks can cause damage to reputation, have legal or regulatory implications, or lead to financial loss. The management cannot expect to eliminate all operational risks, but through a control framework and by monitoring and responding to potential risks, the Company is able to manage the risks. Controls include effective segregation of duties, access, authorization and reconciliation procedures, staff education and assessment processes, including the use of internal control.

Credit Risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group seeks to limit the credit risk with respect to customers by setting credit limits for individual customers and monitoring outstanding receivables.

The Group has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties, including regular analysis of debt service, ageing of receivables, etc. Counterparty limits are established in combination with credit terms. In respect to credit risk arising from the Group's other financial assets, including cash and cash equivalents, its exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. The Group limits its credit risk with regard to other financial instruments by only dealing with banks believed to be reputable.

Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Group is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The higher risk is represented by funds borrowed in the national currency, because the interest rates are periodically repriced based on index variation.

Lease contracts concluded in the national currency are also exposed due to the above repricing process, as the discount rate in this case is linked to the internal borrowing rates for funds withdrawn in the national currency.

The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings.

Internal Control

MedLife's overall internal control system is well integrated into the organizational structure and it is carried out by (1) the legal and compliance department for setting internal control standards and monitoring various control measures and (2) internal cost control departments for implementation of control measures.

Off-balance sheet arrangements

As of 31 December 2020, the Group is not part to any off-balance sheet obligations or arrangements.

Changes in Accounting Policies

To the best of the Company's knowledge, there are no material accounting standards applicable to the Group that will require a prospective change in any of the Group's accounting policies.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the consolidated financial statements.

Financial assets that potentially subject the Group to concentrations of credit risk consist principally of cash, short-term deposits, trade and other receivables. The Group's cash equivalents and short-term deposits are placed with reputable financial institutions with a high credit rating.

Trade receivables are represented net of the allowance for expected credit losses. Credit risk with respect to trade receivables is limited due to the large number of customers comprising the Company's customer base, which consists mainly of both individuals and companies. Around 62% of the total sales are cashbased with remaining being based on issuance of invoices.

The financial condition of these customers in relation to their credit standing is evaluated on an ongoing basis. The Group has also developed certain procedures to assess legal entities as customers prior to signing contracts, aimed at providing preventive and prophylactic health care packages (PPMs) and monitoring their ability to meet the payments during the course of contracts. Also, the Group has established an internal Collection department which actively monitors encashments received from customers.

The gross carrying amounts of financial assets (before credit loss allowances) included in the statement of financial position represent the Group's maximum exposure to credit risk in relation to these assets.

The Group has only 20% of its sales during 2020 deriving from the treatment of NHIH insured patients (concentration of credit risk) – reliance on major customers.

At 31 December 2020 and 31 December 2019, the Company did not consider there to be a significant concentration of credit risk. Please see note 7 – Accounts receivables, for further details regarding credit risks of trade and other receivables and also note 3.17 Trade receivables, for further details of accounting policies used by the Group.

MEDLIFE SHARES

Subscribed and paid in share capital

Company's share capital is fully subscribed and paid and has a value of RON 5,536,270.5, of which RON 4,015,500 and RON equivalent of USD 362,161.1, representing a cash contribution and RON 2,935.5 contributions in kind of Mr. Mihail Marcu and Nicolae Marcu, as shareholders, and RON 513,270.5 representing the contribution to the social capital as a result of the successful capital increase operation performed in December 2017.

As at 31 December 2020, Company's share capital is divided into 22.145.082 nominative, freely transferable, fully paid ordinary shares, each having a nominal value of RON 0.25, issued in dematerialized form by registration in Company's shareholders register. The are no shares issued that do not represent share capital of the Company. The Company issued only one class of shares: ordinary. The Company has not issued convertible securities, exchange securities or securities with warrants associated. The holders of ordinary shares are entitled to one vote per share in the shareholders' meetings of the Company, except for the treasury shares bought back by the Company as part of the share buy-back program. All shares rank equally and confer equal rights to the net assets of the Company, except for treasury shares.

History of the share capital of the Company

In the period 2013-2016 there were no changes in the share capital of the Company.

On 11 November 2016, the split of the nominal value of shares issued by the Company from 10 RON/share to 0.25 RON/share was recorded in the trade register, based on the decision of the Extraordinary General Meeting of Shareholders adopted on 1 November 2016. Following the division of the nominal value, the number of shares issued by the Company changed from 502,300 shares to 20,092,000 shares. The Company's share capital became 5,023,000 RON, divided into 20,092,000 shares, each share having a nominal value of 0.25 RON.

On December 19, 2017, the process of raising capital by issuing additional shares was completed. Thus, 753,082 shares were subscribed as a result of exercising the preference right of the shareholders registered in the shareholders' register on October 27, 2017. There are also other 1.3 million shares set in private placement. The date of the newly issued shares was January 11, 2018. Thus the share capital of the Company became 5,536,270.5 RON, divided into 22,145,082 shares, each share having a nominal value of 0.25 RON.

On November 9, 2018, the Company initiated the own share buy-back program. As of December 31, 2019, MedLife held 79,406 treasury shares. In addition, the second share buy-back program was initiated in accordance with EGSM Decision no. 2 from 23 April, 2020. As a consequence, MedLife held 17,347 treasury shares as at 31 December 2020.

In accordance with the Decision of the Extraordinary General Meeting of Shareholders of the Company dated 15.12.2020, the share capital of the Company was increased with RON 27,681,352.50, from RON 5,536,270.5 to RON 33,217,623, by issuance of a number of 110,725,410 new shares with a nominal value of RON 0.25/share. The Share Capital Increase was made with the incorporation of share premium reserves, and the newly issued shares (5-for-1) were allocated without a monetary compensation to all shareholders registered in the shareholders' register of the Company as at 04 of January 2021 (Registration Date). The effects of the share capital increase were processed on 15 of February 2021 and the newly issued shares were allocated to shareholders. The total number of issued ordinary shares of the Company after the share capital increase is 132.870.492.

Shareholding structure of Med Life S.A. as at 31 December 2020

As at 31 December 2020, MedLife S.A. had the following shareholding structure: Marcu family (41.20%), International Finance Corporation (4.5%), with the remaining holding traded on the Bucharest Stock Exchange, at Premium Category. Around 100 legal entities, both from Romania, and abroad, and over 1,000 private individuals held approximately 54.3% of the free traded shares.

Shareholder	Number of shares
Marcu Mihail	3.642.920
Marcu Nicolae	2.367.400
Cristescu Mihaela Gabriela	3.110.115
IFC	1.004.600
Others	12.020.047

DIVIDENDS POLICY

Shares owned by the Company's shareholders other than the Company bear equal and full rights to dividends.

The Company's financial year begins on January 1 and ends on December 31st. Under the Company Law, dividends may be distributed only if the Company records profit, optionally quarterly on the basis of interim financial statements, and annually, after the settlement adjustment is made in the annual financial statements approved by the General Shareholders' Meeting, as under the Romanian law, interim dividends may be distributed. The Company's profit after the profit tax payment will be distributed according to the decision of the general meeting of shareholders. The Company has the obligation to set up reserves and other funds required by the applicable laws.

The Company's general meeting of shareholders is free to decide the distribution of dividends based on the proposal of the Board of Directors. If the Board of Directors do not make such proposal, shareholders holding individually or collectively at least 5% of the voting rights may also request to add to the agenda of the shareholders' meeting an item on the distribution of dividends, including the distribution quota. Dividends may be distributed only out of profits determined by law, pro rata with the contribution to the paid-in share capital, optionally quarterly based on interim financial statements and annually, after the settlement adjustment is made in the annual financial statements.

The General Meetings of Shareholders approving the annual financial statements generally establishes also the amount of the gross dividend per share, as well as the payment process. According to the Law no. 24/2017 on issuers of financial instruments and market operations, the General Meeting of Shareholders approving the distribution of dividends must also set the period during which the dividends will be paid to the entitled shareholders. The beginning of the payment period shall not occur later than 6 months from the date of the meeting. If the General Meeting of Shareholders does not decide on a dividend payment period, the dividends shall be payable within 30 days from the date of publication of the resolution approving the payment of dividends in the Official Gazette of Romania, Part IV. Upon expiry of such period, the Company would be deemed to be in payment default by operation of law.

Dividends may be paid on an optional quarterly basis within the time limit set by the general meeting of shareholders, by adjusting the differences resulting from the distribution of dividends during the year in the annual financial statements. Payment of settlement adjustments is made within 60 days of the date of approval by the General Meeting of Shareholders of the annual financial statements for the financial year ended. Otherwise, the Company or its shareholders, depending on the outcome of the settlement, owes after this term a penalty interest calculated according to the applicable legal provisions, if the decision of the general meeting of the shareholders approving the financial statements of the concluded financial year did not set a higher

interest rate. In the case of partial dividends being distributed among shareholders during a financial year, the annual financial statements will highlight dividends that are partially attributable and will properly adjust the resulting settlement differences.

Payment of dividends is made only to shareholders registered on the registration date ("data de înregistrare") set by the General Meeting of Shareholders approving the distribution of dividends. The registration date must be set on a date that occurs at least 10 business days after the date of the General Meeting of Shareholders. Romanian law also requires that the payment date set by the General Meeting of Shareholders must not occur later than 15 business days after the registration date, but must occur within the six months period from the date of the General Meeting of Shareholders approving the dividend distribution.

According to the applicable regulations, the Company must publish, before the dividend payment date, a press release which will also be sent to FSA and market operator, specifying at least (i) the value of the dividend per share, (ii) the ex-dividend date, (iii) the date of registration, and (iv) the date of payment of the dividends, as approved by the General Meeting of Shareholders, as well as (i) the method of payment of the dividends and (ii) the identification information of the paying agent.

Any dividends that are not claimed within three years from the date on which their payment becomes due may be retained by the Company.

According to the Company Law, the distribution of dividends from fictitious profits or from sources that cannot be distributed during the financial year on the basis of the interim and annual financial statements, or contrary to the financial statements results, entails the criminal liability of directors, the members of the board of directors, members of the executive board or the supervisory board or the legal representatives of the Company and shall be punished by imprisonment from one year to five years. Furthermore, if the Company registers a loss of its net assets, the share capital must be replenished or reduced before any dividend distribution is made. In addition, if the Company has accumulated losses, it may not pay dividends until the losses are offset.

The Board of Directors is focused on creating value for the Company's shareholders. To sustain the Group's current pace of growth in terms of profitability, the Group needs both internal and external resources. Thus, the Board of Directors, committed to further expand the Group's profitability to the benefit of the shareholders, intends to propose not to distribute dividends to the shareholders for as long as the growth of the Group is comparable to that recorded historically.

In case the Board of Directors will propose the distribution of dividends in the future, certain matters will need to be considered, such as: general business conditions, the Group's financial results, investment requirements as well as contractual and legal restrictions on the payment of dividends or any other factors as the Board of Directors may deem relevant. Profits not required for the Company's growth plans or not encumbered by contractual, legal or other restrictions is expected to be paid to the shareholders as dividends, unless it is needed for any other corporate purpose including investments in value creating opportunities.

FINANCIAL ANALYSIS

The following analysis of the Group's financial condition and results of operations as of and for the years ended 31 December 2018, 2019 and 2020 should be read in conjunction with the Financial Statements and the information related to the Group's business included elsewhere in this Annual Report. Selected financial information presented in this section has been derived from the Financial Statements, in each case without material adjustment, unless otherwise stated. Investors should read the Annual Report together with the Financial Statements and other reports issued by the Group and should not rely upon summarized information only.

The following table sets out the Group's consolidated statement of profit and loss and other comprehensive income for the periods ended 31 December 2018, 2019 and 2020 respectively:

For the year ended 31 December,

	2018	2019 *Restated	2020
Sales	794,562,861	967,380,307	1,077,448,351
Other operating revenues	9,844,865	7,648,949	9,274,762
Operating income	804,407,726	975,029,256	1,086,723,113
Consumable materials and repair material	(126,048,830)	(158,167,211)	(189,975,286)
Third party expenses (including doctor's agreements)	(206,077,081)	(264,544,662)	(281,469,012)
Salary and related expenses	(245,139,121)	(291,414,807)	(277,035,208)
Social contributions	(8,136,171)	(10,526,204)	(10,767,730)
Depreciation	(56,982,245)	(90,481,076)	(102,897,388)
Impairment losses and gains (including reversals of impairment losses)	-	1,167,475	(10,888,049)
Other operating expenses	(123,630,969)	(103,719,253)	(104,579,312)
Operating expenses	(766,014,417)	(917,685,738)	(977,611,985)
Operating Profit	38,393,309	57,343,518	109,111,128
Finance cost	(17,567,816)	(20,646,561)	(23,252,552)
Other financial (expenses) / gains	3,008,389	(11,574,446)	(7,307,417)
Financial result	(14,559,427)	(32,221,007)	(30,559,969)
Result before taxes	23,833,882	25,122,512	78,551,159
Income tax expense	(7,051,245)	(8,337,027)	(14,787,475)
Net result	16,782,637	16,785,485	63,763,684
attributable to :
Owners of the Group	13,370,348	13,611,276	56,702,860
Non-controlling interests	3,412,289	3,174,209	7,060,824
Other comprehensive income items that will not be reclassified to profit or loss
Gain on revaluation of equity instruments	-	655,437	-
Deferred tax on other comprehensive income components	-	(104,870)	-
Total other comprehensive income	-	550,567	-
attributable to :
Owners of the Group	-	550,567
Non-controlling interests	-	-	-
Total comprehensive income	16,782,637	17,336,052	63,763,684
attributable to :
Owners of the Group	13,370,348	14,161,843	56,702,860
Non-controlling interests	3,412,289	3,174,209	7,060,824

• • • • • • • ]f - - - - - -

Overview of the Group's sales streams

The Group's core activities are conducted through six business lines, providing a well-balanced business portfolio that covers all key segments of the private medical services market.

Sales for 2020 financial year amounted to RON 1,077,448,351, higher than the sales amount recorded in 2019 with RON 110,068,044 RON or by 11.4%. This increase is mainly explained by increase in Laboratories business line due to RT-PCR testing performed in the 6 RT-PCR laboratories opened at Group level, and in Hospitals business line due to relieving public hospitals by treating chronic patients, but also due to the impact of the acquisitions completed by the Group in 2019 and 2020.

The following table sets out the sales for 2020 as compared to the sales recorded in 2019 and 2018 for each of the Group's business lines:

	2018	2019	2020	Change %	Change %
Sales (RON)	RON	RON	RON	2019/2018	2020/2019
Clinics	233,339,171	295,465,223	307,919,487	26.6%
Stomatology	44,733,559	59,817,358	61,363,524	33.7%
Laboratories	134,680,878	154,135,274	198,519,202	14.4%
Corporate	169,171,271	183,514,802	198,530,858	8.5%
Hospitals	167,320,772	221,198,932	251,943,388	32.2%
Pharmacies	36,111,885	39,341,136	44,405,803	8.9%
Other revenues	9,205,325	13,907,582	14,766,089	51.1%
TOTAL Sales	794,562,861	967,380,307	1,077,448,351	21.8%

The Group's total consolidated sales amounting to RON 1,007,448,351 in the financial year 2020 were represented as follows:

Group sales evolution

2018 % 2019 % 2020 % Clinics 233,339,171 29% 295,465,223 31% 307,919,487 29% Stomatology 44,733,559 6 % 59,817,358 6 % 61,363,524 6 % Laboratories 134,680,878 17% 154,135,274 16% 198,519,202 18% Corporate 169,171,271 21% 183,514,802 19% 198,530,858 18% Hospitals 167,320,772 21% 221,198,932 23% 251,943,388 23% Pharmacies 36,111,885 5 % 39,341,136 4 % 44,405,803 4 % Other revenues 9,205,325 1 % 13,907,582 1 % 14,766,089 1 % Total sales 794,562,861 100% 967,380,307 100% 1,077,448,351 100% For the year ended 31 December

-

Business model independent of NHIH funding

The Group's business and revenue model focuses on the spending power of corporations and private individuals on medical services, while the State's contribution through the NHIH represents a complement, not the core revenue of MedLife's activities. In 2020, 80% of the Group's revenue came from corporations and private individuals. During the same period, only 20% of the Group's revenue came from providing services to patients insured by State programs. In 2018 and 2019, the Group's revenue from State insured patients represented 19% of the Group's total sales.

	For the year ended 31 December
	2018	2019		2020
	RON	%	RON	%	RON	%
Corporations and Private Individuals for HPP and fee-for service payments	644,272,707 81%		781,653,297 81%		857,913,712 80%
State insured patients paid by the NHiH	150,290,154 19%		185,727,010 19%		219,534,639 20%
TOTAL	794,562,861		967,380,307		1,077,448,351

Clinics

The core of the Group's operations is the network of ambulatory clinics throughout Romania. The business line comprises a network of 75 facilities, which offer a wide range of outpatient services covering a broad range of medical specialties. The Group's diagnostic imaging services provided to clients other than hospital inpatients also form part of this business line.

The Group's clinics provide a wide range of services delivered mainly in two formats:

• Hyperclinics, a format pioneered by MedLife in Romania, consisting of large facilities with at least 20 medical offices and surface areas in excess of 1,000 sqm. It is a one-stop-shop for clinical examinations and imaging. This format is designed for larger urban areas, with a population over 175,000 inhabitants. Hyperclinics would usually include a broad range of imaging services on site including radiology, bone density – DEXA, CT, MRI 3T, 2D-4D ultrasounds and Mammography; in the case of new openings, such services may be included in the hyperclinics' offering gradually. Hyperclinic locations also host the services of other business lines, such as pharmacies or sampling points for laboratories. As of 31 December 2020, the Group operated 22 hyperclinics throughout Romania.
• Clinics, offering a range of treatments from general practitioner services to specialists, are aimed at servicing the core needs of the Group's HPP patients and FFS clients. The Group's clinics typically have between 5 and 12 medical offices, although smaller satellite clinics are in operation to address specific market situations. Clinics are designed for smaller cities or to serve specific concentrations of patients. Clinics, with limited capacity and generally limited imaging services, act as feeder networks for the more specialized services located in the hyperclinics. Certain clinics are fully specialized, such as Mindcare and the Obor and Paediatrics hospitals, which also have dedicated outpatient units. As of 31 December 2020, the Group operated 52 clinics throughout Romania and 1 clinic in Budapest, Hungary. Matei Basarab Medical Center in Bucharest will be included in the network starting with 2021.

Clinics network national distribution

Analysis of clinics business line 2020 evolution

The sales of the Clinics business line increased in 2020 with RON 12,454,264 or by 4.2%, from RON 295,465,223 in 2019 to RON 307,919,487 in 2020. The increase was driven by an increase of 6.9% in the average fee per visit, from 158.7 RON/visit in 2019 to 169.6 RON/visit in 2020. The increase was caused by the change in the mix of services accessed by the group's clients during the pandemic period. In terms of number of visits, a contraction was noted in 2020 by 2.5%, leading to a decrease from 1,861,491 visits in 2019 to 1,815,055 visits in 2020. This was caused by traffic restrictions imposed during the pandemics, especially in the healthcare system where military ordinances were adopted with direct impact on outpatient units.

Business line sales do not reflect sales of services provided to HPP patients as part of the packages, but include sales paid as FFS by the HPP patients in the Group's clinics.

The Clinics business line derives its revenue predominately from FFS clients. Treatment for State insured patients through NHIH, mainly relating to diagnostic imaging services, represented 23% of the business line's sales in 2018 and 2019, and 25% in 2020, respectively.

Sales and Visits in Clinics in the period 2018-2020

Corporate

The Corporate business line offers HPPs on a subscription basis, generally to corporate clients, as part of the benefit packages for their employees. These programs, which focus on prevention, such as regular checkups and access to diagnostic services, complement the legally required occupational health services that corporate clients contract from MedLife as the Standard HPP.

MedLife has a portfolio of over 738,000 HPPs patients from over 6,000 different companies. The Group has the largest base

of individuals benefiting from HPP in Romania, according to publicly available data.

The HPPs offered by the Group consist of the following:

• Mandatory occupational health services, which mainly include the provision of annual employee check-ups and more specific services depending on the client's industry. Many companies begin by purchasing occupational health services under the "Standard" HPP and then add benefits under broader HPPs from the same provider for certain or all of their employees, providing an upselling opportunity for the occupational health provider.
• More general, "prevention oriented" health plans, providing expanded access to general practitioners and certain specialists in the Group's clinics as well as specified laboratory tests and diagnostic imaging for higher end packages. The specific services vary depending on the type of package.

Analysis of corporate business line 2020 evolution

For the year ended 31 December 2020, MedLife increased its revenues from HPP by 8.2%, as compared to the previous financial year. This was achieved by sustainably growing the number of corporate clients and implicitly the number of its individual subscribers, while focusing on the retention and up-sale of existing clients.

The expansion of the Group's footprint outside Bucharest has enabled access to new potential clients as the Group's own branded Clinics and other facilities offer a local solution directly under the MedLife brand. The Group has consolidated its regional sales teams to address this market.

Corporate Sales and subscriptions in the period 2018-2020

Stomatology

The Group opened its first standalone stomatology clinic under the DentaLife brand in Bucharest in 2015 in leased premises, with the plan to expand the network further within Bucharest and across the country.

On July 11, 2016, the Group completed the acquisition of Dent Estet, the most important player on the dental services market in Romania. The acquisition of Dent Estet has propelled the Group into a leading position in the dental services market, which continues to be a highly fragmented market.

Following the acquisition of Dent Estet, the Group continued to expand its segment under the Dent Estet brand, consolidating its already well-defined position in the market. The Group's Dentistry business line offers a full range of services, ranging from medical examinations to surgery, implants or orthodontic services.

As of December 31, 2020, MedLife Group included 12 dental clinics, of which 10 within Dent Estet Group (five for adults and five for children and adolescents), DentaLife in Bucharest and RMC DentArt in Budapest. Krondent stomatology center in Brasov will be included in the network starting with 2021, leading to a total of 13 dental clinics.

Stomatology national distribution

Analysis of stomatology business line 2020 evolution

Stomatology business line sales increased in 2020 with RON 1,546,166 or by 2.6%, from RON 59,817,358 in 2019 to RON 61,363,524 in 2020. The increase was mainly driven by the increase in average fee per visit by 41.9%, from RON 484.9 in 2019 to RON 688.1 in 2020. This increase is justified through a change in the mix of services provided (focus on implantology services). In terms of number of visits, a significant contraction was noted in 2020 by 27.7%, leading to a decrease from 123,349 visits in 2019 to 89,172 visits in 2020. This was caused by traffic restrictions imposed during the pandemics, especially in the healthcare system where military ordinances were adopted with direct impact on stomatology division (only emergency cases were treated during 2 months period).

Stomatology business line is not subject to NHIH allocations; all of the sales are fee for service ("FFS") based.

Sales and Visits in Stomatology business line in the period 2018-2020

Laboratories

The Group is a leading player in the field of laboratories, where the Group has been active since 1999. The Group is currently one of the leading laboratory chains focused on the private market in Romania. The Laboratories business line provides the following range of services: biochemistry, pathological anatomy (cytology and histology), molecular biology and genetics, hematology, immunology, microbiology and toxicology.

The Group operates 33 laboratories under both MedLife brand and Sfanta Maria brand, ranging from the large, state-of-the-art Grivita lab facility to smaller regional facilities. As of 31 December 2020, the Group also operated approximately 180 sampling points throughout Romania, under both brands of the Group. Sampling points are locations where the Group collects blood and other samples from patients. Matei Basarab laboratory in Bucharest will be included in the network starting with 2021, leading to a total of 34 laboratories at national level.

Laboratories and Sampling Points national distribution

Legend

Analysis of laboratories business line 2020 evolution

Laboratories sales increased in 2020 with RON 44,383,928 or by 28.8%, from RON 154,135,274 in 2019 to RON 198,519,202 in 2020. The increase was due to an increase by 46% in the average fee per test, from 26.1 RON/lab test in 2019 to 38,1 RON/lab test in 2020; the increase was determined by RT PCR tests which are, on average, much expensive than the rest of the laboratory tests performed. In terms of volume of analyses performed, a decrease by 11.7% was registered in 2020 as compared to 2019, from 5,905,490 analyses in 2019, to 5,211,645 analyses in 2020.

The Laboratories business line sources the bulk of its revenue from FFS clients. In 2018 and 2019 only 16% of the business line's revenue came from servicing NHIH patients, while in 2020, 12%.

Sales and Analyses performed in Laboratories in the period 2018-2020

Hospitals

MedLife created its Hospitals business line to complement its clinic and laboratory activities, creating a fullservice offering. The Group's first hospital, Life Memorial Hospital ("LMH"), opened in 2007, was one of the first, and is still among the largest private hospitals in Romania. Subsequent growth has resulted in the Group becoming the largest private operator of inpatient facilities in Romania, measured by licensed number of beds, as well as operating theatres.

Between 2010-2020, the Group developed five new hospitals and acquired and integrated five existing hospital units:

• MedLife Pediatric Hospital in Bucharest, opened in 2011. The hospital aims to care for hospitalized patients and surgery for pediatric patients and hosts a specialized clinic, a pharmacy and a laboratory (which operates according to their fields of activity). The hospital has authorization for 132 beds and has 2 operating theaters. Diagnostic imaging equipment is installed in this unit, which includes ultrasound and X-ray equipment. The hospital was a brownfield development on land owned by the Group.
• Genesys Arad was bought in 2011 and operates as a general hospital in Arad, in the western part of Romania. The hospital has authorization for 59 beds and 3 operating rooms. The hospital itself was established in 2009 and owns the land and the building in which it operates.
• PDR Hospital in Brasov was developed and expanded by the Group following the acquisition of PDR in 2011, which included the land and building in which the hospital operates. This generalist hospital is licensed for 132 beds and has 6 operating theatres.
• Orthopedics Obor Hospital, located in central Bucharest in leased facilities, opened in 2012. It is licensed as an external section of LMH with 36 beds and 3 operating theatres. The section specializes in orthopedic surgery and since 2016 has become the center for the Group's development of a neurological surgery center of excellence.
• Titan Hospital was established in 2015 in rented facilities above the existing MedLife Titan outpatient unit. It is licensed as an external section of LMH and has 29 beds and one operating theatre.
• Interventional Cardiology Centre (Angiolife) was established as an external section of LMH in rented facilities next to the LMH site. Opened in 2015, the Centre has 12 beds and one operating theatre, focusing on the treatment of heart disease through laparoscopic procedures. The development of the Interventional Cardiology Center reflects the Group's ongoing focus on niche opportunities where specialist medical teams can be recruited to serve the Group's patient base.
• Humanitas Hospital was acquired in 2017 and functions as a generalist hospital in Cluj. The hospital has licensed 20 beds and 2 operating theatres.
• The Polisano Hospital in Sibiu was acquired in 2018 includes the Polisano European Hospital recognized as one of the most modern and performing hospital units in Romania and the largest private maternity hospital in Transylvania. The hospital has 205 beds and 3 operating theatres.
• Lotus Hospital in Ploiești was bought in 2019. The hospital comprises 32 beds (of which 10 have day care) and an operating theatre with 2 operating rooms.

The following table contains the breakdown of beds per hospital and specialty:

	ATI	Neonatology	Patients with continuous hospitalization	Patients with day care hospitalization	TOTAL
Paediatrics Hospital	1 0	-	9 6	2 6	132
LMH	1 8	4 3	156	1 4	231
Angio	3	-	9	-	1 2
Orthopaedics Hospital	1 1	-	2 5	-	3 6
Titan Hospital	4	-	6	1 9	2 9
Turnului Hospital (including Eva Maternity)	1 6	1 8	7 2	2 6	132
Genesys Hospital	4	1 0	4 1	4	5 9
Iași day care	1	-	-	6	7
Timișoara day care	2	-	-	8	1 0
Craiova day care	-	-	-	2 1	2 1
Humanitas	3	-	1 1	6	2 0
Polisano	2 1	2 6	146	1 2	205
Lotus	4	7	1 1	1 0	3 2
TOTAL	9 7	104	573	152	926

Hospitals national distribution

Legend

Analysis of hospitals business line 2020 evolution

The Hospitals business line's total sales increased in 2020 with RON 30,744,456 or by 13.9%, from RON 221,198,932 in 2019 to RON 251,943,388 in 2020. The increase is due to the increase in the average fee per patient with 14.6%, from RON 2,675.3 in 2019 to RON 3,064.7 in 2020. The average fee per patient increase was driven by the much higher complexity of the surgeries undertaken and a change in the mix of services during the pandemic period when patients were migrating from public to private hospitals.

The Hospitals business line derives its revenue predominantly from FFS patients. Treatment of State insured patients for the NHIH, generally relating to maternity, gynecology, cardiology and oncology represented 33%, 34% and 36% of the business line's sales in 2018, 2019 and 2020.

Sales and Patients in Hospitals in the period 2018-2020

42

Pharmacies

The Group launched its PharmaLife brand of pharmacies in 2010 to capture additional revenue from the patient traffic in the Group's clinics. PharmaLife operates pharmacies in the Group's own facilities, space, license and sales potential permitting, but also in their proximity.

As at 31 December 2020, 14 pharmacies were in operation, providing patients with prescription and over-the-counter healthcare products, including products under own brand named Doctor Life.

Pharmacies national distribution

Analysis of pharmacies business line 2020 evolution

The sales of the Pharmacies business line increased in 2020 with RON 5,064,667 or by 12.9%, from RON 39,341,136 in 2019 to RON 44,405,803 in 2020. The increase was mainly due to an increase of 45.3% in the average value of each transaction performed by clients, from RON 156.9 sales per client in 2019 to RON 227.9 sales per client in 2020. However, a decrease by 22.3% was noted in the number of clients, from 250,717 in 2019, to 194,838 in 2020, mainly due to traffic restrictions in the medical hubs were the pharmacies are located.

In 2020, 34.4% of the PharmaLife sales were cash-based, the difference being NHIH-subsidized. In 2019 and 2018 cashbased sales represented 41% out of total pharmacies business line.

Sales and transactions (clients) in pharmacies in the period 2018-2020

Other revenues

Other revenues include mostly sales brokerage commissions pertaining to the insurances intermediated by the Group's insurance broker and revenue from Stem Cells Bank's stem cell collection and storage services. Other revenues increased in 2020 with RON 858,506 or by 6.2%, from 13,907,582 RON in 2019 to RON 14,776,088 in 2020.

Analysis of the other items of the profit and loss account

Other operating revenues

Other operating revenues increased in 2020 with RON 1,625,813 or by 21.3%, from RON 7,648,949 in 2019 to RON 9,274,762 in 2020. This item mainly includes income from operating grants in total amount of RON 2,749,803, the capitalized costs of intangible assets as a result of the Group's investment of its own resources in the further development of IT platforms in total amount of RON 3,723,981, and other operating revenues in total amount of RON 2,800,978.

Operating expenses

Operating expenses include variable and fixed costs, as well as the cost of goods and materials used to provide the Group's services. The Group's operating expenses as a percentage of sales were 96.4% in 2018, 94.9% in 2019 and 90.7% in 2020. Main operating expenses categories are detailed below.

Operating expenses evolution 2018, 2019 and 2020

	For the period ended 31 December
	2018		2019		2020
Description	RON	%	RON	%	RON	%
Consumable materials and repair materials	126,048,830 16.5%		158,167,211 17.2%		189,975,286 19.4%
Third party expenses (including doctor's agreements)	206,077,081 26.9%		264,544,662	29%	281,469,012	29%
Salary and related expenses	245,139,121	32%	291,414,807	32%	277,035,208	28%
Social contributions	8,136,171	1 %	10,526,204	1 %	10,767,730	1 %
Depreciation	56,982,245	7 %	90,481,076	10%	102,897,388	11%
Impairment losses and gains (including reversals of impairment losses)	-	0 %	(1,167,475)	0 %	10,888,049	1 %
Other expenses, out of which:	123,630,969		103,719,253		104,579,312
Utilities	9,056,380	1 %	11,854,596	1 %	12,634,324	1 %
Commodities	29,367,048	4 %	30,649,995	3 %	35,649,736	4 %
Repairs maintenance	8,984,186	1 %	11,895,850	1 %	11,549,854	1 %
Rent	41,986,204	5 %	10,569,322	1 %	6,520,160	1 %
Insurance premiums	2,538,221	0 %	3,122,303	0 %	3,002,708	0 %
Promotion expense	15,011,240	2 %	14,207,313	2 %	13,508,044	1 %
Communications	3,748,038	0 %	3,962,770	0 %	4,236,791	0 %
Other administration and operating expesnses	12,939,652	2 %	17,457,104	2 %	17,477,695	2 %
	766,014,417	100%	917,685,738	100%	977,611,985	100%

Consumables, materials and repair materials

These expenses include various medical supplies and other goods used by the Group's business lines, including laboratory reagents, surgery and consultation sterilized consumables, and cleaning supplies. The Group's expense for consumables, materials and repair materials increased in 2020 with RON 31,808,075 or by 20.1%, from RON 158,167,211 in 2019 to RON 189,975,286 in 2020. The increase is maily linked to the increase in laboratories and hospitals business lines.

This category of expenses as a percentage of the Group's sales represented 15.9% % in 2018, 16.4% in 2019 and 17.6% in 2020.

Salary and related expenses and social contributions

These expenses include the gross salary expenses and corresponding salary related taxes pertaining to the Group's own staff including doctors, nurses, lab personnel, pharmacists and administration in the head office and the operating units. The costs of doctors providing services on an independent basis to the Group are included in Third party expenses (including doctors' agreements), discussed below.

The Group's salaries and social contributions decreased in 2020 with RON 14,138,073 RON or by 4.7%, from RON 301,941,011 in 2019 to RON 287,802,938 in 2020, mainly due to technical unemployment subsidies, but also cost cutting measures that will have a long term effect on profitability.

This category of expenses as a percentage of the Group's sales represented 31.9% in 2018, 31.2% in 2019 and 26.7% in 2020.

Third party expenses (including doctors' agreements)

Third party expenses include mainly the costs of doctors contracted by the Group as independent service providers. It also includes various other costs incurred with third parties such as financial and legal consultants and the costs of the NetLife network, which services the Group's HPP clients in areas where the Group is not present.

The Group's third party expenses increased in 2020 with RON 16,924,350 or by 6.4%, from RON 264,544,662 in 2019 to RON 281,469,012 in 2020. This increase was largely due to the increase in the services provided by doctors contracted by the Group as independent service providers. This category of expenses as a share in the Group's sales represented 25.9% in 2018, 27.3% in 2019 and 26.1% in 2020.

Depreciation

Depreciation and amortization expenses increased in 2020 with RON 12,416,312 or by 13.7%, from RON 90,481,076 in 2019 to RON 102,897,388 in 2020. The increase is due to the increase in the asset base of the Group as well as the effect of IFRS 16. This category of expenses as a share in the Group's sales represented 7.2% in 2018, 9.4% in 2019 and 9.6% in 2020.

Rent, utilities and repairs maintenance

These expenses include the rent for locations in which the renting contracts do not meet the recognition criteria under IFRS 16 (reclassification from rent expenses into depreciation and financial cost), as well as the utilities paid for all units and repairs maintenance costs for buildings and equipement. The Group's expense for rent, utilities and repairs maintenance decreased in 2020 with RON 3,615,430 or by 10.5%, from RON 34,319,768 in 2019 to RON 30,704,338 in 2020. The decrease is mainly due to renegociations performed by management of the Group with lessors during the state of emergency in order to reduce the montly rent for a determined period of time, or to defer payment.

This category of expense as a percentage of the Group's sales represented 7.6% in 2018, 3.5% in 2019 and 2.8% in 2020.

Commodities expenses

These expenses mainly include the cost of the pharmaceutical products sold by the Group's pharmacies. Commodities expenses increased in 2020 with RON 4,999,741 or by 16.3%, from RON 30,649,995 in 2019 to RON 35,649,736 in 2020. The increase was due to increased sales in pharmacies divison.

This category of expense as a percentage of the Group's sales represented 3.7% in 2018, 3.2% in 2019 and 3.3% in 2020.

Promotion expenses

These expenses include the Group's advertising campaigns in various media, public relations activities and other marketing related expenses. The promotion expenses slightly decreased in 2020, with RON 699,269 or by 4.9%, from RON 14,207,313 in 2019 to RON 13,508,044 in 2020.

This category of expense as a percentage of the Group's sales represented 1.9% in 2018, 1.5% in 2019 and 1.3% in 2020.

Insurance premiums and communication

These expenses include communication related expenses (internet, telephone) and both medical and non-medical insurance premiums, including policies for malpraxis, third party liability, motor vehicles third party and facultative, and property insurance. The expense for insurance premiums and communication slightly increased in 2020, with RON 154,426 or by 2.2%, from RON 7,085,073 in 2019 to RON 7,239,499 in 2020. This category of expense as a percentage of the Group's sales represented 0.8% in 2018 ,0.7% in 2019 and 0.7% in 2020.

EBITDA PRO-FORMA

Adjusted EBITDA, presented in the Pro-Forma Financial Information for the year ended December 31, 2020, recorded an increase of 51.6% or 76,222,646 RON, as compared to the EBITDA for the year ended December 31, 2019, from RON 147,824,594 in 2019, to RON 224,047,240 in 2020. Please refer to the "Pro-forma financial information for the 12 month period ended December 31, 2020" annex for more details regarding Pro-Forma financial information.

Pro-forma EBITDA and Pro-forma EBITDA Margin evolution for the period 2018-2020

Operating Profit

Operating profit increased in 2020 with RON 51,767,610 or by 90.3%, from RON 57,343,518 in 2019 to RON 109,111,128 in 2020; the increase was mainly triggered by good operating performance in the laboratories division, but also costcutting measures with short, but also medium to long term effects.

Financial result

Financial loss decreased in 2020 with RON 1,661,038 or by 5.2%, from RON 32,221,007 in 2019 to RON 30.559.969 in 2020.

Net interest expense

Net interest expense increased in 2020 with RON 2,605,991 or by 12.6%, from RON 20,646,561 in 2019 to RON 23,252,552 in 2020. The increase in net interest expense was due to the increase in interest bearing debt from one period to the other.

Net foreign exchange (losses) / gains

Net foreign exchange losses decreased in 2020 with RON 4,267,029 or by 36.9%, from RON 11,574.446 RON in 2019, to RON 7,307,417 in 2020.

Result before taxes

As a result of the factors presented above, the result before taxes increased in 2020 with RON 53,428,647, from RON 25,122,512 in 2019, to RON 78,551,159 in 2020.

Income tax expense

Income tax expense increased in 2020 by RON 6,450,448 or by 77.4 %, from RON 8,337,027 in 2019, to RON 14,787,475 in 2020.

Net result for the year

Net result increased in 2020 with RON 46,978,199 as compared to 2019, or by 280%, from a profit of RON 16,785,485 in 2019, to a profit of RON 63,763,684 in 2020. This increase is the consequence of the increase of operating profit figure in the net result.

Consolidated statement of financial position

The following table sets out the Group's consolidated statement of financial position for the periods ended 31 December 2017, 2018 and 2019 respectively.

	For the year ended 31 December,
	2018 *Restated	2019 *Restated	2020
NON-CURRENT ASSETS
Goodwill	82,378,647	96,007,730	147,256,824
Intangible assets	39,647,014	43,275,568	46,755,678
Tangible fixed assets	458,033,010	491,151,660	535,672,488
Right-of-use asset	146,435,936	133,169,294	146,821,194
Other financial assets	10,599,596	80,970,942	27,940,022
TOTAL NON-CURRENT ASSETS	737,094,203	844,575,194	904,446,206
CURRENT ASSETS
Inventories	31,070,480	43,390,267	53,058,518
Receivables	78,957,879	100,323,815	121,079,030
Other receivables	13,117,114	20,770,400	15,822,146
Cash and cash equivalents	33,722,339	37,688,896	81,970,397
	156,867,812	202,173,378	271,930,091
Assets classified as held for sale	381,665	381,665	-
PREPAYMENTS	6,186,462	7,224,106	7,117,566
TOTAL CURRENT ASSETS	163,435,939	209,779,149	279,047,657
TOTAL ASSETS	900,530,142	1,054,354,343	1,183,493,863
CURRENT LIABILITIES
Trade and other payables	131,744,422	165,133,428	151,690,134
Overdraft	30,911,018	29,011,944	27,127,907
Current portion of lease liability	36,696,515	40,425,758	41,166,069
Current portion of long term debt	23,162,490	24,802,015	46,436,217
Current tax liabilities	729,572	308,391	5,467,450
Provisions	2,458,957	1,749,188	7,209,494
Other short term liabilities	27,578,281	56,629,297	35,230,733
Liabilities directly associated with assets classified as
held for sale	458,785	363,318	-
TOTAL CURRENT LIABILITIES	253,740,040	318,423,339	314,328,004
LONG TERM DEBT
Lease liability	145,214,124	141,065,745	147,097,180
Other long term debt	19,253,369	22,851,746	18,119,743
Long term debt	287,013,365	345,952,241	414,696,592
TOTAL LONG-TERM LIABILITIES	451,480,858	509,869,732	579,913,515
Deferred tax liability	16,436,342	19,162,671	20,345,799
TOTAL LIABILITIES	721,657,240	847,455,742	914,587,319
SHAREHOLDER'S EQUITY
Issued capital and share capital	81,495,470	81,495,470	82,027,012
Treasury shares	(6,056,105)	(2,699,804)	(666,624)
Reserves	93,906,109	108,709,302	124,211,557
Retained earnings	(9,994,660)	(3,356,485)	35,701,579
Equity attributable to owners of the Group	159,350,814	184,148,483	241,273,524
Non-controlling interests	19,522,088	22,750,118	27,633,021
TOTAL EQUITY	178,872,902	206,898,601	268,906,545
TOTAL LIABILITIES AND EQUITY	900,530,142	1,054,354,343	1,183,493,863

Analysis of the main elements of the consolidated statement of financial position

Non-current assets

Non-current assets amount to RON 904,446,206 as at December 31, 2020, recording an increase with RON 59,871,013, or by 7.1 % as compared to December 31, 2019. The increase was mainly due to the acquisitions made.

The Group's fixed tangible assets comprise of buildings and lands, which are used for its private healthcare network. The Group companies own some of these assets. Most of the owned properties are held under sole ownership by the Group companies, while certain other properties are held under co-ownership with individuals.

In addition, the Group uses a large number of properties under lease agreements and some other under free lease agreements and concession agreements, which are periodically renewed.

Most of the owned properties are subject to immovable mortgages to secure borrowings granted by the Group's creditors.

As at 31 December 2020, the Group had the following structure of tangible and intangible assets:

	Intangibles	Land	Construction	Vehicles and equipment	Construction in progress	Total
1 January 2020	90,407,188	29,353,962	348,065,764	437,799,343	19,940,484	925,566,742
Additions	9,702,862	-	37,503,262	32,072,444	10,625,075	89,903,642
Transfers	-	-	3,196,963	1,662,301	(4,859,264)	-
Disposals	(17,296)	-	(4,055)	(7,204,313)	(1,699,070)	(8,924,735)
Additions from business combinations	3,773,097	2,338,215	71,691	31,309,240	-	37,492,243
Disposals from business combinations	-	-	-	-	-	-
Revaluation	-	150,508	(499,835)	531,533	-	182,206
31 December 2020	103,865,851	31,842,685	388,333,790	496,170,548	24,007,225	1,044,220,099

	Intangibles	Land	Construction	Vehicles and equipment	Construction in progress	Total
Depreciation
1 January 2020	47,131,621	84,120	83,514,570	260,409,202	-	391,139,513
Charge of the year	9,963,555	-	13,898,022	42,371,980	-	66,233,557
Disposals	(9,573)	-	-	(7,746,206)	-	(7,755,779)
Additions from business combinations	24,571	-	71,691	12,078,379	-	12,174,641
Disposals from business combinations	-	-	-	-	-	-
Revaluation	-	-	-	-	-	-
Impairment losses recognized in profit or loss	-	-	-	-	-	-
31 December 2020	57,110,173	84,120	97,484,283	307,113,355	-	461,791,932
Net Book Value
1 January 2020	43,275,568	29,269,842	264,551,193	177,390,141	19,940,484	534,427,228
31 December 2020	46,755,678	31,758,565	290,849,507	189,057,193	24,007,225	582,428,168

Current Assets

Current assets increased with RON 69,268,508 or by 33.0%, from RON 209,779,149 as at December 31, 2019, to RON 279,047,657 as at December 31, 2020.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost of inventories comprises of all the costs incurred in bringing the inventories to their present location and condition, being valued on a first in first out basis. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

	For the year ended 31 December,
	2018	2019	2020
Consumables	20,132,101	25,187,152	30,365,966
Materials in the form of inventory items	254,463	319,603	634,230
Merchandise	10,682,477	17,880,962	22,057,554
Inventory in transit	1,439	2,550	768
TOTAL	31,070,480	43,390,267	53,058,518

Receivables

Receivables are measured in the balance sheet at the estimated amount to be realized. Group receivables cover a wide range of clients. The main client to the state budget is the National Health Insurance House.

The average collection period for services rendered is 95 days. No interest is charged on trade receivables for the first 95 days from the date of the invoice.

	For the year ended 31 December,
	2018	2019	2020
Customers and contract assets	91,081,445	109,517,379	141,240,034
Advances to suppliers	5,285,312	7,047,839	6,968,448
Allowance for doubtful receivables	(17,408,878)	(16,241,403)	(27,129,452)
TOTAL	78,957,879	100,323,815	121,079,030

Current Liabilities

Current liabilities (excluding interest bearing liabilities) decreased with RON 24,585,810, or by 11%, from RON 224,183,622 as at December 31, 2019, to RON 199,597,812 as at December 31, 2020.

Group suppliers

The Group acquires its medical and non-medical supplies from market leading suppliers, including highly reputed international firms and local companies. The Group has customary supply agreements with its major suppliers for medical disposables, substances used in laboratory activities, pharmaceuticals, medical equipment and other non-medical purchases. These agreements are negotiated at Group level, in order to leverage a higher bargaining power to obtain favorable terms for the Group. The procurement department is a key factor in generating cost synergies immediately after the Group closes an acquisition and redirects the purchasing flows of the newly acquired unit through the centralized purchasing department of the Group. The Group chooses its suppliers having regard for quality, prices and delivery capabilities and aims to create long-term strong business relationships with its suppliers.

The Group's largest suppliers include Mediplus Exim, Abbott Germany, Novaintermed and Farmexpert, which supply the reagents and other consumables used in the medical activity, as well as certain pieces of equipment required for the performance of the medical activity, which are provided by certain suppliers for use with their products. Suppliers of diagnostic imaging equipment include, among others, General Electric and Siemens.

The Group acquires their pharmaceutical products from local distributors of pharmaceuticals and the main suppliers in 2020 were Mediplus Exim S.R.L., Farmexpert D.C.I. S.R.L., Farmexim S.A., Romastru Trading S.R.L. and Farmaceutica Remedia S.A..The largest non-medical suppliers of the Group are Telekom Romania for communication solutions and property leases and Capital Fleet Management for operational leasing. Other non-medical purchases include information technology and information systems hardware and software, office equipment, stationery, furniture. In addition, various services such as medical waste disposal, laundry, security, catering are outsourced by the Group to third party companies.

Financial Debt

Interest bearing debt increased with RON 90,534,259, or by 15%, from RON 604,109,449 as at December 31, 2019, to RON 694,643,708 as at December 31, 2020.

As at 31 December 2020, the companies within the Group were parties to a number of financing agreements, used to finance the Group's capital expenditures as well as working capital.

The table below summarizes the Group's debts from loan and leasing contracts as at 31 December 2018, 2019 and 2020:

	For the year ended 31 December,
Loan agreements	2018	2019	2020
Current portion of loans (Overdraft inclusive)	54,073,508	53,813,959	73,564,124
Non-current portion of loans	287,013,365	345,952,241	414,696,592
TOTAL	341,086,873	399,766,200	488,260,716

	For the year ended 31 December,
Financial leasing	2018	2019	2020
Current portion of lease liability	8,949,472	40,425,758	41,166,069
Long-term lease liability	26,525,231	141,065,745	147,097,180
TOTAL	35,474,703	181,491,503	188,263,249

As at December 31, 2020, the Group's drawn and undrawn financing facilities included the following:

• On September 24, 2019 Med Life SA (together with the co-borrowers Policlinica de Rapid Diagnostic SA, Bahtco Invest SA, Accipiens SA, Genesys Medical Clinic SRL, Clinica Polisano SRL, Centrul Medical Sama SA, Dent Estet Clinic SA and Valdi Medica SRL) signed with the Romanian Commercial Bank, Raiffeisen Bank, BRD Groupe Societe Generale and Transilvania Bank a refinancing agreement to the existing facilities, extending the financing period, rearranging the terms and conditions, as well as for an additional credit limit of 28 million euros, which will be in the form of a term facilities, being used by Medlife, along with other liquidities of the Company, for possible new purchasing opportunities in the market. On 15 May 2020, this facility was extended with 20 million euro.

• a guaranteed overdraft facility between Garanti Bank S.A. and Med Life S.A., the amount drawn on December 31, 2020, is of RON 9,738,800;

• an overdraft facility between Unicredit Tiriac Bank and Prima Medical S.R.L., with a maximum credit limit of RON 800,000, drawn in full on December 31, 2020;

• 2 guaranteed loan facilities concluded between Garanti Bank S.A. and Anima Specialty Medical Services S.R.L; the balance outstanding at December 31, 2020 is RON 4,871,368;

• an overdraft facility concluded between Garanti Bank S.A. and Anima Specialty Medical Services S.R.L within 1,500,000 RON; on December 31, 2020 the amount drawn is RON 1,249,000;

• a guaranteed loan concluded between Bancpost and Med Life Ocupational S.R.L. worth EUR 225,000; the balance outstanding at December 31, 2020 is RON 255,567;

• 1 guaranteed loan contract concluded between Banca Transilvania S.A. and Ghencea Medical Center, the balance outstanding at December 31, 2020 is RON 631,181;

• a loan agreement and a guaranteed overdraft facility between CEC Bank S.A. and Clinic Polisano S.R.L., the balance outstanding at December 31, 2020 is RON 32,946,065;

• an overdraft facility between Banca Transilvania S.A. and Onco Team Diagnostic S.A., the balance outstanding at December 31, 2020 is RON 456,254;

• a loan agreement concluded between Banca Transilvania S.A. and Micromedica Roman S.R.L., the balance outstanding at December 31, 2020 is RON 1,892,368;

• a loan agreement concluded between Banca Transilvania S.A. and Centrul Medical Micromedica S.R.L., the balance outstanding at December 31, 2020 is RON 2,191,232;

• an overdraft facility between CIB Bank and RMG Ungaria, the balance outstanding at December 31, 2020 is RON 10.104;

• a loan agreement concluded between Libra Bank S.A. and Labor Maricor S.R.L., the balance outstanding at December 31, 2020 is RON 7.333.

The interest rate for each loan for each interest period is the rate per year that is the sum of the applicable margin and depending on the currency of each loan, EURIBOR for the amounts in EUR or ROBOR for the amounts in RON.

The following guarantees have been requested, within the credit agreement at the level of the whole Group:

• real estate mortgage on the land located in Calea Grivitei no. 365 sector 1 Bucharest Romania (cadastral no. 13183/1) and of the related constructions;

• real estate mortgage on the land and constructions that make up the Pediatric Hospital in Bucharest. str. Zagazului no. 7 - CF 218010;

• real estate mortgage on the land and constructions that make up the PDR Clinic and Hospital located in Brasov str. Turnului no. 5 - CF 127854;

• movable mortgage on certain movable assets (medical equipment) owned by each company - Med Life, Bahtco Invest SA and Policlinica de Diagnostic Rapid SA;

• movable mortgage on future medical equipment to be purchased by the debtor and co-borrowers created in favor of the Financing Parties; or of those acquired by the Company as a result of financing the leasing debts through the syndicated loan;

• movable mortgage on the insurances of each debtor regarding the mortgaged tangible assets in favour of the Financing Parties;

• mortgage on the shares held by the Company in the share capital of the initial debtors and of the companies Medical Center Sama SA, Ultratest SA, Rur Medical SA etc, and any other significant company or any future debtor if appropriate;

• movable mortgage on the bank accounts of the initial and new borrowers;

• mortgage on certain commercial debts of Med Life (including debts related to the National House of Health Insurance or any other similar entities and the debts that resulted from significant commercial contracts);

• a movable mortgage on the actions of the sponsors of the debtor which will be created on the basis of a contract of movable mortgage on the shares, concluded between the sponsors and the creditors;

• real estate mortgage on the land owned by Accipiens, located in Dr. Cornel Radu street, no. 3, Arad (cadastral no. 301842) and the related constructions;

• real estate mortgage on the land owned by the Sama Medical Center, located in str. Infratirii, no. 5A, Craiova (cadastral no. 204837) and related constructions;

As at December 31, 2020 none of the Group members was in breach of any applicable term of the financing facilities.

Liquidity and Capital Resources

The following table sets out the Group's summary cash flow information for the periods ended 31 December 2018, 2019 and 2020:

	For the year ended 31 December,
	2018	2019 *Restated	2020
Net profit before taxes	23,833,883	25,122,512	78,551,159
Adjustments for:
Depreciation	56,982,245	90,481,076	102,897,388
Provisions for liabilities and charges	(260,399)	(709,768)	5,460,306
Interest revenue	(813,677)	(69,900)	(50,893)
Interest expense	17,567,816	20,646,561	23,252,552
Allowance for doubtful receivables	(161,589)	(1,167,475)	10,888,049
Financial Discounts	(6,983)	5	-
Other non-monetary gains	(6,549,809)	(3,789,152)	(3,712,076)
Unrealized exchange gain / loss	1,407,018	9,260,113	7,392,342
Goodwill impairment		-	90,706
Operating cash flow before working capital changes	91,998,505	139,773,971	224,769,532
Decrease / (increase) in accounts receivable	(20,931,344)	(16,815,577)	(35,539,764)
Decrease / (increase) in inventories	(5,902,259)	(2,044,361)	(9,968,002)
Decrease / (increase) in prepayments	1,889,895	(725,989)	1,018,264
Increase / (decrease) in accounts payable	8,257,035	11,944,565	(19,743,767)
Cash generated from working capital changes	(16,686,673)	(7,641,362)	(64,233,268)
Cash generated from operations	75,311,832	132,132,609	160,536,264
Income Tax Paid	(6,194,673)	(6,134,448)	(9,716,112)
Interest Paid	(18,165,105)	(19,514,509)	(22,207,210)
Interest received	813,677	69,899	50,893
Net cash from / (used in) operating activities	51,765,731	106,553,551	128,663,835
Investment in business combination	(16,985,373)	(53,182,778)	(23,769,813)
Additional participation interest acquired	-	(1,532,500)	-
Purchase of intangible assets	(2,396,311)	(3,020,776)	(5,962,689)
Purchase of property, plant and equipment	(49,923,781)	(50,681,033)	(83,116,171)
Net cash used in investing activities	(69,305,465)	(108,417,087)	(112,848,673)
Cash flow from financing activities
Increase in Loans	46,683,462	63,121,293	101,692,813
Payment of loans	(58,474,480)	(14,533,110)	(25,118,546)
Financial Lease payments	(9,341,826)	(40,315,278)	(43,857,062)
Dividends paid to NCI	(292,924)	(186,698)	(701,987)
Payments for purchase of treasury shares	(6,056,105)	(2,256,114)	(3,548,879)
Net cash generated by financing activity	(27,481,873)	5,830,093	28,466,339
Net change in cash and cash equivalents	(45,021,607)	3,966,557	44,281,501
Cash and cash equivalents beginning of the period	79,227,766	33,722,339	37,688,896
Cash and cash equivalents end of the period	34,206,159	37,688,896	81,970,397

Net cash generated from operating activities

Net cash generated from operations increased in 2020 with RON 22,110,284 or 20.8 %, from RON 106,553,551 in 2019, to RON 128,663,835 in 2020. This increase was mainly due to the increase in the activity of the Group, both through organic development (6 RT PCR laboratories) and acquisitions, but also through the optimizations performed and cost cutting measures.

Net cash used in investing activities

Net cash used in investing activities increased with RON 4,431,586, or by 4.1%, from RON 108,417,087 in 2019, to RON 112,848,673 in 2020. The increase is determined on one hand by a decrease in cash used in business combinations, from RON 53,182,778 in 2019, to RON 23,769,813 in 2020. On the other hand, cash outflows for investments in non-current assets (intangibles and property plant and equipment) were RON 89,078,609, increasing with RON 35,377,051 as compared to 2019 (mainly due to the plot of land acquired in Calea Grivitei and the development of RT-PCR laboratories).

Net cash (used in)/ generated from financing activities

Net cash generated from financing activities increased with RON 22,636,245, from RON 5,830,093 in 2019, to RON 28,446,339 in 2020. In 2020, the Group's cash outflows to repay loans and financial leasing, including leases classified under IFRS 16, amounted to RON 68,975,608, while cash inflows from loan drawdowns to finance the acquisitions and increase working capital lines to support growth and ensure liquidity during the state of emergency were of RON 101,692,813. Payments for the purchase of treasury shares amounted to RON 3,548,879.

SUBSEQUENT EVENTS

In the first quarter of 2021, MedLife finalized the acquisition of Matei Basarab Medical Center and Krondent.

MedLife Group has also announced the first acquisition of 2021: 60% of the share capital of Medica Sibiu. Medica Sibiu has been operating on the private medical services market since 2001 and consists of a large outpatient unit, a medical analysis laboratory and an occupational health center. In addition, Medica Sibiu is one of the providers under contract with Sibiu County Health Insurance House (CJAS), covering a wide range of laboratory tests and medical consultations, for specialties such as endocrinology, internal medicine, neurology, psychiatry, clinical psychology. According to the company's representatives, in 2020, Medica Sibiu registered a turnover of 3.7 million RON. The transaction was finalized in April 2021.

Considering the termination, by mutual agreement, of the mandate of Mrs. Geanina Durigu as Director of the Laboratories Division, and respectively as a member of the Executive Committee of the Company, the Board of Directors of Med Life S.A appointed Mr. Marius Petrila, Director of IT Department, as a member of the Executive Committee, the mandate being valid until 21.10.2024.

There were no other significant events after December 31, 2020.

ANNEXES

MED LIFE GROUP PRO FORMA FINANCIAL INFORMATION FOR THE 12 MONTHS PERIOD ENDED AT 31 DECEMBRE 2020

Introduction

The following Consolidated Pro Forma PL of the Consolidated PL is based on the Group's Consolidated audited Financial Statements for the 12 months period ended on 31 December 2020, adjusted with the historical financial results of the companies acquired by the Group during the period from 1 January 2020 to 31 December 2020 (the "Acquired Companies"). Details of the Acquired Companies are set out below.

The Consolidated Pro Forma PL for the 12 months period ended 31 December 2020 transpose (i) the acquisition of the Acquired Companies as if the acquisition had occurred on 1 January 2020 by combining the financial results for the period of the Acquired Companies with those of the Group and (ii) the elimination of certain expenses included in the Consolidated PL of the Group which the Group considers to be non-operational and/or non-recurring in nature.

The Consolidated Pro Forma PL provide a hypothetical illustration of the impact of the transactions on the Company's earnings. The Consolidated Pro Forma PL has been prepared for the Group as at and for the 12 months period ended 31 December 2020. The Consolidated Pro Forma PL should be read in conjunction with the Group`s audited Consolidated Financial Statements for the 12 months period ended 31 December 2020.

Purpose of the Consolidated Pro Forma PL

The Consolidated Pro Forma PL set out below has been prepared to (i) illustrate the effect on the Group of the acquisitions completed in 12 months 2020 and (ii) provide an estimate of the Group's recurring EBITDA.

The Group's unaudited consolidated pro forma Adjusted EBITDA is also useful when analyzing the Group's current debt compared to its earnings capacity. Although the Consolidated BS in the Consolidated FS include the full amount of debt incurred to finance the acquisitions completed as of 31 December 2020, the Consolidated PL includes no portion of the annual earnings of the Acquired Companies. Using the unaudited consolidated pro forma Adjusted EBITDA for such comparison allows inclusion of a measure of the full period earnings that will contribute to the servicing of the debt incurred in relation to the acquisitions.

In the 12 months period of 2020, the Company made the following acquisitions in pursuit of a consolidation strategy aimed at complementing the Group's service offering, expanding its national footprint and consolidating its market position:

• 12% of share capital of Genesys Arad, as a result, MedLife holds the 73% stake;
• 10% of the share capital of Ghencea Medical Center SA, MedLife becoming the shareholder with 100%;
• 100% of share capital of Labor Maricor;
• 100% of the shares in Centrul Medical Matei Basarab SRL;
• 75% of share in Pharmachem Distributie SRL;
• 100% of the shares in CED Pharma SRL;
• 36% of the shares in KronDent SRL (indirectly): 60% acquisition through Dent Estet Clinic SA.

The Consolidated Pro Forma PL has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and therefore, does not represent the Group's actual financial results. The Consolidated Pro Forma PL do not necessarily reflect what the combined Group's financial condition or results of operations would have been, had the acquisitions occurred on the dates indicated in the pro-forma calculations. They also may not be useful in predicting the future financial condition and results of operations of the Group with the acquired companies. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

	Consolidated PL	Normalisation	One off	Consolidated Pro forma PL
SALES	1,077,448,351	136,046,535	-	1,213,494,886
Other operating revenues	9,274,762	534,843	-	9,809,605
OPERATING INCOME	1,086,723,113	136,581,378	-	1,223,304,491
OPERATING EXPENSES	(977,611,985)	(131,539,461)	5,261,188	(1,103,890,258)
OPERATING PROFIT	109,111,128	5,041,917	5,261,188	119,414,233
Finance cost	(23,252,552)	(582,449)	-	(23,835,001)
Other financial expenses	(7,307,417)	(535,277)	-	(7,842,694)
FINANCIAL RESULT	(30,559,969)	(1,117,726)	-	(31,677,695)
RESULT BEFORE TAXES	78,551,159	3,924,191	5,261,188	87,736,538
Income tax expense	(14,787,475)	(554,265)	(841,790)	(16,183,530)
NET RESULT	63,763,684	3,369,926	4,419,398	71,553,008

Consolidated Pro-Forma PL

Net Income to Adjusted EBITDA

				12 Months ended December 31, 2020
	Consolidated PL	Normalisation	One off	Consolidated Pro forma PL
Net income/(loss) for the period Add back:	63,763,684	3,369,926	4,419,398	71,553,008
Taxes on income Out of which:	14,787,475	554,265	841,790	16,183,530
Base tax expense One off impact	14,787,475 -	554,265 -	- 841,790	15,341,740 841,790
Net financial result	30,559,969	1,117,726	-	31,677,695
Depreciation, amortisation and impairment, including write-ups	102,897,388	1,735,618	-	104,633,007
Adjusted EBITDA	212,008,516	6,777,536	5,261,188	224,047,240

Sales split by Business Line

				12 Months ended December 31, 2020
	Consolidated PL	Normalisation	One off	Consolidated Pro forma PL
Clinics	307,919,487	13,519,953	-	321,439,439
Stomatology	61,363,524	4,728,020	-	66,091,544
Laboratories	198,519,202	108,815	-	198,628,017
Corporate	198,530,858	-	-	198,530,858
Hospitals	251,943,388	-	-	251,943,388
Pharmacies	44,405,803	24,840,072	-	69,245,875
Other	14,766,089	92,849,675	-	107,615,764
Total Sales	1,077,448,351	136,046,535	-	1,213,494,886

Basis for the Consolidated Pro Forma PL

The Consolidated Pro Forma PL for the 12 months period ended 31 December 2020 has been prepared starting from the Consolidated PL of the Group as of 31 December 2020. The Consolidated Pro Forma PL was prepared in a manner consistent with the accounting policies adopted by the Group in the Consolidated FS as of 31 December 2020.

The Consolidated Pro Forma PL for the 12 months ended 31 December 2020 gives effect to the acquisitions of the Acquired Companies as if the acquisitions had occurred on 1 January 2020. Also, certain expense items incurred by the Group in the relevant period which are considered to be non-operational and nonrecurring by nature as detailed in the notes to the tables, are reflected in the Consolidated Pro Forma PL as one-off adjustments, based on management judgment for the Group, without taking into account the Acquired Companies.

Consolidated Pro Forma PL adjustments

Normalization adjustment

Normalization adjustments are made to include the financial results of the Acquired Companies in the Group results for the relevant period. The adjustments represent the unaudited Income Statement items for the portion of the relevant period prior to and including the month of acquisition of the companies.

The companies that were normalized and the months included in the normalization are set out below:

Entity	Date of obtaining control	Months included in Normalization (inclusive)
Labor Maricor	April 2020	January – March 2020
Centrul Medical Matei Basarab
SRL	To be determined	January – December 2020
Pharmachem Distributie SRL	To be determined	January – December 2020
CED Pharma SRL	To be determined	January – December 2020
KronDent SRL	To be determined	January – December 2020

One-off adjustments

One-off adjustments represent expenses which have been included in the Group's Consolidated PL but which, in the Group's opinion, represent non-recurring and/or non-operational expenses by nature. These expenses relate to costs incurred in relation to the acquisition of the Acquired Companies which were expensed rather than capitalized as part of the acquisition cost of the companies, including also the costs of aborted or continuing acquisition processes.

The one-off expenses are presented below. The amounts calculated for each of the expenses is gross of the applicable income tax.

Type of Expense	Amount for FY 2020	Note
Cost of Acquisitions	546,494	Note A
Research studies	1,654,900	Nota B
Consultancy costs	1,360,725	Note C
Other costs	1,699,069	Note D
Total	5,261,188

Note A

Cost of Acquisitions includes the expenses incurred in respect of external due diligence reports on target companies covering financial, taxation and legal due diligence as well as the cost of legal advisory services in relation to the signing and closing of the transactions signed or concluded in the period. The external costs of aborted acquisitions are also included.

These expenses are considered non-recurrent and non-operational, as they do not relate to the operational business of the Group.

Note B

The Group issued a series of medical studies with regards to the effect of the pandemic over the general population. These costs are considered non-recurring.

Note C

Includes expenses with consultancy services which are considered non-recurring.

Note D

Includes other expenses considered non-recurring and not linked to the operational activity of the Group.

Mihail Marcu, CEO

__________________

Adrian Lungu, CFO

__________________

Deloitte Audit S.R.L. Clădirea The Mark Tower, Calea Griviței nr. 82-98, Sector 1, 010735 București, România

Tel: +40 21 222 16 61 Fax: +40 21 222 16 60 www.deloitte.ro

INDEPENDENT AUDITOR'S REPORT

To the Shareholders, MED LIFE S.A.

Report on the Audit of the Consolidated Financial Statements

Opinion

• 1. We have audited the consolidated financial statements of Med Life S.A. and its subsidiaries (the Group), with registered office in 365, Calea Grivitei, District 1, Bucharest, identified by unique tax registration code 8422035 which comprise the consolidated statement of financial position as at December 31, 2020, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, including a summary of significant accounting policies and notes to the consolidated financial statements.
• 1. The consolidated financial statements as at December 31, 2020 are identified as follows:

•	Net assets		RON 268,906,545
•	Net profit for the financial year	RON	63,763,684

1. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Order 2844/2016, with subsequent amendments for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU.

Basis for Opinion

1. We conducted our audit in accordance with International Standards on Auditing (ISAs), Regulation (EU) No. 537/2014 of the European Parliament and the Council (forth named "the Regulation") and Law 162/2017 ("the Law"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), in accordance with ethical requirements relevant for the audit of the financial statements in Romania including the Regulation and the Law and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

1. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Numele Deloitte se referă la organizația Deloitte Touche Tohmatsu Limited, o companie cu răspundere limitată din Marea Britanie, la firmele membre ale acesteia, în cadrul căreia fiecare firmă membră este o persoană juridică independentă. Pentru o descriere amănunțită a structurii legale a Deloitte Touche Tohmatsu Limited și a firmelor membre, vă rugăm să accesați www.deloitte.com/ro/despre.

KEY AUDIT MATTER	How our audit addressed the key audit matter
Recognition of leases under IFRS 16
The Company has adopted IFRS 16 as of January 1st, 2019. On adoption date, the impact lead to an increase in total assets of RON 146.4 million and an increase in total liabilities of RON 146.4 million for the opening balance • sheet. The current period is the second financial year in which the Company has applied IFRS 16. • The Company has identified during the current year errors in respect of management estimates applied in the adoption of IFRS 16, starting January 1, 2019. As a result, it has restated previously reported financial information • in relation to measurement under IFRS 16. Further information is set out in Note 3.8 and Note 14 to the consolidated financial statements. In accounting for IFRS 16 the management of the • Company has applied significant judgments and management estimates for determining: • lease term applied to its identified lease agreements; • the discount rate to be applied in measurement of right–of–use assets and lease liabilities; • • the application of exemptions and practical expedients for similar type of contracts characteristics to be accounted on a portfolio basis; • • lease modifications; • measurement in a consistent manner of rent concessions received during the financial year as a result of COVID-19; • • subsequent measurement of key elements from lease contracts which influence the valuation of the right-of-use asset and lease liability. • We have defined the recognition of leases under IFRS 16 as a key audit matter owing to the significant effort required in auditing the various significant management assumptions, judgements and estimates applied, as presented above, in particular subsequent assessment over lease contracts key elements which impacts the measurement of right–of–use assets and lease liabilities.	In responding to the key audit matter identified we have assessed the following: we have obtained an understanding of relevant controls over the identification of new leases, the underlying lease data and subsequent modifications; we have verified the accuracy of the underlying lease data by agreeing a sample of leases to supporting information made available by the Company including leases modification; we have evaluated the completeness of lease contracts by testing the reconciliation to the Company's operating lease commitments and by analysing the most significant service contracts to assess whether they contained a lease under IFRS 16; we have verified the mathematical accuracy of the IFRS 16 calculations for a sample of leases through recalculation of the right–of–use assets, lease liability, depreciation charge and finance cost. Where lease modification took place, we have evaluated the impact triggered; we have evaluated the judgment applied by the Company in estimating the discount rate used for the measurement of right–of–use asset and lease liability; we have analysed the information used by the Company in accounting for IFRS 16 in the consolidated financial statements elements on a portfolio basis, applied in cases where lease contracts with similar characteristics have been identified; we have assessed the material implications of COVID 19 applicable to the Company in accounting for IFRS 16, in particular lease incentives and impairment triggers; we have evaluated the key elements analysed by the Company, based on which restatement for previous reported financial period was performed, presentation of these elements in the statement of financial position in accordance with IAS 1 "Presentation of Financial Statements" and key disclosures required by IAS 8 "Accounting policies, Changes in accounting estimates and Errors". We have also evaluated the material disclosures presented in the notes to the consolidated financial statements as required by IFRS 16.

Other information - Administrator's Consolidated Report

1. The administrators are responsible for the preparation and presentation of the other information. The other information comprises the Administrators' Consolidated report, but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and, unless otherwise explicitly mentioned in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements for the year ended December 31, 2020, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

With respect to the consolidated Administrator's report, we read it and report if this has been prepared, in all material respects, in accordance with the provisions of Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU, with subsequent amendments.

On the sole basis of the procedures performed within the audit of the consolidated financial statements, in our opinion:

• a) the information included in the administrators' report for the financial year for which the consolidated financial statements have been prepared is consistent, in all material respects, with these consolidated financial statements;
• b) the administrators' report has been prepared, in all material respects, in accordance with the provisions of Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU, with subsequent amendments;

Moreover, based on our knowledge and understanding concerning the Company and its environment gained during the audit on the financial statements prepared as at December 31, 2020, we are required to report if we have identified a material misstatement of this consolidated Administrator's report . We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

• 1. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Order 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
• 1. In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
• 1. Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

1. Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

2. 1. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
   2. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
   3. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
   4. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
   5. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
   6. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
   7. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
3. 1. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
4. 1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
5. 1. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. We have been appointed by the General Assembly of Shareholders on 22 April 2019 to audit the consolidated financial statements of Med Life S.A. for the financial year ended December 31, 2020. The uninterrupted total duration of our commitment is 12 years, covering the financial years ended 31 December 2009 until 31 December 2020.

We confirm that:

• Our audit opinion is consistent with the additional report submitted to the Audit Committee of the Company that we issued the same date we issued this report. Also, in conducting our audit, we have retained our independence from the audited entity.
• No non-audit services referred to in Article 5 (1) of EU Regulation No. 537 / 2014 were provided.

The engagement partner on the audit resulting in this independent auditor's report is Irina Dobre.

Irina Dobre, Audit Partner

For signature, please refer to the original Romanian version.

Registered in the Electronic Public Register of Financial Auditors and Audit Firms under AF 3344

On behalf of:

DELOITTE AUDIT SRL

Registered in the Electronic Public Register of Financial Auditors and Audit Firms under FA 25

The Mark Building, 84-98 and 100-102 Calea Griviței, 8th Floor and 9th Floor, District 1 Bucharest, Romania 13 April 2021

MED LIFE GROUP

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020

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

(TOGETHER WITH INDEPENDENT AUDITOR'S REPORT AND ADMINISTRATORS' REPORT)

CONTENTS: PAGE :

CONSOLIDATED STATEMENT OF FINANCIAL POSITION	2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	3
CONSOLIDATED STATEMENT OF CASH FLOWS	4
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	5 – 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	7 – 61
ADMINISTRATORS' REPORT	1 – 21

MED LIFE GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

		MED LIFE GROUP
		CONSOLIDATED STATEMENT OF FINANCIAL POSITION
		AS AT DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	Note	December 31,	December 31,	January 1,
			2019	2019
		2020	*Restated	*restated
ASSETS
Non current assets
Goodwill	4	147,256,824	96,007,730	82,378,647
Intangible assets	5.3	46,755,678	43,275,568	39,647,014
Tangible assets	5	535,672,488	491,151,660	458,033,010
Right-of-use assets	13	146,821,194	133,169,294	146,435,936
Other financial assets	5.5	27,940,022	80,970,942	10,599,596
TOTAL NON-CURRENT ASSETS Current Assets		904,446,206	844,575,194	737,094,204
Inventories	6	53,058,518	43,390,267	31,070,480
Receivables	7	121,079,030	100,323,815	78,957,879
Other receivables		15,822,146	20,770,400	13,117,114
C ash and cash equivalents	8	81,970,397	37,688,896	33,722,339
		271,930,091	202,173,378	156,867,812
Assets classified as held for sale	9	-	381,665	381,665
Prepayments	10	7,117,566	7,224,106	6,186,462
TOTAL CURRENT ASSETS		279,047,657	209,779,149	163,435,939
TOTAL ASSETS		1,183,493,863	1,054,354,343	900,530,142
LIABILITIES & SHAREHOLDER'S EQUITY
Current Liabilities Trade and other payables	11	151,690,134	165,133,428	131,744,422
Overdraft	15	27,127,907	29,011,944	30,911,018
Current portion of lease liability		41,166,069	40,425,758	36,696,515
Current portion of long term debt	15	46,436,217	24,802,015	23,162,490
Current tax liabilities		5,467,450	308,391	729,572
Provisions	13	7,209,494	1,749,188	2,458,957
Other short term liabilities	12	35,230,733	56,629,297	27,578,281
Liabilities directly associated with assets
classified as held for sale	9	-	363,318	458,785
TOTAL CURRENT LIABILITIES		314,328,004	318,423,339	253,740,040
Long Term Debt
Lease liability Other long term debt		14 147,097,180 18,119,743	141,065,745 22,851,746	145,214,124 19,253,369
Long term debt	15	414,696,592	345,952,241	287,013,365
TOTAL LONG-TERM LIABILITIES		579,913,515	509,869,732	451,480,858
Deferred tax liability	26	20,345,799	19,162,671	16,436,342
TOTAL LIABILITIES		914,587,319	847,455,742	721,657,240
SHAREHOLDER'S EQUITY
Issued capital and share capital	16	82,027,012	81,495,470	81,495,470
Treasury shares		(666,624)	(2,699,804)	(6,056,105)
Reserves	18	124,211,557	108,709,302	93,906,109
Retained earnings		35,701,579	(3,356,485)	(9,994,660)
Equity attributable to owners of the Group		241,273,524	184,148,483	159,350,814
Non-controlling interests	19	27,633,021	22,750,118	19,522,088
TOTAL EQUITY		268,906,545	206,898,601	178,872,902
TOTAL LIABILITIES AND EQUITY		1,183,493,863	1,054,354,343	900,530,142

CEO CFO

Mihail Marcu, Adrian Lungu,

MED LIFE GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	MED LIFE GROUP
		FOR THE YEAR ENDED DECEMBER 31, 2020
		(all the amounts are expressed in RON, unless otherwise specified)
	Note	12 months ended December 31, 2019
		2020	*Restated
Sales Other operating revenues	20 21	1,077,448,351 9,274,762	967,380,307 7,648,949
Operating Income		1,086,723,113	975,029,256
Consumable materials and repair materials		(189,975,286)	(158,167,211)
Third party expenses (including doctor's agreements)		(281,469,012)	(264,544,662)
Salary and related expenses	23	(277,035,208)	(291,414,807)
Social contributions Depreciation	23	(10,767,730) (102,897,388)	(10,526,204) (90,481,076)
Impairment losses and gains (including reversals of impairment losses)	7	(10,888,049)	1,167,475
Other operating expenses Operating expenses	22 21,22	(104,579,312) (977,611,985)	(103,719,253) (917,685,738)
Operating Profit		109,111,128	57,343,518
Finance cost	24	(23,252,552)	(20,646,561)
Other financial expenses	24	(7,307,417)	(11,574,446)
Financial result	24	(30,559,969)	(32,221,007)
Result Before Taxes Income tax expense	26	78,551,159 (14,787,475)	25,122,512 (8,337,027)
Net Result		63,763,684	16,785,485
Owners of the Group Non-controlling interests	19	56,702,860 7,060,824	13,611,276 3,174,209
Earnings per share
Basic and diluted earnings per share (RON)	17	0.43	0.10
Other comprehensive income items that will not be reclassified to profit or loss
Gain on revaluation of equity instruments		-	655,437
Deferred tax on other comprehensive income components		-	(104,870)
TOTAL OTHER COMPREHENSIVE INCOME		-	550,567
Total other comprehensive income
attributable to: Owners of the Group		-	550,567
Non-controlling interests		-	-
TOTAL COMPREHENSIVE INCOME		63,763,684	17,336,052
Total comprehensive income attributable to: Owners of the Group		56,702,860	14,161,843
Non-controlling interests	18	7,060,824	3,174,209
Mihail Marcu,		Adrian Lungu,

CEO CFO

Mihail Marcu, Adrian Lungu,

MED LIFE GROUP CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified) Note 12 months ended December 31, 2019 2020 *Restated Net profit before taxes 26 78,551,159 25,122,512 Adjustments for Depreciation 102,897,388 90,481,076 Provisions for risks and charges 5,460,306 (709,768) Interest revenue 24 (50,893) (69,900) Interest expense 24 23,252,552 20,646,561 Allowance for doubtful receivables 7 10,888,049 (1,167,475) Financial Discounts 24 - 5 Other non-monetary gains 21, 24 (3,712,076) (3,789,152) Unrealized exchange gain / loss 7,392,342 9,260,113 Goodwill impairment 4.27 90,706 - Operating cash flow before working capital changes 224,769,532 139,773,971 Decrease / (increase) in accounts receivable (35,539,764) (16,815,577) Decrease / (increase) in inventories (9,968,002) (2,044,361) Decrease / (increase) in prepayments 1,018,264 (725,989) Increase / (decrease) in accounts payable (19,743,767) 11,944,565 Cash generated from working capital changes (64,233,268) (7,641,362) Cash generated from operations 160,536,264 132,132,609 Income Tax Paid (9,716,112) (6,134,448) Interest Paid (22,207,210) (19,514,509) Interest received 50,893 69,899 Net cash from operating activities 128,663,835 106,553,551 Investment in business combination 4.27 (23,769,813) (53,182,778) Additional participation interest acquired 4.27 - (1,532,500) Purchase of intangible assets 5 (5,962,689) (3,020,776) Purchase of property, plant and equipment 5 (83,116,171) (50,681,033) Net cash used in investing activities (112,848,673) (108,417,087) Cash flow from financing activities Increase in Loans 15 101,692,813 63,121,293 Payment of loans 15 (25,118,546) (14,533,110) Financial Lease payments (43,857,062) (40,315,278) Dividends paid to NC I 19 (701,987) (186,698) Payments for purchase of treasury shares (3,548,879) (2,256,114) Net cash in financing activities 28,466,339 5,830,093 Net change in cash and cash equivalents 44,281,501 3,966,557 Cash and cash equivalents at the beginning of the period 37,688,896 33,722,339 Cash and cash equivalents at the end of the period 81,970,397 37,688,896
Mihail Marcu, Adrian Lungu,

CEO CFO

Mihail Marcu, Adrian Lungu,

MED LIFE GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

					MED LIFE GROUP	CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020
	Paid and registered	Paid, registered after year end	Share capital	Treasury shares	Share premium	(all the amounts are expressed in RON, unless otherwise specified) General reserves and other reserves	Revaluation Reserve	Accumulated Results	Attributable to owners of the parent	Non controlling interests	Total Equity
Balance as at December 31,	5,023,000	513,271	5,536,271	(2,699,804)	75,959,199	13,406,769	95,302,534	(419,909)	187,085,059	23,180,510	210,265,569
2019 Correction of error (net of tax)	-	-	-	-	-	-	-	(2,936,575)	(2,936,575)	(430,393)	(3,366,968)
*Restated total equity at the beginning of the financial year	5,023,000	513,271	5,536,271	(2,699,804)	75,959,199	13,406,769	95,302,534	(3,356,485)	184,148,483	22,750,118	206,898,601
Recognition of other reserves	-	-	- -	-	-	661,005	-	(661,005)	-	-	-
for fiscal purposes Recognition of other reserves Increase in share capital	-	-	-	-	-	14,659,044	182,206	(14,659,044)	182,206	-	182,206
through incorporation of reserves	27,681,352	-	27,681,352	-	(27,681,352)	-	-	-	-	-	-
Increase in premiums due to difference between fair value and cost of own shares when the exchange was made	-	-	-	-	-	-	-	-	-	-	-
Subsequent acquisition of NCI	-	-	-	-	-	-	-	(2,324,748)	(2,324,748)	(1,475,933)	(3,800,681)
Distribution of dividends Net release of own shares	-	-	-	-	-	-	-	-	-	(701,987)	(701,987)
used for acquiring additional NCI	-	-	-	2,033,180	-	-	-	-	2,033,180	-	2,033,180
Increase in premiums due to difference between fair value and cost of own shares when the exchange was made	-	-	-	-	531,542	-	-	-	531,542	-	531,542
Total comprehensive income	-	-	- -	-	-	-	-	56,702,860	56,702,860	7,060,824	63,763,684
Deferred tax related to other elements of the overall result	-	-	- -	-	-	-	-	-	-	-	-
Profit of the year	-	-	-	-	-	-	-	56,702,860	56,702,860	7,060,824	63,763,684
Balance as at December 31, 2020	32,704,352	513,271	- 33,217,623	(666,624)	48,809,388	28,726,817	95,484,740	35,701,579	241,273,524	27,633,022	268,906,545

Mihail Marcu, Adrian Lungu, CEO CFO

MED LIFE GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

						CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	Paid and registered	Paid, registered after year end	Share capital	Treasury shares	Share premium	General reserves and other reserves	Revaluation Reserve	Accumulated Results	Attributable to owners of the parent	Non controlling interests	Total Equity
Balance as at December 31, 2019	5,023,000	513,271	5,536,271	(6,056,105)	75,959,199	11,644,268	82,261,841	(9,994,660)	159,350,814	19,522,088	178,872,902
Recognition of other reserves for fiscal purposes	-	-	-	-	-	1,762,501	-	(1,762,501)	-	-	-
Recognition of other reserves	-	-	-	-	-	-	13,040,693	-	13,040,693	-	13,040,693
Net release of own shares used for acquiring additional NCI	-	-	-	4,011,738	-	-	-	-	4,011,738	-	4,011,738
Increase from own shares valuation	-	-	-	(655,438)	-	-	-	-	(655,438)	-	(655,438)
Additional non-controlling interest arising as of result of business combinations	-	-	-	-	-	-	-	-	-	2,279,703	2,279,703
Subsequent acquisition of NCI	-	-	-	-	-	-	-	(5,761,167)	(5,761,167)	(2,039,185)	(7,800,352)
Distribution of dividends Acquisition of own shares	- -	- -	- - -	- -	- -	- -	- -	- -	- -	(186,698) -	(186,698) - -
Total comprehensive income	-	-	-	-	-	-	-	14,161,843	14,161,843	3,174,209	17,336,052
Deferred tax related to other elements of the overall result	-	-	-	-	-	-	-	-	-	-	-
Profit of the year *restated	-	-	-	-	-	-	-	14,161,843	14,161,843	3,174,209	17,336,052
Balance as at December 31, 2019	5,023,000	513,271	5,536,271	(2,699,804)	75,959,199	13,406,769	95,302,534	(3,356,485)	184,148,483	22,750,118	206,898,601

Mihail Marcu, Adrian Lungu, CEO CFO

1. DESCRIPTION OF THE BUSINESS

Med Life S.A. ("Med Life" or the "Parent Company" or the "Company") is a joint-stock company incorporated in 1996, in accordance with the laws and regulations of Romania. The Company's activity resides in the performance of healthcare services activities through medical centres located in Bucharest, Brasov, Cluj, Braila, Sibiu, Timisoara, Iasi, Galati and Constanta.

Medlife Group is offering a large range of medical service having opened 22 Hyperclinics in Bucharest, Timisoara, Brasov, Arad, Iasi, Galati, Craiova, Braila, Sibiu, Cluj, Constanta and Oradea, 53 Clinics, 10 hospitals – located in Bucharest, Sibiu, Arad and Brasov, 33 Laboratories, 14 Pharmacies and 12 Dental Clinics. The Group has also more than 130 private Clinic partners around Romania.

Medlife is the leading health care services providers in Romania, having a significant market share at a national level. The registered office of Medlife is located in Bucharest, Calea Grivitei, no. 365.

The ultimate parent of the Group is Med Life SA.

	Name of subsidiary	Principal Activity	Place of operation	December 31, 2020	December 31, 2019
1	Policlinica de Diagnostic Rapid SA	Medical Services	Brasov, Romania	83.01%	83.01%
2	Medapt SRL (indirectly)	Medical Services	Brasov, Romania	83.01%	83.01%
3	Histo SRL (indirectly)	Medical Services	Brasov, Romania	49.81%	49.81%
4	Policlinica de Diagnostic Rapid Medis SRL (indirectly)	Medical Services	Sfantu Gheorge, Romania	66.41%	66.41%
5	Bahtco Invest SA	Development of building projects	Bucharest, Romania	100%	100%
6	Med Life Ocupational SRL	Medical Services	Bucharest, Romania	100%	100%
7	Pharmalife-Med SRL	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
8	Med Life Broker de Asigurare si Reasigurare SRL	Insurance broker	Bucharest, Romania	99%	99%
9	Accipiens SA	Rental activities	Bucharest, Romania	73%	61%
10	Genesys Medical Clinic SRL (indirectly)	Medical services	Bucharest, Romania	73%	61%
11	Bactro SRL (indirectly)	Medical services	Deva, Romania	73%	61%
12	Transilvania Imagistica SA (indirectly)	Medical services	Oradea, Romania	73%	61%
13	Biofarm Farmec SRL (indirectly)	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
14	RUR Medical SA (indirect)	Medical services	Bucharest, Romania	83.01%	100%
15	Biotest Med SRL	Medical services	Bucharest, Romania	100%	100%
16	Vital Test SRL	Medical services	Bucharest, Romania	100%	100%
17	Centrul Medical Sama SA	Medical Services	Craiova, Romania	90%	90%
18	Ultratest SA (directly and indirectly)	Medical services	Craiova, Romania	76%	76%
19	Diamed Center SRL	Medical Services	Bucharest, Romania	100%	100%
20	Prima Medical SRL	Medical Services	Craiova, Romania	100%	100%
21	Stem Cells Bank SA	Medical Services	Timisoara, Romania	100%	100%
22	Dent Estet Clinic SA	Dental healthcare activities	Bucharest, Romania	60%	60%
23	Green Dental Clinic SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	31%	31%

Details of Med Life SA's subsidiaries at December 31, 2020 and December 31, 2019 are as follows:

24	Dentist 4 Kids SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	31%	31%
25	Dent A Porter SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	31%	31%
26	Dentestet Kids SRL (indirectly)	Dental healthcare	Bucharest,	32%	32%
27	Aspen Laborator Dentar SRL (indirectly)	activities Dental healthcare activities	Romania Bucharest, Romania	45%	45%
28	Centrul Medical Panduri SA	Medical Services	Bucharest, Romania	90%	90%
29	Almina Trading SA	Medical services	Targoviste, Romania	80%	80%
30	Anima Specialty Medical Services SRL	Medical services	Bucharest, Romania	100%	100%
31	Anima Promovare si Vanzari SRL (indirectly)	Medical services	Bucharest, Romania	100%	100%
32	Valdi Medica SA	Medical services	Cluj, Romania	55%	55%
33	Clinica Polisano SRL	Medical services	Sibiu, Romania	100%	100%
34	Solomed Clinic SA	Medical services	Pitesti, Romania	80%	80%
35	Solomed Plus SRL (indirectly)	Medical services	Pitesti, Romania	80%	80%
36	Ghencea Medical Center SA	Medical services	Bucharest, Romania	100%	90%
37	Sfatul medicului SRL	Medical platform	Bucharest,	100%	100%
38	RMC Dentart (indirectly)	Dental healthcare activities	Romania Budapest, Hungary	51%	51%
39	RMC Medical (indirectly)	Medical services	Budapest, Hungary	51%	51%
40	RMC Medlife	Holding	Budapest, Hungary	51%	51%
41	Badea Medical SRL	Medical services	Cluj, Romania	65%	65%
42	Oncoteam Diagnostic SA	Medical services	Bucharest, Romania	75%	75%
43	Centrul medical Micromedica SRL	Medical services	Piatra Neamt, Romania	100%	100%
44	Micromedica Targu Neamt SRL (indirectly)	Medical services	Targu Neamt, Romania	100%	100%
45	Micromedica Bacau SRL (indirectly)	Medical services	Bacau, Romania	100%	100%
46	Micromedica Roman SRL (indirectly)	Medical services	Roman, Romania	100%	100%
47	Medrix Center SRL (indirectly)	Medical services	Roznov, Romania	100%	100%
48	Spitalul Lotus SRL	Medical services	Ploiesti, Romania	100%	100%
49	Labor Maricor SRL	Medical Services	Bacau, Romania	100%	0%
50	Centrul Medical Matei Basarab SRL*	Medical Services	Bucharest, Romania	100%	0%
51	Farmachem Distributie SRL*	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	75%	0%
52	CED Pharma SRL*	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	0%
53	KronDent SRL (indirect)*	Dental healthcare	Brasov, Romania	36%	0%

* The control over these companies will be obtained in the first semester of 2021 and will be consolidated starting with 2021.

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)

2.1 Initial application of new amendments to the existing standards effective for the current reporting period

The following amendments to the existing standards issued by the International Accounting Standards Board (IASB) and adopted by the EU are effective for the current reporting period:

• Amendments to IAS 1 "Presentation of Financial Statements" and IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" - Definition of Material - adopted by the EU on 29 November 2019 (effective for annual periods beginning on or after 1 January 2020),
• Amendments to IFRS 3 "Business Combinations" Definition of a Business adopted by the EU on 21 April 2020 (effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020 and to asset acquisitions that occur on or after the beginning of that period),
• Amendments to IFRS 9 "Financial Instruments", IAS 39 "Financial Instruments: Recognition and Measurement" and IFRS 7 "Financial Instruments: Disclosures" - Interest Rate Benchmark Reform - adopted by the EU on 15 January 2020 (effective for annual periods beginning on or after 1 January 2020),
• Amendments to IFRS 16 "Leases" Covid-19-Related Rent Concessions beyond 30 June 2021 (effective for annual reporting periods beginning on or after 1 April 2021. Earlier application permitted, including in financial statements not yet authorised for issue at the date the amendment is issued.)
• Amendments to References to the Conceptual Framework in IFRS Standards adopted by the EU on 29 November 2019 (effective for annual periods beginning on or after 1 January 2020).

The adoption of amendments to the existing standards has not led to any material changes in the Group's financial statements, except for Covid-19-Related Rent Concessions.

*In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provides practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical expedient to IFRS 16. The practical expedient permits a lessee to elect not to assess whether a COVID19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease modification.

The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions are met:

a) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

b) Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021); and

c) There is no substantive change to other terms and conditions of the lease.

In the current financial year, the Group has applied the amendment to IFRS 16 (as issued by the IASB in May 2020) in advance of its effective date.

In the current year, the Group 0068as applied Amendments to IFRS 16 "Leases" - Covid-19-Related Rent Concessions in advance of its effective date The practical expedient has been applied to all qualifying rent concessions received for buildings. The management elected not to apply the practical expedient for rent concessions received for vehicles. Please see Note 16 for the impact recognized in profit or loss that arise from rent concessions to which the Group (lessee) has applied the practical expedient. Please see note 14 – Leases for further details.

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

At the date of authorization of these financial statements, the following amendments to the existing standards were issued by IASB and adopted by the EU and which are not yet effective:

• Amendments to IFRS 4 Insurance Contracts "Extension of the Temporary Exemption from Applying IFRS 9" adopted by the EU on 16 December 2020 (the expiry date for the temporary exemption from IFRS 9 was extended from 1 January 2021 to annual periods beginning on or after 1 January 2023),
• Amendments to IFRS 9 "Financial Instruments", IAS 39 "Financial Instruments: Recognition and Measurement", IFRS 7 "Financial Instruments: Disclosures", IFRS 4 "Insurance

Contracts" and IFRS 16 "Leases" - Interest Rate Benchmark Reform — Phase 2 adopted by the EU on 13 January 2021 (effective for annual periods beginning on or after 1 January 2021).

2.3 New standards and amendments to the existing standards issued by IASB but not yet adopted by the EU

At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except for the following new standards and amendments to the existing standards, which were not endorsed for use in EU as at 31 December 2020 (the effective dates stated below is for IFRS as issued by IASB):

• IFRS 14 "Regulatory Deferral Accounts" (effective for annual periods beginning on or after 1 January 2016) - the European Commission has decided not to launch the endorsement process of this interim standard and to wait for the final standard,
• IFRS 17 "Insurance Contracts" including amendments to IFRS 17 (effective for annual periods beginning on or after 1 January 2023),
• Amendments to IAS 1 "Presentation of Financial Statements" Classification of Liabilities as Current or Non-Current (effective for annual periods beginning on or after 1 January 2023),
• Amendments to IAS 16 "Property, Plant and Equipment" Proceeds before Intended Use (effective for annual periods beginning on or after 1 January 2022),
• Amendments to IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" Onerous Contracts — Cost of Fulfilling a Contract (effective for annual periods beginning on or after 1 January 2022);
• Amendments to IFRS 3 "Business Combinations" Reference to the Conceptual Framework with amendments to IFRS 3 (effective for annual periods beginning on or after 1 January 2022),
• 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 and further amendments (effective date deferred indefinitely until the research project on the equity method has been concluded),
• Amendments to various standards due to "Improvements to IFRSs (cycle 2018 -2020)" resulting from the annual improvement project of IFRS (IFRS 1, IFRS 9, IFRS 16 and IAS 41) primarily with a view to removing inconsistencies and clarifying wording (The amendments to IFRS 1, IFRS 9 and IAS 41 are effective for annual periods beginning on or after 1 January 2022. The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.).

The Group anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact on the financial statements of the Group in the period of initial application.

Hedge accounting for a portfolio of financial assets and liabilities whose principles have not been adopted by the EU remains unregulated.

According to the Group's estimates, the application of hedge accounting to a portfolio of financial assets or liabilities pursuant to IAS 39: "Financial Instruments: Recognition and Measurement" would not significantly impact the financial statements, if applied as at the balance sheet date.

3. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of these consolidated financial statements of the Group are set out below.

3.1 Statement of compliance

The consolidated financial statements have been prepared in accordance with International Accounting

Standards for Financial Reporting ("IFRSs") as adopted by the European Union ("EU").

The accounting policies applied in these financial statements are the same as those applied in the Group's annual consolidated financial statements as at and for the year ended 31 December 2019, except for the adoption of new standards effective as of January 1st 2020.

Additionally, the consolidated financial statements have been prepared in accordance with Order 2844/2016 for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU with subsequent amendments.

3.2 Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for the revaluation of certain non-current assets and financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

These consolidated financial statements have been prepared to serve the Group as consolidated financial statements.

The Group maintains its accounting records in Romanian Lei ("RON") and maintains the accounting books in accordance with the Regulations on Accounting and Reporting issued by the Ministry of Finance in Romania. The accompanying consolidated financial statements are based on the statutory accounting records of the individual entities and have been adjusted to present the consolidated financial statements in accordance with IFRS.

3.3 Going concern

These consolidated financial statements have been prepared on a going concern basis, which assumes the Group will be able to realize its assets and discharge its liabilities in the normal course of business. The Group will continue its activity according to the normal course of business in the foreseeable future without encountering the impossibility of continuing its activity or without the significant decrease of its activity.

For the purposes of assessing liquidity and going concern, the Group has modelled scenarios reflecting suitable assumptions over the next 12–month period that serve to inform the decisions the Group takes regarding future cost savings, cash generation, debt covenants and levels of investment. The Group's financial performance to date in FY21 across all divisions has been ahead of the modelled scenarios.

In addition, due to the proactive response taken by the Group to improve its liquidity position, since the beginning of the pandemic crisis, the cashflows of the Group have remained stable, demonstrating the financial discipline across the Group and the conservative approach taken when modelling scenarios.

As part of the Group's proactive response to maintaining its liquidity position and optimising its response to the crisis, a broad range of consequent actions was taken including:

• All non-urgent and non-committed capital programmes have been postponed or reduced during the initial months of the pandemic;

• Non-essential administrative costs generally and relating to projects specifically have been postponed or reduced;

• Measures have been taken to further optimise working capital management;

• Lease amortisation payments have been deferred, where possible;
• Decreasing the working hours for key administrative staff from 5 to 4 working days;

• Negotiation with providers, considered "not mandatory" for the Group in order to suspend the collaboration for a defined period of time.

• The Management of the Group reassessed the serving capacity of all business units and readjusted their medical infrastructure to the new market requirements. In this respect, all business units went through a market repositioning process that allowed them to address more efficiently customers' needs as a result of population's change of approach in relation to post Covid medical services.

All measures taken have been decided upon having in mind the Group's strategy to better position itself to all the new market changes, on the long term. As a consequence, the management focused on increasing efficiency of its operations in order to obtain better flexibility over capitalizing market opportunities.

Additional mitigating steps were implemented, such as further reductions in fixed operating costs, rent waivers and government intervention packages.

In response to the COVID-19 coronavirus pandemic, in March 2020 the Romanian authorities introduced a government programme for companies that were forced to shut down their operations and furlough staff. Under the programme, an eligible company could apply for this in an amount up to a level of 75% of the average salary per economy, to continue paying monthly salaries to its furloughed employees. The measure taken by the Group was to reduce costs in connection with support departments by sending non-critical staff into technical unemployment. The costs were borne by the Romanian Government up to a level of 75% of the average salary per economy; for salaries that exceeded the average in the economy, the difference was borne by the Group.

Also, the Group has made a 50% reduction of the salaries of the management team for a period of 45 days (from March 16 to April 30). The impact was not quantified, being considered insignificant as a share in operating expenses.

Another support measure during the state alert is the settlement for the sanitary units with beds in contractual relationship with the National Health Insurance Houses of the amounts contracted and settled from the budget of the Single National Health Insurance Fund or from the budget of the Ministry of Health, regardless the number of cases performed or, as the case may be, at the level of the activity actually performed in the conditions in which it exceeds the contracted level (Document no. 195/2020, Chapter III / Art. 17 / c)).

These steps have provided additional support to the liquidity analysis and modelled scenarios.

Going forward, the management has assessed the continuity of such measures and included this scenario in the financial modelling of the Group concluding that all cost cutting measures are replicable for the future periods and will continue to release margin into the Group's cashflows.

Based on the Group's current financial position and the modelled scenarios, the directors have concluded that the Group has sufficient liquidity to meet all its obligations for at least the twelve months from the date of this report and the directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

3.4 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Parent Company (Med Life S.A.) and entities controlled by the Company (its subsidiaries). Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Noncontrolling interests in subsidiaries are identified separately from the Group's equity therein.

The interests of non-controlling shareholders are initially measured at the non-controlling interests' proportionate share of the fair value of the acquired company's identifiable net assets.

Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

3.5 Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree.

The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognized at their fair value at the acquisition date.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

When the consideration transferred by the Group in a business combination includes a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.

3.6 Accounting estimates and judgments

The preparation of the consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities as of the date of the balance sheet and revenue and expenses for the period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Impact of COVID 19 in respect of untaken holidays balance

In order to mitigate the effects generated by COVID 19, the Group took a series of measures to protect the business and address potential liquidity management risks by applying a series of cost cutting measures in relation to personnel costs and enrolled a significant number of its personnel into technical unemployment procedures. As a side effect, but also generated by the long period of lock down measures applied by the Romanian government the demand for vacation leaves has decreased significantly within the Group during 2020. As a result, the management decided to take on a prudent approach in terms of provisioning untaken holidays and recognized a provision of RON 6 million as at December, 31 2020.

Impact of COVID 19 in respect of IFRS 9

The Group observed that the medical crisis has determined a slowdown in collection of its receivables as a result of the working capital challenges encountered by its clients.

In order to counter this risk, the management decided to apply a prudent approach to future cashflows an recognized an allowance for bad and doubtful debts of RON 10.8 million as at December, 31 2020.

3.7 Foreign currency translation

Functional and presentation currency

These consolidated financial statements are presented in Romanian Leu ("RON"), which is the currency of the primary economic environment in which the Group operates (its "functional currency").

The exchange rates on December 31, 2020 were RON 4.8694 for EUR 1 (December 31, 2019: RON 4.7793 for EUR 1), respectively 1.3356 for HUF 100 (December 31, 2019: RON 1.4459 for 100 HUF). The average exchange rates for the period of 12 months 2020 were 4.8276 RON for 1 EUR (12 months 2019: 4.7454 RON for 1 EUR), respectively 1.3777 RON for 100 HUF (12 months 2019: 1.4589 for 100 HUF).

The monetary assets and liabilities in foreign currency as of reporting date have been converted from EUR to RON at the closing exchange rate as announced by the National Bank of Romania.

The profit and loss incurred before the transaction date of the acquired businesses in 2020 were eliminated.

3.8 Correction of error

The comparative figures have been adjusted to conform with changes in presentation in the current year.

Implementation of IFRS 16

Given its large and complex operations, the Group leases a significant number of assets including buildings and land for operational activities, medical equipment and vehicles. Contractual periods differ, depending on the lease type and the leased asset, the driver being the strategic point of view the Group has into further managing its asset portfolio.

As a result of the pandemic crisis, the Group commenced the process of securing its strategic facilities under lease agreements, for longer periods of time. Accordingly, several major lease agreements have been renegotiated with focus on better commercial conditions for the Group, in terms of both pricing and better security over extension options for the lease agreements.

In addition to this approach, the management decided to purchase many of its prior-leased locations in order to secure the Group's growth in line with its strategic plan. All these aspects where reflected when accounting for leased properties under IFRS 16, by also restating the opening balance, for comparability reasons.

In this respect, the management has evaluated its options for early termination as well as the existence of the Group's single triggered decision to extend the lease term, on a case-by-case basis.

In determining the lease term, all facts and circumstances that create an economic incentive to exercise an extension option, or to exercise a termination option, are considered.

Basic earnings per share for the prior year have also been restated. The amount of the correction for basic earnings per share was a decrease of 0.02 RON per share. For more details please see Note 17 – Earnings per share.

The Company has also reclassified "Materna" vouchers from Cash equivalents to Other financial assets due to the fact that their convertibility in cash exceeds more than three months and some grants were reclassified from short term to long term. For more details please see Note 8 – Cash and banks.

				MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	January 1,		January 1,	December 31,		December 31,
	2019	Restatements	2019 *Restated	2019	Restatements	2019 *Restated	2020
ASSETS Non current assets
Goodwill	82,378,647	-	82,378,647	96,007,730	-	96,007,730	147,256,824
Intangible assets	39,647,014	-	39,647,014	43,275,568	-	43,275,568	46,755,678
Tangible assets	458,033,010	-	458,033,010	491,151,660	-	491,151,660	535,672,488
Right-of-use asset	123,469,629	22,966,307	146,435,936	101,388,393	31,780,901	133,169,294	146,821,194
Other financial assets TOTAL NON-CURRENT	10,115,776	483,820	10,599,596	79,773,620	1,197,322	80,970,942	27,940,022
ASSETS	713,644,076	23,450,127	737,094,203	811,596,971	32,978,223	844,575,194	904,446,206
Current Assets
Inventories Receivables	31,070,480 78,957,879	- -	31,070,480 78,957,879	43,390,267 100,323,815	- -	43,390,267 100,323,815	53,058,518 121,079,030
Other receivables	13,117,114	-	13,117,114	20,770,400	-	20,770,400	15,822,146
Cash and cash equivalents	34,206,159	(483,820)	33,722,339	38,886,218	(1,197,322)	37,688,896	81,970,397
	157,351,632	(483,820)	156,867,812	203,370,700	(1,197,322)	202,173,378	271,930,091
Assets classified as held for sale	381,665	-	381,665	381,665	-	381,665	-
Prepayments	6,186,462	-	6,186,462	7,224,106	-	7,224,106	7,117,566
TOTAL CURRENT ASSETS	163,919,759	(483,820)	163,435,939	210,976,471	(1,197,322)	209,779,149	279,047,657
TOTAL ASSETS	877,563,835	22,966,307	900,530,142	1,022,573,442	31,780,901	1,054,354,343	1,183,493,863
LIABILITIES & SHAREHOLDER'S EQUITY Current Liabilities		-
Trade payable and other payables	140,970,528	(9,226,106)	131,744,422	172,829,534	(7,696,106)	165,133,428	151,690,134
Overdraft	30,911,018	-	30,911,018	29,011,944	-	29,011,944	27,127,907
Current portion of lease liability	42,143,923	(5,447,408)	36,696,515	46,742,639	(6,316,881)	40,425,758	41,166,069
Current portion of long term	23,162,490	-	23,162,490	24,802,015	-	24,802,015	46,436,217
debt Current tax liabilities	729,572	-	729,572	308,391	-	308,391	5,467,450
Provisions	2,458,957	-	2,458,957	1,749,188	-	1,749,188	7,209,494
Other short term liabilities	37,605,544	(10,027,263)	27,578,281	65,134,937	(8,505,640)	56,629,297	35,230,733
Liabilities directly associated with assets classified as held for sale	458,785	-	458,785	363,318	-	363,318	-
TOTAL CURRENT LIABILITIES	278,440,817 (24,700,777)		253,740,040		340,941,966 (22,518,627)	318,423,339	314,328,004
Long Term Debt
Lease liability	116,800,409	28,413,715	145,214,124	99,007,320	42,058,425	141,065,745	147,097,180
Other long term debt	-	19,253,369	19,253,369	6,650,000	16,201,746	22,851,746	18,119,743
Long term debt	287,013,365	-	287,013,365	345,952,241	-	345,952,241	414,696,592
TOTAL LONG-TERM LIABILITIES	403,813,774	47,667,084	451,480,858	451,609,561	58,260,171	509,869,732	579,913,515
Deferred tax liability	16,436,342	-	16,436,342	19,756,346	(593,675)	19,162,671	20,345,799
TOTAL LIABILITIES	698,690,933	22,966,307	721,657,240	812,307,873	35,147,869	847,455,742	914,587,319
SHAREHOLDER'S EQUITY
Issued capital and share capital	81,495,470	-	81,495,470	81,495,470	-	81,495,470	82,027,012
Treasury shares Reserves	(6,056,105) 93,906,109	- -	(6,056,105) 93,906,109	(2,699,804) 108,709,302	- -	(2,699,804) 108,709,302	(666,624) 124,211,557
Retained earnings	(9,994,660)	-	(9,994,660)	(419,910)	(2,936,575)	(3,356,485)	35,701,579
Equity attributable to owners	159,350,814	-	159,350,814	187,085,058	(2,936,575)	184,148,483	241,273,524
	19,522,088	-	19,522,088	23,180,511	(430,393)	22,750,118	27,633,021
of the Group
Non-controlling interests
TOTAL EQUITY TOTAL LIABILITIES AND	178,872,902	-	178,872,902	210,265,569	(3,366,968)	206,898,601	268,906,545

	MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	2019	12 months ended December 31, Restatements	2019 *Restated	2020
Sales Other operating revenues	967,380,307 7,648,949	(0) 0	967,380,307 7,648,949	1,077,448,351 9,274,762
Operating Income Operating expenses	975,029,256 (918,594,743)	- 909,005	975,029,256 (917,685,738)	1,086,723,113 (977,611,985)
Operating Profit	56,434,513	909,005	57,343,518	109,111,128
Finance cost Other financial expenses	(19,186,950) (8,164,408)	(1,459,611) (3,410,038)	(20,646,561) (11,574,446)	(23,252,552) (7,307,417)
Financial result	(27,351,358)	(4,869,649)	(32,221,007)	(30,559,969)
Result Before Taxes	29,083,155	(3,960,643)	25,122,512	78,551,159
Income tax expense Net Result	(8,930,702) 20,152,453	593,675 (3,366,968)	(8,337,027) 16,785,485	(14,787,475) 63,763,684
Owners of the Group Non-controlling interests	16,547,851 3,604,602	(2,936,575) (430,393)	13,611,276 3,174,209	56,702,860 7,060,824
Other comprehensive income items that will not be reclassified to profit or loss
Gain/loss on revaluation of own shares	655,437	0	655,437	-
Deferred tax on other comprehensive income components	(104,870)	0	(104,870)	-
TOTAL OTHER COMPREHENSIVE INCOME	550,567	0	550,567	-
Total other comprehensive income attributable to: Owners of the Group	550,567	- 0	550,567	-
Non-controlling interests TOTAL COMPREHENSIVE INCOME	- 20,703,020	- (3,366,968)	- 17,336,052	- 63,763,684
Total comprehensive income attributable to:
Owners of the Group Non-controlling interests	17,098,419 3,604,602	(2,936,576) (430,393)	14,161,843 3,174,209	56,702,860 7,060,824

	FOR THE YEAR ENDED DECEMBER 31, 2020
		(all the amounts are expressed in RON, unless otherwise specified)
		12 months ended December 31,
	2019	Restatements	2019 *Restated	2020
Net profit before taxes	29,083,155	(3,960,643)	25,122,512	78,551,159
Adjustments for
Depreciation	93,303,786	(2,822,710)	90,481,076	102,897,388
Provisions for liabilities and charges Interest revenue	(709,768) (69,900)	- -	(709,768) (69,900)	5,460,306 (50,893)
Interest expense	19,186,950	1,459,611	20,646,561	23,252,552
Allowance for doubtful debts and receivables written-off	(1,270,169)	102,694	(1,167,475)	10,888,049
Financial Discounts Other non-monetary gains	5 (5,503,274)	- 1,714,122	5 (3,789,152)	- (3,712,076)
Unrealized exchange gain / loss	8,299,783	960,330	9,260,113	7,392,342
GW impairment		-	-	90,706
Net gain on disposal of property		-	-	-
Operating cash flow before working capital changes	142,320,568	(2,546,597)	139,773,971	224,769,532
Decrease / (increase) in accounts receivable	(15,999,381)	(816,196)	(16,815,577)	(35,539,764)
Decrease / (increase) in inventories	(2,044,361)	-	(2,044,361)	(9,968,002)
Decrease / (increase) in prepayments	(725,989)	-	(725,989)	1,018,264
Increase / (decrease) in accounts payable	9,494,857	2,449,708	11,944,565	(19,743,767)
Cash generated from WC changes	(9,274,874)	1,633,512	(7,641,362)	(64,233,268)
Cash generated from operations	133,045,694	(913,085)	132,132,609	160,536,264
Income Tax Paid	(6,134,448)	- -	(6,134,448)	(9,716,112)
Interest Paid Interest received	(16,340,776) 69,899	(3,173,733) -	(19,514,509) 69,899	(22,207,210) 50,893
Net cash from / (used in) operating activities	110,640,369	(4,086,818)	106,553,551	128,663,835
		-
Investment in business combination Additional participation interest acquired	(53,182,778) (1,532,500)	(0) -	(53,182,778) (1,532,500)	(23,769,813) -
Purchase of intangible assets Purchase of property, plant and equipment	(3,020,776) (50,681,033)	- -	(3,020,776) (50,681,033)	(5,962,689) (83,116,171)
Net cash used in investing activities	(108,417,087)	(0)	(108,417,087)	(112,848,673)
Cash flow from financing activities
Increase in Loans Payment of loans	63,121,293 (14,533,110)	- -	63,121,293 (14,533,110)	101,692,813 (25,118,546)
Financial Lease payments	(43,688,594)	3,373,316	(40,315,278)	(43,857,062)
Dividends paid to NCI	(186,698)	-	(186,698)	(701,987)
Payments for purchase of treasury shares	(2,256,114)	0	(2,256,114)	(3,548,879)
	2,456,777	3,373,316	5,830,093	28,466,339
Net change in cash and cash equivalents	4,680,059	(713,502)	3,966,557	44,281,501
Cash and cash equivalents beginning of the	34,206,159	(483,820)	33,722,339	37,688,896
period Cash and cash equivalents end of the

3.9 Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see 3.5 above) less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the unit may be impaired. If the recoverable amount of the cashgenerating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss in the consolidated statement of comprehensive income/income statement. An impairment loss recognized for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

3.10 Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

3.11 Property, plant and equipment

Land and buildings held for use in the supply of services, or for administrative purposes, are stated in the balance sheet at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The lands and constructions held for administrative purposes are recorded in the balance sheet at the revalued amount, which is the fair value at the date of the revaluation, less accumulated depreciation and accumulated impairment losses. The value of land and buildings owned presented in these consolidated financial statements is based on the valuation reports which were performed as of December 31, 2019 by independent valuators certified by ANEVAR. The revaluation is performed with sufficient regularity as to ensure that the Group presents land and buildings at fair value in the consolidated financial statements

Expenses for repairs and maintenance are recognized in the profit or loss account at the time of their execution. Costs with capital repairs are included in the book value of the asset when it is probable that future economic benefits above the initially evaluated standard of performance of the existing asset will be transferred to the Group. Capital renovations are depreciated over the remaining useful period of the respective asset. The land is not depreciated.

Installations and equipment are recorded at cost, less accumulated depreciation and accumulated impairment losses.

Assets under construction are recorded at cost, less accumulated impairment losses and moved to tangible assets once they become available for use.

The depreciation is calculated at the values of the tangible assets by the linear method up to the estimated residual values of the assets. Estimated useful lives, residual values and depreciation method are reviewed at the end of each year, and the effects of changes in estimates are recorded prospectively.

The following useful lives are used in the calculation of depreciation:

Buildings 10 – 50 years Plant and equipment 3 – 15 years Fixtures and fittings 3 – 15 years

Years

3.12 Assets held under finance leases

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

3.13 Intangible assets

Intangible assets acquired are reported at cost less accumulated amortization and 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.

The Group's intangible assets are represented by software licenses which are amortized straight-line over a period of three years.

Intangible assets with indefinite useful lives such as trademarks, customer lists, contract advantage, that are acquired separately are carried at cost less accumulated impairment losses.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

De-recognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in profit or loss when the asset is derecognized.

Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets that are not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

3.14 Investments in subsidiaries

A subsidiary is an entity, including an unincorporated entity such as a partnership, which is controlled by another entity (known as the parent). Control is achieved where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

A parent company, shall present consolidated financial statements in which it consolidates its investments in subsidiaries in accordance with this IAS 27 Consolidated and Separate Financial Statements.

3.15 Investments in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the associate, less any impairment in the value of individual investments.

Losses of an associate in excess of the Group's interest in that associate (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss. Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group's interest in the relevant associate.

3.16 Inventories

Inventories are stated at the lower of cost and net realizable value. Cost of inventories comprises of all the costs incurred in bringing the inventories to their present location and condition, being valued on a first in first out basis. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. The group applies FIFO as a costing method.

3.17 Trade receivables

Trade receivables are recognised initially at the amount of consideration (transaction price) that is unconditional, unless they contain significant financing components when they are recognised at fair value. They are subsequently measured at amortised cost using the effective interest method, less loss allowance.

The Group recognises a loss allowance for expected credit losses on trade receivables and contract assets. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected credit losses on this financial asset are estimated using a provision matrix based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

Write-off policy

The Group 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. Financial assets written off may still be subject to enforcement activities under the Group's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given 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 assets such as trade receivables, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate.

The Group recognises an impairment gain or loss in profit or loss for all trade receivables with a corresponding adjustment to their carrying amount through a loss allowance account.

Interest revenues

Interest income is recognized using the effective interest method for debt instruments measured subsequently at amortized cost. The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period.

Interest income is recognized in profit or loss and is included in the "finance income - interest revenue" line item.

3.18 Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand, cash held at call with banks with original maturities of three months or less.

3.19 Government grants

Government grants are assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. They exclude those forms of government assistance which cannot reasonably have a value placed upon them and transactions with government which cannot be distinguished from the normal trading transactions of the entity.

Government grants are recognised at their fair value when there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. Alternatively, they are deducted in reporting the related expense.

Government grants relating to the purchase of property, plant and equipment are included in the consolidated statement of financial position as deferred income and they are credited to profit or loss on a straight-line basis over the expected lives of the related assets.

3.20 Financial instruments

Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit and loss.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense (or income) over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability (or asset), or (where appropriate) a shorter period, to the amortised cost of a financial liability (or asset).

Financial assets

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVTOCI. For financial assets other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial sets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset.

Interest income is recognised in profit or loss and is included in the "finance income - interest revenue" line item.

Foreign exchange gains and losses

The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically, for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the 'other financial expenses' line item.

Impairment of financial assets accounting policy is presented in note 3.17.

Derecognition of financial assets

The Group 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 Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition 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.

Financial liabilities and equity

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit and loss.

Financial liabilities measured subsequently at amortised cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense (or income) over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability (or asset), or (where appropriate) a shorter period, to the amortised cost of a financial liability (or asset).

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'other financial expenses' line item in profit or loss for financial liabilities that are not part of a designated hedging relationship.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability

derecognised and the consideration paid and payable is recognised in profit or loss.

Borrowings

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 balance sheet 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.

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset is capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation.

Other borrowing costs are expensed in the period in which they are incurred.

3.21 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the combined income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax base used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit

nor the accounting profit.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax are recognized as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognized directly in equity, in which case the tax is also recognized directly in equity.

3.22 Share capital

Ordinary shares are classified as equity. The Group presents the amount of dividends recognised as distributions to owners during the period in the statement of changes in equity, and the related amount of dividends per share in the notes to the financial statements.

3.23 Share premiums

Share premiums are own funds created as a result of the difference between the issue value of the shares and the nominal value of the shares. The Group recorded share premiums as a result of the issue of shares.

3.24 Revaluation reserve

The increases in the fair value of land and buildings are recorded against revaluation reserves. Any decreases in the fair value of land and buildings are first deducted from the revaluation reserves and then the difference is recorded through profit and loss accounts. The revaluation is performed with sufficient regularity as to ensure that the Group presents land and buildings at fair value in the consolidated financial statements.

3.25 Provisions for risks and charges

Provisions are recognized when the Group has a legal or constructive obligation, as a result of a past event and it is probable that there will be a future outflow of resources in order to extinguish this liability. Provisions for risks and charges are assessed at the end of each period and adjusted in order to present management's best estimate.

3.26 Revenue recognition

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. Revenue is recognised over time where (i) there is a continuous transfer of control to the customer; or (ii) there is no alternative use for any asset created and there is an enforceable right to payment for performance completed to date. Other revenue contracts are recognised at a point in time when control of the service transfers to the customer.

The Group provides health care medical services to corporate and retail customers, in which one performance obligation is a promise to transfer distinct services to the beneficiary.

The Group's core activities are conducted through five business lines, providing a well-balanced business portfolio that covers all key segments of the private medical services market. Disaggregation of revenue from contracts with customers by business line comprises the following major categories: clinics, stomatology, hospitals, laboratories and corporate.

The Group's business and revenue model focuses on the spending power of corporations and private

individuals on medical services, while the State's contribution through the National Health Insurance House represents a complement, not the core revenue of Group's activities. However, the National Health Insurance House is considered to be one major customer that goes across multiple sectors such as: clinics, hospitals and laboratories, and from which the Group receives the consideration based on reaching preestablished ceilings, for the medical services provided to the State's insured patients, which are the end users of the healthcare medical services. The revenue in relation with NHIH is recognised at the end of the month, when the Group has an enforceable right to payment for performance completed up to date, as the end user receives and consumes the benefits provided by the entity's performance as the entity performs.

Clinics

The core of the Group's operations is the network of ambulatory clinics. The business line comprises a network of 75 facilities, which offer a wide range of outpatient services covering a broad range of medical specialties. The Group's diagnostic imaging services provided to clients other than hospital inpatients also form part of this business line. The Group's clinics provide a wide range of services delivered mainly in two formats:

• Hyper clinics, a format pioneered by the Group in Romania, consisting of large facilities with at least 20 medical offices and surface areas in excess of 1,000 sqm. It is a one-stop-shop for clinical examinations and imaging. This format is designed for larger urban areas, with a population over 175,000. Hyper clinics would usually include a broad range of imaging services on site including radiology, bone density – DEXA, CT, MRI, 2D-4D ultrasounds and Mammography; in the case of new openings, such services may be included in the hyper clinics' offering gradually. Hyper clinic locations also host the services of other business lines, such as sampling points for laboratories.
• Clinics, offering a range of treatments from general practitioner services to specialists, are aimed at servicing the core needs of the Group's HPP patients and FFS clients. The Group's clinics typically have between 5 and 12 medical offices, although smaller satellite clinics are in operation to address specific market situations. Clinics are designed for smaller cities or to serve specific concentrations of patients. Clinics, with limited capacity and generally limited imaging services, act as feeder networks for the more specialized services located in the hyper clinics.

Stomatology

The Group's Dentistry business line offers a full range of services, ranging from medical examinations to surgery, implants or orthodontic services.

Stomatology business line is not subject to NHIH allocations. All of the sales are fee for service ("FFS") based, and the revenue is recognised at a point in time, when the performance obligation is satisfied.

Laboratories

The Laboratories business line provides the following range of services: biochemistry, pathological anatomy (cytology and histology), molecular biology and genetics, haematology, immunology, microbiology and toxicology. Sampling points are locations where the Group collects blood and other samples from patients. The Laboratories business line sources the bulk of its revenue from FFS clients, and the revenue is recognised at a point in time, when the performance obligation is satisfied.

One exception is when the Group provides laboratory tests to other companies' employees and the revenue is recognised at the end of the month, when the Group has an enforceable right to payment for performance completed up to date.

Hospitals

Hospital services provided to patients are regarded as a bundle of services which comprise accommodation, meals, use of equipment, pharmacy stock and nursing services. This is considered to be a single performance obligation as the medical procedures cannot be performed without one of the above elements. Revenue is recorded during the period in which the hospital service is provided and is based on the amounts due from patients. Fees are calculated and billed based on various tariff agreements.

The Hospitals business line derives its revenue predominantly from FFS patients. Treatment of State insured patients for the NHIH, generally relates to maternity, genecology, cardiology and oncology.

The Group does not expect to have any contracts where the period between the transfer of the promised service to the patient and the payment by the patient exceeds one year. Consequently, the Group does not adjust any of the transaction prices for time value of money.

Corporate

The Corporate business line offers HPPs (health prevention packages) on a subscription basis, generally to corporate clients, as part of the benefit packages for their employees. These programs, which focus on prevention, such as regular check-up's and access to diagnostic services, complement the legally required occupational health services that corporate clients contract from the Group as the Standard HPP. The Group has a portfolio of over 700,000 HPPs patients from over 5,000 different companies.

The HPPs offered by the Group consist of the following:

• Mandatory occupational health services, which mainly include the provision of annual employee check-ups and more specific services depending on the client's industry. Many companies begin by purchasing occupational health services under the "Standard" HPP and then add benefits under broader HPPs from the same provider for certain or all of their employees, providing an upselling opportunity for the occupational health provider.
• More general, "prevention oriented" health plans, providing expanded access to general practitioners and certain specialists in the Group's clinics and as well as specified laboratory tests and diagnostic imaging for higher end packages. The specific services vary depending on the type of package.

The revenue in relation with corporate customers is recognized over time. Under the output method, the entity would measure completion of the total performance obligation either in relation to the total obligation that has been satisfied or in relation to what remains to be satisfied, based on health prevention packages delivered.

Contract assets and liabilities

A contract asset (accrued income) is the right to consideration in exchange for services transferred to the customer. Where the Group transfers services to a customer over time before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration to date under the contract. Contract assets are presented within trade and other receivables (Note 7 – Accounts receivables) on the Group Balance Sheet and are expected to be realized in less than one year.

A contract liability (deferred income) is the obligation to transfer services to a customer for which the Group has received consideration from the customer. Where the customer pays consideration before the Group transfers services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Group performs under the contract. Contract liabilities are presented within trade and other payables (Note 11 – Accounts payables) on the Group Balance Sheet.

Using the practical expedient in IFRS 15, the Group does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised service to the customer and when the customer pays for that service will be one year or less. All the contracts are under one year.

Contracts are for periods of less than one year or are billed based on services incurred. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed.

3.27 Employee benefits

Employee benefits

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

All employees of the Group are members of the Romanian State pension plan. The Group does not operate any other pension scheme.

Bonus schemes

The Group recognizes a liability and an expense where a contractual obligation exists for short-term incentives.

The amounts payable to employees in respect of the short-term incentive schemes are determined based on annual business performance targets.

3.28 Related parties

The relationships between the entities and the company are special when one of the parties has the ability to directly control or significantly influence the other party, by using ownership, contractual rights, family relationships or any other means.

Related parties also include individuals which are principal owners, management or members of the Group's Board of Directors, as well as the members of their families.

These consolidated financial statements have been prepared based on the fact that the parties have entered into arm's length transactions with the entities within the group and according to objectively established prices.

3.29 Fair value

Certain accounting policies of the Group and information presentation criteria require determination of the fair value both for the assets and the liabilities of the Group. In determining the fair value of assets and liabilities, the Group uses as much as possible observable market values. Fair values are classified on various levels based on inputs used in valuation techniques, as follows:

• Level 1: (unadjusted) quoted prices on active markets for identical assets and liabilities
• Level 2: inputs, other than the prices included in level 1, which are observable for assets and liabilities, either directly (e.g.: prices) or indirectly (e.g.: derived from prices)
• Level 3: inputs for evaluation of assets and liabilities which are not based on observable market data.

In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Group engages third party qualified valuers to perform the valuation.

Further information about the assumptions made in measuring fair values is included in the note 5.1 Land and buildings carried at fair value.

3.30 IAS 29

Med Life SA was created in 1996. The development of the Group was continuous throughout the years. The significant additions to non-current assets and the material share capital subscriptions and the share premiums were recorded after Romania stopped being considered a hyperinflationary economy. As such, no inflation adjustments have been applied to equity and the Company did not have to apply IAS 29 requirements.

3.31 IFRS 8

IFRS 8 disclosures are meant to enable users of financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

An operating segment is a component of an entity:

• (a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
• (b) whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and
• (c) for which discrete financial information is available.

The Group considers that all the business activities from which it earns revenues are intertwined and that the main business activity represents one segment - the rendering of medical services.

In order to enable users of the financial statements to evaluate the nature and financial effects of the business, the Group decided to present the revenues split on the main business lines (please see Note 19 - Revenue from contracts with customers).

3.32 IFRS 16 "Leases"

The Group leases various buildings, equipment, vehicles and other assets. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.

The Group's assesses whether a contract is or contains a lease, at inception of the contract. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group - except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Assets and liabilities arising from a lease are initially measured on a present value basis.

Lease liabilities include the net present value of the following lease payments:

• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;

• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• The exercise price of a purchase option if the Group is reasonably certain to exercise that option;

• Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option; and

• Lease payments to be made under reasonably certain extension options.

The lease payments are discounted using the lessee's incremental borrowing rate, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Group uses recent third-party financing received by the lessee as a starting point and adjusts the rate to reflect changes in financing conditions since the thirdparty financing was received.

The lease liability is presented as a separate line in the statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-ofuse asset) whenever:

• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

Right-of-use assets are measured at cost comprising the following:

• The amount of the initial measurement of lease liability;
• Any lease payments made at or before the commencement date less any lease incentives;
• Any initial direct costs; and
• Restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.

The right-of-use assets are presented as a separate line in the statement of financial position

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the 'Property, Plant and Equipment' policy.

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

3.33 Subsequent events

The effect of significant subsequent events, after the reporting period, which supplies additional information regarding the financial position of the Group and require adjustments are reflected in the balance sheet or profit and loss, if the case. The significant events that do not require adjustments are disclosed in the notes of the separate financial statements.

3.34 Earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares;

• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

3.35 Critical accounting judgements and key sources of estimation uncertainty

In applying the Group 's accounting policies, which are described in note 3, the management is required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Company's accounting policies

The following are the critical judgements, apart from those involving estimations (which are presented separately below), that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

Critical judgements in assessing the impairment of financial assets

When accounting for its investments in subsidiaries, the Group 's management has concluded that the investments shall be maintained and presented at cost. Please refer to Note 3.14 – Investments in subsidiaries.

Critical judgements in assessing the impairment of non-financial assets

Please refer to Note 5 – tangible and intangible fixed assets.

Critical judgements in determining the fair value of land and buildings

The Group accounts for land and building using the fair value approach based on market comparative valuations performed by certified ANEVAR professional as per revaluation reports concluded as at 31 December 2019. The valuations conform to International Valuation Standards. As at 31 December 2020, the management has not identified any indication that would conclude the need of revaluating its land and buildings for any impairment.

For further details, please see Note 5.1 – Land and buildings carried at fair value.

Critical judgements in assessing revenue recognition

Please refer to Note 3.25 – Revenue recognition.

Critical judgements in determining the lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or

periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

For leases of buildings, cars and equipment, the following factors are normally the most relevant:

• If there are significant penalty payments to terminate (or not extend), the group is typically reasonably certain to extend (or not terminate).

• If any leasehold improvements are expected to have a significant remaining value, the group is typically reasonably certain to extend (or not terminate).

• Otherwise, the group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset.

• If the Group considers that some of the lease agreement shall be terminated earlier, then the assumption of the tenor shall be reassessed accordingly in order to fairly represent the management's view of the leased asset's impact to the Financial Statements.

The lease term is reassessed if an option is actually exercised (or not exercised) or the group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.

Critical judgements in determining the control over subsidiaries

Note 27.1 describes that the Group acquired 4 companies in December 2020 but the control was not obtained as at December 31, 2020.

The Company assessed whether or not the Group has control over the acquired companies based on whether the Group has the practical ability to direct the relevant activities of the targets. After assessment, the Group concluded that the Group cannot direct the relevant activities of the targets and therefore the Group does not have control over the companies as at December 31, 2020.

Key source of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Calculation of loss allowance

The Group always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected credit losses on this financial asset are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

In determining adjustments for impairment of receivables, management incorporates forward-looking information, exercises professional judgment and uses estimates and assumptions. Estimation of expected credit risk losses involved forecasting future macroeconomic conditions for the next 2 years. More details on the assumptions, scenarios used and the weights assigned to each scenario can be found in Note 7 dedicated to accounts receivables.

The incorporation of forward-looking elements reflects the expectations of the Group and involves the creation of scenarios, including an assessment of the probabilities of materialization of each scenario.

4. GOODWILL

The Group records goodwill resulting from business combinations. Please see below the goodwill recorded as of December 31, 2020 and December 31, 2019 (gross carrying amount): 31 December 31 December 2020 2019

10,853,416 10,853,416 215,289 215,289 - 90,706 entrul Medical Sama SA 1,492,537 1,492,537 raiova SA 9,807 9,807 68,393 68,393 enter SRL 2,646,208 2,646,208 1,422,493 1,422,493 1,217,669 1,217,669 7,576,551 7,576,551 entrul Medical Panduri SA 6,979,272 6,979,272 6,354,631 6,354,631 12,863,892 12,863,892 2,824,203 2,824,203 4,070,023 4,070,023 4,693,895 4,693,895 6,066,602 6,066,602 1,503,438 1,503,438 8,726 8,726 1,881,349 1,881,349 Ungaria 8,452,114 8,452,114 1,366,312 1,366,312 1,929,308 1,929,308 25,670,864 - 25,653,196 - 15,740 - 147,256,824 96,007,730 31 December 1 January	2020 2019 Grupul Policlinica de Diagnostic Rapid 11,281,899 11,281,899 Pharmalife Med SRL 138,997 138,997 Grupul Accipiens Biotest Med SRL Vital Test SRL C Ultratest C Bactro Diamed C Prima Medical SRL Stem Cells Bank SA Dent Estet Clinic SA C Almina Trading SRL Anima Specialty Medical Services SRL Valdi Medica SRL Clinica Polisano SRL Ghencea Medical Center Grupul Solomed Sfatul medicului Transilvania Imagistica Badea Medical RMC Oncoteam Diagnostic Other Spital Lotus SRL Grupul Micromedica Laborator Maricor SRL TOTAL Movement in Goodwill
31 December 31 December
	Please see below the goodwill recorded as of December 31, 2020 and December 31, 2019 (gross carrying amount):

Movement in Goodwill

Almina Trading SRL Anima Specialty Medical Services SRL Valdi Medica SRL Clinica Polisano SRL Ghencea Medical Center Grupul Solomed Sfatul medicului Transilvania Imagistica	6,354,631 12,863,892 2,824,203 4,070,023 4,693,895 6,066,602	6,354,631 12,863,892 2,824,203 4,070,023
		4,693,895
		6,066,602
	1,503,438	1,503,438
	8,726	8,726
Badea Medical	1,881,349	1,881,349
Oncoteam Diagnostic	1,366,312	1,366,312
Other	1,929,308	1,929,308
Movement in Goodwill
		31 December	1 January
		2020	2020
Balance at the beginning of the year		96,007,730	82,378,647
		51,339,800	13,629,083
Goodwill recognized during the year
Impairment TOTAL		(90,706) 147,256,824	- 96,007,730

Management conducts impairment tests on an annual basis or whenever there is an indication of impairment to assess the recoverability of the carrying value of goodwill.

Recoverable amount is determined using fair value less cost of disposal. Management has determined the recoverable amount of the 24 CGUs by assessing the fair value less cost of disposal (FVLCOD) of the underlying assets. The valuation is considered to be level 3 in the fair value hierarchy due to unobservable inputs used in the valuation. This is performed using discounted cash flow models.

There are a number of key sensitive judgements made in determining the inputs into these models which include:

• Revenue growth
• Operating margins and
• The discount rates applied to the projected future cash flows.

Management have engaged specialists to assist with the impairment analysis. An impairment of goodwill was identified as of December 31, 2020 in amount of 90,706 RON. The accumulated carrying amount as of December 31, 2020, was in amount of 90,706 RON. The activity of Vital Test Laboratory was moved to MedLife S.A. There were no changes in the valuation techniques compared to prior year. The impairment loss is included in administrative expenses in the statement of profit or loss.

Management's approach and the key assumptions used to determine the CGU's FVLCOD were as follows: for cash flow forecast the management's approach were board approved five years forecasts which are prepared by management.

5. TANGIBLE AND INTANGIBLES FIXED ASSETS

			MED LIFE GROUP
				NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
				FOR THE YEAR ENDED DECEMBER 31, 2020
					(all the amounts are expressed in RON, unless otherwise specified)
For details regarding additions from business combinations – please see further details in Note 27.	Intangibles	Land	Construction	Vehicles and	Construction in	Total
				equipment	progress
	90,407,188
1 January 2020		29,353,962	348,065,764	437,799,343	19,940,484	925,566,742
Additions	9,702,862	-	37,503,262	32,072,444	10,625,075	89,903,642
Transfers	-	-	3,196,963	1,662,301	(4,859,264)	-
Disposals Additions from business combinations	(17,296) 3,773,097	- 2,338,215	(4,055) 71,691	(7,204,313) 31,309,240	(1,699,070) -	(8,924,735) 37,492,243
Disposals from business combinations	-	-	-	-	-	-
Revaluation	-	150,508	(499,835)	531,533	-	182,206
31 December 2020	103,865,851	31,842,685	388,333,790	496,170,548	24,007,225	1,044,220,099
				Vehicles and	Construction in
	Intangibles	Land	Construction	equipment	progress	Total
Depreciation
1 January 2020	47,131,621	84,120	83,514,570	260,409,202	-	391,139,513
Charge of the year	9,963,555	-	13,898,022	42,371,980	-	66,233,557
Disposals	(9,573)	-	-	(7,746,206)	-	(7,755,779)
Additions from business combinations	24,571	-	71,691	12,078,379	-	12,174,641

			For details regarding additions from business combinations – please see further details in Note 27.	As of December 31, 2020 the Group's tangible and intangible assets' structure was the following:
				equipment	Construction in progress	Total
				equipment	Construction in progress	Total
Depreciation
1 January 2020	47,131,621	84,120	83,514,570	260,409,202	-	391,139,513
Charge of the year	9,963,555	-	13,898,022	42,371,980	-	66,233,557
Disposals	(9,573)	-	-	(7,746,206)	-	(7,755,779)
Additions from business combinations	24,571	-	71,691	12,078,379	-	12,174,641
Disposals from business combinations	-	-	-	-	-	-
Revaluation	-	-	-	-	-	-
Impairment losses recognized in profit or loss	-	-	-	-	-	-
31 December 2020	57,110,173	84,120	97,484,283	307,113,355	-	461,791,932
Net Book Value
1 January 2020	43,275,568	29,269,842	264,551,193	177,390,141	19,940,484	534,427,228
31 December 2020	46,755,678	31,758,565	290,849,507	189,057,193	24,007,225	582,428,168

			MED LIFE GROUP
			NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
			FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
As of December 31, 2019 the Group's tangible and intangible assets' structure was the following:	Intangibles	Land	Construction	Vehicles and equipment	Construction in progress	Total
1 January 2019	78,348,031	27,114,136	310,518,800	400,309,544	15,206,937	831,497,448
Additions	9,499,086	-	18,461,338	34,857,632	13,680,009	76,498,066
Transfers	-	-	8,671,989	274,473	(8,946,462)	-
Disposals	(158,806)	-	-	(4,575,732)	-	(4,734,538)
Additions from business combinations	2,718,877	-	21,910	6,539,864	-	9,280,651
Disposals from business combinations	-	-	-	-	-	-
Revaluation	-	2,239,826	10,391,727	393,563	-	13,025,116
31 December 2019	90,407,188	29,353,962	348,065,764	437,799,343	19,940,484	925,566,742
	Intangibles	Land	Construction	Vehicles and	Construction	Total
Depreciation				equipment	in progress
1 January 2019	38,701,017	84,120	70,701,203	224,331,084	-	333,817,424
Charge of the year	8,354,280	-	12,791,458	37,249,475	-	58,395,212
Disposals	(2,534)	-	-	(3,209,400)	-	(3,211,934)
Additions from business combinations	78,858	-	21,910	2,038,044	-	2,138,811
Impairment losses recognized in profit or loss	-	-	-	-	-	-
31 December 2019	47,131,621	84,120	83,514,570	260,409,202	-	391,139,513

				equipment	Construction in progress	Total
		2,239,826	10,391,727	393,563	-	13,025,116
				equipment	Construction in progress	Total
Depreciation
1 January 2019	38,701,017	84,120	70,701,203	224,331,084	-	333,817,424
Charge of the year	8,354,280	-	12,791,458	37,249,475	-	58,395,212
Disposals	(2,534)	-	-	(3,209,400)	-	(3,211,934)
Additions from business combinations	78,858	-	21,910	2,038,044	-	2,138,811
Impairment losses recognized in profit or loss	-	-	-	-	-	-
31 December 2019	47,131,621	84,120	83,514,570	260,409,202	-	391,139,513
Net Book Value
1 January 2019	39,647,014	27,030,016	239,817,597	175,978,460	15,206,937	497,680,024

5.1. Land and buildings carried at fair value

The value of land and buildings of the Group are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value measurements of the Group's freehold land and buildings as at 31 December 2019 were performed by independent valuers not related to the Group. They are certified by ANEVAR and have appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations. 2020 2019 2019

If the lands and buildings of the Group had been valued at historical cost, their book value would have been the one presented below: Carrying amount without revaluation Land Buildings TOTAL	December 31, 2020 4,705,086 242,378,598 247,083,684	December 31, 2019 4,705,086 204,803,645 209,508,731	January 1, 2019 4,705,086 186,320,397 191,025,483
The fair value of the buildings was determined using the cost approach that reflects the cost to a market participant to construct assets of comparable utility and age, adjusted for obsolescence and the revenue based approach (capitalizing the net income from rents). The final value that resulted is the one that derives from the application of the method by cost.
The fair value of the freehold land was determined based on the market price comparison method as well as the residual method. The resulting value was based on the market comparison method.
The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
ANEVAR and have appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations.				impairment losses. The fair value measurements of the Group's freehold land and buildings as at 31 December 2019 were performed by independent valuers not related to the Group. They are certified by

5.2. Assets pledged as securities

The lands and constructions were pledged to guarantee the Company's loans (see Note 14). The Group cannot deposit these assets as collateral for other loans nor sell them to other entities.

• mortgage on the land located in 365 Calea Grivitei Street, district 1, Bucharest Romania (CF 201556) and related constructions
• mortgage on the land and buildings that make up the Pediatric Hospital in Bucharest, 7 Zagazului Street - CF 218010
• mortgage on the land and buildings that make up the Clinic and PDR Hospital located in Brasov, 5 Turnului Street - CF 127854
• mortgage on the land and buildings that make up the Clinic and Genesys Hospital located in Arad, 5 Dr. Cornel Radu Street - CF 301842
• mortgage on the land and buildings located in Craiova, 5A Infratirii Street CF 204837

5.3. Intangible assets

		MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
		FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
5.3. Intangible assets
Carrying amount	December 31,	December 31,
Set-up and development costs	8,569	8,563
Customer lists	6,022,310	6,022,310
Contract advantage	4,992,463	4,992,463
Trademark	21,713,819	18,076,219
Concessions, patents, licenses, trademarks and similar rights and assets	6,385,182	5,159,315
Other intangible assets	7,633,335	9,016,697

The trademark used to identify and distinguish the medical services, customer list, contract advantages have an indefinite useful life. The Group intends to use these intangibles continuously and evidence supports its ability to do so. An analysis of market and competitive trends provides evidence that the services will generate net cash inflows for the group for an indefinite period. Therefore, the intangibles are carried at cost without amortisation, but is tested for impairment.

The useful life for trademarks, customers list and contract advantages cannot be reasonably estimated as they intend to generate future benefits over the period which the company is expected to continue its activity. The capitalized cost for intangible assets recognized during the year is already included in the other intangible assets on the balance sheet – for further details please see note 21 - Other operating revenues.

5.4. Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). The fair value of intangible assets was assessed by an independent appraiser at acquisition date.

MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified) Contract Subsidiary Customer List Trademark Total Advantage Policlinica de Diagnostic Rapid 2,335,446 282,163 - 2,617,609 (2010) Med Life Ocupational (2010) 10,427 64,546 - Genesys Clinic (2011) 631,221 - - Vital Test (2014) - 8,462 - Biotest (2014) - 25,579 - Diamed (2016) - 839,438 605,153 Prima Medical (2016) - 115,865 688,850 Stem Cells Bank (2016) 338,056 - - Dent Estet Clinic (2016) 930,189 - 9,654,592 Centrul Medical Panduri (2016) - 318,179 - Almina Trading SRL (2017) - 632,000 321,000 Anima S (2017) 1,130,000 1,150,000 1,288,000 Anima P (2017) - 870,567 - Valdi Medica SRL (2017) - - 98,000 Clinica Polisano (2018) - - 2,076,000 Ghencea Medical Center (2018) - 600,000 280,000 Grupul Solomed (2018) - 170,000 157,000 Sfatul medicului (2018) 2,338,781 - 235,000 Transilvania Imagistica (2018) - 134,000 49,000 Badea Medical (2019) - - 71,000 Oncoteam Diagnostic (2019) - - 541,000 Rozsakert Medical Center - - 2,011,624
74,973 631,221 8,462 25,579 1,444,591 804,715 338,056 10,584,781 318,179 953,000 3,568,000 870,567 98,000 2,076,000 880,000 327,000 2,573,781 183,000 71,000 541,000 2,011,624
	Ungaria (2019)
Spital Lotus SRL (2020) - - 2,387,000 2,387,000
Grupul Micromedica (2020) - - 1,243,000 1,243,000
Laborator Maricor SRL (2020) - - 7,600 7,600
Total 7,714,120 5,210,799 21,713,819 34,638,738

5.5. OTHER FINANCIAL ASSETS

		MED LIFE GROUP
			NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
			FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	December 31,	December 31,
5.5. OTHER FINANCIAL ASSETS The Company holds significant investments in other companies. Carrying amount	2020	2020
Long-term receivables for stem cells processing	20,894,194	14,961,791
Future receivables estimated as a result of acquisition of Lotus and Micromedica	-	64,258,322
Other receivables	7,045,828	1,750,829

6. INVENTORIES

5.5. OTHER FINANCIAL ASSETS
The Company holds significant investments in other companies.
Carrying amount	December 31,	December 31,
Long-term receivables for stem
Future receivables estimated as a result of acquisition of Lotus and Micromedica
As of December 31, 2020, the Group presents RON 20,894,194 as long-term receivables for stem cells processing.
6. INVENTORIES			31 December 2020	31 December 2019
Consumable Materials in the form of inventory items Merchandise Inventory in transit			30,365,966 634,230 22,057,554 768	25,187,152 319,603 17,880,962 2,550
TOTAL			53,058,518	43,390,267
The cost of inventories recognised as an expense includes 498.518 RON (2019: RON 220.675) in respect of write-downs of inventory to net realisable value.
7. ACCOUNTS RECEIVABLE
		31 December	31 December
		2020	2019
Customers		126,765,253	98,312,303
Contract assets		14,474,781	11,205,076
Advances to suppliers		6,968,448	7,047,839
Allowance for doubtful receivables		(27,129,452)	(16,241,403)

7. ACCOUNTS RECEIVABLE

processing.	As of December 31, 2020, the Group presents RON 20,894,194 as long-term receivables for stem cells
6. INVENTORIES		31 December	31 December
Materials in the form of inventory items		634,230	319,603
Merchandise		22,057,554	17,880,962
		53,058,518	43,390,267
TOTAL 7. ACCOUNTS RECEIVABLE	The cost of inventories recognised as an expense includes 498.518 RON (2019: RON 220.675) in respect of write-downs of inventory to net realisable value.
	31 December	31 December
Customers	126,765,253	98,312,303
Contract assets	14,474,781	11,205,076
Advances to suppliers	6,968,448	7,047,839
Allowance for doubtful
receivables	(27,129,452)	(16,241,403)

Customers' compliance with agreed credit terms is monitored regularly and closely. Where payments are delayed by customers, steps are taken to restrict access to services or contracts are terminated.

Certain customers, which are public or quasi-public institutions, or subsidiaries of MedLife, may have longer payment terms and services may be continued to be delivered when amounts are overdue due to management's assessment of a lower credit risk.

The average receivable period for the services offered is 95 days. There is no interest on commercial receivables within the first 95 days from the date of issue of the invoice.

The carrying amount of financial assets, measured at amortised cost, represents the maximum credit exposure. There are no credit enhancements or collateral held that would offset such amounts. As the customer base of the Group is very diverse, there are generally no large concentrations of credit risk.

Based on the assessed credit risk of the customers, Group`s trade receivables are split between individually assessed and collectively assessed.

		MED LIFE GROUP
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
31 December 2020	Individually assessed	Collectively assessed	Total
Customers	67,350,222	59,415,031	126,765,253
Contract assets	14,474,781	-	14,474,781
Advances to suppliers	6,968,448	-	6,968,448
Allowance for doubtful receivables	(8,740,410)	(18,389,042)	(27,129,452)
Total	80,053,042	41,025,989	121,079,030
	Individually	Collectively
31 December 2019	assessed	assessed	Total
Customers	46,268,722	52,043,581	98,312,303
Contract assets	11,205,076	-	11,205,076
Advances to suppliers	7,047,839	-	7,047,839
Allowance for doubtful

		MED LIFE GROUP
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
31 December 2020	Individually assessed	Collectively
Advances to suppliers Allowance for doubtful	6,968,448	-	6,968,448
Total	80,053,042	41,025,989	121,079,030
31 December 2019	Individually assessed	Collectively assessed	Total
Customers	46,268,722	52,043,581	98,312,303
Contract assets	11,205,076	-	11,205,076
Advances to suppliers Allowance for doubtful	7,047,839	-	7,047,839
receivables	(7,715,835)	(8,525,568)	(16,241,403)
Total	27,388,423	30,556,462	100,323,815

In contract assets, in 2019 and 2020, include a debt of RON 7,365,835 which represents amounts receivable by MedLife S.A. from the Health Insurance House of the Municipality of Bucharest, not yet invoiced. The company has commenced court proceedings against the Health Insurance House of Bucharest. The management of the Company is confident that the amount will be recovered in the end, but considering the unfavorable decisions of the courts in similar cases, the Company has decided to register a value adjustment for the entire amount.

The Group applies the simplified approach for providing for expected credit losses (ECL) prescribed by IFRS 9, which requires the use of the lifetime expected loss provision for all trade receivables which are collectively analysed. No ECL has been recognised for other financial assets carried at amortised cost as there is no related credit risk.

	Base case	Pessimistic	Optimistic
Weight	25%	60%	15%

31 December 2020 Current <30 days < 90 days <180 days <365 days >365 days Total Expected credit loss rate 0.7% 21.9% 28.9% 36.4% 42.9% 62.7% Gross carying amount 27,064,207 1,877,231 1,676,899 1,196,388 2,153,123 25,447,182 59,415,031 Loss allowance 179,667 410,962 484,756 435,646 924,499 15,953,511 18,389,042	The allowance for doubtful receivables collectively assessed based on the Group's provision matrix arising from the ECL was determined as follows:
	Weight	25%
60% 15%
Estimating adjustments doubtful receivables involves forecasting future macroeconomic conditions for the next 2 years. The incorporation of forward-looking elements reflects the Groups expectations and involves the creation of scenarios (baseline, optimistic, pessimistic), including an assessment of the probability of materialization of each scenario. The applied macroeconomic scenarios were modified compared to those used in 2019 to reflect the worsening macroeconomic outlook amid the COVID-19 pandemic. The scenarios used were: the baseline scenario, the optimistic scenario and the pessimistic scenario. The scenario coefficients are determined based on the manager's expectations, taking into account the possible representative results for each scenario. GDP (Gross Domestic Product) was used as a macroeconomic factor considered statistically relevant for the analysed trade receivables. Base case Pessimistic Optimistic
receivables resulting in an ECL reflecting the predictive risk by type of customer. Changes in economic conditions were also considered as part of forward-looking information.
A provision matrix was prepared based on historical observed default rates over the expected life of trade

			MED LIFE GROUP	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(all the amounts are expressed in RON, unless otherwise specified)			FOR THE YEAR ENDED DECEMBER 31, 2020
31 December 2019	Current	<30 days	< 90 days	<180 days <365 days		>365 days	Total
Expected credit loss rate	0.6%	11.6%	16.6%	22.2%	28.4%	30.8%
Gross carying amount	23,342,391	1,041,104	678,904	1,036,118	2,263,445	23,681,618	52,043,581
Loss allowance	132,198	120,864	112,972	230,277	642,680	7,286,576	8,525,568
The following table shows the movement in loss allowance that has been recognized for trade receivables in accordance with the simplified approach set out in IFRS 9.	Individually assessed	Collectively assessed		Total
Balance as at 1 January 2019	7,365,835	10,043,043		17,408,878

			MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
31 December 2019	Current	<30 days	< 90 days		<180 days <365 days	>365 days	Total
Expected credit loss rate	0.6%	11.6%	16.6%	22.2%	28.4%	30.8%
Gross carying amount	23,342,391	1,041,104	678,904	1,036,118	2,263,445	23,681,618	52,043,581
Loss allowance	132,198	120,864	112,972	230,277	642,680	7,286,576	8,525,568
The following table shows the movement in loss allowance that has been recognized for trade receivables in accordance with the simplified approach set out in IFRS 9.	Individually assessed	Collectively
Balance as at 1 January 2019	7,365,835	10,043,043		17,408,878
Amounts written off	-		-	-
Amounts recovered Change in loss allowance due to new trade and other receivables originated net of those derecognised due	-		(1,239,611)	(1,239,611)
to settlement Changes in credit risk	-		548,996	548,996
parameters Balance as at 31 December		350,000 (826,860)		(476,860)
2019	7,715,835		8,525,568	16,241,403
Amounts written off	-		-	-
Amounts recovered Change in loss allowance due to new trade and other receivables originated net of those derecognised due	-		(1,241,371)	(1,241,371)
to settlement Changes in credit risk	-		1,168,314	1,168,314
parameters Balance as at 31 December	1,024,575		9,936,531	10,961,106
2020	8,740,410	18,389,042		27,129,452
8. CASH AND BANKS
				31 December		31 December
Cash in bank				78,177,086		34,122,192
Cash in hand				2,230,022		1,992,738
				1,563,289		1,573,966
Cash equivalents

8. CASH AND BANKS

Amounts written off	-	-	-
Amounts recovered Change in loss allowance receivables originated net of those derecognised due	-	(1,239,611)	(1,239,611)
to settlement Changes in credit risk	-	548,996	548,996
parameters Balance as at 31 December	350,000	(826,860)	(476,860)
2019	7,715,835	8,525,568	16,241,403
Amounts written off	-	-	-
Amounts recovered	-	(1,241,371)	(1,241,371)
Change in loss allowance receivables originated net of those derecognised due
to settlement Changes in credit risk	-	1,168,314	1,168,314
parameters Balance as at 31 December	1,024,575	9,936,531	10,961,106
2020	8,740,410	18,389,042	27,129,452
8. CASH AND BANKS			31 December 2020	31 December 2019
Cash in bank			78,177,086	34,122,192
Cash in hand			2,230,022	1,992,738
Cash equivalents			1,563,289	1,573,966
TOTAL			81,970,397	37,688,896
1,004,612 RON (31 December 2019: 1,197,322 RON).				Maternal vouchers are part of a financial support program granted to pregnant women in Bucharest, by the Capital City Hall. The Company has reclassified them from Cash equivalents to Financial assets due to the fact that their convertibility in cash exceeds more than three months. The amount reclassified in 2020 was
9. ASSETS CLASSIFIED AS HELD FOR SALE
			31 December 2020	31 December 2019
Apartment owned by MedLife Ocupational			-	381,665
The Group intends to dispose of the above assets within a twelve month period. The disposal of the apartment held by Med Life Occupational is directly linked to advance payment made by the former

9. ASSETS CLASSIFIED AS HELD FOR SALE

31 December	31 December

The amount of liabilities directly linked to assets held for sale as of December 31, 2020 is RON 0 (December 31, 2019: RON 363,318).

10. PREPAYMENTS

11. ACCOUNTS PAYABLE

	MED LIFE GROUP
		NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
		FOR THE YEAR ENDED DECEMBER 31, 2020
		(all the amounts are expressed in RON, unless otherwise specified)
10. PREPAYMENTS
As of December 31, 2020 the Group has prepayments in amount of RON 7,117,566 (RON 7,224,106 as of
December 31, 2019). The prepayments balance as of December 31, 2020 and December 31, 2019 consists mainly of deferred commissions for financing related to the Club loan for undrawn facilities and other
amounts such as insurance policies for professionals and tangible assets.
11. ACCOUNTS PAYABLE
		31 December		31 December
Suppliers		132,306,159	2020	2019 140,620,689
Fixed assets suppliers		15,573,776		18,421,340
Contract liabilities		3,810,199		6,091,399
TOTAL		151,690,134		165,133,428
The balance of the suppliers account consists of debts for the acquisition of reagents, laboratory equipment,
office equipment, stationery, cleaning products and food.
In order to maintain the Group's liquidity position and optimising its response to the Covid19 crisis, non
urgent and non-committed capital programmes have been postponed or reduced, along with other non essential administrative costs, which lead to an overall decrease on the accounts payable position.
12. OTHER LIABILITIES
		31 December	31 December
		2020		2019
Salary and related liabilities (incl. contributions) Other liabilities		14,322,374 20,908,360	17,477,756 39,151,541
TOTAL		35,230,734	56,629,297
13. PROVISIONS
	December 31, 2020	December 31, 2019
Carrying amount at start of year Acquired through business	1,749,188	2,458,957
combination Additional provision charged to plant	-	-

12. OTHER LIABILITIES

	31 December	31 December
TOTAL	35,230,734	56,629,297

13. PROVISIONS

12. OTHER LIABILITIES
		31 December	31 December
TOTAL		35,230,734	56,629,297
13. PROVISIONS
Carrying amount at start of year	1,749,188	2,458,957
Acquired through business combination	-	-
Additional provision charged to plant and equipment	-	-
Charged/(credited) to profit or loss
- additional provisions recognised	7,307,889	947,589
- unused amounts reversed - unwinding of discount	(403,364)	(1,071,783) -
Amounts used during the year	(1,444,219)	(585,575)
Carrying amount at end of year	7,209,494	1,749,188

14. LEASES

Amounts recognised in the balance sheet

	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	MED LIFE GROUP
	FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
14. LEASES
Leasing facilities refer to buildings, medical equipment and vehicles.
Amounts recognised in the balance sheet
Right-of-use asset	Buildings	Vehicles	Equipment	Total
Cost Value at 1 January 2020
*restated	151,681,960	2,714,495	10,858,702	165,255,157
Additions	42,203,125	12,295,328	1,663,734	56,162,188
Disposals Value at 31 December 2020	(4,271,893) 189,613,192	(109,198) 14,900,625	(7,610,972) 4,911,465	(11,992,062) 209,425,283
Accumulated depreciation Value at 1 January 2020
*restated	27,741,931	843,553	3,500,379	32,085,864
Charge for the year	32,912,995	1,634,078	2,116,758	36,663,831
Disposals	(2,429,700)	(109,198)	(3,606,710)	(6,145,607)
Value at 31 December 2020	58,225,226	2,368,434	2,010,428	62,604,088
Carrying amount
At 31 December 2019	123,940,029	1,870,942	7,358,323	133,169,294
At 31 December 2020	131,387,966	12,532,191	2,901,038	146,821,195
	December 31,	December 31,
	2020	2019
		*restated
Non-current - Lease Liabilities	147,097,180	141,065,745
Current portion – Lease Liabilities	41,166,069	40,425,758
TOTAL	188,263,249	181,491,503
Amounts recognised in the statement of profit or loss
	December 31,	December 31,
	2020	2019
Depreciation charge of right-of-		*restated
use assets Interest expense on lease	36,663,831	32,085,864
liabilities for rent contracts that fall under IFRS 16 (included in finance cost)	5,584,132	5,170,080
C ovid (Gain) Foregiveness amount	(2,344,386)	-
PL (Gain) from contracts	(319,382)	-
terminated earlier Foreign exchange loss for rent contracts that fall under IFRS 16 in relation with Lease Liabilities	2,546,808	3,410,037
Expense relating to short-term

Amounts recognised in the statement of profit or loss

	2020	2019 *restated
Depreciation charge of right-of- use assets	36,663,831	32,085,864
Interest expense on lease liabilities for rent contracts that fall under IFRS 16 (included in finance cost)
terminated earlier	(319,382)	-
Foreign exchange loss for rent contracts that fall under IFRS 16 in relation with Lease Liabilities	2,546,808	3,410,037
Expense relating to short-term leases (included in rent expenses)	709,563	4,884,561
Expense relating to leases of low value assets that are not shown above as short-term leases (included in rent expenses)	5,810,597	5,684,761

The total cash outflow for leases amount to RON 37,447,575 (2019: RON 34,991,216) for contracts that fall under IFRS 16 (which refer to rental of buildings, equipment and vehicles).

15. FINANCIAL DEBT

	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all the amounts are expressed in RON, unless otherwise specified)	FOR THE YEAR ENDED DECEMBER 31, 2020
15. FINANCIAL DEBT	31 December	31 December
	2020	2019
Current portion of long-term loans (including overdraft)	73,564,124	53,813,959
Non-current portion of long-term loans	414,696,592	345,952,241
TOTAL	488,260,716	399,766,200
	31 December	31 December
	2020	2019
		*restated
Cash and cash equivalents	81,970,397	37,688,896
Borrowings (including overdraft)	488,260,716	399,766,200
Lease liabilities	188,263,249	181,491,503
Net debt	594,553,567	543,568,807
Overdraft	27,127,907	29,011,944
	41,166,069	40,425,758
Current portion of lease liability	46,436,217	24,802,015
Current portion of long term debt
Long Term Debt
Lease liability	147,097,180	141,065,745

• On September 24, 2019 Med Life SA (together with the co-borrowers Policlinica de Rapid Diagnostic SA, Bahtco Invest SA, Accipiens SA, Genesys Medical Clinic SRL, Clinica Polisano SRL, Centrul Medical Sama SA, Dent Estet Clinic SA and Valdi Medica SRL) signed with the Romanian Commercial Bank, Raiffeisen Bank, BRD Groupe Societe Generale and Transilvania Bank a refinancing agreement to the existing facilities, extending the financing period, rearranging the terms and conditions, as well as for an additional credit limit of 28 million euros, which will be in the form of a term facilities, being used by Medlife, along with other liquidities of the Company, for possible new purchasing opportunities in the market. On 15 May 2020, this facility was extended with 20 million euro.

• a guaranteed overdraft facility between Garanti Bank S.A. and Med Life S.A., the amount drawn on December 31, 2020, is of RON 9,738,800;

• an overdraft facility between Unicredit Tiriac Bank and Prima Medical S.R.L., with a maximum credit limit of RON 800,000, drawn in full on December 31, 2020;

• 2 guaranteed loan facilities concluded between Garanti Bank S.A. and Anima Specialty Medical Services S.R.L; the balance outstanding at December 31, 2020 is RON 4,871,368;

• an overdraft facility concluded between Garanti Bank S.A. and Anima Specialty Medical Services S.R.L within 1,500,000 RON; on December 31, 2020 the amount drawn is RON 1,249,000;

• a guaranteed loan concluded between Bancpost and Med Life Ocupational S.R.L. worth EUR 225,000; the balance outstanding at December 31, 2020 is RON 255,567;

• 1 guaranteed loan contract concluded between Banca Transilvania S.A. and Ghencea Medical Center, the balance outstanding at December 31, 2020 is RON 631,181;

• a loan agreement and a guaranteed overdraft facility between CEC Bank S.A. and Clinic Polisano S.R.L., the balance outstanding at December 31, 2020 is RON 32,946,065;

• an overdraft facility between Banca Transilvania S.A. and Onco Team Diagnostic S.A., the balance outstanding at December 31, 2020 is RON 456,254;

• a loan agreement concluded between Banca Transilvania S.A. and Micromedica Roman S.R.L., the balance outstanding at December 31, 2020 is RON 1,892,368;

• a loan agreement concluded between Banca Transilvania S.A. and Centrul Medical Micromedica S.R.L., the balance outstanding at December 31, 2020 is RON 2,191,232;

• an overdraft facility between CIB Bank and RMG Ungaria, the balance outstanding at December 31, 2020 is RON 10.104;

• a loan agreement concluded between Libra Bank S.A. and Labor Maricor S.R.L., the balance outstanding at December 31, 2020 is RON 7.333.

The interest rate for each loan for each interest period is the rate per year that is the sum of the applicable

margin and depending on the currency of each loan, EURIBOR for the amounts in EUR or ROBOR for the amounts in RON.

The following guarantees have been requested, within the credit agreement at the level of the whole Group: • real estate mortgage on the land located in Calea Grivitei no. 365 sector 1 Bucharest Romania (cadastral no. 13183/1) and of the related constructions

• real estate mortgage on the land and constructions that make up the Pediatric Hospital in Bucharest. str. Zagazului no. 7 - CF 218010

• real estate mortgage on the land and constructions that make up the PDR Clinic and Hospital located in Brasov str. Turnului no. 5 - CF 127854

• movable mortgage on certain movable assets (medical equipment) owned by each company - Med Life, Bahtco Invest SA and Policlinica de Diagnostic Rapid SA

• movable mortgage on future medical equipment to be purchased by the debtor and co-borrowers created in favor of the Financing Parties; or of those acquired by the Company as a result of financing the leasing debts through the syndicated loan

• movable mortgage on the insurances of each debtor regarding the mortgaged tangible assets in favour of the Financing Parties

• mortgage on the shares held by the Company in the share capital of the initial debtors and of the companies Medical Center Sama SA, Ultratest SA, Rur Medical SA etc, and any other significant company or any future debtor if appropriate.

• movable mortgage on the bank accounts of the initial and new borrowers

• mortgage on certain commercial debts of Med Life (including debts related to the National House of Health Insurance or any other similar entities and the debts that resulted from significant commercial contracts)

• a movable mortgage on the actions of the sponsors of the debtor which will be created on the basis of a contract of movable mortgage on the shares, concluded between the sponsors and the creditors.

• real estate mortgage on the land owned by Accipiens, located in Dr. Cornel Radu street, no. 3, Arad (cadastral no. 301842) and the related constructions

• real estate mortgage on the land owned by the Sama Medical Center, located in str. Infratirii, no. 5A, Craiova (cadastral no. 204837) and related constructions.

As at December 31, 2020 none of the Group members was in breach of any applicable term of the financing facilities.

16. ISSUED CAPITAL

The issued share capital in nominal terms consists of 22,145,082 ordinary shares as at 31 December 2020 (31 December 2019: 22,145,082) with a nominal value of RON 0,25 per share. The holders of ordinary shares are entitled to one vote per share in the shareholders' meetings of the Company, except for the treasury shares bought back by the Company as part of the share buy-back program. All shares rank equally and confer equal rights to the net assets of the Company, except for treasury shares.

In accordance with the Decision of the Extraordinary General Meeting of Shareholders of the Company dated 15.12.2020, the share capital of the Company was increased with RON 27,681,352.50, from RON 5,536,270.5 to RON 33,217,623, by issuance of a number of 110,725,410 new shares with a nominal value of RON 0.25/share. The Share Capital Increase was made with the incorporation of share premium reserves, and the newly issued shares (5-for-1) were allocated without a monetary compensation to all shareholders registered in the shareholders' register of the Company as at 4 of January 2021 (Registration Date). 2020 2019 Share capital 33,217,623 5,536,271 Share premium 48,809,389 75,959,199 TOTAL 82,027,012 81,495,470

The effects of the share capital increase were processed on 15 of February 2021 and the newly issued shares were allocated to shareholders.

The total number of issued ordinary shares of the Company after the share capital increase is 132.870.492.

Please refer to Note 16 – Earnings per share for further details

31 December	31 December

17. EARNINGS PER SHARE

According to the Decision of the Extraordinary General Meeting of Shareholders of the Company dated 15.12.2020, the Company performed a share split of 5-for-1. The effects of the share split were recorded on 15th February 2021, when the Central Depository allocated to all shareholders registered in the Company's shareholders' register as at 04.01.2021 (Registration Date) 5 newly issued shares for each share held at the registration date. 31 December 31 December

15.12.2020, the Company performed a share split of 5-for-1. The effects of the share split were recorded on 15th February 2021, when the Central Depository allocated to all shareholders registered in the Company's shareholders' register as at 04.01.2021 (Registration Date) 5 newly issued shares for each share held at the registration date.
For the calculation of basic and diluted earnings per share for 2020 and 2019, the new number of issued ordinary shares was considered: 132.870.492 shares, instead of 22.145.082 shares).
In addition, the own shares repurchased by the Company were not treated as outstanding shares for the calculation of basic and diluted earnings per share, and are deducted from the total number of issued ordinary shares.
The basic and diluted earnings per share have the same value, due to the fact that there are no elements with a diluting effect on the result.
	2020	2019 *restated
Total basic and diluted earnings per share attributable to the ordinary equity holders of the company	0.43	0.10
Earnings used in calculating earnings per share:
	31 December	31 December
	2020	2019
Profit attributable to the ordinary equity holders of the company used in calculating basic and diluted earnings per share	56,702,860	13,611,276
Weighted average number of shares used as the denominator
	31 December	31 December
	2020	2019
Weighted average number of ordinary shares used as the denominator in calculating basic and diluted
earnings per share	132,388,206	132,324,153

18. RESERVES

	MED LIFE GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	FOR THE YEAR ENDED DECEMBER 31, 2020
(all the amounts are expressed in RON, unless otherwise specified)
18. RESERVES
The structure of the Group's reserves is presented below:	December 31,	December 31,
	2020	2019 *restated
General reserves (i) Other reserves (ii)	19,311,000 9,415,817	3,990,951 9,415,817
Revaluation reserves (iii)	95,484,740	95,302,534
TOTAL	124,211,557	108,709,302
(i), (ii) General reserves and other	December 31,	December 31,
reserves	2020		2019
Balance at beginning of the year	13,406,768	11,644,268
Movements	15,320,049	1,762,500
Balance at the end of the year	28,726,817	13,406,768
(iii) Revaluation reserves	December 31, 2020	December 31,	2019
Balance at beginning of the year	95,302,534	82,261,841
Decrease arising revaluation correction Increase due to revaluation	- 182,206	13,040,693	- -
Deferred tax related to revaluation Balance at the end of the year	- 95,484,740	95,302,534	-
The properties revaluation reserve arises on the revaluation of land and buildings. When revalued land or
buildings are sold, the portion of the properties revaluation reserve that relates to that asset, and that is effectively realized, is transferred directly to general reserves.
The effects of taxes on income, if any, resulting from the revaluation of property, plant and equipment are recognized and disclosed in accordance with IAS 12 Income Taxes (please see note 25).
19. NON-CONTROLLING INTEREST
		31 December	31 December
		2020	2019
Balance at beginning of year		22,750,118	*Restated 19,522,088
Share of profit for the year		7,060,824	3,174,209
Non-controlling interests arising on the acquisition of subsidiaries		-	2,279,703
Subsequent acquisition of NC I Distribution of dividends		(1,475,933) (701,987)	(2,039,185) (186,698)

19. NON-CONTROLLING INTEREST

(iii) Revaluation reserves	December 31,	December 31,
Balance at beginning of the year	95,302,534	82,261,841
Decrease arising revaluation correction Increase due to revaluation	- 182,206	13,040,693	- -
	95,484,740	95,302,534
buildings are sold, the portion of the properties revaluation reserve that relates to that asset, and that is
effectively realized, is transferred directly to general reserves. The effects of taxes on income, if any, resulting from the revaluation of property, plant and equipment are recognized and disclosed in accordance with IAS 12 Income Taxes (please see note 25).
19. NON-CONTROLLING INTEREST
		31 December 2020	31 December 2019
Balance at beginning of year		22,750,118	*Restated 19,522,088
Share of profit for the year		7,060,824	3,174,209
Non-controlling interests arising on the acquisition of subsidiaries		-	2,279,703
Subsequent acquisition of NC I		(1,475,933)	(2,039,185)
Distribution of dividends		(701,987)	(186,698)

In October, 2020, the Group acquired an additional 10% of the issued shares of Ghencea Medical Center and on December, 2020 the Group acquired an additional 5% of the issued shares of Group Arad for a total consideration of 3,800,678 RON. For the transaction occurred during December 2020, the Group has only recognized the consideration paid in relation with the additional 5% acquired in Group Arad, while the impact on equity will be reflected starting with January 2021, similar with the regularly consolidation process.

Immediately prior to the purchase, the carrying amount of the existing non-controlling interest in Group was 1,475,933 RON. The Group recognised a decrease in non-controlling interests of 1,475,933 RON and a decrease in equity attributable to owners of the parent of 2,324,745 RON. The effect on the equity attributable to the owners of Group during the year is summarised as follows:

			MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
			FOR THE YEAR ENDED DECEMBER 31, 2020
			(all the amounts are expressed in RON, unless otherwise specified)
			December 31,	December 31,
				2020	2019 * restated
acquired	Carrying amount of non-controlling interests			1,475,933	2,039,185
	Consideration paid to non-controlling interests			(3,800,678)	(7,800,352)
within equity	Excess of consideration paid recognised in the transactions with non-controlling interests reserve			(2,324,745)	(5,761,167)
20.	REVENUE FROM CONTRACTS WITH CUSTOMERS
	Revenue from customers consist of medical services, including revenues from prevention packages of corporate customers and fees for services rendered within Group's clinics and various hospitals within Romania. Please see breakdown below.
	12 months 2020		12 months 2020		Variation
Business Line	Sales	% of Total Sales	Sales	% of Total Sales	2020/2019
Clinics	307,919,487	28.6%	295,465,223	30.5%	4.2%
Stomatology	61,363,524	5.7%	59,817,358	6.2%	2.6%
Hospitals	251,943,388	23.4%	221,198,932	22.9%	13.9%
Laboratories	198,519,202	18.4%	154,135,274	15.9%	28.8%
Corporate	198,530,858	18.4%	183,514,802	19.0%	8.2%
		4.1%	39,341,136	4.1%	12.9%
Pharmacies	44,405,803

20. REVENUE FROM CONTRACTS WITH CUSTOMERS

				2020	2019 * restated
	Carrying amount of non-controlling interests
within equity	transactions with non-controlling interests reserve			(2,324,745)	(5,761,167)
20.	REVENUE FROM CONTRACTS WITH CUSTOMERS
	Revenue from customers consist of medical services, including revenues from prevention packages of corporate customers and fees for services rendered within Group's clinics and various hospitals within Romania. Please see breakdown below. 12 months 2020	% of Total	12 months 2020	% of Total	Variation
Business Line	Sales	Sales	Sales	Sales	2020/2019
Clinics	307,919,487	28.6%	295,465,223	30.5%	4.2%
Stomatology	61,363,524	5.7%	59,817,358	6.2%	2.6%
Hospitals	251,943,388	23.4%	221,198,932	22.9%	13.9%
Laboratories	198,519,202	18.4%	154,135,274	15.9%	28.8%
Corporate	198,530,858	18.4%	183,514,802	19.0%	8.2%
Pharmacies	44,405,803	4.1%	39,341,136	4.1%	12.9%
Others	14,766,089	1.4%	13,907,582	1.4%	6.2%
TOTAL SALES	1,077,448,351	100.0%	967,380,307	100%	11.4%
21. Other operating revenues	The Group has only 20% of its sales during 2020 deriving from the treatment of NHIH insured patients. OTHER OPERATING REVENUES Other operating revenues caption comprises:		12 months 2020	2,800,978	12 months 2019 2,344,424
	Income / (expense) from operating grants			2,749,803	1,515,373
C	apitalized cost of intangible assets			3,723,981	3,789,152
TOTAL				9,274,762	7,648,949
22.	OTHER OPERATING EXPENSES
			12 months 2020		12 months 2019 *restated

21. OTHER OPERATING REVENUES

	12 months 2020	12 months 2019
Income / (expense) from operating grants	2,749,803	1,515,373
TOTAL	9,274,762	7,648,949

22. OTHER OPERATING EXPENSES

	The Group has only 20% of its sales during 2020 deriving from the treatment of NHIH insured patients.
21.	OTHER OPERATING REVENUES
	Other operating revenues caption comprises:
		12 months 2020	12 months 2019
	Income / (expense) from operating grants	2,749,803	1,515,373
TOTAL		9,274,762	7,648,949
22.	OTHER OPERATING EXPENSES
		12 months 2020	12 months 2019 *restated
Utilities		12,634,324	11,854,596
Commodities		35,649,736	30,649,995
Repairs maintenance		11,549,854	11,895,850
Rent		6,520,160	10,569,322
Insurance premiums		3,002,708	3,122,303
Promotion expense		13,508,044	14,207,313
Communications		4,236,791	3,962,770
	Other administration and operating expenses	17,477,695	17,457,104
TOTAL		104,579,312	103,719,253

23. KEY MANAGEMENT PERSONNEL EXPENSES

The structure of Med Life personnel is described below:

	MED LIFE GROUP
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	December 31,	December 31,
	2020	2019
Management Staff	155 4,503	161 4,722
Total	4,658	4,883
	The short-term benefits paid by the Group, by type of personnel are described below:
	December 31, 2020	December 31, 2019
Management Staff	33,400,743 254,402,195	35,134,419 266,806,592

	December 31,	December 31,
Management	33,400,743	35,134,419
Total	287,802,938	301,941,011

24. NET FINANCIAL RESULT

	December 31,		December 31,
Management	155		161
	The short-term benefits paid by the Group, by type of personnel are described below:
	December 31,		December 31,
Management	33,400,743		35,134,419
Total	287,802,938		301,941,011
24. NET FINANCIAL RESULT		12 months 2020		12 months 2019 *Restated
Other financial expenses (Loss)/Gain from foreign exchange rate impact Finance cost Other income			- (9,943,800) (23,252,551) 2,585,489 50,893	(5) (11,709,876) (20,646,504) 65,480 69,899
Interest income FINANCIAL NET LOSS		(30,559,969)		(32,221,007)
25. RELATED PARTIES
(a) Main shareholders	As of December 31, 2020, the shareholders' structure of Med Life SA is as presented below:
		Number of shares	%	Value
Legal entities		71,455,241	53.78%	17,863,810
Marcu Mihail		21,557,520	16.22%	5,389,380
C ristescu Mihaela Gabriela		18,660,690	14.04%	4,665,173

25. RELATED PARTIES

(a) Main shareholders

Management	33,400,743		35,134,419
Total	287,802,938		301,941,011
24. NET FINANCIAL RESULT
		12 months 2020		12 months 2019 *Restated
(Loss)/Gain from foreign exchange rate impact			(9,943,800)	(11,709,876)
Finance cost			(23,252,551)	(20,646,504)
Other income			2,585,489	65,480
FINANCIAL NET LOSS			(30,559,969)	(32,221,007)
25. RELATED PARTIES
(a) Main shareholders As of December 31, 2020, the shareholders' structure of Med Life SA is as presented below:		Number of
		shares	%	Value
Legal entities		71,455,241	53.78%	17,863,810
Marcu Mihail		21,557,520	16.22%	5,389,380
C ristescu Mihaela Gabriela		18,660,690	14.04%	4,665,173
Marcu Nicolae		14,204,400	10.69%	3,551,100
Others		6,992,641	5.26%	1,748,160
TOTAL		132,870,492	100.00%	33,217,623
As of December 31, 2019, the shareholders' structure of Med Life SA is as presented below:
		Number of shares	%	Value
Marcu Mihail		4,119,320	18.60%	1,029,829
Marcu Nicolae		2,913,800	13.16%	728,451
C ristescu Mihaela Gabriela		3,110,115	14.04%	777,531
Others		12,001,847	54.20%	3,000,460
TOTAL		22,145,082	100%	5,536,271
Please refer to Note 17 – Earnings per share for further details.
(b) Executive Committee and Board of Directors' compensation

Number of

(b) Executive Committee and Board of Directors' compensation

Compensations granted to the members of the Executive Committee were as follows:

MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified) Executive C ommittee 6,192,697 6,768,127 Board of Directors 3,507,111 3,724,068

12 months 2020 12 months 2019

Executive Committee compensation includes the payments toward members of the top management under their mandate contracts concluded with the Company for a period of 4 years.

As at December 31, 2020, the Company's Executive Committee consisted of ten managers remunerated based on mandate agreement. No new member has been appointed during the year.

12 months 2020	12 months 2019

(c) Related parties

based on mandate agreement. No new member has been appointed during the year.
On October 21st, 2020, the Board of Directors extended all mandates for a new period of 4 years, ending October 21st, 2024.
Compensations granted to the members of the Board of Directors were as follows:
	12 months 2020	12 months 2019
Med Life SA Board of Directors consists of 7 members under administration agreements concluded with the Company, approved by the General Shareholders Meeting.
For two of the members, the administration agreements ended in December 2020 and two new members were appointed on December 15th, 2020 by the Shareholders of the Company along with the extension of the Board Members' mandate for a period of 4 years, starting December 21st, 2020 and ending December
20th, 2024.
No loans were granted to managers and administrators in 2020 and 2019.
(c) Related parties The related parties identified are: Nautic Life SRL, DR. CRISTESCU I. MIHAELA-GABRIELA (shareholder) and Marcu Nicolae (shareholder).	Receivables from		Payables to
	December 31,	December 31,	December 31,	December 31,
U I. MIHAELA-GABRIELA DR. CRISTESC Marcu Nicolae	2020 - 8,000	2019 58,400 -	2020 53,561 -	2019 4,839 7,402
Nautic Life S.R.L.	-	-	2,616	2,616
Total	8,000	58,400	56,177	14,857
	Sales in 2020	Sales in 2019	Purchases in 2020	Purchases in 2019
NAUTIC LIFE MARC U NICOLAE U I. MIHAELA-GABRIELA DR. CRISTESC	- 8,000 -	- 1,633 -	- - 700,800	- - 700,800

26. TAXATION

(all the amounts are expressed in RON, unless otherwise specified)
26. TAXATION
	December 31,	December 31,
	2020	2019
		*restated
Current income tax expense	14,787,475	5,610,697
Deferred tax expense	-	2,726,330
Total income tax expense	14,787,475	8,337,027
Profit before tax	78,551,159	25,122,512
Tax expense using the statutory rate of 16%	12,568,185	4,019,602
(2019: 16%)
Fiscal effect of non-deductible expenses	3,291,511	1,571,574
Fiscal effect of non-taxable income	(582,043)	(548,292)
Fiscal effect of deductible legal reserve	(463,065)	(66,662)
Sponsorship Reinvestit profit and other fiscal facilities	(208,871) (2,331,624)	(797,663) (849,257)
Other elements (including different fiscal
treatment)	2,422,963	2,386,264
Deferred tax expense	90,419	2,726,330
Income tax for the current year	14,787,475	8,441,897
Income tax to comprehensive income	-	104,870
Income tax to profit or loss – Expense	14,787,475	8,337,027
	December	December
	31,	31, 2019
	2020	*restated
Income tax liabilities as at January 1	308,391	729,572
Income tax liabilities through acquisitions	178,115	(2,299)
Income tax paid in the current year	(9,716,112)	(6,134,448)
Income tax payable in the current year	14,697,056	5,715,567
Current tax liabilities as at 31 December	5,467,450	308,391

	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	MED LIFE GROUP
		FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
Components of deferred tax	31 December	Change in	1 January
	2020	deferred tax	2020
Deferred tax assets Non-current assets	-	-	-
Trade receivables	1,332,184	-	1,332,184
Total deferred tax asset	1,332,184	-	1,332,184
Deferred tax liability	31 December	Modificări în	1 January
	2020	impozitul amânat	2020
Acquisition of subsidiaries	3,751,265	1,092,708	2,658,557
Other elements Revaluation reserve	104,870 17,821,848	- 90,421	104,870 17,731,428
Total deferred tax liability	21,677,983	1,183,129	20,494,855
Net deferred tax liability	20,345,799	1,183,129	19,162,671
	2019 *restated	deferred tax *restated	2019
Deferred tax assets
Non-current assets Trade receivables	- 1,332,184	- -	- 1,332,184
Total deferred tax asset	1,332,184	-	1,332,184
Deferred tax liability	31 December	Modificări în	1 January
	2019	impozitul amânat	2019
Acquisition of subsidiaries	2,658,557	600,412	2,058,145
Other elements Revaluation reserve	104,870 17,731,428	104,870 2,021,048	- 15,710,381
Total deferred tax liability	20,494,855	2,726,330	17,768,526
Net deferred tax liability	19,162,671	2,726,330	16,436,342

The Group accrues income taxes at the rate of 16% on profits computed in accordance with the Romanian tax legislation.

The net effect of the change on deferred tax balances recognized as at December 31, 2020, except for the deferred tax related to the revaluation reserve which is recognized in equity, is reflected in the statement of comprehensive income for the year then ended.

27. BUSINESS COMBINATIONS

27.1. Subsidiaries acquired and consideration transferred

Subsidiaries acquired during the period 1 January – 31 December 2020:

Acquisition of Lotus Hospital, Micromedica Medical Center, Labor Maricor, Centrul Medical Matei Basarab, Pharmachem Distributie, CED Pharma, KronDent.

The Group signed the sale and purchase agreement for share capital for acquiring the following companies:

• 100% of the shares in Centrul Medical Matei Basarab SRL (November 19, 2020);
• 75% of share in Pharmachem Distributie SRL (December 15, 2020);
• 100% of the shares in CED Pharma SRL (December 24, 2020);
• 36% of the shares in KronDent SRL (December 21, 2020)

In March 2021, the Group obtained control over two of the above mentioned companies: Centrul Medical Matei Basarab SRL and KronDent SRL. Pharmachem Distributie SRL and CED Pharma SRL are still under analysis by Competition Council.

The Group has become the sole shareholder of Ghencea Medical Center, completing its shareholding package with additional 10% percent, thus reaching 100% and also has increase the package of shares held in Geneys Arad by 7% in June 2020 and by 5% in December 2020 reaching 73%.

The Group obtained control over the following companies starting with January 1, 2020:

• 100% of the shares in Lotus Hospital;
• 100% of the shares in Micromedica Medical Center;
• 100% of the shares in Labor Maricor SRL;

The acquisition has significantly increased the group's market share in this industry and complements the group's existing operational activity.

Acquisition of Lotus Hospital

Medlife announced the acquisition of 100% of the shares of Lotus Hospital in Ploiești, the most important provider of private medical services in Prahova county, which provides integrated outpatient, imaging, laboratory, hospitalization and maternity services. The hospital comprises 22 beds in 12 reserves, 2 intensive care rooms and one operating block with 2 operating rooms. The outpatient part is equipped with 9 consulting rooms, covering 21 medical specialties, but also with a complete department of radiology and medical imaging equipped with state-of-the-art equipment. At the same time, the unit also includes a laboratory, which performs over 500 most complex medical tests

Acquisition of Micromedica Medical Center

Medlife announced the acquisition of the majority package of Micromedica Medical Center, one of the most important providers of private medical services in Moldova.

Micromedica has been active on the private healthcare market since 1995 and offers patients a wide range of investigations, from multidisciplinary consultations for over 28 medical specialties and laboratory services, to complex imaging investigations. The group comprises of six medical units located in the cities of Piatra Neamț, Bacău, Roman, Bicaz, Roznov and Târgu Neamț, all equipped with high-quality medical equipment.

Acquisition of Labor Maricor

MedLife Medical System takes over 100% stake in Labor Maricor, Bacau.

Acquisition of Matei Basarab Medical Center

MedLife Medical System announces the acquisition of the 100% stake in the Veridia Medical Center in Bucharest, known as the Matei Basarab Medical Center.

Acquisition of Pharmachem Distributie

Acquisition of CED Pharma

Acquisition of KronDent (indirect)

27.2. Assets acquired and liabilities recognized at the date of acquisition

	MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
MedLife Medical system announces the signing of the acquisition for the 75% majority stake of Pharmachem Distributie SRL. It is the group's largest acquisition this year, being, also, the first acquisition in the pharma sector.
Acquisition of CED Pharma MedLife Medical System announces the signing of the transaction for the acquisition of the full package of shares of CED Pharma group of companies. It is the second acquisition of MedLife Group in the pharma segment, announced within two weeks.
Acquisition of KronDent (indirect) DENT ESTET group of clinics, market leader in the field of dentistry services in Romania, announces the signing of the SPA for the majority stake of 60% of the shares of KronDent S.R.L, a periodontology implantology and dentistry clinic, based in Brasov.
27.2. Assets acquired and liabilities recognized at the date of acquisition
Assets acquired and liabilities recognized at the date of acquisition	2020	2019
Non-current assets	53,011,018	9,694,101
Current assets	6,849,744	5,343,311
Current liabilities	26,896,656	9,085,695
Non-current liabilities	4,551,198	-
Net assets	28,412,908	5,951,717
27.3 – Acquisition related costs
The Group incurred acquisition-related costs of 5,261,188 RON on legal fees and due diligence costs. These costs have been included in 'Other administration and operating expenses.

27.3 – Acquisition related costs

28. FINANCIAL INSTRUMENTS (IFRS 7)

28.1. Goodwill arising on acquisition

Non-current assets	53,011,018	9,694,101
Current assets	6,849,744	5,343,311
Current liabilities	26,896,656	9,085,695
27.3 – Acquisition related costs
The Group incurred acquisition-related costs of 5,261,188 RON on legal fees and due diligence costs.
These costs have been included in 'Other administration and operating expenses.
28. FINANCIAL INSTRUMENTS (IFRS 7)
28.1. Goodwill arising on acquisition
Goodwill arising on acquisition	2020	2019
Consideration transferred	64,698,530	17,301,096
Less: fair value of identifiable net assets	(13,358,730)	(5,951,717)
acquired Plus non-controlling interest	-	2,279,704
Goodwill arising on acquisition	51,339,800	13,629,083
Bargain gain arising on acquisition	-	-
The goodwill is attributable to the workforce and also to the know-how acquired and the high profitability of the acquired business. It will not be deductible for tax purposes.
28.2. Net cash outflow on acquisition of subsidiaries
	31 decembrie	31 decembrie
	2020	2019
		56,550,113
Consideration paid in cash	25,876,601
Less: cash and cash equivalent balances	(2,106,788)	(1,834,835)
acquired at acquisition date

28.2. Net cash outflow on acquisition of subsidiaries

	31 decembrie	31 decembrie
Consideration paid in cash	25,876,601	56,550,113
Less: cash and cash equivalent balances
	23,769,813	54,715,278

(a) Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 14, cash and cash equivalents disclosed in note 8 and equity, comprising issued capital, reserves and retained earnings as disclosed in note 15 and note 16.

The Group's risk management reviews the capital structure regularly. As a part of this review, the management considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the management, the Group will balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

(b) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the consolidated financial statements.

Financial assets that potentially subject the Group to concentrations of credit risk consist principally of cash, short-term deposits, trade and other receivables. The Group's cash equivalents and short-term deposits are placed with reputable financial institutions with a high credit rating.

Trade receivables are represented net of the allowance for expected credit losses. Credit risk with respect to trade receivables is limited due to the large number of customers comprising the Company's customer base, which consists mainly of both individuals and companies. Around 62% of the total sales are cashbased with remaining being based on issuance of invoices.

The financial condition of these customers in relation to their credit standing is evaluated on an ongoing basis.

The Group has also developed certain procedures to assess legal entities as customers prior to signing contracts, aimed at providing preventive and prophylactic health care packages (PPMs) and monitoring their ability to meet the payments during the course of contracts. Also, the Group has established an internal Collection department which actively monitors encashments received from customers.

The gross carrying amounts of financial assets (before credit loss allowances) included in the statement of financial position represent the Group's maximum exposure to credit risk in relation to these assets. The Group has only 20% of its sales during 2020 deriving from the treatment of NHIH insured patients (concentration of credit risk) – reliance on major customers.

At 31 December 2020 and 31 December 2019, the Company did not consider there to be a significant concentration of credit risk. Please see note 7 – Accounts receivables, for further details regarding credit risks of trade and other receivables and also note 3.17 Trade receivables, for further details of accounting policies used by the Group.

(c) Financial risk management objectives

The Group's Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

(d) Market risk

The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see (g) below).

There has been no change to the Group's exposure to market risks or the manner in which it manages and measures the risk.

(e) Interest rate risk management

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Group is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The higher risk is represented by funds borrowed in the national currency, because the interest rates are periodically repriced based on index variation.

Lease contracts concluded in the national currency are also exposed due to the above repricing process, as the discount rate in this case is linked to the internal borrowing rates for funds withdrawn in the national currency.

Interest rate sensitivity analysis

The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate sensitivity analysis The sensitivity analysis below has been determined based on the exposure to interest rates for interest bearing financial instruments at the reporting date. Out of the total outstanding balances for both borrowings and leases only the amounts that refers to the Club loan and lease contracts (which refer to rent of buildings, equipment and vehicles) have been considered for the sensitivity on interest rate computation. These amounts which were included in the analysis cover more than 80% of the total outstanding balances for both borrowings and leases.
A 10% per cent increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.
The assumptions used have not changed from previous years.
If interest rates had been 10% per cent higher and all other variables were held constant, the Group's profit for the year ended 31 December 2020 would decrease by RON 930,828 RON (2019: decrease with RON 676,833). This is mainly attributable to the Group's exposure to interest rates on its borrowings and leases.
A mo unts expo sed to interest rate risk
LIA B ILIT IES	T o tal	Out o f which included in the sensitivity analysis		Interest expenses % current interest rate fo selected po	per year at the r the fo rtio n	Interest expenses per year at the interest rate increased by 10% r the selected po rtio n	Variatio n that affects the pro fit and lo ss acco unt when the interest rate increases by 10%
2020
Overdraft Short-Term and Long-Term portions of loans	27,127,907 461,132,809	Club loan	431,325,762 88%		9,655,745	10,096,860	441,115
Short-Term and Long-Term portions of leases	188,263,249	Contracts that refer to rent of buildings, equipment and	157,179,389	83%	5,584,132
		vehicles which fall under IFRS 16				6,073,844	489,713
2019
Overdraft Short-Term and Long-Term portions of loans	29,011,944 370,754,256	Club loan	343,462,123 86%		6,289,867	6,576,409	286,542
Short-Term and Long-Term portions of leases	181,491,503	Contracts that refer to rent of buildings, equipment and vehicles which fall under IFRS 16	138,844,059	77%	5,170,080	5,560,371	390,291
	D ecember 31, 2020	D ecember 31, 2019*restated

(f) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following table details the Group's remaining contractual maturity for financial liabilities as of December 31, 2020 and December 31, 2019. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

				MED LIFE GROUP
			FOR THE YEAR ENDED DECEMBER 31, 2020		NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
			(all the amounts are expressed in RON, unless otherwise specified)
2020	Weighted average	Carrying amount	Total	Year 1	Year 2	Year 3	Year 4	Year 5	> Year 5
	effective interest rate
Non-interest bearing instruments Trade payables		151,690,134	151,690,134	151,690,134	-	-	-	-	-
Interest bearing instruments Overdraft		27,127,907	27,127,907	27,127,907	-	-	-	-	-
Borrowings	EURIBOR 6M / ROBOR 6M +	461,132,809	506,462,937	55,496,969	90,320,846	80,048,662	79,362,463	96,657,366	104,576,631
Lease contracts	margin	188,263,249	204,696,341	46,667,130	39,965,313	33,010,993	28,349,969	19,830,231	36,872,706
Total		828,214,099	889,977,319	280,982,140	130,286,159	113,059,655	107,712,431	116,487,596	141,449,337
2019 *restated	Weighted average effective interest rate	Carrying amount	Total	Year 1	Year 2	Year 3	Year 4	Year 5	> Year 5
Non-interest bearing instruments Trade payables		165,133,428	165,133,428	165,133,428	-	-	-	-	-
Interest bearing instruments Overdraft		29,011,944	29,011,944	29,011,944	-	-	-	-	-
Borrowings	EURIBOR 6M / ROBOR 6M +	370,754,256	435,274,032	32,099,776	56,013,504	60,173,091	60,471,094	62,030,670	164,485,897
Lease contracts	margin	181,491,503	198,138,087	45,083,377	36,664,002	29,730,241	23,329,305	19,819,059	43,512,104
Total		746,391,131	827,557,491	271,328,525	92,677,505	89,903,331	83,800,399	81,849,729	207,998,001

	EURIBOR 6M / ROBOR 6M +	461,132,809	506,462,937	55,496,969	90,320,846	80,048,662	79,362,463	96,657,366	104,576,631
Lease contracts	margin	188,263,249	204,696,341	46,667,130	39,965,313	33,010,993	28,349,969	19,830,231	36,872,706
	effective interest rate
Non-interest bearing instruments Trade payables		165,133,428	165,133,428	165,133,428	-	-	-	-	-
Interest bearing
instruments					-	-	-	-	-
Overdraft		29,011,944	29,011,944	29,011,944
Borrowings	EURIBOR 6M / ROBOR 6M +	370,754,256	435,274,032	32,099,776	56,013,504	60,173,091	60,471,094	62,030,670	164,485,897
Lease contracts	margin	181,491,503	198,138,087	45,083,377	36,664,002	29,730,241	23,329,305	19,819,059	43,512,104

(g) Fair value of financial instruments

Financial instruments in the balance sheet include trade receivables and other receivables, cash and cash equivalents, short-term and long-term loans and trade and other payables. The estimated fair values of these instruments approximate their carrying amounts. The carrying amounts represent the Group's maximum exposure to credit risk for existing receivables.

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters through matching mechanism between assets and liabilities. Starting with 2020, the Group can withdraw money in the national currency from the credit facility available but not used, in order to limit foreign currency exposure.

Financial instruments that are not held at fair value

At level 1 of the fair value hierarchy, the Group classified cash and cash equivalents as assets that are not held at fair value.

At level 3 of the fair value hierarchy, the Group and the Bank classified in the category of assets: cash equivalents (maternity vouchers), trade and other receivables, other financial assets, and in the category of debt: loans from banks and other financial institutions, leasing debts, trade payables and other financial liabilities.

The following table shows the fair value and the fair value hierarchy for assets and liabilities that are not measured at fair value in the statement of financial position as at 31 December 2020:

	(all the amounts are expressed in RON, unless otherwise specified)	FOR THE YEAR ENDED DECEMBER 31, 2020	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ASSETS	Classification under IFRS 9	Carry ing amount	Fair value	Level 1	Level 2	Level 3
C ash and cash equivalents
Receivables Other financial assets	Amortized cost Amortized cost Amortized cost	81,970,397 121,079,030 27,940,022	81,970,397 121,079,030 27,940,022	81,970,397 - -	- - -	- 121,079,030 27,940,022
LIABILITIES
Trade and other payables Overdraft	Amortized cost Amortized cost	151,690,134 27,127,907	151,690,134 27,127,907	- -	- -	151,690,134 27,127,907
Other long term debt	Amortized cost	18,119,743	18,119,743	-	-	18,119,743
Lease liability	Amortized cost	188,263,249	188,263,249	-	-	188,263,249
Long term debt	Amortized cost	461,132,809	461,132,809	-	-	461,132,809
Carrying amount is a reasonable approximation of fair value (e.g. for cash, short-term trade receivables and payables, lease liabilities).
(h) Recognised fair value measurements
 Fair value hierarchy
This note explains the judgements and estimates made in determining the fair values of the non-financial assets that are recognized and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its non-financial assets and liabilities into the three levels prescribed under the accounting standards. An explanation of each level is provided in note 3.28.
31 December 2020 Land and buildings	Note Level 1 5 -	Level 2 Level 3 -	322,608,072
	Note Level 1	Level 2 Level 3

(h) Recognised fair value measurements

31 December 2020	Note Level 1 Level 2 Level 3
Land and buildings	ל	322,608,072
31 December 2019	Note Level 1 Level 2 Level 3

• Valuation techniques used to determine level 3 fair values are presented in note 5.
• Valuation inputs and relationships to fair value

Foreign currency sensitivity analysis

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

		MED LIFE GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
		FOR THE YEAR ENDED DECEMBER 31, 2020
		(all the amounts are expressed in RON, unless otherwise specified)
2020	RON	1 EUR = 4.8694 RON	100 HUF = 1.3356 RON	Total
ASSETS
C ash and cash equivalents	68,481,009	11,999,891	1,489,497	81,970,397
Trade receivables	119,647,488	-	1,431,542	121,079,030
Financial assets	1,004,612	26,828,562	106,848	27,940,022
LIABILITIES
Trade payables	142,680,721	7,369,746	1,639,667	151,690,134
Overdraft	17,378,983	9,738,800	10,124	27,127,907
Other long term debt	14,794,743	3,325,000	-	18,119,743
Short-Term and Long-Term portions of loans	110,644,115	350,488,694	-	461,132,809
Short-Term and Long-Term portions of leases	12,302,693	174,946,279	1,014,277	188,263,249
2019
*restated ASSETS	RON	4.7793 RON	1.4459 RON	Total
Cash and cash equivalents	36,613,860	431,524	643,512	37,688,896
Trade receivables	98,658,530	-	1,665,285	100,323,815
Financial assets	1,197,322	79,657,948	115,672	80,970,942
LIABILITIES
Trade payables	158,918,087	3,995,047	2,220,294	165,133,428
Liabilities held for sale	-	363,318 9,558,600	- 165,333	363,318 29,011,944
Overdraft	19,288,011

LIABILITIES
Short-Term and Long-Term portions of loans	110,644,115	350,488,694	-	461,132,809
Short-Term and Long-Term portions of leases	12,302,693	174,946,279	1,014,277	188,263,249
2019
ASSETS
Cash and cash equivalents	36,613,860	431,524	643,512	37,688,896
Trade receivables Financial assets	98,658,530 1,197,322	- 79,657,948	1,665,285 115,672	100,323,815 80,970,942
LIABILITIES Trade payables	158,918,087	3,995,047	2,220,294	165,133,428
Liabilities held for sale	-	363,318	-	363,318
Overdraft Other long term debt	19,288,011 16,201,746	9,558,600 6,650,000	165,333 -	29,011,944 22,851,746
Short-Term and Long-Term portions of loans	42,551,986	328,202,270	-	370,754,256
Short-Term and Long-Term portions of leases	4,496,989	175,698,362	1,296,152	181,491,503

The Group is mainly exposed in respect of the exchange rate of the RON versus EUR. The above table details the Group's sensitivity to a 10% increase and decrease in RON against EUR. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel 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.

If EUR is weakening 10% against RON, the profit will increase and the amount stated below will be positive. For a 10% strengthening of EUR against RON there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative.

The assumptions used have not changed from previous years. The variation below is presented as absolute amounts.

	December 31, 2020	December 31, 2019 *restated
Profit or loss	50,704,007	44,437,812

29. COMMITMENTS AND CONTINGENCIES

Contingent li abilities are not recognized in the consolidated financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is probable. A contingent asset is

not recognized in the consolidated financial statements but disclosed when an inflow of economic benefits is probable.

Club loan related commitments

Med Life SA shall not enter into any agreement which will amend, novate, modify or vary the provisions of Med Life's Shareholders' Agreement without the prior written consent of the lenders.

Other commitments

As at December 31, 2020 and December 31, 2019, the Group holds insurance policies to cover possible liabilities towards doctors for malpractice as well as insurance contracts related to buildings and medical equipment.

In conformity with the concluded agreement with the National House of Health Insurance, the Group has to provide primary medical services to National House's insured citizens.

BCR issued letters of warranties in the favour of Med Life S,A, in amount of RON 2,631,819 out of which in EUR 404,646 as of December 31, 2020 (December 31, 2019: RON 2,631,819, equivalent of EUR 404,646).

Fiscal environment

The taxation system in Romania is still developing and is subject to various interpretations and constant changes, which may sometimes be retroactive. Although the actual tax due for a transaction may be minimum, delay interests may be significant, as they can be calculated at the value of the transaction and at a rate of 0.02% per day (interest) and 0.01% (penalties) per day.

In Romania the statute of limitation for tax controls (audits) is of 5 years. Management believes that the tax obligations included in these financial statements are adequate.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Transfer pricing

The fiscal legislation from Romania includes the "market value" principle, according to which the transactions between related parties have to be performed at the market value. The local tax payers, who carry transactions with related parties, have to prepare and make available to the tax authorities from Romania, at their written request, the transfer pricing documentation file. If the companies do not prepare the documentation or they present an incomplete transfer pricing file may attract penalties for nonconformity, and additionally to the information presented in the transfer pricing file, the fiscal authorities may have a different interpretation of the transactions and the circumstances compared to the management's assessment and, as a result, they may impose additional fiscal obligations as a result of adjusting transfer prices. The management of the Group is confident that, if required, they will submit the necessary information in due time to the fiscal authorities. The transactions with related parties and group companies are performed based on the market value principle.

Litigation

The Group is involved in various litigations as part of normal course of business. Management has assessed the legal status together with the Group's legal advisors and all necessary adjustments have been recorded in the consolidated financial statements.

30. AUDITORS' FEES

The auditor of the Group is Deloitte Audit SRL.

The fee for the audit of the consolidated financial statements as of December 31, 2020 of the Group prepared in accordance with IFRS as adopted by EU and the individual financial statements as of December 31, 2020 of the Group prepared in accordance with IFRS as adopted by EU of Med Life SA was EUR 155,500 excluding VAT and out of pocket expenses.

The fee for other audit related services performed in 2020 (in accordance with ISAE 3000 and ISAE 3.240) was EUR 12,000, excluding VAT.

31. EVENTS AFTER THE BALANCE SHEET DATE

Continued action plan to prevent and limit the spread of COVID-19

The MedLife Medical System, the largest operator of medical services in Romania, has implemented, from the first alert day on limiting the spread of SARS-CoV-2 (Coronavirus) virus in Romania, a series of prevention and protection measures for patients. and to the medical and auxiliary staff, focusing on preventing factors that could represent a danger of infection for all those in the medical units.

In all MedLife units, the methodology of surveillance of the acute respiratory system was implemented, and at the moment, the company ensures a good continuity of the medical activity. Epidemiological triage of patients through call-centres and medical teams, special circuits for patients with acute respiratory pathology, adaptation of consultation intervals to increase patient safety (allocating time needed to disinfect spaces after interaction with each patient), creating special spaces for isolating cases suspected of infectious diseases, the provision of protective equipment and disinfectant products, but also the development of complex procedures of cleaning, disinfection and nebulization are only part of the important measures that have been taken and that the special medical teams follow and manage them properly.

Regarding the operational segment, the administrative and support staff, the MedLife Medical System has implemented a Continuity of Activity Plan, the safety of the employees being a priority. The measures consist in dividing the key employees into two teams and avoiding physical interaction between them, but also the remote activity, both ensuring a good continuity of the company's activity. Also, all the events scheduled at Med Life level in the following period were suspended, and they will revert to them when exposure in the public space will no longer represent a risk to human health.

The MedLife Medical System actively monitors the economic situation in Romania and the possible negative implications on its current operations, at present, there are reductions in the activity determined by the social distance measures, imposed by the public authorities as measures to limit the spread of the SARS-CoV-2 virus. (Coronavirus). Despite the diminished activity, the company has taken all necessary measures to maintain good continuity of medical activity in all MedLife clinics and hospitals, taking priority over medical staff and colleagues in the front line and studying the compensation of these turbulences by reducing the short-term overhead costs.

The priority of the MedLife Medical System remains the health of patients and employees, fully respecting the decisions of the local authorities.

The Company assessed the impact of the Coronavirus pandemic over its business and concluded that the financial statements will not be significantly affected by this event. Even though, we currently can't properly evaluate the consequences of this pandemic considering the dynamics in the evolution, the Company doesn't expect a major impact on its activity in the future based on information available to the management at the date of this report.

Greenfield acquisition and investment plans

MedLife Medical System announces its intention to increase its existing facilities by 40 million euros by signing a syndicated loan, the discussions being already advanced with the banks. Depending on the opportunities, other important liquidities of the company will be added to this increase, as appropriate. The bank union that would sign the new loan consists of Banca Comercială Română, as coordinator, main arranger, documentation agent, facility and guarantee agent and financier, BRD Groupe Société Générale, Banca Transilvania and Raiffeisen Bank, as of main arrangers and funders.

The new funds will be dedicated to consolidating and expanding the group nationwide, by developing medical units such as MedPark, where the patient benefits from a 360-degree approach both in terms of the complexity of the medical act and the quality of adjacent services. Major emphasis will be placed on the development of programs and projects in a pandemic context, projects related to prevention, oncology and medical radiotherapy, technology and digitization, the main objective being the needs of the patient caring for his health and wanting to solve his needs efficiently, quickly and safely. According to company representatives, the amount is not intended to complete ongoing acquisitions for which MedLife has sufficient liquidity. At the same time, the company aims to continue the research efforts, and even to intensify them through new investments in the new year.

CEO CFO

Mihail Marcu, Adrian Lungu,

ADMINISTRATORS' REPORT MED LIFE GROUP

YEAR ENDED DECEMBER 31, 2020

1. Presentation of the Group

Med Life S.A. ("Med Life" or the "Parent Company" or the "Company") is a joint-stock company incorporated in 1996, in accordance with the laws and regulations of Romania. The Company's activity consists of providing medical services through a range of medical centres located in all the major cities of the country - cities with over 150,000 inhabitants.

Med Life Group is offering a large range of medical service having opened 22 Hyper clinics in Arad, Bucharest, Braila, Brasov, Cluj, Constanta, Craiova, Galati, Iasi, Oradea, Ploiesti, Sibiu and Timisoara, 53 Clinics, 10 hospitals – located in Bucharest, Arad, Sibiu, Brasov, Cluj and Ploiesti, 33 Laboratories, 14 Pharmacies and 12 Dental Clinics. The Group has also more than 130 private Clinic partners around Romania.

Medlife Group is the largest provider of medical services in Romania based on turnover. More than 5 million unique patients have used Medlife services, and over 700,000 employees nationwide benefit from Medlife healthcare prevention packages as part of the benefits provided by their employers.

Last but not least, Medlife Group is differentiates itself by the significant number of medical test performed in Medlife laboratories annually – 5.2 million test conducted in 2020.

The registered office of Med Life is located in Bucharest, Calea Grivitei, no. 365.

Details of Med Life SA's subsidiaries at December 31, 2020 and December 31, 2019 are as follows:

Name of subsidiary	Principal Activity	Place of operation	December 31, 2020	December 31, 2019
Policlinica de Diagnostic Rapid SA	Medical Services	Brasov, Romania	83.01%	83.01%
Medapt SRL (indirectly)	Medical Services	Brasov, Romania	83.01%	83.01%
Histo SRL (indirectly)	Medical Services	Brasov, Romania	49.81%	49.81%
Policlinica de Diagnostic Rapid Medis SRL (indirectly)	Medical Services	Sfantu Gheorge, Romania	66.41%	66.41%
Bahtco Invest SA	Development of building projects	Bucharest, Romania	100%	100%
Med Life Ocupational SRL	Medical Services	Bucharest, Romania	100%	100%
Pharmalife-Med SRL	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
Med Life Broker de Asigurare si Reasigurare SRL	Insurance broker	Bucharest, Romania	99%	99%
Accipiens SA	Rental activities	Bucharest, Romania	73%	61%
Genesys Medical Clinic SRL (indirectly)	Medical services	Bucharest, Romania	73%	61%
Bactro SRL (indirectly)	Medical services	Deva, Romania	73%	61%
Transilvania Imagistica SA (indirectly)	Medical services	Oradea, Romania	73%	61%
Biofarm Farmec SRL (indirectly)	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
RUR Medical SA (indirect)	Medical services	Bucharest, Romania	83.01%	100%
Biotest Med SRL	Medical services	Bucharest, Romania	100%	100%
Vital Test SRL	Medical services	Bucharest, Romania	100%	100%
Centrul Medical Sama SA	Medical Services	Craiova, Romania	90%	90%
Ultratest SA (directly and indirectly)	Medical services	Craiova, Romania	76%	76%
Diamed Center SRL	Medical Services	Bucharest, Romania	100%	100%
Prima Medical SRL	Medical Services	Craiova, Romania	100%	100%
Stem Cells Bank SA	Medical Services	Timisoara, Romania	100%	100%
Dent Estet Clinic SA	Dental healthcare activities	Bucharest, Romania	60%	60%
Green Dental Clinic SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	31%	31%

Dentist 4 Kids SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	31%	31%
Dent A Porter SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	31%	31%
Dentestet Kids SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	32%	32%
Aspen Laborator Dentar SRL (indirectly)	Dental healthcare activities	Bucharest, Romania	45%	45%
Centrul Medical Panduri SA	Medical Services	Bucharest, Romania	90%	90%
Almina Trading SA	Medical services	Targoviste, Romania	80%	80%
Anima Specialty Medical Services SRL	Medical services	Bucharest, Romania	100%	100%
Anima Promovare si Vanzari SRL (indirectly)	Medical services	Bucharest, Romania	100%	100%
Valdi Medica SA	Medical services	Cluj, Romania	55%	55%
Clinica Polisano SRL	Medical services	Sibiu, Romania	100%	100%
Solomed Clinic SA	Medical services	Pitesti, Romania	80%	80%
Solomed Plus SRL (indirectly)	Medical services	Pitesti, Romania	80%	80%
Ghencea Medical Center SA	Medical services	Bucharest, Romania	100%	90%
Sfatul medicului SRL	Medical platform	Bucharest, Romania	100%	100%
RMC Dentart (indirectly)	Dental healthcare activities	Budapest, Hungary	51%	51%
RMC Medical (indirectly)	Medical services	Budapest, Hungary	51%	51%
RMC Medlife	Holding	Budapest, Hungary	51%	51%
Badea Medical SRL	Medical services	Cluj, Romania	65%	65%
Oncoteam Diagnostic SA	Medical services	Bucharest, Romania	75%	75%
Centrul medical Micromedica SRL	Medical services	Piatra Neamt, Romania	100%	100%
Micromedica Targu Neamt SRL (indirectly)	Medical services	Targu Neamt, Romania	100%	100%
Micromedica Bacau SRL (indirectly)	Medical services	Bacau, Romania	100%	100%
Micromedica Roman SRL (indirectly)	Medical services	Roman, Romania	100%	100%
Medrix Center SRL (indirectly)	Medical services	Roznov, Romania	100%	100%
Spitalul Lotus SRL	Medical services	Ploiesti, Romania	100%	100%
Labor Maricor SRL	Medical Services	Bacau, Romania	100%	0%
Centrul Medical Matei Basarab SRL*	Medical Services	Bucharest, Romania	100%	0%
Farmachem Distributie SRL*	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	75%	0%
CED Pharma SRL*	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	0%
KronDent SRL (indirect)*	Dental healthcare	Brasov, Romania	36%	0%

* The control over these companies will be obtained in the first semester of 2021 and will be consolidated starting with 2021.

The Group business model is focused on providing medical services to clients, both natural and legal persons. The Group seeks to capture the private healthcare spending of these clients throughout all stages of a medical condition: prevention, diagnosis and treatment, by offering a wide range of medical services delivered in modern, high quality facilities by professional teams of doctors, nurses and support personnel. The company places great emphasis on the quality of the services offered to its customers, operating an IT infrastructure and customer service and sales operation that has served over 5 million unique patients, representing over 1 in 4 Romanians.

The Group divides its operations into six business lines:

Corporate: The Corporate business line offers HPP to corporate clients as part of their employee benefit packages. These programmes, which focus on prevention through regular check-ups and access to diagnostic services, complement the legally required occupational health services that corporate clients also contract from MedLife under the HPP offering.

• Clinics: The Clinics business line includes the Group's ambulatory clinics and diagnostic imaging services. Clinics offer general practitioner and specialist consultations, diagnostic imaging services, and some of the clinics also offer day-inpatient services.
• Laboratories: The Laboratories business line provides biochemistry, haematology, coagulation, immunology, microbiology, anatomo-pathology, cytology, molecular biology and toxicology laboratories tests.
• Hospitals: The Hospitals business line covers the Group's inpatient activities, which consist of a wide range of medical and surgical specializations. The 10 hospitals of the group are located in Arad, Bucharest, Brasov, Cluj, Sibiu and Ploiesti. The Group holds 7 inpatient hospital licenses, which encompass the business line's activities. One of the licences was issued for one hospital unit and 3 other external sections. In addition to these, the Group was granted licenses for three additional day-inpatient units, which operate within Clinic locations and provide only day-inpatient services (i.e. Iași, Craiova and Timișoara). The financial results from these three day-inpatient services are accounted for in the Clinics division. The Group regards these units as functional parts of the hyperclinics located in Iași, Craiova and Timișoara.
• Pharmacies: The Pharmacies business line offers prescription, over the counter and other related medical products in 14 pharmacies opened within the Group's clinics or their proximity.
• Stomatology: The Stomatology business line provides a wide range of dental services from simple check-ups to complicated surgery.

2. 2020 Developments

2.1. Acquisitions completed in 2020

In 2020, MedLife Group increased its participation in certain subsidiary companies, and also signed contracts for the acquisition of share capital of the following companies:

• 100% of the shares in Centrul Medical Matei Basarab SRL;
• 75% of share in Pharmachem Distributie SRL;
• 100% of the shares in CED Pharma SRL;
• 36% of the shares in KronDent SRL.
• 100% of the shares in Lotus Hospital;
• 100% of the shares in Micromedica Medical Center;
• 100% of the shares in Labor Maricor SRL;

The Group has become the sole shareholder of Ghencea Medical Center, completing its shareholding package with additional 10% percent, thus reaching 100% and also has increase the package of shares held in Geneys Arad by 7% in June 2020 and by 5% in December 2020 reaching 73%.

Acquisition of Lotus Hospital

Medlife announced the acquisition of 100% of the shares of Lotus Hospital in Ploiești, the most important provider of private medical services in Prahova county, which provides integrated outpatient, imaging, laboratory, hospitalization and maternity services. The hospital comprises 22 beds in 12 reserves, 2 intensive care rooms and one operating block with 2 operating rooms. The outpatient part is equipped with 9 consulting rooms, covering 21 medical specialties, but also with a complete department of radiology and medical imaging equipped with state-of-the-art equipment. At the same time, the unit also includes a laboratory, which performs over 500 most complex medical tests

Acquisition of Micromedica Medical Center

Medlife announced the acquisition of the majority package of Micromedica Medical Center, one of the most important providers of private medical services in Moldova.

Micromedica has been active on the private healthcare market since 1995 and offers patients a wide range of investigations, from multidisciplinary consultations for over 28 medical specialties and laboratory services, to complex imaging investigations. The group comprises of six medical units located in the cities of Piatra Neamț, Bacău, Roman, Bicaz, Roznov and Târgu Neamț, all equipped with high-quality medical equipment.

Acquisition of Labor Maricor

MedLife Medical System takes over 100% stake in Labor Maricor, Bacau.

Acquisition of Matei Basarab Medical Center

MedLife Medical System announces the acquisition of the 100% stake in the Veridia Medical Center in Bucharest, known as the Matei Basarab Medical Center.

Acquisition of Pharmachem Distributie

MedLife Medical system announces the signing of the acquisition for the 75% majority stake of Pharmachem Distributie SRL. It is the group's largest acquisition this year, being, also, the first acquisition in the pharma sector.

Acquisition of CED Pharma

MedLife Medical System announces the signing of the transaction for the acquisition of the full package of shares of CED Pharma group of companies. It is the second acquisition of MedLife Group in the pharma segment, announced within two weeks.

Acquisition of KronDent (indirect)

DENT ESTET group of clinics, market leader in the field of dentistry services in Romania, announces the signing of the SPA for the majority stake of 60% of the shares of KronDent S.R.L, a periodontologyimplantology and dentistry clinic, based in Brasov.

2.2. Organic growth

2.3. Expansion Plans of Existing Medical Units

3. Credit facilities contracted by the Group

2.2.	Organic growth
	Development of 6 RT-PCR laboratories through which the company was able to keep the Group employees safe, to periodically test medical and auxiliary staff and patients and keep the units functional, as well as be part of the national testing program.
2.3.	Expansion Plans of Existing Medical Units
	MedLife invests in the development of the largest private medical project in Romania: MedLife Medical Park. The new medical project will be built next to Medlife Memorial Hospital. Located in the middle of a green area, it will have at completion 1000 beds in a total number of 8 buildings built in pavilionary system. The medical park will include two different stages of development. In the first stage a new hyperclinic, a center for R&D and innovation, kinetotherapy and medical recovery rooms, two restaurants, a center of imaging and radiotherapy, pharmacy and bio food store will be arranged. in the second stage, which is in the phase of feasibility study, MedLife Oncological Institute will be built. The first stage will last for 18-24 months, while the second stage will take place over a period of 3-5 years.
3.	Credit facilities contracted by the Group
	MedLife Group borrowings as at 31 December 2020 are:
		31 December 2020	31 December 2019
	Cash and cash equivalents	81,970,397	*restated 37,688,896
	Borrowings (including overdraft)	488,260,716	399,766,200
Lease liabilities Net debt		188,263,249 594,553,567	181,491,503 543,568,807
Overdraft	Current portion of lease liability	27,127,907 41,166,069	29,011,944 40,425,758
	Current portion of long term debt	46,436,217	24,802,015
Long Term Debt
Lease liability Long term debt		147,097,180 414,696,592	141,065,745 345,952,241

On September 24, 2019 Med Life SA (together with the co-borrowers Policlinica de Rapid Diagnostic SA, Bahtco Invest SA, Accipiens SA, Genesys Medical Clinic SRL, Clinica Polisano SRL, Centrul Medical Sama SA, Dent Estet Clinic SA and Valdi Medica SRL) signed with the Romanian Commercial Bank, Raiffeisen Bank, BRD Groupe Societe Generale and Transilvania Bank a refinancing agreement to the existing facilities, extending the financing period, rearranging the terms and conditions, as well as for an additional credit limit of 28 million euros, which will be in the form of a term facilities, being used by Medlife, along with other liquidities of the Company, for possible new purchasing opportunities in the market. On 15 May 2020, this facility was extended with 20 million euro. As of December 31, 2020, the balance of these facilities is RON 431,325,762;

• a guaranteed overdraft facility between Garanti Bank S.A. and Med Life S.A., the amount drawn on December 31, 2020, is of RON 9,738,800;

• an overdraft facility between Unicredit Tiriac Bank and Prima Medical S.R.L., with a maximum credit limit of RON 800,000, drawn in full on December 31, 2020;

• 2 guaranteed loan facilities concluded between Garanti Bank S.A. and Anima Specialty Medical Services S.R.L; the balance outstanding at December 31, 2020 is RON 4,871,368;

• an overdraft facility concluded between Garanti Bank S.A. and Anima Specialty Medical Services S.R.L within 1,500,000 RON; on December 31, 2020 the amount drawn is RON 1,249,000;

• a guaranteed loan concluded between Bancpost and Med Life Ocupational S.R.L. worth EUR 225,000; the balance outstanding at December 31, 2020 is RON 255,567;

• 1 guaranteed loan contract concluded between Banca Transilvania S.A. and Ghencea Medical Center, the balance outstanding at December 31, 2020 is RON 631,181;

• a loan agreement and a guaranteed overdraft facility between CEC Bank S.A. and Clinic Polisano S.R.L., the balance outstanding at December 31, 2020 is RON 32,946,065;

• an overdraft facility between Banca Transilvania S.A. and Onco Team Diagnostic S.A., the balance outstanding at December 31, 2020 is RON 456,254;

• a loan agreement concluded between Banca Transilvania S.A. and Micromedica Roman S.R.L., the balance outstanding at December 31, 2020 is RON 1,892,368;

• a loan agreement concluded between Banca Transilvania S.A. and Centrul Medical Micromedica S.R.L., the balance outstanding at December 31, 2020 is RON 2,191,232;

• an overdraft facility between CIB Bank and RMG Ungaria, the balance outstanding at December 31, 2020 is RON 10.104;

• a loan agreement concluded between Libra Bank S.A. and Labor Maricor S.R.L., the balance outstanding at December 31, 2020 is RON 7.333.

As at December 31, 2020 none of the Group members was in breach of any applicable term of the financing facilities.

4. Financial Analysis

Analysis of the consolidated profit and loss

^{2020 2019} *Restated Sales 967,380,307 1,077,448,351 Other operating revenues 9,274,762 7,648,949 Operating Income 1,086,723,113 975,029,256 Consumable materials and repair materials (189,975,286) (158,167,211) Third party expenses (including doctor's agreements) (264,544,662) (281,469,012) Salary and related expenses (277,035,208) (291,414,807) Social contributions (10,767,730) (10,526,204) Depreciation (102,897,388) (90,481,076) Impairment losses and gains (including reversals of impairment losses) 1,167,475 (10,888,049) Other operating expenses (104,579,312) (103,719,253) Operating expenses (977,611,985) (917,685,738) Operating Profit 109,111,128 57,343,518 Finance cost (23,252,552) (20,646,561) Other financial expenses (7,307,417) (11,574,446) Financial result (30,559,969) (32,221,007) Result Before Taxes 78,551,159 25,122,512 Income tax expense (14,787,475) (8,337,027) Net Result 63,763,684 16,785,485 Owners of the Group 56,702,860 13,611,276 Non-controlling interests 7,060,824 3,174,209 Earnings per share Basic and diluted earnings per share (RON) 0.43 0.10 Other comprehensive income items that will not be reclassified to profit or loss Gain on revaluation of equity instruments - 655,437 Deferred tax on other comprehensive income components - (104,870) TOTAL OTHER COMPREHENSIVE INCOME - 550,567 Total other comprehensive income attributable to: Owners of the Group - 550,567 Non-controlling interests - - TOTAL COMPREHENSIVE INCOME 63,763,684 17,336,052 Total comprehensive income attributable to: Owners of the Group 56,702,860 14,161,843 Non-controlling interests 7,060,824 3,174,209 12 months ended December 31,

Sales for the 12 month period ended December 31, 2020 amounted to RON 1,077,448,351, higher by 11.4% compared to sales recorded in the 12 month period ended December 31, 2019. This increase was mainly the result of significant growth in all of the Group's business lines, led on a percentage basis by

	Clinics, Hospitals, Corporate and Laboratories, as well as the impact of the acquisitions completed by the
Group in 2019 and 2020.
	The breakdown of revenues by business line is presented below:
	12 months 2020		12 months 2020		Variation
Business Line	Sales	% of Total Sales	Sales	% of Total Sales	2020/2019
Clinics	307,919,487	28.6%	295,465,223	30.5%	4.2%
Stomatology	61,363,524	5.7%	59,817,358	6.2%	2.6%
Hospitals	251,943,388	23.4%	221,198,932	22.9%	13.9%
Laboratories	198,519,202	18.4%	154,135,274	15.9%	28.8%
C orporate	198,530,858	18.4%	183,514,802	19.0%	8.2%
Pharmacies	44,405,803	4.1%	39,341,136	4.1%	12.9%
Others	14,766,089	1.4%	13,907,582	1.4%	6.2%
TOTAL SALES	1,077,448,351	100.0%	967,380,307	100%	11.4%
	The key operational indicators of the Group are:
			12 months ended	12 months ended
Business line	Info		December 31,		December 31,
			2020		2019

Business Line		% of Total Sales		% of Total Sales
Business line	Info
Clinics	Revenue		307,919,487		295,465,223
Clinics	Visits		1,815,055		1,861,491
Clinics	Avg fee		169.6		158.7
Stomatology	Revenue		61,363,524		59,817,358
Stomatology	Visits		89,172		123,349
Stomatology	Avg fee		688.1		484.9
Hospitals	Revenue		251,943,388		221,198,932
Hospitals	Patients		82,209		82,683
Hospitals	Avg fee		3,064.7		2,675.3
Laboratories	Revenue		198,519,202		154,135,274
Laboratories	Analyses		5,211,645		5,905,490
Laboratories	Avg fee		38.1		26.1
C orporate	Revenue		198,530,858		183,514,802
C orporate	Subscriptions		738,582		705,380
C orporate	Avg fee		268.8		260.2
Pharmacies	Revenue		44,405,803		39,341,136
	Clients		194,838		250,717
Pharmacies	Sales per		227.9		156.9
Pharmacies	client

Other operating revenues of the Group for the 12 months period ended 31 December 2020 were of RON 9,274,762, recording an increase of 21.3% as compared to the same period of 2019.

Operating expenses include variable and fixed costs, as well as the cost of goods and materials used to provide the Group's services. The Group recorded operating expenses of RON 977,611,985 in the year ended December 31, 2020, representing an increase of 6.5% as compared to the year ended December 31, 2019.

Operating expenses as a share of total operational revenues accounted for 94.9% in 2019 and 90.7% in 2020.

The evolution of other operating expenses is the following:

	12 months 2020	12 months 2019
Utilities		*restated
	12,634,324	11,854,596
Commodities	35,649,736	30,649,995
Repairs maintenance	11,549,854	11,895,850
Rent	6,520,160	10,569,322
Insurance premiums	3,002,708	3,122,303
Promotion expense	13,508,044	14,207,313
Communications Other administration and operating expenses	4,236,791 17,477,695	3,962,770 17,457,104

Financial result decreased in the 12-month period ended December 31, 2020 by 5.2%, from a loss of RON 32,221,007 in 2019, to a loss of RON 30,559,969 in 2020.

The net result recorded in 2020 increased by 279.9%, from a profit of RON 16,785,485 in 2019 to a profit of RON 63,763,684 in 2020. The increase represents the translation in net result of the increase in operating profit.

Analysis of the consolidated statement of financial position

Analysis of the consolidated statement of financial position
	December 31,	December 31, 2019	January 1, 2019
	2020	*Restated	*restated
ASSETS
Non current assets
Goodwill	147,256,824	96,007,730	82,378,647
Intangible assets	46,755,678	43,275,568	39,647,014
Tangible assets	535,672,488	491,151,660	458,033,010
Right-of-use assets	146,821,194	133,169,294	146,435,936
Other financial assets	27,940,022	80,970,942	10,599,596
TOTAL NON-CURRENT ASSETS	904,446,206	844,575,194	737,094,204
Current Assets Inventories	53,058,518	43,390,267	31,070,480
Receivables	121,079,030	100,323,815	78,957,879
Other receivables	15,822,146	20,770,400	13,117,114
Cash and cash equivalents	81,970,397	37,688,896	33,722,339
	271,930,091	202,173,378	156,867,812
Assets classified as held for sale	-	381,665	381,665
Prepayments	7,117,566	7,224,106	6,186,462
TOTAL CURRENT ASSETS	279,047,657	209,779,149	163,435,939
TOTAL ASSETS	1,183,493,863	1,054,354,343	900,530,142
LIABILITIES & SHAREHOLDER'S EQUITY
Current Liabilities
Trade and other payables Overdraft	151,690,134 27,127,907	165,133,428 29,011,944	131,744,422 30,911,018
Current portion of lease liability	41,166,069	40,425,758	36,696,515
Current portion of long term debt	46,436,217	24,802,015	23,162,490
Current tax liabilities	5,467,450	308,391	729,572
Provisions	7,209,494	1,749,188	2,458,957
Other short term liabilities	35,230,733	56,629,297	27,578,281
Liabilities directly associated with assets	-	363,318	458,785
classified as held for sale
TOTAL CURRENT LIABILITIES	314,328,004	318,423,339	253,740,040
Long Term Debt
Lease liability	147,097,180	141,065,745	145,214,124
Other long term debt	18,119,743	22,851,746	19,253,369
Long term debt	414,696,592	345,952,241	287,013,365
TOTAL LONG-TERM LIABILITIES Deferred tax liability	579,913,515 20,345,799	509,869,732 19,162,671	451,480,858 16,436,342
TOTAL LIABILITIES	914,587,319	847,455,742	721,657,240
SHAREHOLDER'S EQUITY
Issued capital and share capital	82,027,012	81,495,470	81,495,470
Treasury shares	(666,624)	(2,699,804)	(6,056,105)
Reserves	124,211,557	108,709,302	93,906,109
Retained earnings	35,701,579	(3,356,485)	(9,994,660)
Equity attributable to owners of the Group	241,273,524	184,148,483	159,350,814
Non-controlling interests	27,633,021	22,750,118	19,522,088
TOTAL EQUITY	268,906,545	206,898,601	178,872,902
TOTAL LIABILITIES AND EQUITY	1,183,493,863	1,054,354,343	900,530,142

Non-current assets amounted to RON 904,446,206 at 31 December 2020, recording an increase of 7.1% as compared to December 31, 2019. The increase is mainly influenced by the acquisitions made in 2020.

Current assets increased by 34.5% from RON 202,173,378 at 31 December 2019 to RON 271,930,091 at 31 December 2020.

Current liabilities (excluding interest-bearing debts) increased by 22.5%, from RON 162,970,017 at 31 December 2019 to RON 199,597,812 at 31 December 2020.

Interest-bearing debt increased by 28.1%, from RON 542,250,881 as at 31 December 2019 to RON 694,643,708 at December 31, 2020. The increase is due to the financing of the acquisitions completed in 2020, as well as the adoption of IFRS 16.

5. Main Financial Indicators

Period ended at
December 31, 2020
= 0.89
Period ended at
December 31, 2020
= 216%
= 68%
Period ended at
December 31, 2020
= 36.99
Period ended at
December 31, 2020
= 1.19

6. Non-Financial Information

Overview

MedLife Group dedicates all its resources to ensure every client's professional medical services at the highest standards, based on state-of-the-art technological support, in impeccable safety and comfort conditions. The Group has been constantly developing based on the desire to meet the most demanding and complex medical services. The goal of the Group medical units is to improve the quality of life of every patient that use the Group medical services. The access to MedLife Group services is facilitated by the integrated system in place consisting in: hospital, outpatient, laboratory, pharmacy, imaging and corporate subscriptions. As a result, MedLife has become the largest private healthcare provider nationwide based on Sales figures, and is making every effort to further address the needs of patients and to ensure the quality and safety of the medical act.

MedLife offers its services through the largest team of doctors and nurses working in the private sector in Romania, with about 3,000 doctors and 2,000 nurses. The Group employs full-time specialists for the vast majority of specialties offered, but also on a limited-time basis for specialties or specific functions, or works with collaborating medical staff. In addition, given its commitment to provide quality medical services, the Group has consistently invested in medical equipment, which has helped sustain its market leadership in diagnostic imaging technology.

The Group enjoys a high level of satisfaction among patients, achieving a high score for the reputation of its brands among clients and an increasing number of patients is recommending the Group services. The company latest study reveals that MedLife is perceived as a brand that differentiates itself in particular through its openness and respect offered to its customers. The respect offered to the customer, and, at the same time, the efficacy and seriousness proved through the services makes MedLife to be perceived as a trustworthy partner that offers a sense of security.

MedLife received the title of "Most Trusted Brand" by Reader's Digest in the Private Clinics category in Romania for 6 consecutive years (2009-2015), 5 Superbrand Awards (including 2019), Qudal distinction in 2016 and 2017, and ICERTIAS certification for "Superior Excellence" after a study conducted in 2018.

The group conducts weekly patient surveys to get their opinion on the healthcare provided, and the Mystery Shopper is organized biannually at the group level.

Business Model

Med Life's concept of Hyper clinics, large scale ambulatory clinics, as well as the integration of various segments (in the Group) provides substantial potential for revenue capture. For example, an HPP client visiting a Group clinic for a preventative check-up may be advised to undertake further tests or seek further consultations not covered by the HPP. These additional services or consultations are often available within the same Hyper clinic, facilitating the client to choose the Company's services. The Company's ability to accompany the patients in many cases from prevention to diagnosis through treatment provides a continuity of treatment for the patient as well as the capture of FFS revenue for the Group. The Group's Pharmacies business line is another example of revenue capture. When a prescription is given in one of the Group's consulting rooms, patients will often use the most convenient location to fill it: a pharmacy that is

within the same building where the prescription was given. The Group's expansion into the Stomatology business line adds a further leg to this strategy. Preventative dental check-ups can be included in some Health Prevention Packages, ("HPP") which may lead patients to choose the Group for any follow-up treatment as a FFS client.

Sales largely from cash-pay and HPP with low dependency on National Health Houses ("NHIH") funding

Many private healthcare providers in Romania remain dependent for a significant portion of their sales on contracts awarded by the NHIH to service State insured patients. This increases their exposure to changes in the NHIH healthcare priorities, pricings and allocation systems. With only 10% of its sales during 2020 deriving from the treatment of NHIH insured patients, MedLife can independently determine its policies and priorities.

The largest number of HPP clients in Romania

With over 700,000 HPP subscribers as at 31 December 2020, the Group has access to a significant potential client base for its FFS activities. This base is further expanded when the HPP subscribers bring family members and provide referrals to others for the Group's FFS offering. The HPP client base also provides opportunities for up-selling as many of the HPP clients begin with basic medical services packages and gradually move to more comprehensive services.

The Group's continuous investments in new medical facilities set the basis for potential new HPP clients, as the Group's ability to service HPP subscribers in its own medical facilities is often key to the clients' purchasing decision. The market outside Bucharest remains, in the Group's view, underdeveloped for HPP and as such represents an opportunity for further growth by acquiring and integrating local and regional providers, thus expanding its footprint on a regional level and increasing its appeal to HPP clients.

Experienced management able to generate and manage activity development both by organic growth and acquisitions

The Company's track record of organic and acquisition growth is largely due to the Company's strong management team. The Company has developed systems for screening potential acquisitions, completing detailed analysis and decision making in a timely manner, and implementing, post transaction, a fast and efficient integration process. The Company has a reputation in the market as a "friendly acquirer", mainly because the targets' founder/owners are often given the opportunity to stay in the business as minority shareholders, and managers of the subsidiary. Through this approach, MedLife retains their accumulated experience and market knowledge while being able to fully integrate the acquisition into its own systems and revenue capture opportunities. Moreover, by implementing the share buy-back and exchange program of shares with minority shareholders, the Group encourages the alignment of the interests and the contribution of the founders of the subsidiaries to the integrated activity of the group.

From 2010 until December 31, 2020, MedLife has acquired 53 companies (if the representatives of the Competition Council will approve Pharmachem Distributie and CED Pharma - the last acquisitions announced by MedLife), thus gaining valuable expertise and knowledge for the Group, which will allow them to find the best method of continuous and efficient expansion.

Strategy and results

MedLife strategy focuses on maintaining leadership position. MedLife Group seeks to expand its portfolio of units and services, ensuring profitable national coverage to meet the needs of existing and new customers of the Group. At the same time, the Group remains committed to providing clients with safe and quality medical treatments, ensuring a balance between the medical risks and opportunities and the commercial objectives of the Group. Therefore, at the end of 2020, MedLife network include 22 hyper clinics, 53 clinics, 10 hospitals, 33 laboratories, 12 dental clinics and 14 pharmacies, MedLife being the only healthcare provider with large clinics with presence in all cities with over 150,000 inhabitants.

The Group is pursuing opportunities to capture additional revenues and achieve synergies within its current networks and services. The Group aims to achieve this goal through organic growth and the acquisition of smaller providers of medical services on the market. As a result of this strategy, over the past three years, the MedLife Group has been characterized by significant increases in Sales from one reporting period to the next.

Organic growth

During the period 2014 – December 2020, the Company opened a number of new clinics and other facilities, particularly sampling points for its Laboratories business line. Many of these facilities are believed to still have the capacity to service greater numbers of patients, which should allow for the increase in their revenue and profit contribution, as they reach fuller utilization. Further, the Company and the Group continue to optimize the range of services offered at its other facilities to the specific local market conditions, seeking to improve the revenue and margins of each location. As a result, the constant and accelerated ramp-up of these facilities is expected to improve margins as well as deliver further sales growth.

People and resources

The Company services patients through the largest private pool of doctors and nurses in Romania. As of December 31, 2020, the Group, on an overall level, was collaborating with a number of approximately 3,000 physicians and 2,000 qualified nurses across its business lines, including both employees working exclusively for the Group and collaborators, providing services as independent professionals. In addition, more than 1,700 full time employees were working in support and administrative functions as of December 31, 2020.

The Group's objective is that its medical staff be formed exclusively of full-time employees, even if certain specialties and functions either do not justify full-time engagements or such personnel are not available. In these circumstances, the Group enters into part-time employment or collaboration arrangements with the respective staff. The type of contractual arrangement between the Group and its medical staff depends on various criteria, such as the professional context or the time that the medical staff can allocate to services provided to the Group. Medical staff under services agreements are seen by the Group as commercial partners, providing services to the Group as independent contractors, in compliance with the applicable legislation.

The Group seeks to provide adequate compensation and incentives to physicians and other medical staff in exchange for quality medical care and commitments to promote the MedLife Group business model. The usual compensation package offered by the Group to its employees includes fixed remuneration, to which a variable remuneration is added, determined based on a revenue sharing mechanism connected to appointment and consulting activity. Collaborators are compensated based on their appointment and consulting activity.

Collaborators are rewarded according to their number of appointments and consultations. The Group does not operate retirement plans or long-term benefit plans.

The Group invests in human resources programs such as the Life Academy, Good Practice - Nurses School, the Medlife National Conference. These training programs are designed to ensure the professional continuation of its employees, both those in support and administrative staff, as well as those in the medical setting.

As for the relationship with colleagues, the Group provides a safe working environment in which employees are treated fairly and with respect, and the differences between employees are accepted. The Group is committed to providing colleagues with the opportunity to excel and reach their full potential and reward them on a merit basis.

The Group does not tolerate any discrimination, intimidation or harassment of colleagues or between them. The Group encourages clear and open communication with and between colleagues. They can and must promptly express any concerns about any unethical or illegal behaviour by presenting these concerns to the human resources department within the Group. The Group undertakes to investigate such concerns brought to good faith, maintaining the confidentiality of these steps.

Quality Standards

MedLife has implemented the following standards for Quality, Environment and Occupational Health & Safety management systems:

• ISO 9001:2015 (Quality Assessment) through which the organization demonstrates that it has identified the risks and acts to eliminate or limit their effects, which may have a negative impact on the quality management system's ability to achieve the desired results, and a negative impact on customer satisfaction.
• ISO 14001:2015 (Environmental Management System) Implementation of this standard ensures management of the company and its employees as well as external stakeholders (shareholders, investors, institutions, authorities) that the organization's environmental impact is measured and constantly improved.
• OHSAS 18001:2007 (Occupational health & safety management system) represents a working model for the organizations that intend to have a better control over the professional risks.

All of the Group's laboratory facilities are accredited by the Romanian Accreditation Association with ISO 15189 for Quality management.

Health, Safety, Security and Environment

The Group is subjected, and complies with Romanian laws and regulations related to health, safety, security and environment matters. These laws and regulations refer, among other things, to management and disposal of hazardous substances and medical waste, exposure to hazardous materials and protection of health and safety of employees. The Group is required to obtain environmental permits, licenses and authorizations and provide notification to local authorities prior to opening new administrative and medical units.

As of December 31, 2020, the Group is in various stages of procedures for obtaining or updating its fire prevention authorizations for certain of its medical units and other premises. The completion of these procedures is subject to various requirements, such as the performance of certain works and upgrades to the Group's facilities. The Group regards the amounts of the required investments as being immaterial; however, the completion of the necessary works and upgrades is subject to, in certain cases, additional authorizations and clearances, or other procedures in which the Group has engaged. As at December 31, 2020, the Company does not have all fire prevention authorizations in place.

Equipment and Technology

The Group purchases medical equipment to ensure professionally qualified to the highest standards medical services to every client. These devices include, but are not limited to: optical coherence tomography systems, magnetic resonance imaging equipment, computerized tomography equipment, bone density measuring instruments, imaging and identification systems used in dermatoscopy, measurement equipment hepatic rigidity, laser, vacuum systems to reduce fat deposits by cryolysis (LipoCryo), video capsule endoscopy systems.

Medlife laboratories also feature state-of-the-art equipment such as the Abbot Accelerator A3600 automatic line placed in MedLife Grivita laboratory, the first in Romania and in Eastern Europe. Significantly contributes to increasing the accuracy of analyses, reducing execution time, and better traceability and tracking of each patient's samples.

With these equipment and technologies used by MedLife doctors, several surgical interventions have been successfully completed, becoming even a medical premiere in Romania.

Information Technology

The Group relies on international providers for its IT hardware infrastructure. With regards to communication between the Group's various locations, the Group uses a virtual private network, which ensures effectiveness, security and privacy of communications.

The Group has also implemented a robust IT infrastructure within all its hospitals, which covers admission and surgery appointments, medical procedures, patient check-in and check-out, medical supplies and consumables management, billing on a per-customer basis and generating general management reports.

The Laboratories business line has been equipped with software to manage the lab test processes including the management of samples, patient records, barcode labelling and automated procedures for final results.

Principles for respecting human rights

The group is committed to properly treat patients, competitors and providers. All colleagues must always act with integrity and honesty, continuously protecting the Group's reputation when dealing with patients, competitors and suppliers.

The Group seeks to create and maintain mutually beneficial relationships with its patients by promoting a climate of trust and transparency doubled by innovation and good medical practice. The Group ensures that all suppliers are selected and contracted based on merit and objective business standards so as to avoid real or perceived favouritism.

The Group is adept of a free and fair competition and has no dealings with its competitors. The Group respects all laws and regulations in its field of activity, along with industry standards and internationally accepted practice.

Anti-Bribery and Anti-Corruption principles

In accordance with the Articles of Incorporation, all payments made by MedLife to public authorities, in the jurisdictions in which MedLife is operating, are in comply with all applicable legal provisions and are made exclusively for the purp0ose of ensuring the execution of routine governmental action.

The group has a zero tolerance policy regarding bribery and corruption. Group Policy prohibits promising, offering or paying bribes, as well as requesting, accepting or receiving bribes.

The Group also forbids colleagues to accept gifts, hospitality, or gifts that are intended to influence business decisions.

Corporate Social Responsibility

Medlife values include:

Responsibility: The Medlife Group guides its actions according to what is important to people's lives and health;

Professionalism: The Medlife Group reunites for 3,000 doctors, professors, lecturers, doctors in medicine who work day by day with dedication and professionalism;

• Innovation: The Medlife Group has a constant concern about methods, technology and organization that will result in better and more effective medical solutions;
• Care and respect: Every patient is important and respected, and everyone's needs are treated with care and attention.

More technological advances have allowed medicine to evolve to minimally invasive techniques that expose patients to low risks and allow for a faster recovery period. In developed countries, it is common practice for many years: patients to be able to go home without requiring over-night hospitalization. In 2005, MedLife was the first to introduce this concept to the Romanian market. MedLife has created space in hospitals and hyper clinics, where patients can benefit from minimally invasive techniques.

MedLife concept "We Make Romania Well" started with the desire to bring good in Romania in as many forms, not just in health and in the medical system. Thus, Medlife Group has developed and supported a number of projects, events and ideas for the well-being of employees or healthcare professionals at the beginning. The Group also organized or participated in medical events where doctors from the country or from abroad had the opportunity to share new knowledge, technologies or procedures.

InfoLine magazine

The InfoLine magazine supports Medlife Group's patients with information and articles about common illnesses, new technologies implemented in the Group's units, new perspectives and interviews with medical staff.

Blood donation campaign

MedLife has launched a national blood donation program to support blood transfusion centres and promote this behaviour in Romanian society. Started 6 years ago, the program runs in the largest cities in the country.

Pro-bono cases

Medlife's commitment remains to treat and help patients in need of interventions, regardless of the environment they come from or their financial situation. Whether it's light or serious, MedLife doctors handle cases brought by humanitarian foundations or identified cases by the Group's employees.

The MedLive platform

In order to reduce the phenomenon of self-diagnosis and auto-medication and to encourage correct information, directly from the doctor, MedLife launched the MedLive.ro online platform. The MedLive platform is an education platform for MedLife patients as well as for doctors or medical students. In the eight years since the platform was launched, users were able not only to keep up-to-date with the latest news about prevention or maintenance of a healthy lifestyle, but also to interact directly with MedLife doctors.

Good for the Environment - The Green Project for Romania

The Green project, together with every action taken by MedLife, is the essence of the brand. And this time, besides respecting the promise of a quality medical act and excellence proven to every patient, the campaign is MedLife's desire to get even more involved in the future of new generations.

Therefore, the project requires that for each child born in MedLife's maternity clinics, the company plans to plant a tree in a deforested area of the Fagaras Mountains through the FCC (Conservation Carpathia Foundation).

Results for 2019 include 2 stages of afforestation, dozens of Medlife employees and volunteers involved, 40,000 seedlings planted.

Also, for the environment, Medlife Group has created a set of good rules that all Medlife employees apply, such as: reducing electricity consumption; selective collection - paper, plastic, electronic, waste; reducing water consumption.

7. Corporate Governance

The corporate governance statement

MedLife and its board members comply with the corporate governance regime established by the Companies Law with the following exceptions:

• Because some members of the Board of Directors and some executive managers hold various positions in the administration, management or control bodies in the subsidiaries of the Group, any lending by the Group to such subsidiaries can be considered a loan by the Group to its directors which is prohibited under the Companies Law;
• Because some members of the Board of Directors and some executive managers hold various positions in the administration, management or control bodies in the subsidiaries of the Group and other positions within the Group (e.g. executive managers, legal advisors, employees) there is the possibility of occurrence of conflicts of interests.

7.1. Shareholding structure

Legal entities 71,455,241 53.78% 17,863,810 Marcu Mihail 21,557,520 16.22% 5,389,380 C ristescu Mihaela Gabriela 18,660,690 14.04% 4,665,173 Marcu Nicolae 14,204,400 10.69% 3,551,100 Others 6,992,641 5.26% 1,748,160 TOTAL 132,870,492 100.00% 33,217,623	Number of % Value shares	7.1. Shareholding structure
As of December 31, 2020 the shareholders' structure of Med Life SA is as presented below:
Declaration on Compliance with the Corporate Governance Code.
on the official website of the BSE (www.bvb.ro).
MedLife SA has adhered to the Corporate Governance Code of the Bucharest Stock Exchange considering the quality of the issuer on the capital market. The Corporate Governance Code of the BVB can be found The Med Life SA website also includes the following policies and procedures: Organization and Deployment Policy for General Shareholders' Meetings, Code of Ethics and Conduct, Social Responsibility Code, Forecasting Policy and Corporate Governance Statute, documents to which reference is made in the
procedures in place. The responsibility has been translated by the Board of Directors to the management team specific for each department in place: HR and Administrative.
The Group monitors environment, social and human resources policies through its corporate governance		the Bucharest Stock Exchange.
has entered into force and is applicable to all issuers of securities traded on the regulated spot market of
Starting with January 4, 2016, a new corporate governance code issued by the Bucharest Stock Exchange

7.2 Company Management

MedLife is managed in a unitary system by the Board of Directors consisting of 7 members appointed by the Ordinary General Meeting of Shareholders for a four-year term with the possibility of being re-elected. Out of 7 members of the Medlife Board of Directors, 3 members are independent members. The Board of Directors is responsible for MedLife's management, acting in the interest of society and protecting the interests of its shareholders by ensuring a sustainable development of the company. According to the Articles of Incorporation, the Board of Directors is responsible for all necessary and necessary acts in order to fulfil the MedLife object of activity, including the management of MedLife subsidiaries or investments, except for the attributions attributable to the General Meeting of Shareholders by law.

MedLife Board of Directors

As at the date of December 31, 2020, the Board of Directors consists of the following members:

Name	Date of Birth	Title
Mihail Marcu	30.09.1970	Member and Chairman of the
		Board of Directors, CEO
Ana Maria Mihaescu	29.07.1955	Member of the Board of Directors
		- independent member
Dimitrie Pelinescu-Onciul	11.08.1947	Member of the Board of Directors
Dorin Preda	03.04.1976	Member of the Board of Directors

Nicolae Marcu	26.10.1968	Member of the Board of Directors
Voicu Cheta	13.08.1981	Member of the Board of Directors - independent member
Ovidiu Fer	31.12.1983	Member of the Board of Directors - independent member

Mihail Marcu (1970) – Member and Chairman of the Board of Directors, Chief Executive Officer

Mihail Marcu has been the Chairman of the Board of Directors of MedLife since August 2006 and Chief Executive Officer since December 2016. Mihail Marcu is a graduate of Bucharest University, the Mathematics and Computer Science Faculty (1995), and has further graduated other post-graduate and advanced training courses delivered by the Romanian Banking Institute, the Open University, DC Gardner training or Codecs, both in Romania, and abroad. Prior to his position as a member of the Board of Directors of MedLife, Mihail Marcu was the Chief Executive Officer of MedLife between January 2004 and August 2006; before that, he held the office of Vice-Chairman of RoBank S.A. (currently, OTP Bank Romania S.A.), being authorised in this capacity by the National Bank of Romania. Earlier, Mihail Marcu held various positions in Credit Bank Romania S.A. and RoBank S.A., including credit inspector, head of credit unit, manager of the credit department, and manager of the corporate department.

Ana Maria Mihăescu (1955) – Independent Member of the Board of Directors

Ana Maria Mihăescu has been a member of the Board of Directors of MedLife since September 2017. In the last 20 years, Ana Maria Mihăescu has led the mission of the International Finance Corporation of Romania, a World Bank's Division and the largest private sector lender in emerging countries. Between 2011 and 2016, Ana Maria Mihăescu had a decision-making role regarding the IFC projects in several European countries, including Romania. Previously, she held top management positions in the banking sector. Since 2016, she has been a member of the Raiffeisen Bank's Supervisory Board, serving as an independent member for a four-year term.

Dimitrie Pelinescu-Onciul (1947) - Member of the Board of Directors

Dimitrie Pelinescu-Onciul has been a member of the Board of Directors of MedLife since 2008. He is a graduate of the Carol Davila Medicine and Pharmacy University of Bucharest, Faculty of Medicine (1972), specialising in obstetrics and gynecology (residency 1978-1981), and became Doctor in Medical Sciences in 1994. Dimitrie Pelinescu-Onciul is a member of 11 Romanian scientific societies in Romania and of 7 scientific societies abroad, and held among other the office of President of the Romanian Perinatal Medicine Association (2006-2008). Before joining the MedLife team in 2004, Dimitrie Pelinescu-Onciul used to work for Filantropia Clinical Hospital of Bucharest (1994-2004), Titan Clinical Hospital of Bucharest (1986-1991), Brâncovenesc Clinical Hospital (1978-1981), and Sinești Rural Hospital, Vâlcea County (1972-1978), as primary care physician, obstetrics and gynecology, head of clinics or hospital director.

Dorin Preda (1976) – Member of the Board of Directors; Chief Finance and Treasury

Dorin Preda has been a member of the Board of Directors of MedLife since 2008. He is a graduate of the Academy of Economic Studies of Bucharest, Faculty of Finance, Insurance, Banks and Stock Exchanges (1998). Before joining the MedLife team, Dorin Preda was the Chief Executive Officer (CEO) of Asilife Insurance Broker S.R.L. (2007-2008), Branch Manager of HVB –Țiriac Bank S.A. (2006-2007), HVB Bank S.A. (2005-2006), Banca Comerciala Ion Țiriac (2004-2005) and Banca Comerciala RoBank S.A. (2003- 2004). Similarly, he used to hold the positions of Manager of Loans and Marketing Department of Banca Comerciala RoBank S.A. (2001-2002), credit analyst with the same bank (2000-2001), and Manager of the Loans Department of Banca Dacia Felix S.A. (1999-2000).

Nicolae Marcu (1968) – Member of the Board of Directors, Chief Healthcare and Operations Officer

Nicolae Marcu has been a member of the Board of Directors of MedLife and Chief Healthcare and Operations Officer since December 2016. Nicolae Marcu is a graduate of Carol Davila Medicine and Pharmacy University of Bucharest, Faculty of Medicine (1996), and has been a doctoral student in psychiatry since 2000. Nicolae Marcu graduated a number of postgraduate studies in psychiatry in the country and abroad. Prior to his position as a member of the Board of Directors of MedLife, Nicolae Marcu was the Chief Executive Officer of MedLife between August 2006 and December 2016, and prior to joining the MedLife team, Nicolae Marcu was a specialised physician in psychiatry with "Dr. Al Obregia" Psychiatric Hospital.

Voicu Cheța (1981) - Independent Member of the Board of Directors

Voicu Cheța has been a member of the Board of Directors of MedLife since December 2020. He is a lawyer in the Bucharest Bar with over 15 years of legal experience. His specialized practice covers various fields such as high value commercial litigation, commercial arbitration, insolvency and restructuring, labor relations, public procurement, administrative litigation, debt recovery and company law. In the field of legal advice and representation before the courts and arbitral tribunals, he has acquired an overview and proven skills to approach commercial legal relations in a way that ensures their correlation with the needs of economic activity.

Ovidiu Fer (1983) - Independent Member of the Board of Directors

Ovidiu Fer is a member of the Board of Directors of MedLife since December 2020. He is a graduate of the Academy of Economic Studies in Bucharest, Faculty of Finance, Insurance, Banking and Stock Exchanges (2006) and holds an MBA from INSEAD (2014). Starting with 2016, Ovidiu Fer founded the Alpha Quest Regional Investment Fund, as a founding member and is also a member of the Advisory Board of the GapMinder VC Fund (since 2018). Previously, he was a member of the Investment Committee of the IJC Funds (2014-2016) and held the position of external advisor to Elliott Advisors (2013-2014). He also held the position of capital analyst, border market expert and country manager at Wood & Company, in the period 2007-2013 and was a financial analyst for KTD Invest (2005-2007).

Executive Commitee

The Executive Committee is headed by Mr. Mihail Marcu, member of the Board of Directors and General Manager, Nicolae Marcu, Member of the Board of Directors and Director of Health and Operations, Dorin Preda, member of the Board of Directors and responsible for Finance and Treasury. Under the guidance of the above-mentioned key managers, there is a group of executive managers, many of whom have a solid experience within the Group, which manages functions, business lines and headquarters. These professionals have a significant degree of independence and freedom in implementing the budgets established for units and business lines. The composition of the Executive Committee is detailed below:

Name	Title
Mihail Marcu	Chief Executive Officer (CEO)
Nicolae Marcu	Chief Healthcare and Operations Officer
Dorin Preda	Chief Finance and Treasury
Adrian Lungu	Chief Financial Officer
Radu Petrescu	HR Director
Geanina Durigu	Laboratory Director
Mariana Brates	Purchasing Director
Larisa Chirirac	Medical Director
Vera Firu	Accounting and Tax Director
Mirela Dogaru	Corporate and Marketing Director

7.3 Audit Committee

The audit committee has three members:

Name	Date of Birth	Title
Ana Maria Mihaescu	29.07.1955	Member of the Board of Directors
		- independent member
Voicu Cheta	13.08.1981	Member of the Board of Directors
		- independent member
Ovidiu Fer	31.12.1983	Member of the Board of Directors
		- independent member

The Audit Committee has mainly, the following tasks:

• to examine and review the annual financial statements and the profit distribution proposal;
• to carry out annual assessments of the internal control system;
• to evaluate the effectiveness of the internal control system and risk management system;
• to monitor the application of generally accepted legal standards and standards;

• to assess conflicts of interest in affiliated party transactions;

• to analyze and review transactions with affiliated parties that exceed or may be expected to exceed 5% of the net assets of the company in the previous financial year;

• to make CA recommendations.

7.4 Internal Control – Internal Audit function

MedLife established a system of internal control throughout the Group. Internal control is an activity of objective and independent evaluation with consultative purpose performed in order to increase value added and improving the activity of the Group.

Internal control helps the group achieve the objectives set by systematic and disciplined approach, whose goal is to appreciate and improve the efficiency of risk management, control systems and general management.

The objectives of internal control and internal audit are:

• Assessment and evaluation of the accuracy of realized tasks;
• Evaluation of conformity with internal procedures;
• Detection of cases with lack of economic spirit, waste, abuses and other irregularities indicating the persons/ posts responsible for them;
• Presentation to the Board of Directors of objective information from areas covered by internal control and of recommendations in order to eliminate identified issues and follow-up
• Rendering of services in terms of assessments, evaluations, recommendations for the Board of Directors

The Group's internal control checked: compliance with the laws in force; application of the decisions made by the management; good operation of the internal activity; efficient use of resources; prevention and control of the risk of failing to reach the goals set; ensuring an accounting management and financial monitoring of the Group's activities.

Internal control is applicable:

• prior to conducting the operations, upon the preparation of the budget, which would allow subsequently to conducting the operations, the budget control;
• during the operations and after their completion, a case where it is analysed the profitability of the operations and it is ascertained the existence of the conformity or possible irregularities, which need to be adjusted.

7.5 Nomination Committee

The nomination committee consists of the following members:

• 1. Ana Maria Mihaescu, Independent Non-Executive Administrator
• 1. Voicu Cheta, Independent Non-Executive Administrator
• 1. Dimitrie Pelinescu-Onciul, Non-Executive Administrator

The nomination committee has the following responsibilies:

• To approve a description of the role and eligibility conditions required for a specific position in the CA or the Executive Committee;
• To identify candidates for position in the Board of Directors, if the case / to make
• recommendations regarding the proposal of candidates for appointment to the Board of Directors;

At the moment, the Company does not have a remuneration policy in force. However, the amount of the remuneration of the members of the Board of Directors of the Company, as well as the members of the Executive Committee, is published on the company's website and is subject to the approval of the Annual General Shareholders' Meeting. The development of a remuneration policy is currently being considered.

Thus, the following tasks will be assigned to the nomination committee:

• To ensure an adequate remuneration policy, compatible with Group's strategy and long-term interests; - To ensure the publication of the direct and indirect remuneration of the board of directors and executive directors in the annual report, distinguishing between the fixed and variable components of the remuneration.

8. Risk exposures

Capital risk

The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of debt, which includes borrowings from bank and IFC and also financial leasing, cash and cash equivalents and equity, comprising issued capital, reserves and retained earnings.

The Group's risk management reviews the capital structure regularly. As a part of this review, the management considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the management, the Group will balance its overall capital structure through the

payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

Financial risk management objectives

The Group's Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Market risk

The Group's activities expose it primarily to foreign exchange rate risks. There were no changes in the Group's exposure to market risks or the way they manage and assess their risk.

Foreign exchange rate risk

The Group operates and carries out transactions denominated in various currencies. The management analyses the exposure to currency risk and takes the necessary measures to protect itself.

Interest rate risk

The management of the Group analyses the financial costs of borrowing from banks and financial leasing and takes the necessary measures to protect itself against interest rate risk.

Credit risk

The financial assets that might expose the Group to a credit risk concentration mainly consist of receivables (trade receivables and similar receivables). Given the large number of clients of the Group, credit risk is rather limited.

The Group has also developed certain procedures to assess legal entities as customers prior to signing contracts, aimed at providing preventive and prophylactic health care packages (PPMs) and monitoring their ability to meet the payments during the course of contracts.

Liquidity risk/ cash flow risk

The Group's policy is to maintain sufficient liquidities to pay for its obligations when such become due.

The ultimate responsibility for liquidity risk management rests with the Board of Directors, which has set up an appropriate liquidity risk management framework to manage short, medium and long-term funding requirements and liquidity management.

The Group manages liquidity risk by maintaining reserves, continuously monitoring the estimated and effective cash flows and reconciling the maturities of financial assets and liabilities.

Fiscal environment

The taxation system in Romania is still developing and is subject to various interpretations and constant changes, which may sometimes be retroactive. Although the actual tax due for a transaction may be minimum, delay interests may be significant, as they can be calculated at the value of the transaction and at a rate of 0.02% per day (interest) and 0.01% (penalties) per day.

In Romania the statute of limitation for tax controls (audits) is of 5 years. Management believes that the tax obligations included in these financial statements are adequate.

Transfer pricing

The fiscal legislation from Romania includes the "market value" principle, according to which the transactions between related parties have to be performed at the market value. The local tax payers, who carry transactions with related parties, have to prepare and make available to the tax authorities from Romania, at their written request, the transfer pricing documentation file. If the companies do not prepare the documentation or they present an incomplete transfer pricing file may attract penalties for nonconformity, and additionally to the information presented in the transfer pricing file, the fiscal authorities may have a different interpretation of the transactions and the circumstances compared to the management's assessment and, as a result, they may impose additional fiscal obligations as a result of adjusting transfer prices. The management of the Group is confident that, if required, they will submit the necessary information in due time to the fiscal authorities. The transactions with related parties and group companies are performed based on the market value principle.

Litigation

The Group is involved in various litigations as part of normal course of business. Management has assessed the legal status together with the Group's legal advisors and all necessary adjustments have been recorded in the consolidated financial statements.

9. Subsequent events

Actions implemented to prevent and limit the spread of COVID-19

The MedLife Medical System, the largest operator of medical services in Romania, has implemented, from the first alert day on limiting the spread of SARS-CoV-2 (Coronavirus) virus in Romania, a series of prevention and protection measures for patients. and to the medical and auxiliary staff, focusing on preventing factors that could represent a danger of infection for all those in the medical units.

In all MedLife units, the methodology of surveillance of the acute respiratory system was implemented, and at the moment, the company ensures a good continuity of the medical activity. Epidemiological triage of patients through call-centers and medical teams, special circuits for patients with acute respiratory pathology, adaptation of consultation intervals to increase patient safety (allocating time needed to disinfect spaces after interaction with each patient), creating special spaces for isolating cases suspected of infectious diseases, the provision of protective equipment and disinfectant products, but also the development of complex procedures of cleaning, disinfection and nebulization are only part of the important measures that have been taken and that the special medical teams follow and manage them properly.

Regarding the operational segment, the administrative and support staff, the MedLife Medical System has implemented a Continuity of Activity Plan, the safety of the employees being a priority. The measures consist in dividing the key employees into two teams and avoiding physical interaction between them, but also the remote activity, both ensuring a good continuity of the company's activity. Also, all the events scheduled at the group level in the following period were suspended, and they will revert to them when exposure in the public space will no longer represent a risk to human health.

The MedLife Medical System actively monitors the economic situation in Romania and the possible negative implications on its current operations, at present, there are reductions in the activity determined by the social distance measures, imposed by the public authorities as measures to limit the spread of the SARS-CoV-2 virus. (Coronavirus). Despite the diminished activity, the company has taken all necessary measures to maintain good continuity of medical activity in all MedLife clinics and hospitals, taking priority over medical staff and colleagues in the front line and studying the compensation of these turbulences by reducing the short-term overhead costs.

The priority of the MedLife Medical System remains the health of patients and employees, fully respecting the decisions of the local authorities.

The Company assessed the impact of the Coronavirus pandemic over its business and concluded that the financial statements will not be significantly affected by this event. Even though, we currently can't properly evaluate the consequences of this pandemic considering the dynamics in the evolution, the Company doesn't expect a major impact on its activity in the future based on information available to the management at the date of this report.

Greenfield acquisition and investment plans

MedLife Medical System announces its intention to increase its existing facilities by 40 million euros by signing a syndicated loan, the discussions being already advanced with the banks. Depending on the opportunities, other important liquidities of the company will be added to this increase, as appropriate. The bank union that would sign the new loan consists of Banca Comercială Română, as coordinator, main arranger, documentation agent, facility and guarantee agent and financier, BRD Groupe Société Générale, Banca Transilvania and Raiffeisen Bank, as of main arrangers and funders.

The new funds will be dedicated to consolidating and expanding the group nationwide, by developing medical units such as MedPark, where the patient benefits from a 360-degree approach both in terms of the complexity of the medical act and the quality of adjacent services. Major emphasis will be placed on the development of programs and projects in a pandemic context, projects related to prevention, oncology and medical radiotherapy, technology and digitization, the main objective being the needs of the patient caring for his health and wanting to solve his needs efficiently, quickly and safely. According to company representatives, the amount is not intended to complete ongoing acquisitions for which MedLife has sufficient liquidity. At the same time, the company aims to continue the research efforts, and even to intensify them through new investments in the new year.

Administrators

Deloitte Audit S.R.L. Clădirea The Mark Tower, Calea Griviței nr. 82-98, Sector 1, 010735 București, România

Tel: +40 21 222 16 61 Fax: +40 21 222 16 60 www.deloitte.ro

INDEPENDENT AUDITOR'S REPORT

To the Shareholders, Med Life S.A.

Report on the Audit of the Individual Financial Statements

Opinion

• 1. We have audited the individual financial statements of Med Life S.A. ("the Company"), with registered office in 365, Calea Grivitei, District 1, Bucharest, identified by unique tax registration code 8422035, which comprise the individual statement of financial position as at December 31,2020, and the individual statement of comprehensive income, individual statement of changes in equity and individual statement of cash flows for the year then ended, including a summary of significant accounting policies and notes to the individual financial statements.
• 1. The individual financial statements as at December 31, 2020 are identified as follows:

•	Net assets		RON 207,077,279
•	Net profit for the financial year	RON	41,842,280

1. In our opinion, the accompanying individual financial statements present fairly, in all material respects, the individual financial position of the Company as at December 31, 2020, and its individual financial performance and its individual cash flows for the year then ended in accordance with Order 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU.

Basis for Opinion

1. We conducted our audit in accordance with International Standards on Auditing (ISAs), Regulation (EU) No. 537/2014 of the European Parliament and the Council (forth named "the Regulation") and Law 162/2017 ("the Law"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), in accordance with ethical requirements relevant for the audit of the financial statements in Romania including the Regulation and the Law and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

1. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the individual financial statements of the current period. These matters were addressed in the context of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Numele Deloitte se referă la organizația Deloitte Touche Tohmatsu Limited, o companie cu răspundere limitată din Marea Britanie, la firmele membre ale acesteia, în cadrul căreia fiecare firmă membră este o persoană juridică independentă. Pentru o descriere amănunțită a structurii legale a Deloitte Touche Tohmatsu Limited și a firmelor membre, vă rugăm să accesați www.deloitte.com/ro/despre.

KEY AUDIT MATTER	How our audit addressed the key audit matter
Recognition of leases under IFRS 16
The Company has adopted IFRS 16 as of January 1st, 2019. On adoption date, the impact lead to an increase in total assets of RON 91.4 million and an increase in total liabilities of RON 91.4 million for the opening balance sheet.	In responding to the key audit matter identified we have assessed the following: • we have obtained an understanding of relevant controls over the identification of new leases, the underlying lease data and subsequent modifications;
The current period is the second financial year in which the Company has applied IFRS 16. The Company has identified during the current year errors in respect of management estimates applied in the adoption of IFRS 16, starting January 1, 2019. As a result it has restated previously reported financial	• we have verified the accuracy of the underlying lease data by agreeing a sample of leases to supporting information made available by the Company including leases modification; •
information in relation to measurement under IFRS 16. Further information is set out in Note 3.6 and Note 13 to the individual financial statements.	we have evaluated the completeness of lease contracts by testing the reconciliation to the Company's operating lease commitments and by analysing the most significant service contracts to assess whether they contained a lease under IFRS 16;
In accounting for IFRS 16 the management of the Company has applied significant judgments and management estimates for determining: • lease term applied to its identified lease	• we have verified the mathematical accuracy of the IFRS 16 calculations for a sample of leases through recalculation of the right–of–use assets, lease liability, depreciation charge and finance cost. Where lease modification took place, we have evaluated the impact triggered;
agreements; • the discount rate to be applied in measurement of right–of–use assets and lease liabilities;	• we have evaluated the judgment applied by the Company in estimating the discount rate used for the measurement of right–of–use asset, lease liability;
• the application of exemptions and practical expedients for similar type of contracts characteristics to be accounted on a portfolio basis;	• we have analysed the information used by the Company in accounting for IFRS 16 in the individual financial statements elements on a portfolio basis, applied in cases where lease contracts with similar characteristics have been identified;
• lease modifications; • measurement in a consistent manner of rent concessions received during the financial year as a result of COVID-19;	• we have assessed the material implications of COVID 19 applicable to the Company in accounting for IFRS 16, in particular lease incentives and impairment triggers; • we have evaluated the key elements analysed by the
• subsequent measurement of key elements from lease contracts which influence the valuation of the right-of-use asset and lease liability.	Company, based on which restatement for previous reported financial period was performed, presentation of these elements in the statement of financial position in accordance with IAS 1 "Presentation of Financial Statements" and key disclosures required by IAS 8 "Accounting policies, Changes in accounting estimates
We have defined the recognition of leases under IFRS 16 as a key audit matter owing to the significant effort required in auditing the various significant management assumptions, judgements and estimates applied, as presented above, in particular subsequent assessment over lease contracts key	and Errors". We have also evaluated the material disclosures presented in the notes to the individual financial statements as required by IFRS 16.

elements which impacts the measurement of right–

of–use assets and lease liabilities.

Other information- Individual Administrator's Report

1. The administrators are responsible for the preparation and presentation of the other information. The other information comprises the individual Administrators' report, but does not include the individual financial statements and our auditor's report thereon.

Our opinion on the individual financial statements does not cover the other information and, unless otherwise explicitly mentioned in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the individual financial statements for the year ended December 31, 2020, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the individual financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

With respect to the Administrator's report, we read it and report if this has been prepared, in all material respects, in accordance with the provisions of Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU.

On the sole basis of the procedures performed within the audit of the individual financial statements, in our opinion:

• a) the information included in the administrators' report for the financial year for which the individual financial statements have been prepared is consistent, in all material respects, with these individual financial statements;
• b) the individual administrators' report has been prepared, in all material respects, in accordance with the provisions of Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU;

Moreover, based on our knowledge and understanding concerning the Company and its environment gained during the audit on the individual financial statements prepared as at December 31, 2020, we are required to report if we have identified a material misstatement of this individual Administrator's report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Individual Financial Statements

• 1. Management is responsible for the preparation and fair presentation of the individual financial statements in accordance with Order 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
• 1. In preparing the individual financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
• 1. Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Individual Financial Statements

1. Our objectives are to obtain reasonable assurance about whether the individual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these individual financial statements.

2. 1. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
   2. Identify and assess the risks of material misstatement of the individual financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
   3. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
   4. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
   5. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the individual financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
   6. Evaluate the overall presentation, structure and content of the individual financial statements, including the disclosures, and whether the individual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
3. 1. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
4. 1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
5. 1. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the individual financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. We have been appointed by the General Assembly of Shareholders on 22 April 2019 to audit the individual financial statements of Med Life S.A. for the financial year ended December 31, 2020. The uninterrupted total duration of our commitment is 12 years, covering the financial years ended 31 December 2009 until 31 December 2020.

We confirm that:

• Our audit opinion is consistent with the additional report submitted to the Audit Committee of the Company that we issued the same date we issued this report. Also, in conducting our audit, we have retained our independence from the audited entity.
• No non-audit services referred to in Article 5 (1) of EU Regulation No. 537 / 2014 were provided.

The engagement partner on the audit resulting in this independent auditor's report is Irina Dobre.

Irina Dobre, Audit Partner

For signature, please refer to the original Romanian version.

Registered in the Electronic Public Register of Financial Auditors and Audit Firms under AF 3344

On behalf of:

DELOITTE AUDIT SRL

Registered in the Electronic Public Register of Financial Auditors and Audit Firms under FA 25

The Mark Building, 84-98 and 100-102 Calea Griviței, 8th Floor and 9th Floor, District 1 Bucharest, Romania 13 April 2021

MED LIFE S.A.

INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020

PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY EUROPEAN UNION ("IFRS")

(TOGETHER WITH INDEPENDENT AUDITOR'S REPORT AND ADMINISTRATORS' REPORT)

CONTENTS: PAGE:

INDIVIDUAL STATEMENT OF FINANCIAL POSITION	2
INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME	3
INDIVIDUAL STATEMENT OF CASH FLOWS	4
INDIVIDUAL STATEMENT OF CHANGES IN EQUITY	5 – 6
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS	7 – 56
ADMINISTRATORS' REPORT	1 – 22

MED LIFE S.A. INDIVIDUAL STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

		MED LIFE S.A.
	INDIVIDUAL STATEMENT OF FINANCIAL POSITION
	FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
		December 31,	December 31,	January 1,
	Note	2020	2019	2019
			*restated	*restated
ASSETS
NON CURRENT ASSETS
Intangible assets	5	10,675,893	11,739,823	7,701,244
Tangible assets Right-of-use assets	5 12	244,998,068 71,462,302	203,527,953 79,723,850	183,020,161 91,387,056
Financial assets	4	237,335,288	234,220,734	148,383,413
TOTAL NON-CURRENT ASSETS		564,471,551	529,212,360	430,491,875
Current Assets Inventories	6	13,224,013	6,887,412	6,533,910
Trade and other receivables	7	89,382,165	57,944,885	47,146,208
Receivables with group companies	21	95,020,068	84,409,169	74,915,161
Other receivables		11,780,770	13,782,629	3,944,995
Cash and cash equivalents	8	33,735,446	11,657,432	21,274,743
		243,142,462	174,681,527	153,815,017
Prepayments	9	1,325,662	2,793,639	2,204,277
TOTAL CURRENT ASSETS		244,468,124	177,475,166	156,019,294
TOTAL ASSETS		808,939,675	706,687,526	586,511,168
LIABILITIES & SHAREHOLDER'S EQUITY
Current Liabilities
Trade and other payables	10	96,605,850	95,879,220	75,848,191
Overdraft Current portion of lease liability	13	9,738,800 21,416,526	9,558,600 21,908,619	9,327,799 19,604,849
Current portion of long term debt	14	34,881,989	16,434,233	14,669,616
Intercompany payables	22	1,036,693	1,707,947	2,754,866
Current tax liabilities		3,829,499	395,661	312,992
Provisions	12	2,885,053	524,431	0
Short term liabilities	11	16,008,640	33,924,206	6,388,289
TOTAL CURRENT LIABILITIES		186,403,050	180,332,917	128,906,602
Long Term Debt
Lease liability	13	67,027,513	80,139,646	89,195,755
Other long term debt		3,325,000	6,650,000	-
Long term debt	14	333,649,420	265,437,273	205,624,681
TOTAL LONG-TERM LIABILITIES		404,001,933	352,226,919	294,820,436
Deferred tax liability	23	11,457,413	11,457,413	10,785,523
TOTAL LIABILITIES		601,862,396	544,017,249	434,512,561
SHAREHOLDER'S EQUITY
Share capital and share premium	15	82,027,012	81,495,470	81,495,470
Treasury shares		(666,624)	(2,699,804)	(6,056,105)
Reserves	16	90,599,863	76,661,823	73,097,247
Retained earnings		35,117,028	7,212,788	3,461,995
		207,077,279	162,670,277	151,998,607
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY		808,939,675	706,687,526	586,511,168

CEO CFO

Mihail Marcu, Adrian Lungu,

MED LIFE S.A. INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

		MED LIFE S.A.
		INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2020
		(all the amounts are expressed in RON, unless otherwise specified)
			12 Months ended December 31, 2019
	Note	2020	* restated
Sales Other operating revenues	17 18	508,823,190 4,093,568	456,165,019 4,348,742
Operating Income		512,916,758	460,513,761
Consumable materials and repair
materials Third party expenses		(84,668,323)	(66,396,142)
Salary and related expenses (incl.		(140,358,151)	(140,605,350)
contributions) Depreciation	20	(134,748,555) (46,482,290)	(150,265,803) (43,312,183)
Impairment losses and gains (including reversals of impairment losses)		(6,816,733)	1,524,207
Other operating expenses	19	(32,329,352)	(39,538,437)
Operating expenses		(445,403,404)	(438,593,708)
Operating Profit		67,513,354	21,920,053
Finance income - interest revenue		1,714,066	2,183,489
Finance cost Other financial expenses		(13,773,288) (5,565,399)	(11,661,141) (7,843,768)
Financial loss	21	(17,624,620)	(17,321,421)
Result Before Taxes		49,888,734	4,598,632
Income tax expense Net Result	23	(8,046,454) 41,842,280	(1,398,406) 3,200,226
Other comprehensive income items that will not be reclassified to profit or loss
Gain / Loss on revaluation of equity
instruments Deferred tax on other comprehensive	23	-	655,437
income components		-	(104,870)
TOTAL OTHER COMPREHENSIVE INCOME		-	550,567
TOTAL COMPREHENSIVE INCOME		41,842,280	3,750,793

Mihail Marcu, Adrian Lungu, CEO CFO

MED LIFE S.A. INDIVIDUAL STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

	INDIVIDUAL STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	12 Months ended December 31,
	Note	2020	2019 * restated
Net profit before taxes		49,888,734	4,598,632
Adjustments for Depreciation	5	46,482,290	43,312,183
Interest expense	21	13,773,288	11,661,141
Allowance for doubtful receivables Provisions for liabilities and charges	7	6,816,733 2,360,622	(1,524,207) 524,431
Other non-monetary gains	18	(568,952)	(1,885,745)
Unrealised exchange gain / loss on interest bearing obligations Interest revenue	21	5,180,675 (1,714,066)	6,279,385 (2,183,488)
Operating cash flow before working capital changes		122,219,323	60,782,333
Decrease / (increase) in accounts receivable		(35,532,917)	(16,517,233)
Decrease / (increase) in inventories Decrease / (increase) in prepayments		(6,523,215) 212,942	(353,502) (589,362)
Increase / (decrease) in accounts payable		(39,329,389)	24,574,674
Cash generated from/(used in) working capital changes		(81,172,579)	7,114,578
Cash generated from operations		41,046,744	67,896,911
Income tax paid		(4,612,616)	(748,718)
Interest received		1,714,066	2,183,489
Interest paid Net cash from operating activities		(12,829,063) 25,319,132	(11,226,517) 58,105,164
Purchase of investments	4	17,859,198	(53,295,424)
Purchase of intangible assets Purchase of property, plant and equipment	5 5	(2,893,079) (60,312,241)	(6,263,964) (31,226,847)
Loans granted	22	(10,610,899)	(9,494,008)
Net cash used in investing activities		(55,957,021)	(100,280,243)
Cash flow from financing activities
Payment of loans		(15,542,552)	(8,005,257)
Net lease payments Increase in loans		(24,950,950) 97,429,538	(19,821,375) 63,687,433
Payments for purchase of treasury shares		(3,548,879)	(2,256,114)
Decrease in loans granted to group companies	22	(671,254)	(1,046,919)
Net cash from/ (used in) financing activities		52,715,903	32,557,768
Net change in cash and cash equivalents		22,078,014	(9,617,311)
Cash and cash equivalents beginning of the year	8	11,657,432	21,274,743
Cash and cash equivalents end of the year	8	33,735,446	11,657,432

CEO CFO

Mihail Marcu, Adrian Lungu,

MED LIFE S.A. INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

			MED LIFE S.A.
				INDIVIDUAL STATEMENT OF CHANGES IN EQUITY
				FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	Share Capital	Treasury shares	Share premium	General reserves and other reserves	Revaluation Reserve	Accumulated Results	Total Equity
Balance at 31 Dec 2019 as originally presented	5,536,271	(2,699,804)	75,959,199	10,072,949	66,588,874	9,035,002	164,492,491
Correction of error (net of tax)		-	-	-	-	(1,822,213)	(1,822,213)
*Restated total equity at the beginning of the financial year	5,536,271	(2,699,804)	75,959,199	10,072,949	66,588,874	7,212,788	162,670,277
Share capital contribution	-	-	-	-	-	-	-
Net release of own shares used for acquiring additional NCI	-	2,033,180	-	-	-	-	2,033,180
Increase in share capital through incorporation of reserves	27,681,352	-	(27,681,352)	-	-	-	-
Increase in premiums due to difference between fair value and cost of own shares when the exchange was made		-	531,542	-	-	-	531,542
	-
Other reserves, including revaluation reserve	-	-	-	13,938,040	-	(13,938,040)	-
Total comprehensive income Gain/loss from revaluation	- -	- -	- -	- -	- -	41,842,280 -	41,842,280 -
Deferred tax related to other comprehensive income	-	-	-	-	-	-	-
Profit of the year	-	-	-	-	-	41,842,280	41,842,280
Balance as at December 31, 2020	33,217,623	(666,624)	48,809,389	24,010,989	66,588,874	35,117,028	207,077,279

CEO CFO

Mihail Marcu, Adrian Lungu,

MED LIFE S.A. INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)

			MED LIFE S.A.	INDIVIDUAL STATEMENT OF CHANGES IN EQUITY
				FOR THE YEAR ENDED DECEMBER 31, 2020
				(all the amounts are expressed in RON, unless otherwise specified)
				General reserves	Revaluation	Accumulated
	Share Capital	Treasury shares	Share premium	and other reserves			Total Equity
					Reserve	Results
Balance as at January 1, 2019	5,536,271	(6,056,105)	75,959,199	10,072,949	63,024,298	3,461,995	151,998,607
Share capital contribution	-	-	-	-	-	-	-
Acquisition of treasury shares Increase from own shares valuation	- -	4,011,738 (655,437)	- -	- -	-	- -	4,011,738 (655,437)
Other reserves, including revaluation reserve							3,564,576
Total comprehensive income	- -	- -	- -	- -	3,564,576 -	- 3,750,793	3,750,793
Gain/loss from revaluation	-	-	-	-	-	-	-
Deferred tax related to other comprehensive income	-	-	-	-	-	-	-
Profit of the year *restated Balance as at December 31, 2019	- 5,536,271	- (2,699,804)	- 75,959,199	- 10,072,949	- 66,588,874	3,750,793 7,212,788	3,750,793 162,670,277

CEO CFO

Mihail Marcu, Adrian Lungu,

1. DESCRIPTION OF THE BUSINESS

Med Life S.A. ("Med Life" or the "Company") is a joint-stock company incorporated in 1996, in accordance with the laws and regulations of Romania. The Company's activity resides in the performance of healthcare services activities (detailed under 3.22 Revenue recognition and Note 16 Sales) through medical centres located in Bucharest, Cluj, Braila, Timisoara, Iasi, Galati, Ploiesti and Constanta.

Med Life is one of the leading health care services providers in Romania, having a significant market share at a national level. The registered office of Med Life is located in Bucharest, Calea Grivitei, no. 365. The ultimate parent of the Med Life Group is Med Life SA. Details of Med Life SA's subsidiaries at December 31, 2020 and December 31, 2019 are as follows:

	Name of subsidiary	Main activity	Location	December 31, 2020	December 31, 2019
1	Policlinica de Diagnostic Rapid SA	Medical Services	Brasov, Romania	83.01%	83.01%
2	Medapt SRL (indirect)	Medical Services	Brasov, Romania	83.01%	83.01%
3	Histo SRL (indirect)	Medical Services	Brasov, Romania	49.81%	49.81%
4	Policlinica de Diagnostic Rapid Medis SRL (indirect)	Medical Services	Sfantu Gheorghe, Romania	66.41%	66.41%
5	Bahtco Invest SA	Development of building projects	Bucharest, Romania	100%	100%
6	Med Life Ocupational SRL	Medical Services	Bucharest, Romania	100%	100%
7	Pharmalife-Med SRL	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
8	Med Life Broker de Asigurare si Reasigurare SRL	Insurance broker	Bucharest, Romania	99%	99%
9	Accipiens SA	Rental activities	Bucharest, Romania	73%	61%
10	Genesys Medical Clinic SRL (indirect)	Medical Services	Bucharest, Romania	73%	61%
11	Bactro SRL (indirect)	Medical Services	Deva, Romania	73%	61%
12	Transilvania Imagistica SA (indirect)	Medical Services	Oradea, Romania	73%	61%
13	Biofarm Farmec SRL (indirect)	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
14	RUR Medical SA (indirect)	Medical Services	Bucharest, Romania	83.01%	100%
15	Biotest Med SRL	Medical Services	Bucharest, Romania	100%	100%
16	Vital Test SRL	Medical Services	Bucharest, Romania	100%	100%
17	Centrul Medical Sama SA	Medical Services	Craiova, Romania	90%	90%
18	Ultratest SA (directly and indirectly)	Medical Services	Craiova, Romania	76%	76%
19	Diamed Center SRL	Medical Services	Bucharest, Romania	100%	100%
20	Prima Medical SRL	Medical Services	Craiova, Romania	100%	100%
21	Stem Cells Bank SA	Medical Services	Timisoara, Romania	100%	100%
22	Dent Estet Clinic SA	Dental healthcare	Bucharest, Romania	60%	60%
23	Green Dental Clinic SRL (indirect)	Dental healthcare	Bucharest, Romania	31%	31%
24	Dentist 4 Kids SRL (indirect)	Dental healthcare	Bucharest, Romania	31%	31%
25	Dent A Porter SRL (indirect)	Dental healthcare	Bucharest, Romania	31%	31%
26	Dentestet Kids SRL (indirect)	Dental healthcare	Bucharest, Romania	32%	32%
27	Aspen Laborator Dentar SRL (indirect)	Dental healthcare	Bucharest, Romania	45%	45%
28	Centrul Medical Panduri SA	Medical Services	Bucharest, Romania	90%	90%

29	Almina Trading SA	Medical Services	Targoviste, Romania	80%	80%
30	Anima Specialty Medical Services SRL	Medical Services	Bucharest, Romania	100%	100%
31	Anima Promovare si Vanzari SRL (indirect)	Medical Services	Bucharest, Romania	100%	100%
32	Valdi Medica SA	Medical Services	Cluj, Romania	55%	55%
33	Clinica Polisano SRL	Medical Services	Sibiu, Romania	100%	100%
34	Solomed Clinic SA	Medical Services	Pitesti, Romania	80%	80%
35	Solomed Plus SRL (indirect)	Medical Services	Pitesti, Romania	80%	80%
36	Ghencea Medical Center SA	Medical Services	Bucharest, Romania	100%	90%
37	Sfatul medicului SRL	Medical Platform	Bucharest, Romania	100%	100%
38	RMC Dentart (indirect)	Dental healthcare	Budapest, Hungary	51%	51%
39	RMC Medical (indirect)	Medical Services	Budapest, Hungary	51%	51%
40	RMC Medlife	Holding	Budapest, Hungary	51%	51%
41	Badea Medical SRL	Medical Services	Cluj, Romania	65%	65%
42	Oncoteam Diagnostic SA	Medical Services	Bucharest, Romania	75%	75%
43	Centrul medical Micromedica SRL	Medical Services	Piatra Neamt, Romania	100%	100%
44	Micromedica Targu Neamt SRL (indirect)	Medical Services	Targu Neamt, Romania	100%	100%
45	Micromedica Bacau SRL (indirect)	Medical Services	Bacau, Romania	100%	100%
46	Micromedica Roman SRL (indirect)	Medical Services	Roman, Romania	100%	100%
47	Medrix Center SRL (indirect)	Medical Services	Roznov, Romania	100%	100%
48	Spitalul Lotus SRL	Medical Services	Ploiesti, Romania	100%	100%
49	Labor Maricor SRL	Medical Services	Bacau, Romania	100%	0%
50	Centrul Medical Matei Basarab SRL*	Medical Services	Bucharest, Romania	100%	0%
		Distribution of
51	Farmachem Distributie SRL*	Pharmaceutical Products in	Bucharest, Romania	75%	0%
		specialised stores
		Distribution of
		Pharmaceutical
52	CED Pharma SRL*	Products in	Bucharest, Romania	100%	0%
		specialised stores
53	KronDent SRL (indirect)*	Dental healthcare	Brasov, Romania	36%	0%

* The control over these companies will be obtained in the first semester of 2021 and will be consolidated starting with 2021.

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)

2.1 Initial application of new amendments to the existing standards effective for the current reporting period

The following amendments to the existing standards issued by the International Accounting Standards Board (IASB) and adopted by the EU are effective for the current reporting period:

Amendments to IAS 1 "Presentation of Financial Statements" and IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" - Definition of Material - adopted by the EU on 29 November 2019 (effective for annual periods beginning on or after 1 January 2020),

• Amendments to IFRS 9 "Financial Instruments", IAS 39 "Financial Instruments: Recognition and Measurement" and IFRS 7 "Financial Instruments: Disclosures" - Interest Rate Benchmark Reform - adopted by the EU on 15 January 2020 (effective for annual periods beginning on or after 1 January 2020),
• Amendments to IFRS 16 "Leases" Covid-19-Related Rent Concessions (adopted by the EU on 9 October 2020 and effective at the latest, as from 1 June 2020 for financial years starting on or after 1 January 2020),
• Amendments to References to the Conceptual Framework in IFRS Standards adopted by the EU on 29 November 2019 (effective for annual periods beginning on or after 1 January 2020).

The adoption of amendments to the existing standards has not led to any material changes in the Company's financial statements.

The adoption of amendments to the existing standards has not led to any material changes in the Group's financial statements, except for Covid-19-Related Rent Concessions.

*In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provides practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical expedient to IFRS 16. The practical expedient permits a lessee to elect not to assess whether a COVID19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease modification.

The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions are met:

a) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

b) Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021); and

c) There is no substantive change to other terms and conditions of the lease.

In the current financial year, the Group has applied the amendment to IFRS 16 (as issued by the IASB in May 2020) in advance of its effective date.

The practical expedient has been applied to all qualifying rent concessions received for buildings. The management elected not to apply the practical expedient for rent concessions received for vehicles. Please see Note 16 for the impact recognized in profit or loss that arise from rent concessions to which the Group (lessee) has applied the practical expedient.

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

At the date of authorization of these financial statements, the following amendments to the existing standards were issued by IASB and adopted by the EU and which are not yet effective:

• Amendments to IFRS 4 Insurance Contracts "Extension of the Temporary Exemption from Applying IFRS 9" adopted by the EU on 16 December 2020 (the expiry date for the temporary exemption from IFRS 9 was extended from 1 January 2021 to annual periods beginning on or after 1 January 2023),
• Amendments to IFRS 9 "Financial Instruments", IAS 39 "Financial Instruments: Recognition and Measurement", IFRS 7 "Financial Instruments: Disclosures", IFRS 4 "Insurance Contracts" and IFRS 16 "Leases" - Interest Rate Benchmark Reform — Phase 2 adopted by the EU on 13 January 2021 (effective for annual periods beginning on or after 1 January 2021).

2.3 New standards and amendments to the existing standards issued by IASB but not yet adopted by the EU

At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except for the following new standards and amendments to the existing standards, which were not endorsed for use in EU as at 31 December 2020 (the effective dates stated below is for IFRS as issued by IASB):

• IFRS 14 "Regulatory Deferral Accounts" (effective for annual periods beginning on or after 1 January 2016) - the European Commission has decided not to launch the endorsement process of this interim standard and to wait for the final standard,
• IFRS 17 "Insurance Contracts" including amendments to IFRS 17 (effective for annual periods beginning on or after 1 January 2023),
• Amendments to IAS 1 "Presentation of Financial Statements" Classification of Liabilities as Current or Non-Current (effective for annual periods beginning on or after 1 January 2023),
• Amendments to IAS 16 "Property, Plant and Equipment" Proceeds before Intended Use (effective for annual periods beginning on or after 1 January 2022),
• Amendments to IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" Onerous Contracts — Cost of Fulfilling a Contract (effective for annual periods beginning on or after 1 January 2022);
• Amendments to various standards due to "Improvements to IFRSs (cycle 2018 -2020)" resulting from the annual improvement project of IFRS (IFRS 1, IFRS 9, IFRS 16 and IAS 41) primarily with a view to removing inconsistencies and clarifying wording (The amendments to IFRS 1, IFRS 9 and IAS 41 are effective for annual periods beginning on or after 1 January 2022. The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.).

The Company anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact on the financial statements of the Company in the period of initial application.

Hedge accounting for a portfolio of financial assets and liabilities whose principles have not been adopted by the EU remains unregulated.

According to the Company's estimates, the application of hedge accounting to a portfolio of financial assets or liabilities pursuant to IAS 39: "Financial Instruments: Recognition and Measurement" would not significantly impact the financial statements, if applied as at the balance sheet date.

3. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of these individual financial statements of the Company are set out below.

3.1 Statement of compliance

The financial statements have been prepared in accordance with International Accounting Standards for Financial Reporting ("IFRSs") as adopted by the European Union ("EU").

The accounting policies applied in these financial statements are the same as those applied in the Company's annual financial statements as at and for the year ended 31 December 2019, except for the adoption of new standards effective as of January 1st 2020.

Additionally, the financial statements have been prepared in accordance with Order 2844/2016 for the approval of accounting regulations conforming with International Financial Reporting Standards

as adopted by EU with subsequent amendments.

3.2 Basis of preparation

The financial statements have been prepared on the historical cost basis except for the revaluation of certain non-current assets and financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

These financial statements have been prepared to serve the Company as statutory financial statements.

The Company maintains its accounting records in Romanian Lei ("RON") and prepares its statutory financial statements in accordance with the Regulations on Accounting and Reporting issued by the Ministry of Finance in Romania. The accompanying financial statements are based on the statutory records of the individual entities and have been adjusted to present the financial statements in accordance with IFRS.

3.3 Going concern

These financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company will continue its activity according to the normal course of business in the foreseeable future without encountering the impossibility of continuing its activity or without the significant decrease of its activity.

For the purposes of assessing liquidity and going concern, the Company has modelled scenarios reflecting suitable assumptions over the next 12–month period that serve to inform the decisions the Company takes regarding future cost savings, cash generation, debt covenants and levels of investment. The Company's financial performance to date in FY21 across all divisions has been ahead of the modelled scenarios.

In addition, due to the proactive response taken by the Company to improve its liquidity position, since the beginning of the pandemic crisis, the cashflows of the Company have remained stable, demonstrating the financial discipline across the Company and the conservative approach taken when modelling scenarios.

As part of the Company's proactive response to maintaining its liquidity position and optimising its response to the crisis, a broad range of consequent actions was taken including:

• All non-urgent and non-committed capital programmes have been postponed or reduced during the initial months of the pandemic;

• Non-essential administrative costs generally and relating to projects specifically have been postponed or reduced;

• Measures have been taken to further optimise working capital management;

• Lease amortisation payments have been deferred, where possible;

• Decreasing the working hours for key administrative staff from 5 to 4 working days;

• Negotiation with providers, considered "not mandatory" for the Med Life in order to suspend the collaboration for a defined period of time.

• The Management of the Company reassessed the serving capacity of all business units and readjusted their medical infrastructure to the new market requirements. In this respect, all business units went through a market repositioning process that allowed them to address more efficiently customers' needs as a result of population's change of approach in relation to post Covid medical services.

All measures taken have been decided upon having in mind the Company's strategy to better position itself to all the new market changes, on the long term. As a consequence, the management focused on increasing efficiency of its operations in order to obtain better flexibility over capitalizing market opportunities.

Additional mitigating steps were implemented, such as further reductions in fixed operating costs, rent waivers and government intervention packages.

In response to the COVID-19 coronavirus pandemic, in March 2020 the Romanian authorities

introduced a government program for companies that were forced to shut down their operations and furlough staff. Under the program, an eligible company could apply for this in an amount up to a level of 75% of the average salary per economy, to continue paying monthly salaries to its furloughed employees. The measure taken by Med Life was to reduce costs in connection with support departments by sending non-critical staff into technical unemployment. The costs were borne by the Romanian Government up to a level of 75% of the average salary per economy; for salaries that exceeded the average in the economy, the difference was borne by Med Life.

Also, Med Life has made a 50% reduction of the salaries of the management team for a period of 45 days (from March 16 to April 30). The impact was not quantified, being considered insignificant as a share in operating expenses.

Another support measure during the state alert is the settlement for the sanitary units with beds in contractual relationship with the National Health Insurance Houses of the amounts contracted and settled from the budget of the Single National Health Insurance Fund or from the budget of the Ministry of Health, regardless the number of cases performed or, as the case may be, at the level of the activity actually performed in the conditions in which it exceeds the contracted level (Document no. 195/2020, Chapter III / Art. 17 / c)).

These steps have provided additional support to the liquidity analysis and modelled scenarios.

Going forward, the management has assessed the continuity of such measures and included this scenario in the financial modelling of the Company concluding that all cost cutting measures are replicable for the future periods and will continue to release margin into the Company's cashflows.

Based on the Company's current financial position and the modelled scenarios, the directors have concluded that the Company has sufficient liquidity to meet all its obligations for at least the twelve months from the date of this report and the directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

3.4 Accounting estimates and judgments

The preparation of the financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities as of the date of the balance sheet and revenue and expenses for the period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Impact of COVID 19 in respect of untaken holidays balance

In order to mitigate the effects generated by COVID 19, the Company took a series of measures to protect the business and address potential liquidity management risks by applying a series of cost cutting measures in relation to personnel costs and enrolled a significant number of its personnel into technical unemployment procedures. As a side effect, but also generated by the long period of lock down measures applied by the Romanian government, the demand for vacation leaves has decreased significantly within the Company during 2020. As a result, the management decided to take on a prudent approach in terms of provisioning untaken holidays and recognized a provision of RON 2.3 million as at December, 31 2020.

Impact of COVID 19 in respect of IFRS 9

The Company observed that the medical crisis has determined a slowdown in collection of its receivables as a result of the working capital challenges encountered by its clients.

In order to counter this risk, the management decided to apply a prudent approach to future cashflows an recognized an allowance for bad and doubtful debts of RON 6.8 million as at December, 31 2020.

3.5 Foreign currency translation

Functional and presentation currency

These financial statements are presented in Romanian Leu ("RON"), which is the currency of the primary economic environment in which the Company operates (its "functional currency").

The exchange rates on December 31, 2020 were RON 4.8694 for EUR 1 (December 31, 2019: RON 4.7793 for EUR 1), respectively 1.3356 for HUF 100 (December 31, 2019: RON 1.4459 for 100 HUF). The average exchange rates for the period of 12 months 2020 were 4.8276 RON for 1 EUR (12 months 2019: 4.7454 RON for 1 EUR), respectively 1.3777 RON for 100 HUF (12 months 2019: 1.4589 for 100 HUF).

The monetary assets and liabilities in foreign currency as of reporting date have been converted from EUR to RON at the closing exchange rate as announced by the National Bank of Romania.

3.6 Correction of error

The comparative figures have been adjusted to conform with changes in presentation in the current year.

Implementation of IFRS 16

Given its large and complex operations, the Company leases a significant number of assets including buildings and land for operational activities, medical equipment and vehicles. Contractual periods differ, depending on the lease type and the leased asset, the driver being the strategic point of view the Company has into further managing its asset portfolio.

As a result of the pandemic crisis, the Company commenced the process of securing its strategic facilities under lease agreements, for longer periods of time. Accordingly, several major lease agreements have been renegotiated with focus on better commercial conditions for the Company, in terms of both pricing and better security over extension options for the lease agreements.

In addition to this approach, the management decided to purchase many of its prior-leased locations in order to secure the Company growth in line with its strategic plan. All these aspects were reflected when accounting for leased properties under IFRS 16, by also restating the opening balance, for comparability reasons.

In this respect, the management has evaluated its options for early termination as well as the existence of the Company single triggered decision to extend the lease term, on a case-by-case basis.

In determining the lease term, all facts and circumstances that create an economic incentive to exercise an extension option, or to exercise a termination option, have been considered.

The Company has also reclassified "Materna" vouchers from Cash and cash equivalents to Other financial assets due to the fact that their convertibility in cash exceeds more than three months and some grants were reclassified from short term to long term. For details, please see note 8 – Cash and banks.

			FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	January 1, 2019	Restatements	January 1, 2019 * restated	December 31, 2019	Restatements	December 31, 2019 * restated	December 31, 2020
ASSETS
NON CURRENT ASSETS Intangible assets Tangible assets	7,701,244 183,020,161	- -	7,701,244 183,020,161	11,739,823 203,527,953	- -	11,739,823 203,527,953	10,675,893 244,998,068
Right-of-use assets Financial assets TOTAL NON-CURRENT ASSETS	81,327,515 147,899,593 419,948,513	10,059,541 483,820 10,543,362	91,387,056 148,383,413 430,491,875	59,318,528 233,023,412 507,609,716	20,405,322 1,197,322 21,602,644	79,723,850 234,220,734 529,212,360	71,462,302 237,335,288 564,471,551
Current Assets Inventories Trade and other receivables	6,533,910 47,146,208	- -	6,533,910 47,146,208	6,887,412 57,944,885	- -	6,887,412 57,944,885	13,224,013 89,382,165
Receivables with group companies Other receivables Cash and cash equivalents	74,915,161 3,944,995 21,758,563	- - (483,820)	74,915,161 3,944,995 21,274,743	84,409,169 13,782,629 12,854,754	- - (1,197,322)	84,409,169 13,782,629 11,657,432	95,020,068 11,780,770 33,735,446
	154,298,837	(483,820)	153,815,017	175,878,849	(1,197,322)	174,681,527	243,142,462
Prepayments	2,204,277	-	2,204,277	2,793,639	- -	2,793,639	1,325,662
TOTAL CURRENT ASSETS	156,503,114	(483,820)	156,019,294	178,672,488	- (1,197,322)	177,475,166	244,468,124
TOTAL ASSETS	576,451,627	10,059,541	586,511,168	686,282,204	- 20,405,322	706,687,526	808,939,675
LIABILITIES & SHAREHOLDER'S EQUITY Current Liabilities
Trade and other payables Overdraft	75,848,191 9,327,799	- -	75,848,191 9,327,799	95,879,220 9,558,600	- -	95,879,220 9,558,600	96,605,850 9,738,800
Current portion of lease liability	23,104,927	(3,500,078)	19,604,849	26,879,902	(4,971,283)	21,908,619	21,416,526
Current portion of long term debt	14,669,616	-	14,669,616	16,434,233	-	16,434,233	34,881,989
Intercompany payables Current tax liabilities Provisions	2,754,866 312,992 -	- - -	2,754,866 312,992 -	1,707,947 395,661 524,431	- - -	1,707,947 395,661 524,431	1,036,693 3,829,499 2,885,053
Short term liabilities TOTAL CURRENT LIABILITIES	6,388,289 132,406,680	- (3,500,078)	6,388,289 128,906,602	33,924,206 185,304,200	- (4,971,283)	33,924,206 180,332,917	16,008,640 186,403,050
Long Term Debt
Lease liability Other long term debt	75,636,136 -	13,559,619 -	89,195,755 -	52,532,728 6,650,000	27,606,918 -	80,139,646 6,650,000	67,027,513 3,325,000
Long term debt TOTAL LONG-TERM LIABILITIES	205,624,681 281,260,817	- 13,559,619	205,624,681 294,820,436	265,437,273 324,620,001	- 27,606,918	265,437,273 352,226,919	333,649,420 404,001,933
Deferred tax liability	10,785,523	-	10,785,523	11,865,511	(408,098)	11,457,413	11,457,413
TOTAL LIABILITIES	424,453,020	10,059,541	434,512,561	521,789,712	22,227,537	544,017,249	601,862,396
SHAREHOLDER'S EQUITY
Share capital and share premium Treasury shares	81,495,470 (6,056,105)	- -	81,495,470 (6,056,105)	81,495,470 (2,699,804)	- -	81,495,470 (2,699,804)	82,027,012 (666,624)
Reserves	73,097,247	-	73,097,247	76,661,823	-	76,661,823	90,599,863
Retained earnings	3,461,995	-	3,461,995	9,035,002	(1,822,214)	7,212,788	35,117,028
TOTAL EQUITY	151,998,607	-	151,998,607	164,492,491	(1,822,213)	162,670,277	207,077,279
TOTAL LIABILITIES AND EQUITY	576,451,627	10,059,541	586,511,168	686,282,204	20,405,324	706,687,526	808,939,675

	(all the amounts are expressed in RON, unless otherwise specified)	FOR THE YEAR ENDED DECEMBER 31, 2020
		12 Months ended December 31,
	2019	Restatements	2019 *restated	2020
Sales	456,165,019	-	456,165,019	508,823,190
Other operating revenues Operating Income	4,348,742 460,513,761	- -	4,348,742 460,513,761	4,093,568 512,916,758
Operating expenses	(439,150,017)	556,309	(438,593,708)	(445,403,404)
Operating Profit	21,363,744	556,309	21,920,053	67,513,354
Finance income - interest revenue	2,183,489	-	2,183,489	1,714,066
Finance cost Other financial expenses	(11,027,079) (5,691,210)	(634,062) (2,152,558)	(11,661,141) (7,843,768)	(13,773,288) (5,565,399)
Financial result	(14,534,800)	(2,786,621)	(17,321,421)	(17,624,620)
Result Before Taxes	6,828,944	(2,230,312)	4,598,632	49,888,734
Income tax expense Net Result	(1,806,505) 5,022,439	408,099 (1,822,213)	(1,398,406) 3,200,226	(8,046,454) 41,842,280
Other comprehensive income items that will not be reclassified to profit or loss
Gain / Loss on revaluation of properties	655,437	-	655,437	-
Deferred tax on other comprehensive income components	(104,870)	-	(104,870)	-
TOTAL OTHER COMPREHENSIVE INCOME	550,567	-	550,567	-
TOTAL COMPREHENSIVE INCOME	5,573,006	(1,822,213)	3,750,793	41,842,280

	NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS	MED LIFE S.A.
		FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
	12 Months ended December 31, 2019
Profit/(loss) before taxes	2019 6,828,944	Restatements (2,230,312)	*restated 4,598,632	2020 49,888,734
Adjustments for
Depreciation Interest expense	45,914,443 11,027,079	(2,602,260) 634,062	43,312,183 11,661,141	46,482,290 13,773,288
Allowance for doubtful receivables	(1,524,207)	-	(1,524,207)	6,816,733
Provisions for liabilities and charges Other non-monetary gains	524,431 (3,042,137)	- 1,156,392	524,431 (1,885,745)	2,360,622 (568,952)
Unrealised exchange gain / loss on	5,691,210	588,175	6,279,385	5,180,675
interest bearing obligations Interest revenue	(2,183,488)	-	(2,183,488)	(1,714,066)
Operating cash flow before working capital changes	63,236,275	(2,453,942)	60,782,333	122,219,323
Decrease / (increase) in accounts receivable	(15,803,731)	(713,502)	(16,517,233)	(35,532,917)
Decrease / (increase) in inventories	(353,502)	-	(353,502)	(6,523,215)
Decrease / (increase) in prepayments	(589,362)	-	(589,362)	212,942
Increase / (decrease) in accounts	23,010,291	1,564,383	24,574,674	(39,329,389)
payable Cash generated from working capital changes	6,263,696	850,882	7,114,578	(81,172,579)
Cash generated from operations	69,499,971	(1,603,060)	67,896,911	41,046,744
Income tax paid	(748,718)	-	(748,718)	(4,612,616)
Interest received	2,183,489	-	2,183,489	1,714,066
Interest paid	(9,436,063)	(1,790,454)	(11,226,517)	(12,829,063)
Net cash from / (used in) operating activities	61,498,679	(3,393,515)	58,105,164	25,319,132
Purchase of investments	(53,295,424)	-	(53,295,424)	17,859,198
Purchase of intangible assets	(6,263,964)	-	(6,263,964)	(2,893,079)
Purchase of property, plant and equipment	(31,226,847)	-	(31,226,847)	(60,312,241)
Loans granted	(9,494,008)	-	(9,494,008)	(10,610,899)
Net cash used in investing activities	(100,280,243)	-	(100,280,243)	(55,957,021)
Cash flow from financing activities
Payment of loans	(8,005,257)	-	(8,005,257)	(15,542,552)
Lease payments Increase in loans	(22,501,389) 63,687,433	2,680,014 -	(19,821,375) 63,687,433	(24,950,950) 97,429,538
Payments for purchase of treasury	(2,256,114)	-	(2,256,114)	(3,548,879)
shares Decrease in loans granted to group
companies Net cash from/ (used in) financing	(1,046,919) 29,877,754	- 2,680,014	(1,046,919) 32,557,768	(671,254) 52,715,903
activities
Net change in cash and cash equivalents	(8,903,810)	(713,501)	(9,617,311)	22,078,014
Cash and cash equivalents beginning of the year	21,758,563	(483,820)	21,274,743	11,657,432

3.7 Investments in subsidiaries

Med Life has significant investments in subsidiaries. The investments are accounted for at cost less impairment. Management conducts testing annually or whenever there is an indication of impairment to assess whether any impairment losses should be recognized.

3.8 Property, plant and equipment

Land and buildings held for use in the supply of services, or for administrative purposes, are stated in the balance sheet at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The lands and constructions held for sale for the provision of services or for administrative purposes are recorded in the balance sheet at the revalued amount, which is the fair value at the date of the revaluation, less accumulated depreciation and accumulated impairment losses. The value of the land and buildings held presented in these financial statements is established on the basis of the evaluation reports prepared on December 31, 2019 by independent evaluators certified by ANEVAR. The reassessment is carried out with sufficient regularity to ensure that the Company presents the land and buildings at fair value in the financial statements.

Expenses for repairs and maintenance are recognized in the profit or loss account at the time of their execution. Costs with capital repairs are included in the book value of the asset when it is probable that future economic benefits above the initially evaluated standard of performance of the existing asset will be transferred to the Company. Capital renovations are depreciated over the remaining useful period of the respective asset. The land is not depreciated.

Installations and equipment are recorded at cost, less accumulated depreciation and accumulated impairment losses.

Assets under construction are recorded at cost, less accumulated impairment losses and moved to tangible assets once they become available for use.

The depreciation is calculated at the values of the tangible assets by the linear method up to the estimated residual values of the assets. Estimated useful lives, residual values and depreciation method are reviewed at the end of each year, and the effects of changes in estimates are recorded prospectively.

The following useful lives are used in the calculation of depreciation:

Buildings	10 – 50 years
Plant and equipment	3 – 15 years
Fixtures and fittings	3 – 15 years

Years

3.9 Assets held under finance leases

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

3.10 Intangible assets

Intangible assets acquired are reported at cost less accumulated amortization and 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.

The Company's intangible assets are represented by software licenses which are depreciated straight-line over a period of three years.

De-recognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in profit or 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 amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets that are not yet available for use are tested for impairment at least annually and whenever there are indications that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or a cashgenerating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

3.11 Inventories

Inventories are stated at the lower of cost and net realizable value. Cost of inventories comprises of all the costs incurred in bringing the inventories to their present location and condition, being valued on a first in first out basis. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. The Company applies FIFO as a costing method.

3.12 Trade receivables

Trade receivables are recognised initially at the amount of consideration (transaction price) that is unconditional, unless they contain significant financing components when they are recognised at fair value. They are subsequently measured at amortised cost using the effective interest method, less loss allowance.

Med Life recognises a loss allowance for expected credit losses on trade receivables and contract assets. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

Med Life always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected credit losses on this financial asset are estimated using a provision matrix based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

Write-off policy

Med Life 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. Financial assets written off may still be subject to enforcement activities under the Med Life's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given 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 assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate.

Med Life recognises an impairment gain or loss in profit or loss for all trade receivables with a corresponding adjustment to their carrying amount through a loss allowance account.

Interest revenue

Interest income is recognized using the effective interest method for debt instruments measured subsequently at amortized cost. The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. Interest income is recognized in profit or loss and is included in the "finance income - interest revenue" line item.

3.13 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown in current liabilities in the balance sheet.

3.14 Financial instruments

Financial assets and financial liabilities are recognised in the Med Life's statement of financial position when the Med Life becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Debt instruments that meet the following conditions are measured subsequently at amortised cost: • the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVTOCI. For financial assets other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the creditimpaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset.

Interest income is recognised in profit or loss and is included in the "finance income - interest revenue" line item.

Foreign exchange gains and losses

The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically, for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the 'other financial expenses' line item.

Impairment of financial assets accounting policy is presented in note 3.12.

Derecognition of financial assets

Med Life 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 Med Life neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, Med Life recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If Med Life retains substantially all the risks and rewards of ownership of a transferred financial asset, Med Life continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition 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.

Financial liabilities and equity

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit and loss.

Financial liabilities measured subsequently at amortised cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense (or income) over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability (or asset), or (where appropriate) a shorter period, to the gross carrying amount of financial asset or amortized cost of financial liability.

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'other financial expenses' line item in profit or loss for financial liabilities that are not part of a designated hedging relationship.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Borrowings

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 balance sheet 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.

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

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.

Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset is capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation.

Other borrowing costs are expensed in the period in which they are incurred.

3.15 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the combined income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax are recognized as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognized directly in equity, in which case the tax is also recognized directly in equity.

3.16 Share capital

Ordinary shares are classified as equity. Med Life presents in the statement of changes in equity or in the notes to the financial statements the amount of dividends recognised as distributions to owners during the period and the related amount of dividends per share.

3.17 Share premiums

Share premiums are own funds created as a result of the difference between the issue value of the shares and the nominal value of the shares. The Company recorded share premiums as a result of the issue of shares.

3.18 Revaluation reserve

The increases in the fair value of land and buildings are recorded against revaluation reserves. Any decreases in the fair value of land and buildings are first deducted from the revaluation reserves and then the difference is recorded through profit and loss accounts. The revaluation is performed with sufficient regularity as to ensure that the Company presents land and buildings at fair value in the financial statements.

3.19 Provisions for risks and charges

Provisions are recognized when the Company has a legal or constructive obligation, as a result of a past event and it is probable that there will be a future outflow of resources in order to extinguish this liability. Provisions for risks and charges are assessed at the end of each period and adjusted in order to present management's best estimate.

3.20 Revenue recognition

Revenue is measured based on the consideration to which the Company expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. Revenue is recognised over time where (i) there is a continuous transfer of control to the customer; or (ii) there is no alternative use for any asset created and there is an enforceable right to payment for performance completed to date. Other revenue contracts are recognised at a point in time when control of the service transfers to the customer. Contract assets are advances received from customers. The Company does not operate loyalty programs.

The Company provides health care medical services to corporate and retail customers, in which one performance obligation is a promise to transfer distinct services to the beneficiary.

The Company's core activities are conducted through five business lines, providing a well-balanced business portfolio that covers all key segments of the private medical services market. Disaggregation of revenue from contracts with customers by business line comprises the following major categories: clinics, stomatology, hospitals, laboratories and corporate.

The Company's business and revenue model focuses on the spending power of corporations and private individuals on medical services, while the State's contribution through the National Health Insurance House represents a complement, not the core revenue of Med Life's activities. However, the National Health Insurance House is considered to be one major customer that goes across multiple sectors such as: clinics, hospitals and laboratories, and from which the Company receives the consideration based on reaching pre-established ceilings, for the medical services provided to the State's insured patients, which are the end users of the healthcare medical services. The revenue in relation with NHIH is recognised at the end of the month, when the Company has an enforceable right to payment for performance completed up to date, as the end user receives and consumes the benefits provided by the entity's performance as the entity performs.

Clinics

The core of the Company's operations is the network of ambulatory clinics. The business line comprises a network of 75 facilities, which offer a wide range of outpatient services covering a broad range of medical specialties. The Company's diagnostic imaging services provided to clients other

than hospital inpatients also form part of this business line. The Company's clinics provide a wide range of services delivered mainly in two formats:

• Hyper clinics, a format pioneered by Med Life in Romania, consisting of large facilities with at least 20 medical offices and surface areas in excess of 1,000 sqm. It is a one-stop-shop for clinical examinations and imaging. This format is designed for larger urban areas, with a population over 175,000. Hyper clinics would usually include a broad range of imaging services on site including radiology, bone density – DEXA, CT, MRI, 2D-4D ultrasounds and Mammography; in the case of new openings, such services may be included in the hyper clinics' offering gradually. Hyper clinic locations also host the services of other business lines, such as sampling points for laboratories.
• Clinics, offering a range of treatments from general practitioner services to specialists, are aimed at servicing the core needs of the Med Life's HPP patients and FFS clients. The Med Life's clinics typically have between 5 and 12 medical offices, although smaller satellite clinics are in operation to address specific market situations. Clinics are designed for smaller cities or to serve specific concentrations of patients. Clinics, with limited capacity and generally limited imaging services, act as feeder networks for the more specialized services located in the hyper clinics.

Stomatology

The Company's Dentistry business line offers a full range of services, ranging from medical examinations to surgery, implants or orthodontic services.

Stomatology business line is not subject to NHIH allocations. All of the sales are fee for service ("FFS") based, and the revenue is recognised at a point in time, when the performance obligation is satisfied.

Laboratories

The Laboratories business line provides the following range of services: biochemistry, pathological anatomy (cytology and histology), molecular biology and genetics, haematology, immunology, microbiology and toxicology. Sampling points are locations where the Med Life collects blood and other samples from patients. The Laboratories business line sources the bulk of its revenue from FFS clients, and the revenue is recognised at a point in time, when the performance obligation is satisfied. One exception is when the Company provides laboratory tests to other companies' employees and the revenue is recognised at the end of the month, when the Company has an enforceable right to payment for performance completed up to date.

Hospitals

Hospital services provided to patients are regarded as a bundle of services which comprise accommodation, meals, use of equipment, pharmacy stock and nursing services. This is considered to be a single performance obligation as the medical procedures cannot be performed without one of the above elements.

Revenue is recorded during the period in which the hospital service is provided and is based on the amounts due from patients. Fees are calculated and billed based on various tariff agreements.

The Hospitals business line derives its revenue predominantly from FFS patients. Treatment of State insured patients for the NHIH, generally relates to maternity, gynaecology, cardiology and oncology.

The Company does not expect to have any contracts where the period between the transfer of the promised service to the patient and the payment by the patient exceeds one year. Consequently, Med Life does not adjust any of the transaction prices for time value of money.

Corporate

The Corporate business line offers HPPs (health prevention packages) on a subscription basis, generally to corporate clients, as part of the benefit packages for their employees. These programs, which focus on prevention, such as regular check-ups and access to diagnostic services, complement the legally required occupational health services that corporate client's contract from Med Life as the Standard HPP.

The HPPs offered by Med Life consist of the following:

• Mandatory occupational health services, which mainly include the provision of annual employee check-ups and more specific services depending on the client's industry. Many companies begin by purchasing occupational health services under the "Standard" HPP and then add benefits under broader HPPs from the same provider for certain or all of their employees, providing an upselling opportunity for the occupational health provider.
• More general, "prevention oriented" health plans, providing expanded access to general practitioners and certain specialists in the Med Life's clinics and as well as specified laboratory tests and diagnostic imaging for higher end packages. The specific services vary depending on the type of package.

The revenue in relation with corporate customers is recognized over time. Under the output method, the entity would measure completion of the total performance obligation either in relation to the total obligation that has been satisfied or in relation to what remains to be satisfied, based on health prevention packages delivered.

Contract assets and liabilities

A contract asset (accrued income) is the right to consideration in exchange for services transferred to the customer. Where the Company transfers services to a customer over time before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration to date under the contract. Contract assets are presented within trade and other receivables (Note 7 – Trade receivables) on the Company Balance Sheet and are expected to be realized in less than one year.

A contract liability (deferred income) is the obligation to transfer services to a customer for which the Company has received consideration from the customer. Where the customer pays consideration before the Group transfers services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract. Contract liabilities are presented within trade and other payables (Note 11 – Account payables) on the Company Balance Sheet.

Using the practical expedient in IFRS 15, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised service to the customer and when the customer pays for that service will be one year or less. All the contracts are under one year.

Contracts are for periods of less than one year or are billed based on services incurred. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed.

3.21 Employee benefits

The Company, in the normal course of business, makes payments to the Romanian State on behalf of its employees for social, pensions, health care and unemployment cover. 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 does not operate any other pension scheme.

Bonus schemes

The Company recognizes a liability and an expense where a contractual obligation exists for shortterm incentives.

The amounts payable to employees in respect of the short-term incentive schemes are determined based on annual business performance targets.

3.22 Fair value

Certain accounting policies of the Company and information presentation criteria require determination of the fair value both for the assets and the liabilities of the Company. In determining the fair value of assets and liabilities, the Company uses as much as possible observable market

values. Fair values are classified on various levels based on inputs used in valuation techniques, as follows:

• Level 1: (unadjusted) quoted prices on active markets for identical assets and liabilities
• Level 2: inputs, other than the prices included in level 1, which are observable for assets and liabilities, either directly (e.g.: prices) or indirectly (e.g.: derived from prices)
• Level 3: inputs for evaluation of assets and liabilities which are not based on observable market data.

In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation.

Further information about the assumptions made in measuring fair values is included in the note 5.1 Land and buildings carried at fair value.

3.23 IFRS 8

IFRS 8 disclosures are meant to enable users of financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

An operating segment is a component of an entity:

• (a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
• (b) whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and
• (c) for which discrete financial information is available.

Med Life considers that all the business activities from which it earns revenues are intertwined and that the main business activity represents one segment- the rendering of medical services.

3.24 IFRS 16 "Leases"

The Company leases various buildings, equipment, vehicles and other assets. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.

The Company assesses whether a contract is or contains a lease, at inception of the contract. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company - except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. Payments associated with shortterm leases and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Assets and liabilities arising from a lease are initially measured on a present value basis.

Lease liabilities include the net present value of the following lease payments:

• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• The exercise price of a purchase option if the Company is reasonably certain to exercise that option;
• Payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option; and
• Lease payments to be made under reasonably certain extension options.

The lease payments are discounted using the lessee's incremental borrowing rate, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security

and conditions. To determine the incremental borrowing rate, the Company uses recent third-party financing received by the lessee as a starting point and adjusts the rate to reflect changes in financing conditions since the third-party financing was received.

The lease liability is presented as a separate line in the statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

Right-of-use assets are measured at cost comprising the following:

• The amount of the initial measurement of lease liability;
• Any lease payments made at or before the commencement date less any lease incentives;
• Any initial direct costs; and
• Restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.

The right-of-use assets are presented as a separate line in the statement of financial position

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the 'Property, Plant and Equipment' policy. Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

3.25 Subsequent events

The effect of significant subsequent events, after the reporting period, which supplies additional information regarding the financial position of the Company and require adjustments are reflected in the balance sheet or profit and loss, if the case. The significant events that do not require adjustments are disclosed in the notes of the separate financial statements.

3.26 Critical accounting judgements and key sources of estimation uncertainty

In applying the Company's accounting policies, which are described in note 3, the management is required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in

which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Company's accounting policies

The following are the critical judgements, apart from those involving estimations (which are presented separately below), that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

Critical judgements in assessing the impairment of financial assets

When accounting for its investments in subsidiaries, the Company's management has concluded that the investments shall be maintained and presented at cost. Please refer to Note 3.7 – Investments in subsidiaries.

Critical judgements in assessing the impairment of non-financial assets

Please refer to Note 5 – Tangible and intangible fixed assets.

Critical judgements in determining the fair value of land and buildings

The Company accounts for land and building using the fair value approach based on market comparative valuations performed by certified ANEVAR professional as per revaluation reports concluded as at 31 December 2019. The valuations conform to International Valuation Standards. As at 31 December 2020, the management has not identified any indication that would conclude the need of revaluating its land and buildings for any impairment.

For further details, please see Note 5.1 – Land and buildings carried at fair value.

Critical judgements in assessing revenue recognition

Please refer to Note 3.20 – Revenue recognition.

Critical judgements in determining the lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

For leases of buildings, cars and equipment, the following factors are normally the most relevant:

• If there are significant penalty payments to terminate (or not extend), the group is typically reasonably certain to extend (or not terminate).

• If any leasehold improvements are expected to have a significant remaining value, the group is typically reasonably certain to extend (or not terminate).

• Otherwise, the group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset.

• If the Company considers that some of the lease agreement shall be terminated earlier, then the assumption of the tenor shall be reassessed accordingly in order to fairly represent the management's view of the leased asset's impact to the Financial Statements.

The lease term is reassessed if an option is actually exercised (or not exercised) or the group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.

Key sources of estimation uncertainty

Calculation of loss allowance

The Company always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected credit losses on this financial asset are estimated using a provision matrix based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

In determining adjustments for impairment of receivables, management incorporates forwardlooking information, exercises professional judgment and uses estimates and assumptions. Estimation of expected credit risk losses involved forecasting future macroeconomic conditions for the next 2 years. More details on the assumptions, scenarios used and the weights assigned to each scenario can be found in Note 7 dedicated to accounts receivables.

The incorporation of forward-looking elements reflects the expectations of the Company and involves the creation of scenarios, including an assessment of the probabilities of materialization of each scenario.

4. FINANCIAL ASSETS

The Company holds significant investments in other companies.

	31 December	31 December
Carrying amount	2020	2019
Cost of investments in other companies	222,209,791	219,441,742
Long-term loans granted to group companies	12,497,232	12,072,552
Other financial assets	2,628,265	2,706,440
TOTAL	237,335,288	234,220,734

Investments in other companies

Investments in other companies represent 27% of the total assets of the Company.

Movement in cost of investments

	December 31, 2020	December 31, 2019
Balance at the beginning of the year	219,441,742	135,043,779
Acquisition of social parts in other companies	2,768,049	84,397,963
Balance at year end	222,209,791	219,441,742

Med Life, directly or through its subsidiaries, signed the sale contract for the purchase of shares in the capital of the following companies:

• 100% of the shares in Centrul Medical Matei Basarab SRL (November 19, 2020);
• 75% of share in Pharmachem Distributie SRL (December 15, 2020);
• 100% of the shares in CED Pharma SRL (December 24, 2020);
• 36% of the shares in KronDent SRL (December 21, 2020)

In March 2021, the Company obtained control over two of the above mentioned companies: Centrul Medical Matei Basarab SRL and KronDent SRL. Pharmachem Distributie SRL and CED Pharma SRL are still under analysis by Competition Council.

The Company has become the sole shareholder of Ghencea Medical Center, completing its shareholding package with additional 10% percent, thus reaching 100% and also has increase the package of shares held in Geneys Arad by 7% in June 2020 and by 5% in December 2020 reaching 73%.

Management conducts impairment tests on an annual basis or whenever there is an indication of impairment to assess the recoverability of the carrying value of investments at individual level. This is performed using discounted cash flow models.

There are a number of key sensitive judgements made in determining the inputs into these models which include:

• Revenue growth
• Operating margins and
• The discount rates applied to the projected future cash flows.

Management have engaged independent specialists to assist with the determination of the discount rates for the significant Cash Generating Units to which the cost of investment relates.

Long-term loans granted to other Group companies

As of December 31, 2020, the Company presents long-term loans granted to Bahtco Invest SA and Medlife Ocupational SRL of RON 11,652,927 (January 1, 2020: RON 11,439,873).

Other financial assets

Other financial assets represent mainly rent deposits with a maturity longer than one year.

5. TANGIBLE AND INTANGIBLES FIXED ASSETS

		FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
5. TANGIBLE AND INTANGIBLES FIXED ASSETS As of December 31, 2020, the Company's tangible and intangible assets' structure was the following:
	Intangibles	Land	Constructions	Vehicles and equipment	Construction in progress	Total
Cost 1 January 2020	39,344,056	12,792,780	177,858,290	164,270,619	12,432,653	406,698,399
Additions	4,769,898	-	36,523,125	18,783,238	9,260,541	69,336,801
Transfers Disposals Revaluation	- (7,684) -	- - -	841,337 - -	- (401,315) -	(841,337) (1,699,069) -	- (2,108,068) -
31 December 2020	44,106,270	12,792,780	215,222,752	182,652,542	19,152,788	473,927,133
Depreciation
1 January 2020	27,604,233	-	53,003,956	110,822,433	-	191,430,622
Charge of the year Disposals	5,826,144 -	- -	7,499,233 -	13,850,112 (352,939)	- -	27,175,489 (352,939)

The amortization of intangible assets is presented in the line operating expenses in the statement of profit or loss.

			MED LIFE S.A. NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
As of December 31, 2019, the Company's tangible and intangible assets' structure was the following:
	Intangibles	Land	Constructions	Vehicles and equipment	Construction in progress	Total
Cost 1 January 2019	31,194,347	13,429,395	153,078,974	152,453,145	8,310,154	358,466,015
Additions	8,149,709	-	18,431,430	11,677,171	6,684,887	44,943,197
Transfers	-	-	2,562,388	-	(2,562,388)	-
Disposals Revaluation	- -	- (636,615)	- 3,785,498	(253,259) 393,563	- -	(253,259) 3,542,446
31 December 2019	39,344,056	12,792,780	177,858,290	164,270,619	12,432,653	406,698,399
Depreciation
1 January 2019	23,493,103	-	47,435,376	96,816,131	-	167,744,610
Charge of the year	4,111,130	-	5,568,580	14,225,623	-	23,905,334
Disposals	-	-	-	(219,322)	-	(219,322)
Revaluation	-	-	-	-	-	-
31 December 2019	27,604,233	-	53,003,956	110,822,433	-	191,430,622
Net Book Values
1 January 2019	7,701,244	13,429,395	105,643,598	55,637,014	8,310,154	190,721,405

5.1. Land and buildings carried at fair value

The value of freehold land and buildings related to Med Life are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value measurements of Med Life's freehold land and buildings as at 31 December 2019 were performed by independent valuers not related to Med Life. They are certified by ANEVAR and have appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations. December 31, December 31, December 31, 2020 2019 2018

the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value measurements of Med Life's freehold land and buildings as at 31 December 2019 were performed by independent valuers not related to Med Life. They are certified
by ANEVAR and 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 was based on recent market transactions on arm's length terms for similar properties.
The fair value of the freehold land was determined based on the market price comparison method as well as the residual method. The resulting value was based on the market comparison method.
The fair value of the buildings was determined using the cost approach that reflects the cost to a market participant to construct assets of comparable utility and age, adjusted for obsolescence and the revenue based approach (capitalizing the net income from rents). The final value that resulted is the one that derives from the application of the method by cost.
If the lands and buildings of the Company had been valued at historical cost, their book value would have been the one presented below:
Carrying amount without
revaluation
Land	1,346,998	1,346,998	1,346,998
Buildings	96,991,436	60,468,311	42,036,881
TOTAL	98,338,434	61,815,309	43,383,879

The trademark used to identify and distinguish the medical services, customer list, contract advantages have an indefinite useful life. The Company intends to use these intangibles continuously and evidence supports its ability to do so. An analysis of market and competitive trends provides evidence that the services will generate net cash inflows for the group for an indefinite period. Therefore, the intangibles are carried at cost without amortisation, but is tested for impairment. The useful life for trademarks, customers list and contract advantages cannot be reasonably estimated as they intend to generate future benefits over the period which the company is expected to continue its activity. The capitalized cost for intangible assets recognized during the year is already included in the other intangible assets on the balance sheet – for further details please see note 20 - Other operating revenues.

5.2. Assets pledged as securities

The lands and constructions were pledged to guarantee the Company's loans (see Note 13). The company cannot deposit these assets as collateral for other loans nor sell them to other entities.

6. INVENTORIES

31 December	31 December
2020	2019
13,144,957	6,842,340
	42,522
768	2,550
13,224,013	6,887,412
	78,288

The cost of inventories recognised as an expense includes RON 186,614 (2019: RON 201,679) in respect of write-downs of inventory to net realisable value.

7. ACCOUNTS RECEIVABLE

	MED LIFE S.A.
	NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
	FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
ACCOUNTS RECEIVABLE
	December 31,	December 31,
7.	2020	2019
Trade receivables Contract assets	100,502,440 # 8,058,383 #	61,274,200 7,837,288
Advances to suppliers	2,310,518 #	3,505,840
Allowance for doubtful receivables	(21,489,176) # #	(14,672,443)

Credit risk for the Company primarily relates to trade receivables in the ordinary course business.
Customers' compliance with agreed credit terms is monitored regularly and closely. Where payments are delayed by customers, steps are taken to restrict access to services or contracts are terminated. Certain customers, which are public or quasi-public institutions, may have longer payment terms and services may be continued to be delivered when amounts are overdue due to management's assessment of a lower credit risk.
The average receivable period for the services offered is 95 days. There is no interest on commercial receivables within the first 95 days from the date of issue of the invoice.
The carrying amount of financial assets, measured at amortised cost, represents the maximum credit exposure. There are no credit enhancements or collateral held that would offset such amounts. As the customer base of the Company is very diverse there are generally no large concentrations of credit risk.
The Company applies the simplified approach for providing for expected credit losses (ECL) prescribed by IFRS 9, which requires the use of the lifetime expected loss provision for all trade receivables. No ECL has been recognised for other financial assets carried at amortised cost as there is no related credit risk.
Based on the assessed credit risk of the customers, Med Life's trade receivables, contract assets and other receivables are split between individually assessed and collectively assessed.
	Individually	Collectively
31 December 2020	assessed	assessed	Total
Trade receivables	60,484,687	40,017,753	100,502,440
Contract assets Advances to suppliers	8,058,383 2,310,518	- -	8,058,383 2,310,518
Allowance for doubtful receivables	(8,174,147)	(13,315,029)	(21,489,176)
Total	62,679,441	26,702,724	89,382,165
	Individually	Collectively
31 December 2019	assessed	assessed	Total
Trade receivables	23,411,130	37,863,070	61,274,200
Contract assets Advances to suppliers	7,837,288 3,505,840	- -	7,837,288 3,505,840
Allowance for doubtful receivables	(7,365,835)	(7,306,608)	(14,672,443)

Individually	Collectively
assessed

In contract assets, in 2019 and 2020, is included a debt of RON 7,365,835 which represents amounts receivable from the Health Insurance House of the Municipality of Bucharest, not yet invoiced. The company has commenced court proceedings against the Health Insurance House of Bucharest. The management of the Company is confident that the amount will be recovered in the end, but considering the unfavourable decisions of the courts in similar cases, the Company has decided to register a value adjustment for the entire amount.

The Company applies the simplified approach for providing for expected credit losses (ECL) prescribed by IFRS 9, which requires the use of the lifetime expected loss provision for all trade receivables which are

collectively analysed. No ECL has been recognised for other financial assets carried at amortised cost as there is no related credit risk.

A provision matrix was prepared based on historical observed default rates over the expected life of trade receivables resulting in an ECL reflecting the predictive risk by type of customer. Changes in economic conditions were also considered as part of forward-looking information.

Estimating adjustments doubtful receivables involves forecasting future macroeconomic conditions for the next 2 years. The incorporation of forward-looking elements reflects the Company's expectations and involves the creation of scenarios (baseline, optimistic, pessimistic), including an assessment of the probability of materialization of each scenario. The applied macroeconomic scenarios were modified compared to those used in 2019 to reflect the worsening macroeconomic outlook amid the COVID-19 pandemic. 31 December 2020 Current <30 days < 90 days <180 days <365 days >365 days Total Expected credit loss rate 0.66% 21.89% 28.91% 36.41% 42.94% 62.69% Gross carying amount 17,667,031 606,207 603,497 516,202 1,152,141 19,472,675 40,017,753 Loss allowance 132,710 117,258 174,458 187,967 494,702 12,207,935 13,315,029 31 December 2019 Current <30 days < 90 days <180 days <365 days >365 days Total Expected credit loss rate 0.57% 11.61% 16.64% 22.23% 28.39% 35.41% Gross carying amount 16,292,211 774,004 452,837 598,463 1,089,667 18,655,889 37,863,070 Loss allowance 89,856 92,270 75,353 133,008 309,399 6,606,722 7,306,608

The scenarios used were: the baseline scenario, the optimistic scenario and the pessimistic scenario. The scenario coefficients are determined based on the manager's expectations, taking into account the possible representative results for each scenario. GDP (Gross Domestic Product) was used as a macroeconomic factor considered statistically relevant for the analysed trade receivables.

	Base case	Pessimistic	Optimistic
Weight	25%	60%	15%

31 December 2020	Current	<30 days				< 90 days <180 days <365 days >365 days	Total
Expected credit loss rate	0.66%	21.89%		28.91%	42.94%	62.69%
Gross carying amount	17,667,031	606.207	603.497			516,202
Loss allowance	117.258	132.710				174,458

31 December 2019	Current	<30 days				< 90 days <180 days <365 days >365 days	Total
Expected credit loss rate	0.57%	11.61%	16.64% -	22.23% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	28.39%	35.41%
Gross carying amount	16,292,211	774.004	452.837			598,463
Loss allowance	92.270	89.856	75.353			133,008	7,306,608

scenario coefficients are determined based on the manager's expectations, taking into account the possible representative results for each scenario. GDP (Gross Domestic Product) was used as a macroeconomic factor considered statistically relevant for the analysed trade receivables.
	Base case		Pessimistic		Optimistic
Weight	25%		60%		15%
The allowance for doubtful receivables collectively assessed based on the Company's provision matrix arising from the ECL was determined as follows:
		Individually assessed	Collectively assessed		Total
Balance as at 1 January 2019 Amounts written off		7,365,835 -	8,830,815	-	16,196,650 -
Amounts recovered		-	(1,239,611)		(1,239,611)
Change in loss allowance due to new trade and other receivables originated net of those derecognised due
to settlement		-		548,996	548,996
Changes in credit risk parameters		-		(833,592)	(833,592)
Balance as at 31 December 2019 Amounts written off		7,365,835 -	7,306,608	-	14,672,443 -
Amounts recovered		-		(904,872)	(904,872)
Change in loss allowance due to new trade and other receivables originated net of those derecognised due
to settlement		-		851,619	851,619
Changes in credit risk parameters		808,312	6,061,674		6,869,986
Balance as at 31 December 2020		8,174,147	13,315,029		21,489,176
		The accompanying notes are an integral part of the individual financial statements. 35

8. CASH AND BANKS

	31 December	31 December
	2020	2019
Cash in bank	32,531,266	10,484,676
Cash in hand	946,719	898,503
Cash equivalents	257,461	274,253
TOTAL	33,735,446	11,657,432

Maternal vouchers are part of a financial support program granted to pregnant women in Bucharest, by the Capital City Hall. The Company has reclassified them from Cash equivalents to Financial assets due to the fact that their convertibility in cash exceeds more than three months. The amount reclassified in 2020 was 1,004,612 RON (31 December 2019: 1,197,322 RON).

9. PREPAYMENTS

As of December 31, 2020 the Company has prepayments in amount of RON 1,325,662 (RON 2,793,639 as of January 1, 2020). The prepayments balance as of December 31, 2020 consists mainly of deferred commissions for financing related to the Club loan for undrawn facilities and amounts such as insurance policies for professionals and tangible assets.

10. ACCOUNTS PAYABLE

			31 December	31 December
			2020	2019
Suppliers			85,659,132	80,812,869
Fixed assets suppliers			8,240,800	10,148,099
Contract liability			2,705,918	4,918,252
TOTAL			96,605,850	95,879,220
11. OTHER SHORT-TERM LIABILITIES			31 December	31 December
			2020	2019
Salary and related liabilities (incl. contributions)			9,195,331	8,805,986
Other liabilities			6,813,309	25,118,220
TOTAL			16,008,640	33,924,206
12. PROVISIONS
	December 31,	December 31,
	2020	2019
Carrying amount at start of year	524,431	-
Charged/(credited) to profit or loss
- additional provisions recognised	3,312,536	524,431

11. OTHER SHORT-TERM LIABILITIES

	31 December	31 December
	2020	2019
Salary and related liabilities (incl. contributions)	9,195,331	8,805,986
Other liabilities	6,813,309	25,118,220
TOTAL	16,008,640	33,924,206

12. PROVISIONS

The balance of the suppliers account consists of debts for the acquisition of reagents, laboratory equipment, office equipment, stationery, cleaning products and food.
		9,195,331	8,805,986
			25,118,220
			33,924,206
524,431	-
3,312,536	524,431
(217,668)	-
(734,246)	-
	OTHER SHORT-TERM LIABILITIES Salary and related liabilities (incl. contributions)		6,813,309 16,008,640

13. LEASES

Amounts recognised in the balance sheet

		MED LIFE S.A.
			NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
			(all the amounts are expressed in RON, unless otherwise specified)
13. LEASES
Amounts recognised in the balance sheet
Right-of-use asset	Buildings	Vehicles	Equipment Total
Cost
Value at 31 December 2019 *restated Additions	88,889,775 5,173,923	1,765,879 8,527,981	8,474,924 1,472,573	99,130,578 15,174,477
Disposals Value at 31 December 2020	(558,166) 93,505,532	- 10,293,860	(7,610,972) 2,336,525	(8,169,138) 106,135,917
Accumulated depreciation
Value at 31 December 2019 *restated	16,077,460	525,313	2,803,954	19,406,727
Charge for the year Disposals Value at 31 December 2020	16,773,848 (433,203) 32,418,106	1,086,165 - 1,611,478	1,446,788 (3,606,710) 644,032	19,306,801 (4,039,912) 34,673,616
Carrying amount
At 31 December 2019 *restated At 31 December 2020	72,812,315 61,087,427	1,240,566 8,682,382	5,670,970 1,692,493	79,723,850 71,462,302
		December 31,	December 31,
		2020	2019
			*restated
Non-current - Lease Liabilities		67,027,513	80,139,646
Current portion – Lease Liabilities		21,416,526	21,908,619
TOTAL		88,444,039	102,048,265

Amounts recognised in the statement of profit or loss

	MED LIFE S.A. NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
(all the amounts are expressed in RON, unless otherwise specified)
Amounts recognised in the statement of profit or loss
	December 31,	December 31,
	2020	2019 *restated
Depreciation charge of right-of-use assets	19,306,801	19,406,727
Interest expense on lease liabilities (included in finance cost)	2,744,777	3,184,678
Covid (Gain) Foregiveness amount	(771,948)	-
PL (Gain) from contracts terminated earlier	(291,638)	-
Foreign exchange loss in relation with Lease Liabilities	1,365,058	586,730
Income tax expense in relation with Lease Liabilities	-	-
Expense relating to short-term leases (included in rent expenses)	506,511	4,529,530
Expense relating to leases of low-value assets that are not shown above as short term leases (included in rent expenses)	3,177,357	2,944,000
The total cash outflow for leases amount to 20,474,244 (2019: 21,357,260) for contracts that fall under IFRS 16 (which refer to rental of buildings, equipment and vehicles).
Please refer to Note 3.7 Comparative Information for further details on restatement of prior periods in relation to leases.
14. FINANCIAL DEBT
		31 December	31 December
Current portion of long-term loans (incl. overdraft)		44,620,789	25,992,833
Non-current portion of long-term loans TOTAL		333,649,420 378,270,209	265,437,273 291,430,106
		31 December	31 December

14. FINANCIAL DEBT

• On September 24, 2019 Med Life SA (together with the co-debtors Policlinica de Rapid Diagnostic SA, Bahtco Invest SA, Accipiens SA, Genesys Medical Clinic SRL, Clinica Polisano SRL, Medical Center Sama SA, Dent Estet Clinic SA and Valdi Medica SRL) signed with the Banca Comerciala Romana, Raiffeisen Bank, BRD Groupe Societe Generale and Banca Transilvania the refinancing of the existing facilities, the extension of the financing period, the rearrangement of the terms and conditions, as well as for an additional credit limit of EUR 28 million, which will be in the form a term facility, being used by Medlife, along with other liquidities of the Company, for possible new purchasing opportunities in the market. On 15 May 2020, this facility was extended with 20 million euro.

• a guaranteed overdraft facility concluded between Garanti Bank S.A. and Med Life SA the amount drawn on December 31, 2020 is RON 9,738,800.

The interest rate for each loan for each interest period is the rate per year that is the sum of the applicable margin and depending on the currency of each loan, EURIBOR for the amounts in EUR or ROBOR for the amounts in RON.

The following guarantees have been requested, within the credit agreement at the level of the whole Group: • real estate mortgage on the land located in Calea Grivitei no. 365 sector 1 Bucharest Romania (cadastral no. 13183/1) and of the related constructions

• real estate mortgage on the land and constructions that make up the Pediatric Hospital in Bucharest. str. Zagazului no. 7 - CF 218010

• real estate mortgage on the land and constructions that make up the PDR Clinic and Hospital located in Brasov str. Turnului no. 5 - CF 127854

• movable mortgage on certain movable assets (medical equipment) owned by each company - Med Life, Bahtco Invest SA and Policlinica de Diagnostic Rapid SA

• movable mortgage on future medical equipment to be purchased by the debtor and co-borrowers created in favor of the Financing Parties; or of those acquired by the Company as a result of financing the leasing debts through the syndicated loan

• movable mortgage on the insurances of each debtor regarding the mortgaged tangible assets in favour of the Financing Parties

• mortgage on the shares held by the Company in the share capital of the initial debtors and of the companies Medical Center Sama SA, Ultratest SA, Rur Medical SA etc, and any other significant company or any future debtor if appropriate.

• movable mortgage on the bank accounts of the initial and new borrowers

• mortgage on certain commercial debts of Med Life (including debts related to the National House of Health Insurance or any other similar entities and the debts that resulted from significant commercial contracts)

• a movable mortgage on the actions of the sponsors of the debtor which will be created on the basis of a contract of movable mortgage on the shares, concluded between the sponsors and the creditors.

• real estate mortgage on the land owned by Accipiens, located in Dr. Cornel Radu street, no. 3, Arad (cadastral no. 301842) and the related constructions

• real estate mortgage on the land owned by the Sama Medical Center, located in str. Infratirii, no. 5A, Craiova (cadastral no. 204837) and related constructions.

15. ISSUED CAPITAL

The issued share capital in nominal terms consists of 22,145,082 ordinary shares as at 31 December 2020 (31 December 2019: 22,145,082) with a nominal value of RON 0,25 per share. The holders of ordinary shares are entitled to one vote per share in the shareholders' meetings of the Company, except for the treasury shares bought back by the Company as part of the share buy-back program. All shares rank equally and confer equal rights to the net assets of the Company, except for treasury shares.

In accordance with the Decision of the Extraordinary General Meeting of Shareholders of the Company dated 15.12.2020, the share capital of the Company was increased with RON 27,681,352.50, from RON 5,536,270.5 to RON 33,217,623, by issuance of a number of 110,725,410 new shares with a nominal value of RON 0.25/share. The Share Capital Increase was made with the incorporation of share premium reserves, and the newly issued shares (5-for-1) were allocated without a monetary compensation to all shareholders registered in the shareholders' register of the Company as at 04 of January 2021 (Registration Date).

The effects of the share capital increase were processed on 15 of February 2021 and the newly issued shares were allocated to shareholders.

The total number of issued ordinary shares of the Company after the share capital increase is 132.870.492.

Please refer to Note 23 – Earnings per share for further details

		MED LIFE S.A.
			NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
		FOR THE YEAR ENDED DECEMBER 31, 2020	(all the amounts are expressed in RON, unless otherwise specified)
	31 December	31 December
	2020	2019
Share capital	33,217,623	5,536,271
Share premium TOTAL	48,809,389 82,027,012	75,959,199 81,495,470
16. RESERVES
The structure of the Company's reserves is presented below:

16. RESERVES

2020 2019 48,809,389 75,959,199 RESERVES December 31, December 31, 2020 2019 3,431,665 1,107,254 20,579,324 8,965,695 66,588,874 66,588,874 90,599,863 76,661,823 December 31, December 31, 2020 2019 10,072,949 10,072,949 13,938,040 -		MED LIFE S.A. NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020	(all the amounts are expressed in RON, unless otherwise specified)
Share premium 16. The structure of the Company's reserves is presented below: General reserves (i) Other reserves (ii) Revaluation reserves (iii) TOTAL (i), (ii) General reserves and other reserves Balance at beginning of the year Movements

(i), (ii) General reserves and other
	2020	2019
Balance at beginning of the year	10,072,949	10,072,949
Movements	13,938,040	-
Balance at the end of the year	24,010,989	10,072,949
(iii) Revaluation reserves	December 31, 2020	December 31, 2019
Balance at beginning of the year	66,588,874	63,024,298
Decrease arising revaluation correction	-	-
Increase due to revaluation Deferred tax related to revaluation	- -	3,564,576 -
Balance at the end of the year	66,588,874	66,588,874

The properties revaluation reserve arises on the revaluation of land and buildings. When revalued land or buildings are sold, the portion of the properties revaluation reserve that relates to that asset, and that is effectively realized, is transferred directly to general reserves.

The effects of taxes on income, if any, resulting from the revaluation of property, plant and equipment are recognized and disclosed in accordance with IAS 12 Income Taxes (please see note 22).

17. REVENUE FROM CONTRACTS WITH CUSTOMERS

Turnover for the year ended December 31, 2020 is of RON 508,717,326 (for 12 months 2019 RON 456,165,019) consisting of medical services, including revenues from prevention packages of corporate customers and fees for services rendered within Med Life's clinics and various hospitals within Romania.

MED LIFE S.A. NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified) % of Total % of Total Variation Business line 12 months 2020 sales 12 months 2019 sales 2020/2019 Clinics 119,308,791 23.4% 132,954,254 29.1% -10.3% Hospitals 115,724,253 22.7% 101,614,584 22.3% 13.9% Laboratories 124,490,534 24.5% 81,549,789 17.9% 52.7% Corporate 147,217,262 28.9% 137,271,836 30.1% 7.2% Stomatology 1,974,121 0.4% 2,774,556 0.6% -28.8% Other 108,229 0.0% - 0.0% 100.0% Total sales 508,823,190 100.0% 456,165,019 100.0% 11.5% The Group has only 10% of its sales during 2020 deriving from the treatment of NHIH insured patients. 18. OTHER OPERATING REVENUES

18. OTHER OPERATING REVENUES

	12 months 2020	12 months 2019
Other operating revenues	2,224,434	2,462,997
Capitalized cost of intangible assets	1,869,134	1,885,745
TOTAL	4,093,568	4,348,742

19. OTHER OPERATING EXPENSES

				sales	2020/2019
18.	OTHER OPERATING REVENUES					The Group has only 10% of its sales during 2020 deriving from the treatment of NHIH insured patients.
	Other operating revenues caption comprises:
					12 months 2020	12 months 2019
Other operating revenues					2,224,434	2,462,997
	Capitalized cost of intangible assets				1,869,134	1,885,745
TOTAL					4,093,568	4,348,742
19.	OTHER OPERATING EXPENSES				12 months 2019
				12 months 2020		*restated
Utilities				4,510,812		4,746,958
Repairs maintenance				4,361,730		5,491,322
Rent				3,683,868		7,473,530
Insurance premiums Promotion expense				1,837,638 8,512,328		2,042,402 7,898,505
Communications				1,956,064		2,063,051
	Other administration and operating expenses			7,466,912		9,822,669
TOTAL				32,329,352		39,538,437
20.	relation to Other operating expenses. KEY MANAGEMENT PERSONNEL EXPENSES The structure of Med Life personnel is described below:	December 31,	December 31,			Please refer to Note 3.7 – Comparative Information for further details on restatement of prior periods in
Management		2020 43		2019 44
Staff		1,838		2,156
Total		1,881		2,200
						The short-term benefits (salary expenses) paid by the Company, by type of personnel are described below:
		December 31,		December 31,

20. KEY MANAGEMENT PERSONNEL EXPENSES

December 31, 2020	December 31, 2019
43	44
1,838	2,156

	December 31, 2020	December 31, 2019
Management	14,584,487	18,122,853
Staff	120,164,068	132,142,950
Total	134,748,555	150,265,803

21. NET FINANCIAL RESULT

21. NET FINANCIAL RESULT			12 months 2020	12 months 2019 *restated
Other financial expenses			-	-
(Loss)/Gain from foreign exchange rate impact			(6,628,985)
Finance cost			(13,773,288)	(7,843,768) (11,661,141)
Other income			1,063,587	-
Interest income			1,714,066	2,183,489
FINANCIAL NET PROFIT/(LOSS)			(17,624,620)	(17,321,420)
(a) Main shareholders
As of December 31, 2020, the shareholders' structure of Med Life SA is as presented below: ISSUED CAPITAL	Number of shares	%	Value
Legal entities	71,455,241	53.78%	17,863,810
Marcu Mihail	21,557,520	16.22%	5,389,380
Cristescu Mihaela Gabriela	18,660,690	14.04%	4,665,173
Marcu Nicolae Others	14,204,400 6,992,641	10.69% 5.26%	3,551,100 1,748,160

22. RELATED PARTIES

(a) Main shareholders

	Other financial expenses			-	-
	(Loss)/Gain from foreign exchange rate impact			(6,628,985)	(7,843,768)
Finance cost				(13,773,288)	(11,661,141)
	Other income			1,063,587	-
	Interest income			1,714,066	2,183,489
	FINANCIAL NET PROFIT/(LOSS)			(17,624,620)	(17,321,420)
	Please refer to Note 3.7 – Comparative Information for further details on restatement of prior periods in relation to Net Financial Result
22.	RELATED PARTIES
	(a) Main shareholders
	As of December 31, 2020, the shareholders' structure of Med Life SA is as presented below:
	ISSUED CAPITAL
		Number of shares	%	Value
Legal entities		71,455,241	53.78%	17,863,810
Marcu Mihail		21,557,520	16.22%	5,389,380
	Cristescu Mihaela Gabriela	18,660,690	14.04%	4,665,173
Marcu Nicolae		14,204,400	10.69%	3,551,100
Others		6,992,641	5.26%	1,748,160
TOTAL		132,870,492	100.00%	33,217,623
	As of December 31, 2019, the shareholders' structure of Med Life SA is as presented below:	Number of shares	%		Value
Marcu Mihail		4,119,320	18.60%		1,029,829
	Marcu Nicolae	2,913,800	13.16%		728,451
	Cristescu Mihaela Gabriela	3,110,115	14.04%		777,531
Others		12,001,847	54.20%		3,000,460
TOTAL		22,145,082	100%		5,536,271
	Please refer to Note 23 – Earnings per share for further details.
	(b) Executive Committee and Board of Directors' compensation

Cristescu Mihaela Gabriela	18,660,690	14.04%	4,665,173
Marcu Nicolae Others	14,204,400 6,992,641	10.69% 5.26%	3,551,100 1,748,160
As of December 31, 2019, the shareholders' structure of Med Life SA is as presented below:
Marcu Mihail	4,119,320	18.60%		1,029,829
Please refer to Note 23 – Earnings per share for further details.
Compensations granted to the members of the Executive Committee were as follows: Executive Committee	12 months 2020 6,192,697	12 months 2019 6,768,127
Executive Committee compensation includes the payments toward members of the top management under their mandate contracts concluded with the Company for a period of 4 years. As at December 31, 2020, the Company's Executive Committee consisted of ten managers remunerated
based on mandate agreement. No new member has been appointed during the year.
On October 21st, 2020, the Board of Directors extended all mandates for a new period of 4 years, ending October 21st, 2024.
Compensations granted to the members of the Board of Directors were as follows:
Board of Directors	12 months 2020 3,507,111	12 months 2019 3,724,068
	The accompanying notes are an integral part of the individual financial statements.	42

(b) Executive Committee and Board of Directors' compensation

Executive Committee	6,192,697	6,768,127

	12 months 2020	12 months 2019
Board of Directors	3,507,111	3.724.068

(c) Subsidiaries

Balance of receivables and payables from/to subsidiaries:

Trade Receivables/Trade Payables

		(all the amounts are expressed in RON, unless otherwise specified)
Med Life SA Board of Directors consists of 7 members under administration agreements concluded with the Company, approved by the General Shareholders Meeting.
For two of the members, the administration agreements ended in December 2020 and two new members were appointed on December 15th, 2020 by the Shareholders of the Company along with the extension of the Board Members' mandate for a period of 4 years, starting December 21st, 2020 and ending December 20th, 2024. No loans were granted to managers and administrators in 2020 and 2019.
(c) Subsidiaries
Balance of receivables and payables from/to subsidiaries:
Trade Receivables/Trade Payables The Company's trade relations with its subsidiaries represent rendering of medical services, rental of medical facilities and acquisition of materials and commodities.
	Receivables from		Payables to
	December 31,	December 31,	December 31,	December 31,
	2020	2019	2020	2019
Centrul Medical Panduri S.A. Almina Trading S.A.	743,100 1,254,890	291,439 192,014	1,199,728 188,349	505,374 211,550
DR. CRISTESCU I. MIHAELA-GABRIELA	-	58,400	53,561	4,839
Anima Speciality Medical Services S.R.L.	1,541,536	534,201	2,520,173	1,205,251
Pharmalife Med S.R.L. Biofarm Farmec S.R.L.	15,540 -	1 -	246,758 8,887	8,667 8,887
Policlinica de Diagnostic Rapid S.A.	5,845,665	3,162,096	6,613,507	4,572,269
Histo S.R.L.	1,233	70	241,857	189,112
Genesys Medical S.R.L.	4,020,915	922,134	4,498,243	2,811,864
Policlinica de Diagnostic Rapid Medis S.R.L. Accipiens S.A.	576,138 6,692	257,810 6,692	3,083,951 -	877,996 -
Biotest Med S.R.L.	252,136	178,472	4,395,898	3,540,539
Vital Test S.R.L.	209,786	170,442	1,617,662	2,452,839
Centrul Medical Sama S.A. Ultratest Craiova S.A.	3,186,819 73,336	2,371,164 62,803	3,734,429 5,106	2,513,729 5,106
Bahtco Invest S.A.	-	-	2,654,184	1,072,467
Medapt S.R.L.	-	-	832,033	832,033
RUR Medical S.A.	244,108	244,108	1,134,616	1,134,616
Bactro S.R.L. Transilvania Imagistica S.R.L.	- -	- -	- 50,569	107,048 24,049
Diamed Center S.R.L.	2,310,093	1,673,698	55,676	36,039
Stem Cells Bank S.A.	473,593	329,058	-	-
Dent Estet Clinic S.R.L.	57,291	7,186	90,771	9,139
Medlife Ocupational S.R.L. Solomed Clinic S.A.	55,990 1,117,493	55,990 418,069	- 1,053,222	- 675,068
Clinica Polisano S.R.L.	2,170,483	1,048,850	1,502,728	868,707
Prima Medical S.R.L.	44,963	36,583	224,233	178,500
Aspen Laborator Dentar S.R.L.	217 1,156	72 -	3,920 506,492	2,395 263,620
	304,507	-	-	-
Solomed Plus S.A. Valdi Medica S.R.L.		-	-	-
Ghencea Medical Center S.A.	22,147		-	-
Sfatul Medicului S.R.L.	159,754	-
Spital Lotus S.R.L. Centrul Medical Micromedica S.R.L.	137,207 121,416	- -	14,961 259,239	- -
Onco Team Diagnostic S.R.L.	625	-	483,791	-
Badea Medical S.R.L.	313	-	11,309	-
RMC Medlife Holding Kft. Marcu Nicolae	877 8,000	- -	- -	- 7,402
Life Finance G.I.E.	-	-	232	-
Nautic Life S.R.L.	-	-	2,616	2,616

Loans granted to and obtained from subsidiaries (financial assets and financial liabilities at amortized cost)

		FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)	MED LIFE S.A. NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
Loans granted to and obtained from subsidiaries (financial assets and financial liabilities at
amortized cost)		Outstanding balance of:
	Loans granted to:		Interest receivable from:
	December 31, 2020	December 31, 2019	December 31, 2020	December 31, 2019
Valdi Medica S.R.L.	1,870,000	1,870,000	74,860	40,524
Policlinica de Diagnostic Rapid S.A.	10,312	11,078	-	-
Bahtco Invest S.A.	48,233,843	41,285,437	4,070,930	3,299,615
MedLife Ocupational S.R.L. Vital Test S.R.L.	1,500,814 -	1,748,314 -	319,332 269	289,480 269
Stem Cells Bank S.A.	6,662,186	5,043,186	291,081	184,959
Clinica Polisano S.R.L.	28,380,363	29,380,363	1,817,074	1,277,564
Diamed Center S.R.L.	9,229,717	8,522,069	518,538	356,418
Ghencea Medical Center S.A. Sfatul Medicului S.R.L.	150,000 1,322,500	150,000 142,500	6,345 14,065	3,590 1,416
Pharmalife Med S.R.L.	2,701,438	2,874,938	-	-
RMC Medlife Holding Kft.	340,858	-	2,775	-
Total	100,402,032	91,027,886	7,115,269	5,453,835
Total interest income recognized in the period was in amount of 1,710,675 RON.
			Outstanding balance of:
		Loans obtained from: December 31, 2020	December 31, 2019	Interest payable to: December 31, 2020	December 31, 2019
Pharmalife Med S.R.L.		-	-	93,656	145,672
Policlinica de Diagnostic Rapid S.A.		382,922	382,922	29,314	22,283
Policlinica de Diagnostic Rapid Medis S.R.L.		-	640,000	39,160	33,308
Asilife S.R.L. Prima Medical S.R.L.		159,000 270,000	159,000 270,000	32,349 30,292	29,428 25,334
		811,922	1,451,922	224,771	256,025

Total interest income recognized in the period was in amount of 1,710,675 RON.
		Loans obtained from: December 31,	December 31,	December 31,	Interest payable to: December 31,
Total interest expense recognized in the period was in amount of 17,841 RON. The management has calculated the impact of accounting for amortized cost and concluded that the ECL
impact is immaterial. Interest receivable and interest payable from subsidiaries			Movement in:
		Borrowings received		Reimbursments paid
Policlinica de Diagnostic Rapid Medis S.R.L.		2020 -	2019 -	2020 640,000	2019 -
Asilife S.R.L.	-		-	-	-
Policlinica de Diagnostic Rapid S.A.	-		-	-	-
Prima Medical S.R.L.	-		-	-	-
Pharmalife Med S.R.L.	-		2,979,510	-	6,917,907

Interest receivable and interest payable from subsidiaries

Total interest expense recognized in the period was in amount of 17,841 RON. The management has calculated the impact of accounting for amortized cost and concluded that the ECL impact is immaterial.
Interest receivable and interest payable from subsidiaries
	Borrowings received		Reimbursments paid
	Borrowings granted		Reimbursments received
	2020	2019	2020	2019
Bahtco Invest S.A.	8,690,577	2,894,756	1,954,283	3,400,870
Diamed Center S.R.L.	707,648	2,150,361	-	500
Ghencea Medical Center S.A. MedLife Ocupational S.R.L.	- 102,500	250,000 66,000	- 350,000	100,000 175,000

	Borrowings received		Reimbursments paid
		Movement in:
	Borrowings granted		Reimbursments received
Bahtco Invest S.A.	8,690,577	2,894,756	1,954,283	3,400,870
Diamed Center S.R.L.	707,648	2,150,361	-	500
Ghencea Medical Center S.A.	-	250,000	-	100,000
MedLife Ocupational S.R.L.	102,500	66,000	350,000	175,000
Policlinica de Diagnostic Rapid S.A.	798	977	1,565	490
Pharmalife Med S.R.L.	3,456,000	-	3,629,500	-
Clinica Polisano S.R.L.	-	-	1,000,000	-
RMC Medlife Holding Kft.	341,950	-	1,092	-
Stem Cells Bank S.A.	1,619,000	1,980,800	-	-
Sfatul Medicului S.R.L.	1,180,000	142,500	-	-
Valdi Medica S.R.L. Accipiens S.A.	- -	940,000 -	- -	- -
Total	16,098,473	8,425,394	6,936,439	3,676,860

Transactions with subsidiaries:

Sales and purchases

	NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS	MED LIFE S.A.
	FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
Transactions with subsidiaries:
Sales and purchases
	Sales		Purchases
	2020	2019	2020	2019
NAUTIC LIFE	-	-	-	-
MARCU NICOLAE	8,000	1,633	-	-
DR. CRISTESCU I. MIHAELA-GABRIELA	-	-	700,800	700,800
Policlinica de Diagnostic Rapid S.A. Policlinica de Diagnostic Rapid Medis S.R.L.	2,161,218 176,375	1,542,811 190,854	2,071,284 4,766,455	2,204,311 139,268
Bahtco Invest S.A.	-	-	13,811,613	14,008,082
Histo S.R.L.	-	-	47,645	48,730
RUR Medical S.A.	-	-	-	126,171
Genesys Medical S.R.L.	3,081,693	1,054,664	1,686,379	1,995,710
Bactro S.R.L. Biotest Med S.R.L.	- 132,210	- 77,704	13,104 2,247,551	47,494 2,931,988
Vital Test S.R.L.	47,143	78,139	975,854	2,740,994
Centrul Medical Sama S.A.	798,348	412,668	1,315,080	1,717,286
Ultratest Craiova S.A.	10,533	44,661	-	-
Prima Medical S.R.L.	-	-	42,304	72,184
Diamed Center S.R.L.	636,395	702,075	256,041	355,264
Aspen Laborator Dentar S.R.L. Almina Trading S.A.	- 1,498,315	- 567,481	3,975 431,428	3,320 531,869
Centrul Medical Panduri S.A.	444,572	403,936	796,354	627,410
Dentestet 4 Kids S.R.L.	12,516	13,449	-	-
Dent Estet Clinic S.R.L.	253,051	53,164	99,402	96,914
Green Dental S.R.L.	2,378	1,848	-	-
Life Finance G.I.E.	-	-	-	776
Clinica Polisano S.R.L. Solomed Clinic S.A.	1,093,971 695,028	1,050,418 348,876	628,401 401,552	590,151 478,375
Solomed Plus S.A.	1,156	-	219,154	244,924
Anima Speciality Medical Services S.R.L.	980,970	883,213	2,318,922	2,195,421
Stem Cells Bank S.A.	143,902	150,999	-	-
Valdi Medica S.R.L.	387,527	156,031	-	-
Sfatul Medicului S.R.L.	8,394	5,175	-	-
Pharmalife Med S.R.L. Ghencea Medical Center S.A.	9,827 26,536	- -	455,279 -	24,414 -
Transilvania Imagistica S.R.L.	-	-	26,520	22,387
Centrul Medical Micromedica S.R.L.	118,395	-	259,239	-
Onco Team Diagnostic S.R.L.	-	-	853,509	-
Spital Lotus S.R.L.	493,782	-	45,502	-
	13,222,235
Total		7,739,799	34,473,347	31,904,244

23. TAXATION

	MED LIFE S.A.
	NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
	(all the amounts are expressed in RON, unless otherwise specified)
23. TAXATION
	December 31, 2020	December 31, 2019
		*restated
Current income tax expense	8,046,454	831,387
Deferred tax expense Total income tax expense	- 8,046,454	567,019 1,398,406
Profit before tax	49,888,734	4,598,632
Tax expense using the statutory rate of 16% (2019: 16%)	7,982,197	735,781
Fiscal effect of non-deductible expenses	2,542,949	1,070,928
Fiscal effect of deductible legal reserve Sponsorship	(371,906) -	- (580,052)
Reinvestit profit and other fiscal facilities Other elements	(2,168,003) 61,216	(703,815) 413,414
Deferred tax expense	-	567,020
Income tax for the current year	8,046,454	1,503,276
Income tax to comprehensive income	-	104,870
Income tax to profit or loss – Expense	8,046,454	1,398,406
	31 decembrie	31 decembrie
	2020	2019
Income tax liabilities as at January 1	(395,661)	(312,992)
Income tax paid in the current year	4,612,616	748,718
Income tax payable in the current year	(8,046,454)	(831,387)
Current tax liabilities	(3,829,499)	(395,661)

31 decembrie	31 decembrie

		MED LIFE S.A. NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
		FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)
Components of deferred tax	December 31	Changes in Deferred tax liability	1 January
	2020		2020
Deferred tax assets Non-current assets	-	-	-
Trade receivables	1,258,534	-	1,258,534
Total deferred tax asset	1,258,534	-	1,258,534
Deferred tax liability Deferred tax liability as a result of
IFRS 16 application	-	-	-
Other elements Revaluation reserve	104,870 12,611,076	- -	104,870 12,611,076
Total deferred tax liability	12,715,946	-	12,715,946
Net deferred tax liability	11,457,413	-	11,457,413
		Changes in
Components of deferred tax	December 31 *restated	Deferred tax liability *restated	1 January
	2019		2019
Deferred tax assets
Non-current assets Trade receivables	- 1,258,534	- -	- 1,258,534
	1,258,534	-	1,258,534
Total deferred tax asset
Deferred tax liability Deferred tax liability as a result of

Components of deferred tax	December 31 *restated	Changes in Deferred tax liability *restated	1 January
Deferred tax assets
	1,258,534	-	1,258,534
Deferred tax liability
Deferred tax liability as a result of IFRS 16 application	-	-	-
Other elements	104,870	104,870	-
Revaluation reserve	12,611,076	567,020	12,044,056
	12,715,946	671,890	12,044,056
Total deferred tax liability
Net deferred tax liability	11,457,413	671,890	10,785,523

24. FINANCIAL INSTRUMENTS (IFRS 7)

(a) Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of debt, which includes the borrowings disclosed in note 13, cash and cash equivalents disclosed in note 8 and equity, comprising issued capital, reserves and retained earnings as disclosed in notes 14 and 15.

The Company's risk management reviews the capital structure regularly. As a part of this review, the management considers the cost of capital and the risks associated with each class of capital, based on recommendations of the management, the Company will balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

(b) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements.

Financial assets that potentially subject the Company to concentrations of credit risk consist principally of cash, short-term deposits, trade and other receivables. The Company's cash equivalents and short-term deposits are placed with reputable financial institutions with a high credit rating.

Trade receivables are represented net of the allowance for expected credit losses. Credit risk with respect to trade receivables is limited due to the large number of customers comprising the Company's customer base, which consists mainly of both individuals and companies. Around 61% of the total sales are cashbased with remaining being based on issuance of invoices.

The financial condition of these customers in relation to their credit standing is evaluated on an ongoing basis.

The Company has also developed certain procedures to assess legal entities as customers prior to signing contracts, aimed at providing preventive and prophylactic health care packages (PPMs) and monitoring their ability to meet the payments during the course of contracts. Also, the Company has established an internal Collection department which actively monitors encashments received from customers.

The gross carrying amounts of financial assets (before credit loss allowances) included in the statement of financial position represent the Company's maximum exposure to credit risk in relation to these assets. At 31 December 2020 and 31 December 2019, the Company did not consider there to be a significant concentration of credit risk. The Company has only 10% of its sales during 2020 deriving from the treatment of NHIH insured patients (concentration of credit risk) – reliance on major customers. Please see note 7 – Trade receivables, for further details regarding credit risks of trade and other receivables and also note 3.17 Trade receivables, for further details of accounting policies used by the Group.

(c) Financial risk management objectives

The Company's Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

(d) Market risk

The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see (g) below).

There has been no change to the Company's exposure to market risks or the manner in which it manages and measures the risk.

(e) Interest rate risk management

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The higher risk is represented by funds borrowed in the national currency, because the interest rates are periodically repriced based on index variation.

Lease contracts concluded in the national currency are also exposed due to the above repricing process, as the discount rate in this case is linked to the internal borrowing rates for funds withdrawn in the national currency.

The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for interest bearing financial instruments at the reporting date. Out of the total outstanding balances for both borrowings and leases only the amounts that refers to the Club loan and lease contracts (which refer to rent of buildings, equipment and vehicles) have been considered for the sensitivity on interest rate computation. These amounts which were included in the analysis cover more than 80% of the total outstanding balances for both borrowings and leases.

A 10% per cent increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

The assumptions used have not changed from previous years.

Amounts exposed to interest rate risk

		NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)	MED LIFE S.A.
If interest rates had been 10% per cent higher and all other variables were held constant, the Group's profit for the year ended 31 December 2020 would decrease by RON 611,820 RON (2019: decrease with RON 464,786). This is mainly attributable to the Group's exposure to interest rates on its borrowings and leases.
Amounts exposed to interest rate risk
LIABILITIES	Total	Out of which included in the sensitivity analysis		%	Interest expenses per year at the current interest rate for the selected portion	Interest expenses per year at the interest rate increased by 10% for the selected portion	Variation that affects the profit and loss account when the interest rate increases by 10%
2020 Overdraft	9,738,800
Short-Term and Long-Term portions of loans	368,531,409	Club loan	367,764,790	97%	8,037,714	8,403,616	365,902
Short-Term and Long-Term portions of leases	88,444,039	Contracts that refer to rent of buildings, equipment and vehicles which fall under IFRS 16	76,727,811	87%	2,744,776	2,990,695	245,918
2019 Overdraft	9,558,600
Short-Term and Long-Term portions of loans	281,871,506	Club loan	280,794,076	96%	5,209,254	5,443,171	233,917
Short-Term and Long-Term portions of leases	102,048,265	Contracts that refer to rent of buildings, equipment and vehicles which fall under IFRS 16	83,110,554	81%	3,184,678	3,415,547	230,869
		December 31,	December 31,

	December 31, 2020	December 31, 2019 *restated
Profit or loss	611,820	464,786

(f) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the management of the Company's short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following table details the Company's remaining contractual maturity for financial liabilities as of December 31, 2020. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay, the table includes both interest and principal cash flows.

				MED LIFE S.A.
			NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
			(all the amounts are expressed in RON, unless otherwise specified)	FOR THE YEAR ENDED DECEMBER 31, 2020
	2020
	Weighted average	Carrying amount	Total	Year 1	Year 2	Year 3	Year 4	Year 5	> Year 5
	effective interest rate
Non-interest bearing instruments
Trade payables		96,605,850	96,605,850	96,605,850	-	-	-	-	-
Interest bearing instruments Overdraft		9,738,800	9,738,800	9,738,800	-	-	-	-
Club Loan	EURIBOR 6M / ROBOR 6M +	368,531,409	402,633,097	42,641,200	75,421,523	65,436,103	62,121,855	79,516,306	- 77,496,109
Lease contracts	margin	88,444,039	95,954,487	24,029,684	21,704,968	18,378,683	11,776,203	7,881,586	12,183,364
Total		563,320,098	604,932,234	173,015,534	97,126,491	83,814,786	73,898,057	87,397,892	89,679,473
*restated	2019
	Weighted average	Carrying amount	Total	Year 1	Year 2	Year 3	Year 4	Year 5	> Year 5
	effective interest rate
Non-interest bearing instruments
Trade payables		95,879,220	95,879,220	95,879,220	-	-	-	-
Interest bearing instruments Overdraft		9,558,600	9,558,600	9,558,600	-	-	-	-
Club Loan	EURIBOR 6M / ROBOR 6M +	281,871,506	308,986,841	22,038,954	41,348,757	43,153,786	43,661,524	44,831,820	- 113,952,001
Lease contracts	margin	102,048,265	112,503,005	25,163,323	22,464,161	19,144,717	15,906,643	10,130,614	19,693,548
		489,357,591

(g) Fair value of financial instruments

Financial instruments in the balance sheet include trade receivables and other receivables, cash and cash equivalents, short-term and long-term loans and trade and other payables. The estimated fair values of these instruments approximate their carrying amounts. The carrying amounts represent the Company's maximum exposure to credit risk.

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters through matching mechanism between assets and liabilities. Starting with 2020, the Company can withdraw money in the national currency from the credit facility available but not used, in order to limit foreign currency exposure.

Financial instruments that are not held at fair value

At level 1 of the fair value hierarchy, the Company classified cash and cash equivalents as assets that are not held at fair value.

At level 3 of the fair value hierarchy, the Company and the Bank classified in the category of assets: cash equivalents (maternity vouchers), trade and other receivables, other financial assets, and in the category of debt: loans from banks and other financial institutions, leasing debts, trade payables and other financial liabilities.

The following table shows the fair value and the fair value hierarchy for assets and liabilities that are not measured at fair value in the statement of financial position as at 31 December 2020:

ASSETS	Classification under IFRS 9	Carrying amount	Fair value	Level 1	Level 2	Level 3
Cash and cash equivalents	Amortized cost	33,735,446	33,735,446	33,735,446	-	-
Trade and other receivables	Amortized cost	89,382,165	89,382,165	-	-	89,382,165
Financial assets	Amortized cost	237,335,288	237,335,288	-	-	237,335,288
LIABILITIES
Trade and other
payables	Amortized cost	96,605,850	96,605,850	-	-	96,605,850
Overdraft	Amortized cost	9,738,800	9,738,800	-	-	9,738,800
Other long term debt	Amortized cost	3,325,000	3,325,000	-	-	3,325,000
Lease liability	Amortized cost	88,444,039	88,444,039	-	-	88,444,039
Long term debt	Amortized cost	368,531,409	368,531,409	-	-	368,531,409

		FOR THE YEAR ENDED DECEMBER 31, 2020 (all the amounts are expressed in RON, unless otherwise specified)	NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
ASSETS	Classification under IFRS 9	Carrying amount	Fair value	Level 1	Level 2	Level 3
Cash and cash equivalents
Trade and other receivables Financial assets	Amortized cost Amortized cost Amortized cost	33,735,446 89,382,165 237,335,288	33,735,446 89,382,165 237,335,288	33,735,446 - -	- - -	- 89,382,165 237,335,288
LIABILITIES
Trade and other payables Overdraft Other long term debt	Amortized cost Amortized cost Amortized cost	96,605,850 9,738,800 3,325,000	96,605,850 9,738,800 3,325,000	- - -	- - -	96,605,850 9,738,800 3,325,000
Lease liability	Amortized cost	88,444,039	88,444,039	-	-	88,444,039
Long term debt	Amortized cost	368,531,409	368,531,409	-	-	368,531,409
Carrying amount is a reasonable approximation of fair value (e.g., for cash, short-term trade receivables and payables, lease liabilities).
(h) Recognised fair value measurements
 Fair value hierarchy
This note explains the judgements and estimates made in determining the fair values of the non-financial assets that are recognized and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its non-financial assets and liabilities into the three levels prescribed under the accounting standards.
31 December 2020 Land and buildings	Note Level 1 5 -	Level 2 -	Level 3 167,512,343
31 December 2019	Note Level 1 5 -	Level 2 -	Level 3 137,647,114

(h) Recognised fair value measurements

Land and buildings	5 -	-	137,647,114

• Valuation techniques used to determine level 3 fair values are presented in note 5.
• Valuation inputs and relationships to fair value

Foreign currency sensitivity analysis

The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

		(all the amounts are expressed in RON, unless otherwise specified)
2020	RON	1 EUR = 4.8694 RON	Total
ASSETS Cash and cash equivalents	22,671,972	11,063,474	33,735,446
Trade receivables	89,382,165	-	89,382,165
Receivables from group companies	84,044,060	10,976,008	95,020,068
Long-term loans to group companies	-	12,497,232	12,497,232
Other long term receivables	2,628,265	-	2,628,265
LIABILITIES
Trade payables Overdraft	96,605,850 -	- 9,738,800	96,605,850 9,738,800
Other long term debt	-	3,325,000	3,325,000
Short-Term and Long-Term portions of loans	71,024,752	297,506,657	368,531,409
Short-Term and Long-Term portions of financial leasing	545,269	87,898,770	88,444,039
Payables to group companies	1,036,693	-	1,036,693
2019* restated	RON	1 EUR = 4.7793 RON	Total
ASSETS
Cash and cash equivalents	11,523,469	133,963	11,657,432
Trade receivables	57,944,885	-	57,944,885
Receivables from group companies	74,141,066	10,268,103	84,409,169
Long-term loans to group companies	-	12,072,552	12,072,552
Other long term receivables	2,706,440	-	2,706,440
LIABILITIES
Trade payables	95,879,220	-	95,879,220
Overdraft	-	9,558,600	9,558,600
Other long term debt Short-Term and Long-Term portions of loans	- 10,000,000	6,650,000 271,871,506	6,650,000 281,871,506
Short-Term and Long-Term portions of financial leasing	570,049	101,478,216	102,048,265
Payables to group companies	1,707,947	-	1,707,947

The Company is mainly exposed in respect of the exchange rate of the RON versus EUR. The above table details the Company's sensitivity to a 10% increase and decrease in RON against EUR. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel 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.

If EUR is weakening 10% against RON, the profit will increase and the amount stated below will be positive. For a 10% strengthening of EUR against RON there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative.

The assumptions used have not changed from previous years. The variation below is presented as absolute amounts.

	December 31, 2020	December 31, 2019 *restated
Profit or loss	36,393,251	36,708,370

25. COMMITMENTS AND CONTINGENCIES

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is probable. A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.

Club loan related commitments

Med Life SA shall not enter into any agreement which will amend, novate, modify or vary the provisions of Med Life's Shareholders' Agreement without the prior written consent of the lenders.

Other commitments

As at December 31, 2020 and December 31, 2020, the Med Life SA holds insurance policies to cover possible liabilities towards doctors for malpractice as well as insurance contracts related to buildings and medical equipment.

In conformity with the concluded agreement with the National House of Health Insurance, Med Life has to provide primary medical services to National House's insured citizens.

BCR issued letters of warranties in the favour of Med Life S.A., in amount of RON 2,146,895 out of which in EUR 270,124 as of December 31, 2020 (December 31, 2019: RON 2,631,819, out of which EUR 404,646

Fiscal environment

The taxation system in Romania is still developing and is subject to various interpretations and constant changes, which may sometimes be retroactive. Although the actual tax due for a transaction may be minimum, delay interests may be significant, as they can be calculated at the value of the transaction and at a rate of 0.02% per day (interest) and 0.01% (penalties) per day.

In Romania the statute of limitation for tax controls (audits) is of 5 years. Management believes that the tax obligations included in these financial statements are adequate.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Transfer pricing

The fiscal legislation from Romania includes the "market value" principle, according to which the transactions between related parties have to be performed at the market value. The local tax payers, who carry transactions with related parties, have to prepare and make available to the tax authorities from Romania, at their written request, the transfer pricing documentation file. If the companies do not prepare the documentation or they present an incomplete transfer pricing file may attract penalties for nonconformity, and additionally to the information presented in the transfer pricing file, the fiscal authorities may have a different interpretation of the transactions and the circumstances compared to the management's assessment and, as a result, they may impose additional fiscal obligations as a result of adjusting transfer prices. The management of the Company is confident that, if required, they will submit the necessary information in due time to the fiscal authorities. The transactions with related parties and group companies are performed based on the market value principle.

Litigation

The Company is involved in various litigations as part of normal course of business, Management has assessed the legal status together with the Company's legal advisors and all necessary adjustments have been recorded in the financial statements.

26. AUDITORS 'FEES

The auditor of Med Life is Deloitte Audit SRL.

The fee for the audit of the consolidated financial statements as of December 31, 2020 of the Med Life prepared in accordance with IFRS as adopted by EU and the individual financial statements as of December 31, 2020 of the Med Life prepared in accordance with IFRS as adopted by EU of Med Life SA was EUR 87,500, excluding VAT and out of pocket expenses.

The fee for other audit related services performed in 2020 (in accordance with ISAE 3000 and ISAE 3240) was EUR 15,500, excluding VAT.

27. EVENTS AFTER THE BALANCE SHEET DATE

Continued action plan to prevent and limit the spread of COVID-19

The MedLife Medical System, the largest operator of medical services in Romania, has implemented, from the first alert day on limiting the spread of SARS-CoV-2 (Coronavirus) virus in Romania, a series of prevention and protection measures for patients. and to the medical and auxiliary staff, focusing on preventing factors that could represent a danger of infection for all those in the medical units.

In all MedLife units, the methodology of surveillance of the acute respiratory system was implemented, and at the moment, the company ensures a good continuity of the medical activity. Epidemiological triage of patients through call-centres and medical teams, special circuits for patients with acute respiratory pathology, adaptation of consultation intervals to increase patient safety (allocating time needed to disinfect spaces after interaction with each patient), creating special spaces for isolating cases suspected of infectious diseases, the provision of protective equipment and disinfectant products, but also the development of complex procedures of cleaning, disinfection and nebulization are only part of the important measures that have been taken and that the special medical teams follow and manage them properly.

Regarding the operational segment, the administrative and support staff, the MedLife Medical System has implemented a Continuity of Activity Plan, the safety of the employees being a priority. The measures consist in dividing the key employees into two teams and avoiding physical interaction between them, but also the remote activity, both ensuring a good continuity of the company's activity. Also, all the events scheduled at Med Life level in the following period were suspended, and they will revert to them when exposure in the public space will no longer represent a risk to human health.

The MedLife Medical System actively monitors the economic situation in Romania and the possible negative implications on its current operations, at present, there are reductions in the activity determined by the social distance measures, imposed by the public authorities as measures to limit the spread of the SARS-CoV-2 virus. (Coronavirus). Despite the diminished activity, the company has taken all necessary measures to maintain good continuity of medical activity in all MedLife clinics and hospitals, taking priority over medical staff and colleagues in the front line and studying the compensation of these turbulences by reducing the short-term overhead costs.

The priority of the MedLife Medical System remains the health of patients and employees, fully respecting the decisions of the local authorities.

The Company assessed the impact of the Coronavirus pandemic over its business and concluded that the financial statements will not be significantly affected by this event. Even though, we currently can't properly evaluate the consequences of this pandemic considering the dynamics in the evolution, the Company doesn't expect a major impact on its activity in the future based on information available to the management at the date of this report.

Greenfield acquisition and investment plans

MedLife Medical System announces its intention to increase its existing facilities by 40 million euros by signing a syndicated loan, the discussions being already advanced with the banks. Depending on the opportunities, other important liquidities of the company will be added to this increase, as appropriate. The bank union that would sign the new loan consists of Banca Comercială Română, as coordinator, main arranger, documentation agent, facility and guarantee agent and financier, BRD Groupe Société Générale, Banca Transilvania and Raiffeisen Bank, as of main arrangers and funders.

The new funds will be dedicated to consolidating and expanding the group nationwide, by developing medical units such as MedPark, where the patient benefits from a 360-degree approach both in terms of the complexity of the medical act and the quality of adjacent services. Major emphasis will be placed on the development of programs and projects in a pandemic context, projects related to prevention, oncology and medical radiotherapy, technology and digitization, the main objective being the needs of the patient caring for his health and wanting to solve his needs efficiently, quickly and safely. According to company representatives, the amount is not intended to complete ongoing acquisitions for which MedLife has sufficient liquidity. At the same time, the company aims to continue the research efforts, and even to intensify them through new investments in the new year.

CEO CFO

Mihail Marcu, Adrian Lungu,

ADMINISTRATORS' REPORT MED LIFE S.A.

YEAR ENDED DECEMBER 31, 2020

1. Presentation of the Company

Med Life S.A. ("Med Life" or the "Parent Company" or the "Company") is a joint-stock company incorporated in 1996, in accordance with the laws and regulations of Romania. The Company's activity consists of providing medical services through a range of medical centres located in all the major cities of the country - cities with over 150,000 inhabitants.

The registered office of Med Life is located in Bucharest, Calea Grivitei, no. 365.

Details of Med Life SA's subsidiaries at December 31, 2020 and December 31, 2019 are as follows:

	Name of subsidiary	Main activity	Location	December 31, 2020	December 31, 2019
1	Policlinica de Diagnostic Rapid SA	Medical Services	Brasov, Romania	83.01%	83.01%
2	Medapt SRL (indirect)	Medical Services	Brasov, Romania	83.01%	83.01%
3	Histo SRL (indirect)	Medical Services	Brasov, Romania	49.81%	49.81%
4	Policlinica de Diagnostic Rapid Medis SRL (indirect)	Medical Services	Sfantu Gheorghe, Romania	66.41%	66.41%
5	Bahtco Invest SA	Development of building projects	Bucharest, Romania	100%	100%
6	Med Life Ocupational SRL	Medical Services	Bucharest, Romania	100%	100%
7	Pharmalife-Med SRL	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
8	Med Life Broker de Asigurare si Reasigurare SRL	Insurance broker	Bucharest, Romania	99%	99%
9	Accipiens SA	Rental activities	Bucharest, Romania	73%	61%
10	Genesys Medical Clinic SRL (indirect)	Medical Services	Bucharest, Romania	73%	61%
11	Bactro SRL (indirect)	Medical Services	Deva, Romania	73%	61%
12	Transilvania Imagistica SA (indirect)	Medical Services	Oradea, Romania	73%	61%
13	Biofarm Farmec SRL (indirect)	Distribution of Pharmaceutical Products in specialised stores	Bucharest, Romania	100%	100%
14	RUR Medical SA (indirect)	Medical Services	Bucharest, Romania	83.01%	100%
15	Biotest Med SRL	Medical Services	Bucharest, Romania	100%	100%
16	Vital Test SRL	Medical Services	Bucharest, Romania	100%	100%
17	Centrul Medical Sama SA	Medical Services	Craiova, Romania	90%	90%
18	Ultratest SA (directly and indirectly)	Medical Services	Craiova, Romania	76%	76%
19	Diamed Center SRL	Medical Services	Bucharest, Romania	100%	100%
20	Prima Medical SRL	Medical Services	Craiova, Romania	100%	100%
21	Stem Cells Bank SA	Medical Services	Timisoara, Romania	100%	100%
22	Dent Estet Clinic SA	Dental healthcare	Bucharest, Romania	60%	60%
23	Green Dental Clinic SRL (indirect)	Dental healthcare	Bucharest, Romania	31%	31%
24	Dentist 4 Kids SRL (indirect)	Dental healthcare	Bucharest, Romania	31%	31%
25	Dent A Porter SRL (indirect)	Dental healthcare	Bucharest, Romania	31%	31%
26	Dentestet Kids SRL (indirect)	Dental healthcare	Bucharest, Romania	32%	32%
27	Aspen Laborator Dentar SRL (indirect)	Dental healthcare	Bucharest, Romania	45%	45%
28	Centrul Medical Panduri SA	Medical Services	Bucharest, Romania	90%	90%

29	Almina Trading SA	Medical Services	Targoviste, Romania	80%	80%
30	Anima Specialty Medical Services SRL	Medical Services	Bucharest, Romania	100%	100%
31	Anima Promovare si Vanzari SRL (indirect)	Medical Services	Bucharest, Romania	100%	100%
32	Valdi Medica SA	Medical Services	Cluj, Romania	55%	55%
33	Clinica Polisano SRL	Medical Services	Sibiu, Romania	100%	100%
34	Solomed Clinic SA	Medical Services	Pitesti, Romania	80%	80%
35	Solomed Plus SRL (indirect)	Medical Services	Pitesti, Romania	80%	80%
36	Ghencea Medical Center SA	Medical Services	Bucharest, Romania	100%	90%
37	Sfatul medicului SRL	Medical Platform	Bucharest, Romania	100%	100%
38	RMC Dentart (indirect)	Dental healthcare	Budapest, Hungary	51%	51%
39	RMC Medical (indirect)	Medical Services	Budapest, Hungary	51%	51%
40	RMC Medlife	Holding	Budapest, Hungary	51%	51%
41	Badea Medical SRL	Medical Services	Cluj, Romania	65%	65%
42	Oncoteam Diagnostic SA	Medical Services	Bucharest, Romania	75%	75%
43	Centrul medical Micromedica SRL	Medical Services	Piatra Neamt, Romania	100%	100%
44	Micromedica Targu Neamt SRL (indirect)	Medical Services	Targu Neamt, Romania	100%	100%
45	Micromedica Bacau SRL (indirect)	Medical Services	Bacau, Romania	100%	100%
46	Micromedica Roman SRL (indirect)	Medical Services	Roman, Romania	100%	100%
47	Medrix Center SRL (indirect)	Medical Services	Roznov, Romania	100%	100%
48	Spitalul Lotus SRL	Medical Services	Ploiesti, Romania	100%	100%
49	Labor Maricor SRL	Medical Services	Bacau, Romania	100%	0%
50	Centrul Medical Matei Basarab SRL*	Medical Services	Bucharest, Romania	100%	0%
		Distribution of
51	Farmachem Distributie SRL*	Pharmaceutical	Bucharest, Romania	75%	0%
		Products in
		specialised stores
		Distribution of
52	CED Pharma SRL*	Pharmaceutical	Bucharest, Romania	100%	0%
		Products in
		specialised stores
53	KronDent SRL (indirect)*	Dental healthcare	Brasov, Romania	36%	0%

* The control over these companies will be obtained in the first semester of 2021 and will be consolidated starting with 2021

MedLife business model is focused on providing medical services to clients, both natural and legal persons. The Group seeks to capture the private healthcare spending of these clients throughout all stages of a medical condition: prevention, diagnosis and treatment, by offering a wide range of medical services delivered in modern, high quality facilities by professional teams of doctors, nurses and support personnel. The company places great emphasis on the quality of the services offered to its customers, operating an IT infrastructure and customer service and sales operation that has served over 5 million unique patients, representing over 1 in 4 Romanians.

The Company divides its operations into 4 business lines:

• Corporate: The Corporate business line offers HPP to corporate clients as part of their employee benefit packages. These programmes, which focus on prevention through regular check-ups and access to diagnostic services, complement the legally required occupational health services that corporate clients also contract from MedLife under the HPP offering.
• Clinics: The Clinics business line includes the Group's ambulatory clinics and diagnostic imaging services. Clinics offer general practitioner and specialist consultations, diagnostic imaging services, and some of the clinics also offer day-inpatient services.
• Laboratories: The Laboratories business line provides biochemistry, haematology, coagulation, immunology, microbiology, anatomo-pathology, cytology, molecular biology and toxicology laboratories tests.
• Hospitals: The Hospitals business line covers the Group's inpatient activities, which consist of a wide range of medical and surgical specializations.

2. 2020 Developments

2.1. Acquisitions completed in 2020

In 2020, MedLife SA increased its participation in certain subsidiary companies, and also signed contracts for the acquisition of share capital of the following companies:

• 100% of the shares in Centrul Medical Matei Basarab SRL;
• 75% of share in Pharmachem Distributie SRL;
• 100% of the shares in CED Pharma SRL;
• 36% of the shares in KronDent SRL.
• 100% of the shares in Lotus Hospital;
• 100% of the shares in Micromedica Medical Center;
• 100% of the shares in Labor Maricor SRL;

Acquisition of Lotus Hospital

Medlife announced the acquisition of 100% of the shares of Lotus Hospital in Ploiești, the most important provider of private medical services in Prahova county, which provides integrated outpatient, imaging, laboratory, hospitalization and maternity services. The hospital comprises 22 beds in 12 reserves, 2 intensive care rooms and one operating block with 2 operating rooms. The outpatient part is equipped with 9 consulting rooms, covering 21 medical specialties, but also with a complete department of radiology and medical imaging equipped with state-of-the-art equipment. At the same time, the unit also includes a laboratory, which performs over 500 most complex medical tests

Acquisition of Micromedica Medical Center

Medlife announced the acquisition of the majority package of Micromedica Medical Center, one of the most important providers of private medical services in Moldova.

Micromedica has been active on the private healthcare market since 1995 and offers patients a wide range of investigations, from multidisciplinary consultations for over 28 medical specialties and laboratory services, to complex imaging investigations. The group comprises of six medical units located in the cities of Piatra Neamț, Bacău, Roman, Bicaz, Roznov and Târgu Neamț, all equipped with highquality medical equipment.

Acquisition of Labor Maricor

MedLife Medical System takes over 100% stake in Labor Maricor, Bacau.

Acquisition of Matei Basarab Medical Center

MedLife Medical System announces the acquisition of the 100% stake in the Veridia Medical Center in Bucharest, known as the Matei Basarab Medical Center.

Acquisition of Pharmachem Distributie

MedLife Medical system announces the signing of the acquisition for the 75% majority stake of Pharmachem Distributie SRL. It is the group's largest acquisition this year, being, also, the first acquisition in the pharma sector.

Acquisition of CED Pharma

MedLife Medical System announces the signing of the transaction for the acquisition of the full package of shares of CED Pharma group of companies. It is the second acquisition of MedLife Group in the pharma segment, announced within two weeks.

Acquisition of KronDent (indirect)

DENT ESTET group of clinics, market leader in the field of dentistry services in Romania, announces the signing of the SPA for the majority stake of 60% of the shares of KronDent S.R.L, a periodontology-implantology and dentistry clinic, based in Brasov.

2.2. Organic growth

Development of 4 RT-PCR laboratories through which the company was able to keep MedLife employees safe, to periodically test medical and auxiliary staff and patients and keep the units functional, as well as be part of the national testing program.

2.3. Expansion Plans of Existing Medical Units

MedLife invests in the development of the largest private medical project in Romania: MedLife Medical Park. The new medical project will be built next to Medlife Memorial Hospital. Located in the middle of a green area, it will have at completion 1000 beds in a total number of 8 buildings built in pavilionary system. The medical park will include two different stages of development. In the first stage a new hyperclinic, a center for R&D and innovation, kinetotherapy and medical recovery rooms, two restaurants, a centre of imaging and radiotherapy, pharmacy and bio food store will be arranged. in the second stage, which is in the phase of feasibility study, MedLife Oncological Institute will be built. The first stage will last for 18-24 months, while the second stage will take place over a period of 3-5 years. 2020 2019 Current portion of long-term loans (incl. overdraft) 44,620,789 25,992,833 Non-current portion of long-term loans 333,649,420 265,437,273

3. Credit facilities contracted by the Company

FINANCIAL DEBT

	31 December	31 December
TOTAL	378,270,209	291,430,106

As at December 31, 2020, MedLife SA drawn and undrawn financing facilities included the following:

• On September 24, 2019 Med Life SA (together with the co-debtors Policlinica de Rapid Diagnostic SA, Bahtco Invest SA, Accipiens SA, Genesys Medical Clinic SRL, Clinica Polisano SRL, Medical Center Sama SA, Dent Estet Clinic SA and Valdi Medica SRL) signed with the Banca Comerciala Romana, Raiffeisen Bank, BRD Groupe Societe Generale and Banca Transilvania the refinancing of the existing facilities, the extension of the financing period, the rearrangement of the terms and conditions, as well as for an additional credit limit of EUR 28 million, which will be in the form a term facility, being used by Medlife, along with other liquidities of the Company, for possible new purchasing opportunities in the market. On 15 May 2020, this facility was extended with 20 million euro.

• a guaranteed overdraft facility concluded between Garanti Bank S.A. and Med Life SA the amount drawn on December 31, 2020 is RON 9,738,800.

4. Financial Analysis

Analysis of the standalone profit and loss statement

4. Financial Analysis
Analysis of the standalone profit and loss statement		12 Months ended December 31,
	2020	2019 * restated
Sales	508,823,190	456,165,019
Other operating revenues Operating Income	4,093,568 512,916,758	4,348,742 460,513,761
Consumable materials and repair materials	(84,668,323)	(66,396,142)
Third party expenses	(140,358,151)	(140,605,350)
Salary and related expenses (incl. contributions)	(134,748,555)	(150,265,803)
Depreciation	(46,482,290)	(43,312,183)
Impairment losses and gains (including reversals of impairment losses) Other operating expenses	(6,816,733) (32,329,352)	1,524,207 (39,538,437)
Operating expenses	(445,403,404)	(438,593,708)
Operating Profit	67,513,354	21,920,053
Finance income - interest revenue	1,714,066	2,183,489
Finance cost Other financial expenses	(13,773,288) (5,565,399)	(11,661,141) (7,843,768)
Financial loss	(17,624,620)	(17,321,421)
Result Before Taxes	49,888,734	4,598,632
Income tax expense Net Result	(8,046,454) 41,842,280	(1,398,406) 3,200,226
Other comprehensive income items that will not be reclassified to profit or loss
Gain / Loss on revaluation of equity instruments	-	655,437
Deferred tax on other comprehensive income components	-	(104,870)
TOTAL OTHER COMPREHENSIVE INCOME	-	550,567
TOTAL COMPREHENSIVE INCOME	41,842,280	3,750,793

Sales for the 12-month period ended 31 December 2020 ("12 months 2020") amounted to RON 508,823,190, higher by 11.5% compared to sales recorded in the 12 months of 2019 ("12 months 2019"). This increase was mainly the result of a growth in all of the business lines determined by a mixture of increase in prices and volume.

Operating expenses include variable and fixed costs, as well as the cost of goods and materials used to provide services. Med Life SA recorded operating expenses of RON 445,403,404 during 12 months 2020, representing an increase of 1.6%, or RON 6,809,696, as compared to 12 months 2019. The increase is mainly linked to overall business increase.

Operating profit recorded a 208% increase in 12 months 2020 as compared to 12 months 2019, from RON 21,920,053 in 12 months 2019 to RON 67,513,354 in 12 months 2020.

Financial loss increased in 12 months 2020 by RON 303,199 from a loss of RON 17,321,421 in 12 months 2019 to a loss of RON 17,624,620 in 12 months 2020.

Net result increased in 12 months 2020 by RON 38,642,054 from a profit of RON 3,200,226 in 12 months 2019 to a profit of RON 41,842,280 in 12 months 2020.

Analysis of the standalone statement of financial position

Analysis of the standalone statement of financial position
	December 31,	December 31, 2019	January 1, 2019
	2020	*restated	*restated
ASSETS
NON CURRENT ASSETS
Intangible assets	10,675,893	11,739,823	7,701,244
Tangible assets Right-of-use assets	244,998,068 71,462,302	203,527,953 79,723,850	183,020,161 91,387,056
Financial assets	237,335,288	234,220,734	148,383,413
TOTAL NON-CURRENT ASSETS	564,471,551	529,212,360	430,491,875
Current Assets
Inventories	13,224,013	6,887,412	6,533,910
Trade and other receivables	89,382,165	57,944,885	47,146,208
Receivables with group companies	95,020,068	84,409,169	74,915,161
Other receivables Cash and cash equivalents	11,780,770 33,735,446	13,782,629 11,657,432	3,944,995 21,274,743
	243,142,462	174,681,527	153,815,017
Prepayments	1,325,662	2,793,639	2,204,277
TOTAL CURRENT ASSETS	244,468,124	177,475,166	156,019,294
TOTAL ASSETS	808,939,675	706,687,526	586,511,168
LIABILITIES & SHAREHOLDER'S EQUITY
Current Liabilities
Trade and other payables	96,605,850	95,879,220	75,848,191
Overdraft	9,738,800	9,558,600	9,327,799
Current portion of lease liability	21,416,526	21,908,619	19,604,849
Current portion of long term debt	34,881,989	16,434,233	14,669,616
Intercompany payables Current tax liabilities	1,036,693 3,829,499	1,707,947 395,661	2,754,866 312,992
Provisions	2,885,053	524,431	0
Short term liabilities	16,008,640	33,924,206	6,388,289
TOTAL CURRENT LIABILITIES	186,403,050	180,332,917	128,906,602
Long Term Debt
Lease liability	67,027,513	80,139,646	89,195,755
Other long term debt	3,325,000	6,650,000	-
Long term debt	333,649,420	265,437,273	205,624,681
TOTAL LONG-TERM LIABILITIES	404,001,933	352,226,919	294,820,436
Deferred tax liability	11,457,413	11,457,413	10,785,523
TOTAL LIABILITIES	601,862,396	544,017,249	434,512,561
SHAREHOLDER'S EQUITY
Share capital and share premium	82,027,012	81,495,470	81,495,470
Treasury shares	(666,624)	(2,699,804)	(6,056,105)
Reserves	90,599,863	76,661,823	73,097,247
Retained earnings	35,117,028	7,212,788	3,461,995
TOTAL EQUITY	207,077,279	162,670,277	151,998,607
TOTAL LIABILITIES AND EQUITY	808,939,675	706,687,526	586,511,168

Non-current assets reached RON 564,471,551 as at December 31, 2020, recording an increase of 6.7% as compared to December 31, 2019.

Current assets increased by RON 66,992,958 or 37.7% from RON 177,475,166 as at December 31, 2019 to RON 244,468,124 at December 31, 2020.

Interest-bearing debt increased by RON 69,910,876, from RON 400,128,371 in December 31, 2019 to RON 470,039,248 at December 31, 2020. The increase is due to the financing of the company's current activity. The increase is mainly due to the adoption of IFRS 16. = 1.31 Period ended at = 195% = 66%

5. Main financial ratios of Med Life SA

132,431,465 at December 31, 2019 to RON 120,365,735 at December 31, 2020.		Current liabilities (excluding interest-bearing debts) decreased by RON 12,065,730, or 9.1%, from RON
activity. The increase is mainly due to the adoption of IFRS 16.		Interest-bearing debt increased by RON 69,910,876, from RON 400,128,371 in December 31, 2019 to RON 470,039,248 at December 31, 2020. The increase is due to the financing of the company's current
5. Main financial ratios of Med Life SA
		Period ended at
1 Current ratio	31 December, 2020
2 Debt to equity ratio	31 December, 2020
Long Term Debt Equity	404,001,933 207,077,279
Long Term Debt Capital Assets	404,001,933 611,079,212
		Period ended at
3 Trade receivables turnover (days)	31 December, 2020

1 Current ratio		Period ended at 31 December, 2020
2 Debt to equity ratio		31 December, 2020
3 Trade receivables turnover (days)		Period ended at 31 December, 2020
Average receivables Sales	73,663,525 = 508,823,190	52.12
4 Fixed assets turnover		Period ended at 31 December, 2020
Sales Net Fixed Assets	508,823,190 = 564,471,551	0.90

Sales	508.823.190
Net Fixed Assets	564,471,551	0.90

6. Non-financial information

Overview

MedLife S.A. dedicates all its resources to ensure every client's professional medical services at the highest standards, based on state-of-the-art technological support, in impeccable safety and comfort conditions. The Company has been constantly developing based on the desire to meet the most demanding and complex medical services. The goal of the Company medical units is to improve the quality of life of every patient that use the company medical services. The access to MedLife S.A. services is facilitated by the integrated system in place consisting in: hospital, outpatient, laboratory, pharmacy, imaging and corporate subscriptions. As a result, MedLife has become the largest private healthcare provider nationwide based on Sales figures, and is making every effort to further address the needs of patients and to ensure the quality and safety of the medical act.

MedLife offers its services through the largest team of doctors and nurses working in the private sector in Romania, with about 3,000 doctors and 2,000 nurses. The Company employs full-time specialists for the vast majority of specialties offered, but also on a limited-time basis for specialties or specific functions, or works with collaborating medical staff. In addition, given its commitment to provide quality

medical services, the Company has consistently invested in medical equipment, which has helped sustain its market leadership in diagnostic imaging technology.

The Company enjoys a high level of satisfaction among patients, achieving a high score for the reputation of its brands among clients and an increasing number of patients is recommending the group services. The Company latest study reveals that MedLife is perceived as a brand that differentiates itself in particular through its openness and respect offered to its customers. The respect offered to the customer, and, at the same time, the efficacy and seriousness proved through the services makes MedLife to be perceived as a trustworthy partner that offers a sense of security.

MedLife received the title of "Most Trusted Brand" by Reader's Digest in the Private Clinics category in Romania for 6 consecutive years (2009-2015), 5 Superbrand Awards (including 2019), Qudal distinction in 2016 and 2017, and ICERTIAS certification for "Superior Excellence" after a study conducted in 2018.

The Company conducts weekly patient surveys to get their opinion on the healthcare provided, and the Mystery Shopper is organized biannually at the group level.

Business Model

Med Life's concept of Hyper clinics, large scale ambulatory clinics, as well as the integration of various segments provides substantial potential for revenue capture. For example, an HPP client visiting a Group clinic for a preventative check-up may be advised to undertake further tests or seek further consultations not covered by the HPP. These additional services or consultations are often available within the same Hyper clinic, facilitating the client to choose the Company's services. The Company's ability to accompany the patients in many cases from prevention to diagnosis through treatment provides a continuity of treatment for the patient as well as the capture of FFS revenue for the Company.

Sales largely from cash-pay and HPP with low dependency on National Health Houses ("NHIH") funding

Many private healthcare providers in Romania remain dependent for a significant portion of their sales on contracts awarded by the NHIH to service State insured patients. This increases their exposure to changes in the NHIH healthcare priorities, pricings and allocation systems. With only 10% of its sales during 2020 deriving from the treatment of NHIH insured patients, MedLife can independently determine its policies and priorities.

The largest number of HPP clients in Romania

With over 700,000 HPP subscribers as at 31 December 2020, Med Life has access to a significant potential client base for its FFS activities. This base is further expanded when the HPP subscribers bring family members and provide referrals to others for Med Life's FFS offering. The HPP client base also provides opportunities for up-selling as many of the HPP clients begin with basic medical services packages and gradually move to more comprehensive services.

The Company's continuous investments in new medical facilities set the basis for potential new HPP clients, as the Company's ability to service HPP subscribers in its own medical facilities is often key to the clients' purchasing decision. The market outside Bucharest remains, in Med Life's view, underdeveloped for HPP and as such represents an opportunity for further growth by acquiring and integrating local and regional providers, thus expanding its footprint on a regional level and increasing its appeal to HPP clients.

Experienced management able to generate and manage activity development both by organic growth and acquisitions

The Company's track record of organic and acquisition growth is largely due to the Company's strong management team. The Company has developed systems for screening potential acquisitions, completing detailed analysis and decision making in a timely manner, and implementing, post transaction, a fast and efficient integration process. The Company has a reputation in the market as a "friendly acquirer", mainly because the targets' founder/owners are often given the opportunity to stay in the business as minority shareholders, and managers of the subsidiary. Through this approach, MedLife retains their accumulated experience and market knowledge while being able to fully integrate the acquisition into its own systems and revenue capture opportunities. Moreover, by implementing the share buy-back and exchange program of shares with minority shareholders, MedLife encourages the

alignment of the interests and the contribution of the founders of the subsidiaries to the integrated activity of the group.

From 2010 until December 31, 2019, MedLife has acquired 53 companies (if the representatives of the Competition Council will approve Ced Pharma and Pharmachem Distributie - the last acquisitions announced by MedLife), thus gaining valuable expertise and knowledge for the Group, which will allow them to find the best method of continuous and efficient expansion.

Strategy and results

MedLife strategy focuses on maintaining leadership position. MedLife seeks to expand its portfolio of units and services, ensuring profitable national coverage to meet the needs of existing and new customers of the Company. At the same time, the Company remains committed to providing clients with safe and quality medical treatments, ensuring a balance between the medical risks and opportunities and the commercial objectives of the Group. Therefore, at the end of 2020, MedLife network include 22 hyper clinics, 53 clinics, 10 hospitals, 33 laboratories, 12 dental clinics and 14 pharmacies, MedLife being the only healthcare provider with large clinics with presence in all cities with over 150,000 inhabitants.

The Company is pursuing opportunities to capture additional revenues and achieve synergies within its current networks and services. The Company aims to achieve this goal through organic growth and the acquisition of smaller providers of medical services on the market. As a result of this strategy, over the past two years, MedLife has been characterized by significant increases in Sales from one reporting period to the next, as follows: an increase of 10.6% in 2018 as compared to 2017, reaching Sales of RON 419,850,605, an increase of 8.6% in 2019 as compared to 2018, reaching Sales of RON 456,165,019 in 2019 and an increase of 11.5% in 2020 as compared to 2019, reaching Sales of RON 508,823,190 in 2020.

The increase in Sales was accompanied by an increase in EBITDA in absolute values, as follows: an increase of 36.8% in absolute value in 2018 compared to 2017, reaching EBITDA of RON 16,900,968 RON, an increase of 29.7% in absolute value in 2019 compared to 2018, reaching EBITDA of RON 21,920,053, respectively an increase of 208% in absolute value in 2020 compared to 2019, reaching EBITDA of RON 45,593,301. The increase was also influenced by the implementation of IFRS 16, which restates rent expenses in financial expense and depreciation.

Organic growth

During the period 2014 – December 2020, the Company opened a number of new clinics and other facilities, particularly sampling points for its Laboratories business line. Many of these facilities are believed to still have the capacity to service greater numbers of patients, which should allow for the increase in their revenue and profit contribution, as they reach fuller utilization. Further, the Company continue to optimize the range of services offered at its other facilities to the specific local market conditions, seeking to improve the revenue and margins of each location. As a result, the constant and accelerated ramp-up of these facilities is expected to improve margins as well as deliver further sales growth.

People and resources

The Company services patients through the largest private pool of doctors and nurses in Romania. As of December 31, 2020, the Group, on an overall level, was collaborating with a number of approximately 3,000 physicians and 2,000 qualified nurses across its business lines, including both employees working exclusively for the Group and collaborators, providing services as independent professionals. In addition, more than 1,700 full time employees were working in support and administrative functions as of December 31, 2020.

The Company's objective is that its medical staff be formed exclusively of full-time employees, even if certain specialties and functions either do not justify full-time engagements or such personnel are not available. In these circumstances, the Company enters into part-time employment or collaboration arrangements with the respective staff. The type of contractual arrangement between the Group and its medical staff depends on various criteria, such as the professional context or the time that the medical staff can allocate to services provided to the Company. Medical staff under services agreements are seen by the Group as commercial partners, providing services to the Company as independent contractors, in compliance with the applicable legislation.

The Company seeks to provide adequate compensation and incentives to physicians and other medical staff in exchange for quality medical care and commitments to promote the MedLife business model. The usual compensation package offered by the Company to its employees includes fixed remuneration, to which a variable remuneration is added, determined based on a revenue sharing mechanism connected to appointment and consulting activity. Collaborators are compensated based on their appointment and consulting activity.

Collaborators are rewarded according to their number of appointments and consultations. The Company does not operate retirement plans or long-term benefit plans.

The Company invests in human resources programs such as the Life Academy, Good Practice- Nurses School, the Medlife National Conference. These training programs are designed to ensure the professional continuation of its employees, both those in support and administrative staff, as well as those in the medical setting.

As for the relationship with colleagues, the Company provides a safe working environment in which employees are treated fairly and with respect, and the differences between employees are accepted. The Company is committed to providing colleagues with the opportunity to excel and reach their full potential and reward them on a merit basis.

The Company does not tolerate any discrimination, intimidation or harassment of colleagues or between them. The group encourages clear and open communication with and between colleagues. They can and must promptly express any concerns about any unethical or illegal behaviour by presenting these concerns to the human resources department within the Company. The Company undertakes to investigate such concerns brought to good faith, maintaining the confidentiality of these steps.

Quality Standards

MedLife has implemented the following standards for Quality, Environment and Occupational Health & Safety management systems:

• ISO 9001:2015 (Quality Assessment) through which the organization demonstrates that it has identified the risks and acts to eliminate or limit their effects, which may have a negative impact on the quality management system's ability to achieve the desired results, and a negative impact on customer satisfaction.
• ISO 14001:2015 (Environmental Management System) Implementation of this standard ensures management of the company and its employees as well as external stakeholders (shareholders, investors, institutions, authorities) that the organization's environmental impact is measured and constantly improved.
• OHSAS 18001:2007 (Occupational health & safety management system) represents a working model for the organizations that intend to have a better control over the professional risks.

All of the Company's laboratory facilities are accredited by the Romanian Accreditation Association with ISO 15189 for Quality management.

Health, Safety, Security and Environment

The Company is subjected, and complies with Romanian laws and regulations related to health, safety, security and environment matters. These laws and regulations refer, among other things, to management and disposal of hazardous substances and medical waste, exposure to hazardous materials and protection of health and safety of employees. The Company is required to obtain environmental permits, licenses and authorizations and provide notification to local authorities prior to opening new administrative and medical units.

As of December 31, 2020, the Company is in various stages of procedures for obtaining or updating its fire prevention authorizations for certain of its medical units and other premises. The completion of these procedures are subject to various requirements, such as the performance of certain works and upgrades to the Company's facilities. The Company regards the amounts of the required investments as being immaterial; however, the completion of the necessary works and upgrades is subject to, in certain cases,

additional authorizations and clearances, or other procedures in which the Group has engaged. As at December 31, 2020, the Company does not have all fire prevention authorizations in place.

Equipment and Technology

The Company purchases medical equipment to ensure professionally qualified to the highest standards medical services to every client. These devices include, but are not limited to: optical coherence tomography systems, magnetic resonance imaging equipment, computerized tomography equipment, bone density measuring instruments, imaging and identification systems used in dermatoscopy, measurement equipment hepatic rigidity, laser, vacuum systems to reduce fat deposits by cryolysis (LipoCryo), video capsule endoscopy systems.

Medlife laboratories also feature state-of-the-art equipment such as the Abbot Accelerator A3600 automatic line placed in MedLife Grivita laboratory, the first in Romania and in Eastern Europe. Significantly contributes to increasing the accuracy of analyses, reducing execution time, and better traceability and tracking of each patient's samples.

With these equipment and technologies used by MedLife doctors, several surgical interventions have been successfully completed, becoming even a medical premiere in Romania.

Information Technology

The Company relies on international providers for its IT hardware infrastructure. With regards to communication between the Company's various locations, the Company uses a virtual private network, which ensures effectiveness, security and privacy of communications.

The Company has also implemented a robust IT infrastructure within all its hospitals, which covers admission and surgery appointments, medical procedures, patient check-in and check-out, medical supplies and consumables management, billing on a per-customer basis and generating general management reports.

The Laboratories business line has been equipped with software to manage the lab test processes including the management of samples, patient records, barcode labelling and automated procedures for final results.

Principles for respecting human rights

The Company is committed to properly treat patients, competitors and providers. All colleagues must always act with integrity and honesty, continuously protecting the Company's reputation when dealing with patients, competitors and suppliers.

The Company seeks to create and maintain mutually beneficial relationships with its patients by promoting a climate of trust and transparency doubled by innovation and good medical practice. The Company ensures that all suppliers are selected and contracted based on merit and objective business standards so as to avoid real or perceived favouritism.

The Company is adept of a free and fair competition and has no dealings with its competitors. The Company respects all laws and regulations in its field of activity, along with industry standards and internationally accepted practice.

Anti-Bribery and Anti-Corruption principles

In accordance with the Articles of Incorporation, all payments made by MedLife to public authorities, in the jurisdictions in which MedLife is operating, are in comply with all applicable legal provisions and are made exclusively for the purp0ose of ensuring the execution of routine governmental action.

The Company has a zero-tolerance policy regarding bribery and corruption. Company Policy prohibits promising, offering or paying bribes, as well as requesting, accepting or receiving bribes.

The Company also forbids colleagues to accept gifts, hospitality, or gifts that are intended to influence business decisions.

Corporate Social Responsibility

Medlife values include:

• Responsibility: Medlife guides its actions according to what is important to people's lives and health;
• Professionalism: Medlife reunites for 3,000 doctors, professors, lecturers, doctors in medicine who work day by day with dedication and professionalism;
• Innovation: Medlife has a constant concern about methods, technology and organization that will result in better and more effective medical solutions;
• Care and respect: Each patient is important and respected, and everyone's needs are treated with care and attention.

More technological advances have allowed medicine to evolve to minimally invasive techniques that expose patients to low risks and allow for a faster recovery period. In developed countries, it is common practice for many years: patients to be able to go home without requiring over-night hospitalization. In 2005, MedLife was the first to introduce this concept to the Romanian market. MedLife has created space in hospitals and hyperclinics, where patients can benefit from minimally invasive techniques.

MedLife concept "We Make Romania Well" started with the desire to bring good in Romania in as many forms, not just in health and in the medical system. Thus, Medlife Group has developed and supported a number of projects, events and ideas for the well-being of employees or healthcare professionals at the beginning. The company also organized or participated in medical events where doctors from the country or from abroad had the opportunity to share new knowledge, technologies or procedures.

InfoLine magazine

The InfoLine magazine supports Company's patients with information and articles about common illnesses, new technologies implemented in the Company's units, new perspectives and interviews with medical staff.

Blood donation campaign

MedLife has launched a national blood donation program to support blood transfusion centers and promote this behavior in Romanian society. Started 6 years ago, the program runs in the largest cities in the country.

Pro-bono cases

Medlife's commitment remains to treat and help patients in need of interventions, regardless of the environment they come from or their financial situation. Whether it's light or serious, MedLife doctors handle cases brought by humanitarian foundations or identified cases by the group's employees.

The MedLive platform

In order to reduce the phenomenon of self-diagnosis and auto-medication and to encourage correct information, directly from the doctor, MedLife launched the MedLive.ro online platform. The MedLive platform is an education platform for MedLife patients as well as for doctors or medical students. In the eight years since the platform was launched, users were able not only to keep up-to-date with the latest news about prevention or maintenance of a healthy lifestyle, but also to interact directly with MedLife doctors.

Good for the Environment - The Green Project for Romania

The Green project, together with every action taken by MedLife, is the essence of the brand. And this time, besides respecting the promise of a quality medical act and excellence proven to every patient, the campaign is MedLife's desire to get even more involved in the future of new generations.

Therefore, the project requires that for each child born in MedLife's maternity clinics, the company plans to plant a tree in a deforested area of the Fagaras Mountains through the FCC (Conservation Carpathia Foundation).

Results for 2019 include 2 stages of afforestation, dozens of Medlife employees and volunteers involved, 40,000 seedlings planted.

Also, for the environment, Medlife Group has created a set of good rules that all Medlife employees apply, such as: reducing electricity consumption; selective collection - paper, plastic, electronic, waste; reducing water consumption.

7. Corporate Governance

The corporate governance statements

MedLife and its board members comply with the corporate governance regime established by the Companies Law with the following exceptions:

• Because some members of the Board of Directors and some executive managers hold various positions in the administration, management or control bodies in the subsidiaries of the Company, any lending by the Company to such subsidiaries can be considered a loan by the Company to its directors which is prohibited under the Companies Law;
• Because some members of the Board of Directors and some executive managers hold various positions in the administration, management or control bodies in the subsidiaries of the Company and other positions within the Company (e.g., executive managers, legal advisors, employees) there is the possibility of occurrence of conflicts of interests.

7.1. Shareholding structure

As of December 31, 2020, the shareholders' structure of Med Life SA is as presented below: ERROR! NOT A VALID LINK. Legal entities Marcu Mihail Cristescu Mihaela Gabriela Marcu Nicolae Others TOTAL	Number of shares 71,455,241 21,557,520 18,660,690 14,204,400 6,992,641 132,870,492	% 53.78% 16.22% 14.04% 10.69% 5.26% 100.00%	Value 17,863,810 5,389,380 4,665,173 3,551,100 1,748,160 33,217,623
7.1. Shareholding structure
Code, Forecasting Policy and Corporate Governance Statute, documents to which reference is made in the Declaration on Compliance with the Corporate Governance Code.
Deployment Policy for General Shareholders' Meetings, Code of Ethics and Conduct, Social Responsibility
The Med Life SA website also includes the following policies and procedures: Organization and
the quality of the issuer on the capital market. The Corporate Governance Code of the BVB can be found on the official website of the BSE (www.bvb.ro).
MedLife SA has adhered to the Corporate Governance Code of the Bucharest Stock Exchange considering
management team specific for each department in place: HR and Administrative.
The Company monitors environment, social and human resources policies through its corporate governance procedures in place. The responsibility has been translated by the Board of Directors to the
of the Bucharest Stock Exchange.
has entered into force and is applicable to all issuers of securities traded on the regulated spot market
Starting with January 4, 2016, a new corporate governance code issued by the Bucharest Stock Exchange

Details regarding shareholders rights is public and can be found in the published Prospectuses of the Company, as well as in the Articles of Incorporation of the Company.

7.2 Company Management

MedLife is managed in a unitary system by the Board of Directors consisting of 7 members appointed by the Ordinary General Meeting of Shareholders for a four-year term with the possibility of being reelected. Out of 7 members of the Medlife Board of Directors, 3 members are independent members. The Board of Directors is responsible for MedLife's management, acting in the interest of society and protecting the interests of its shareholders by ensuring a sustainable development of the company. According to the Articles of Incorporation, the Board of Directors is responsible for all necessary and necessary acts in order to fulfil the MedLife object of activity, including the management of MedLife subsidiaries or investments, except for the attributions attributable to the General Meeting of Shareholders by law.

MedLife Board of Directors

As at the date of December 31, 2020, the Board of Directors consists of the following members:

Name	Date of Birth	Title
Mihail Marcu	30.09.1970	Member and Chairman of the
		Board of Directors, CEO
Ana Maria Mihaescu	29.07.1955	Member of the Board of
		Directors - independent member
Dimitrie Pelinescu-Onciul	11.08.1947	Member of the Board of
		Directors
Dorin Preda	03.04.1976	Member of the Board of
		Directors
Nicolae Marcu	26.10.1968	Member of the Board of
		Directors
Voicu Cheta	13.08.1981	Member of the Board of
		Directors - independent member
Ovidiu Fer	31.12.1983	Member of the Board of
		Directors - independent member

Mihail Marcu (1970) – Member and Chairman of the Board of Directors, Chief Executive Officer

Mihail Marcu has been the Chairman of the Board of Directors of MedLife since August 2006 and Chief Executive Officer since December 2016. Mihail Marcu is a graduate of Bucharest University, the Mathematics and Computer Science Faculty (1995), and has further graduated other post-graduate and advanced training courses delivered by the Romanian Banking Institute, the Open University, DC Gardner training or Codecs, both in Romania, and abroad. Prior to his position as a member of the Board of Directors of MedLife, Mihail Marcu was the Chief Executive Officer of MedLife between January 2004 and August 2006; before that, he held the office of Vice-Chairman of RoBank S.A. (currently, OTP Bank Romania S.A.), being authorised in this capacity by the National Bank of Romania. Earlier, Mihail Marcu held various positions in Credit Bank Romania S.A. and RoBank S.A., including credit inspector, head of credit unit, manager of the credit department, and manager of the corporate department.

Ana Maria Mihăescu (1955) – Independent Member of the Board of Directors

Ana Maria Mihăescu has been a member of the Board of Directors of MedLife since September 2017. In the last 20 years, Ana Maria Mihăescu has led the mission of the International Finance Corporation of Romania, a World Bank's Division and the largest private sector lender in emerging countries. Between 2011 and 2016, Ana Maria Mihăescu had a decision-making role regarding the IFC projects in several European countries, including Romania. Previously, she held top management positions in the banking sector. Since 2016, she has been a member of the Raiffeisen Bank's Supervisory Board, serving as an independent member for a four-year term.

Dimitrie Pelinescu-Onciul (1947) - Member of the Board of Directors

Dimitrie Pelinescu-Onciul has been a member of the Board of Directors of MedLife since 2008. He is a graduate of the Carol Davila Medicine and Pharmacy University of Bucharest, Faculty of Medicine (1972), specialising in obstetrics and gynecology (residency 1978-1981), and became Doctor in Medical Sciences in 1994. Dimitrie Pelinescu-Onciul is a member of 11 Romanian scientific societies in Romania and of 7 scientific societies abroad, and held among other the office of President of the Romanian Perinatal Medicine Association (2006-2008). Before joining the MedLife team in 2004, Dimitrie Pelinescu-Onciul used to work for Filantropia Clinical Hospital of Bucharest (1994-2004), Titan Clinical Hospital of Bucharest (1986-1991), Brâncovenesc Clinical Hospital (1978-1981), and Sinești Rural Hospital, Vâlcea County (1972-1978), as primary care physician, obstetrics and gynecology, head of clinics or hospital director.

Dorin Preda (1976) – Member of the Board of Directors; Chief Finance and Treasury

Dorin Preda has been a member of the Board of Directors of MedLife since 2008. He is a graduate of the Academy of Economic Studies of Bucharest, Faculty of Finance, Insurance, Banks and Stock Exchanges (1998). Before joining the MedLife team, Dorin Preda was the Chief Executive Officer (CEO) of Asilife Insurance Broker S.R.L. (2007-2008), Branch Manager of HVB –Țiriac Bank S.A. (2006-2007), HVB Bank S.A. (2005-2006), Banca Comerciala Ion Țiriac (2004-2005) and Banca Comerciala RoBank S.A. (2003- 2004). Similarly, he used to hold the positions of Manager of Loans and Marketing Department of Banca Comerciala RoBank S.A. (2001-2002), credit analyst with the same bank (2000-2001), and Manager of the Loans Department of Banca Dacia Felix S.A. (1999-2000).

Nicolae Marcu (1968) – Member of the Board of Directors, Chief Healthcare and Operations Officer

Nicolae Marcu has been a member of the Board of Directors of MedLife and Chief Healthcare and Operations Officer since December 2016. Nicolae Marcu is a graduate of Carol Davila Medicine and Pharmacy University of Bucharest, Faculty of Medicine (1996), and has been a doctoral student in psychiatry since 2000. Nicolae Marcu graduated a number of postgraduate studies in psychiatry in the country and abroad. Prior to his position as a member of the Board of Directors of MedLife, Nicolae Marcu was the Chief Executive Officer of MedLife between August 2006 and December 2016, and prior to joining the MedLife team, Nicolae Marcu was a specialised physician in psychiatry with "Dr. Al Obregia" Psychiatric Hospital.

Voicu Cheța (1981) - Independent Member of the Board of Directors

Voicu Cheța has been a member of the Board of Directors of MedLife since December 2020. He is a lawyer in the Bucharest Bar with over 15 years of legal experience. His specialized practice covers various fields such as high value commercial litigation, commercial arbitration, insolvency and restructuring, labor relations, public procurement, administrative litigation, debt recovery and company law. In the field of legal advice and representation before the courts and arbitral tribunals, he has acquired an overview and proven skills to approach commercial legal relations in a way that ensures their correlation with the needs of economic activity.

Ovidiu Fer (1983) - Independent Member of the Board of Directors

Ovidiu Fer is a member of the Board of Directors of MedLife since December 2020. He is a graduate of the Academy of Economic Studies in Bucharest, Faculty of Finance, Insurance, Banking and Stock Exchanges (2006) and holds an MBA from INSEAD (2014). Starting with 2016, Ovidiu Fer founded the Alpha Quest Regional Investment Fund, as a founding member and is also a member of the Advisory Board of the GapMinder VC Fund (since 2018). Previously, he was a member of the Investment Committee of the IJC Funds (2014-2016) and held the position of external advisor to Elliott Advisors (2013-2014). He also held the position of capital analyst, border market expert and country manager at Wood & Company, in the period 2007-2013 and was a financial analyst for KTD Invest (2005-2007).

Executive Commitee

The Executive Committee is headed by Mr. Mihail Marcu, member of the Board of Directors and General Manager, Nicolae Marcu, Member of the Board of Directors and Director of Health and Operations, Dorin Preda, member of the Board of Directors and responsible for Finance and Treasury. Under the guidance of the above-mentioned key managers, there is a group of executive managers, many of whom have a solid experience within the Group, which manages functions, business lines and headquarters. These

professionals have a significant degree of independence and freedom in implementing the budgets established for units and business lines. The composition of the Executive Committee is detailed below:

Name	Title
Mihail Marcu	Chief Executive Officer (CEO)
Nicolae Marcu	Chief Healthcare and Operations Officer
Dorin Preda	Chief Finance and Treasury
Adrian Lungu	Chief Financial Officer
Radu Petrescu	HR Director
Geanina Durigu	Laboratory Director
Mariana Brates	Purchasing Director
Larisa Chirirac	Medical Director
Vera Firu	Accounting and Tax Director
Mirela Dogaru	Corporate and Marketing Director

7.3 Audit Committee

The audit committee has three members:

Name	Date of Birth	Title
Ana Maria Mihaescu	29.07.1955	Member of the Board of Directors - independent member
Voicu Cheta	13.08.1981	Member of the Board of Directors - independent member
Ovidiu Fer	31.12.1983	Member of the Board of Directors - independent member

The Audit Committee has mainly, the following tasks:

• to examine and review the annual financial statements and the profit distribution proposal;

• to carry out annual assessments of the internal control system;

• to evaluate the effectiveness of the internal control system and risk management system;

• to monitor the application of generally accepted legal standards and standards;

• to assess conflicts of interest in affiliated party transactions;

• to analyze and review transactions with affiliated parties that exceed or may be expected to exceed 5% of the net assets of the company in the previous financial year;

• to make CA recommendations.

7.4 Internal Control – Internal Audit function

MedLife established a system of internal control throughout the group. Internal control is an activity of objective and independent evaluation with consultative purpose performed in order to increase value added and improving the activity of the Group.

Internal control helps the Company achieve the objectives set by systematic and disciplined approach, whose goal is to appreciate and improve the efficiency of risk management, control systems and general management.

The objectives of internal control and internal audit are:

• Assessment and evaluation of the accuracy of realized tasks;
• Evaluation of conformity with internal procedures;
• Detection of cases with lack of economic spirit, waste, abuses and other irregularities indicating the persons/ posts responsible for them;
• Presentation to the Board of Directors of objective information from areas covered by internal control and of recommendations in order to eliminate identified issues and follow-up
• Rendering of services in terms of assessments, evaluations, recommendations for the Board of Directors

The Company's internal control checked: compliance with the laws in force; application of the decisions made by the management; good operation of the internal activity; efficient use of resources; prevention

and control of the risk of failing to reach the goals set; ensuring an accounting management and financial monitoring of the Company's activities.

Internal control is applicable:

• prior to conducting the operations, upon the preparation of the budget, which would allow subsequently to conducting the operations, the budget control;
• during the operations and after their completion, a case where it is analysed the profitability of the operations and it is ascertained the existence of the conformity or possible irregularities, which need to be adjusted.

7.5 Nomination Committee

The nomination committee consists of the following members:

• 1. Ana Maria Mihaescu, Independent Non-Executive Administrator
• 1. Voicu Cheta, Independent Non-Executive Administrator
• 1. Dimitrie Pelinescu-Onciul, Non-Executive Administrator

The nomination committee has the following responsibilies:

• To approve a description of the role and eligibility conditions required for a specific position in the CA or the Executive Committee;
• To identify candidates for position in the Board of Directors, if the case / to make recommendations regarding the proposal of candidates for appointment to the Board of Directors;

At the moment, the Company does not have a remuneration policy in force. However, the amount of the remuneration of the members of the Board of Directors of the Company, as well as the members of the Executive Committee, is published on the company's website and is subject to the approval of the Annual General Shareholders' Meeting. The development of a remuneration policy is currently being considered.

Thus, the following tasks will be assigned to the nomination committee:

• To ensure an adequate remuneration policy, compatible with MedLife's strategy and long-term interests;

• To ensure the publication of the direct and indirect remuneration of the board of directors and executive directors in the annual report, distinguishing between the fixed and variable components of the remuneration.

8. Risk exposures

Capital risk

The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of debt, which includes borrowings from bank and IFC and also financial leasing, cash and cash equivalents and equity, comprising issued capital, reserves and retained earnings.

The Company's risk management reviews the capital structure regularly. As a part of this review, the management considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the management, the Company will balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

Financial risk management objectives

The Company's Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyses exposures by degree and magnitude of risks.

These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Market risk

The Company's activities expose it primarily to foreign exchange rate risks. There were no changes in the Company's exposure to market risks or the way they manage and assess their risk.

Foreign exchange rate risk

The Company operates and carries out transactions denominated in various currencies. The management analyses the exposure to currency risk and takes the necessary measures to protect itself.

Interest rate risk

The management of the Company analyses the financial costs of borrowing from banks and financial leasing and takes the necessary measures to protect itself against interest rate risk.

Credit risk

The financial assets that might expose the Company to a credit risk concentration mainly consist of receivables (trade receivables and similar receivables). Given the large number of clients of the Company, credit risk is rather limited.

The Company has also developed certain procedures to assess legal entities as customers prior to signing contracts, aimed at providing preventive and prophylactic health care packages (PPMs) and monitoring their ability to meet the payments during the course of contracts.

Liquidity risk/ cash flow risk

The Company's policy is to maintain sufficient liquidities to pay for its obligations when such become due.

The ultimate responsibility for liquidity risk management rests with the board of directors, which has set up an appropriate liquidity risk management framework to manage short, medium and long-term funding requirements and liquidity management.

The Company manages liquidity risk by maintaining reserves, continuously monitoring the estimated and effective cash flows and reconciling the maturities of financial assets and liabilities.

Fiscal environment

The taxation system in Romania is still developing and is subject to various interpretations and constant changes, which may sometimes be retroactive. Although the actual tax due for a transaction may be minimum, delay interests may be significant, as they can be calculated at the value of the transaction and at a rate of 0.02% per day (interest) and 0.01% (penalties) per day in 2019.

In Romania the statute of limitation for tax controls (audits) is of 5 years. Management believes that the tax obligations included in these financial statements are adequate.

Transfer pricing

The fiscal legislation from Romania includes the "market value" principle, according to which the transactions between related parties have to be performed at the market value. The local tax payers, who carry transactions with related parties, have to prepare and make available to the tax authorities from Romania, at their written request, the transfer pricing documentation file. If the companies do not prepare the documentation or they present an incomplete transfer pricing file may attract penalties for non-conformity, and additionally to the information presented in the transfer pricing file, the fiscal authorities may have a different interpretation of the transactions and the circumstances compared to the management's assessment and, as a result, they may impose additional fiscal obligations as a result of adjusting transfer prices. The management of the Company is confident that, if required, they will submit the necessary information in due time to the fiscal authorities. The transactions with related parties and group companies are performed based on the market value principle.

Litigation

The Company is involved in various litigations as part of normal course of business. Management has assessed the legal status together with the Group's legal advisors and all necessary adjustments have been recorded in the consolidated financial statements.

9. Subsequent events

Actions implemented to prevent and limit the spread of COVID-19

The MedLife Medical System, the largest operator of medical services in Romania, has implemented, from the first alert day on limiting the spread of SARS-CoV-2 (Coronavirus) virus in Romania, a series of prevention and protection measures for patients. and to the medical and auxiliary staff, focusing on preventing factors that could represent a danger of infection for all those in the medical units.

In all MedLife units, the methodology of surveillance of the acute respiratory system was implemented, and at the moment, the company ensures a good continuity of the medical activity. Epidemiological triage of patients through call-centers and medical teams, special circuits for patients with acute respiratory pathology, adaptation of consultation intervals to increase patient safety (allocating time needed to disinfect spaces after interaction with each patient), creating special spaces for isolating cases suspected of infectious diseases, the provision of protective equipment and disinfectant products, but also the development of complex procedures of cleaning, disinfection and nebulization are only part of the important measures that have been taken and that the special medical teams follow and manage them properly.

Regarding the operational segment, the administrative and support staff, the MedLife Medical System has implemented a Continuity of Activity Plan, the safety of the employees being a priority. The measures consist in dividing the key employees into two teams and avoiding physical interaction between them, but also the remote activity, both ensuring a good continuity of the company's activity. Also, all the events scheduled at the group level in the following period were suspended, and they will revert to them when exposure in the public space will no longer represent a risk to human health.

The MedLife Medical System actively monitors the economic situation in Romania and the possible negative implications on its current operations, at present, there are reductions in the activity determined by the social distance measures, imposed by the public authorities as measures to limit the spread of the SARS-CoV-2 virus. (Coronavirus). Despite the diminished activity, the company has taken all necessary measures to maintain good continuity of medical activity in all MedLife clinics and hospitals, taking priority over medical staff and colleagues in the front line and studying the compensation of these turbulences by reducing the short-term overhead costs.

The priority of the MedLife Medical System remains the health of patients and employees, fully respecting the decisions of the local authorities.

The Company assessed the impact of the Coronavirus pandemic over its business and concluded that the financial statements will not be significantly affected by this event. Even though, we currently can't properly evaluate the consequences of this pandemic considering the dynamics in the evolution, the Company doesn't expect a major impact on its activity in the future based on information available to the management at the date of this report.

Greenfield acquisition and investment plans

MedLife Medical System announces its intention to increase its existing facilities by 40 million euros by signing a syndicated loan, the discussions being already advanced with the banks. Depending on the opportunities, other important liquidities of the company will be added to this increase, as appropriate. The bank union that would sign the new loan consists of Banca Comercială Română, as coordinator, main arranger, documentation agent, facility and guarantee agent and financier, BRD Groupe Société Générale, Banca Transilvania and Raiffeisen Bank, as of main arrangers and funders.

The new funds will be dedicated to consolidating and expanding the group nationwide, by developing medical units such as MedPark, where the patient benefits from a 360-degree approach both in terms of the complexity of the medical act and the quality of adjacent services. Major emphasis will be placed on the development of programs and projects in a pandemic context, projects related to prevention,

oncology and medical radiotherapy, technology and digitization, the main objective being the needs of the patient caring for his health and wanting to solve his needs efficiently, quickly and safely. According to company representatives, the amount is not intended to complete ongoing acquisitions for which MedLife has sufficient liquidity. At the same time, the company aims to continue the research efforts, and even to intensify them through new investments in the new year.

Administrators

THE STATE OF CONFORMITY WITH THE CORPOARTE GOVENRNANCE CODE OF BVB VALID ON THE DATE OF PUBLISHING THE HEREBY REPORT FOR THE COMPANY MED LIFE S.A.

(hereby referred to as the "Company")

SECTION A. RESPONSIBILITIES

Provisions to be complied with:

1.All companies should have an internal regulation of the Board that includes the reference terms/responsibilities of the Board and the key management positions of the company and that applies, among others, the General principles in the hereby Section of the BVB Corporate Governance Code.

MedLife Corporate Governance Statute adopted and published on the Company's website on February 28, 2017 (Investor Relations section, Corporate Governance subsection, Corporate Governance Documents), is based on the provisions of the Company's Articles of Association, updated with the Board of Directors Decisions (hereinafter referred to as "BD") of November 21 and December 21, 2016, which establishes the responsibilities of the BD and those of the Executive Committee (the Articles of Association are also published on the Company's website at Investor Relations section, Corporate Governance subsection, Constitutive Act).

MedLife is administered in a unitary system by the BD consisting of 7 members appointed by the ordinary GMS for a term of 4 years, with the possibility of being re-elected. The BD is responsible for the management of the Company, acting in the interest of the Company and protecting the general interests of its shareholders by ensuring a sustainable development of the Company. According to the Articles of Association, the BD is responsible for all useful and necessary acts in order to fulfill the object of activity of MedLife, including the administration of MedLife subsidiaries or investments, except for the attributions that are by law assigned to the GMS.

The BD approved the Internal Regulations of the BD on February 28, 2017. This document is an internal document. Also, the BD approved and published on February 28, 2017 on the Company's website a Code of Ethics and Conduct, a code referred to in the Company's Corporate Governance Statute and which establishes standards of conduct that must be adhered to within MedLife and its subsidiaries at all levels: directors, executives, managers, employees, suppliers and subcontractors or consultants, whether they are employed permanently or temporarily.

2.Provisions to handle conflicts of interests should be included in the Board's Internal Regulation. In any case, the members of the Board must notify the Board of any conflicts of interest which have arisen or may arise and refrain from participating in discussions (including by non-attendance, unless non-attendance would prevent the formation of a quorum) and to vote on a decision on the matter giving rise to the conflict of interests.

The members of the Board of Directors have, according to the law, duties of diligence and loyalty to the Company, provided in the Articles of Association of the Company and in the Internal Regulations of the BD. Provisions for the management of conflicts of interest can be found both in the Code of Ethics and Conduct, and in the Internal Regulations of the BD mentioned above.

3. The Board of directors must comprise at least five members.

The BD of the Company consists of 7 members elected by the Ordinary GMS from 15 December 2020, in accordance with the provisions of the Articles of Association of the Company.

4. The majority of the Board of directors' members should not have an executive position. In case of companies of the Premium Category, no less than two non-executive members of the Board of Directors have to be independent. Each independent member of the Board of directors has to file a statement at the moment of their nomination in view of election or re-election, as well as when any change in their status occurs, indicating the elements based on which they are considered to be independent from the perspective of their character and judgement and according to the criteria of the Corporate Governance Code of BVB.

MedLife meets this requirement. According to the Articles of Association of the Company, the majority of the members of the BD are non-executive (4 members out of 7), while 3 members and independent. On the occasion of each (re) appointment of a member of the BD, the Company performs an assessment of the independence of members based on the independence criteria provided by the Corporate Governance Code (which are essentially similar to those provided by the Companies Law).

5. Other commitments and relatively permanent professional obligations of a member of the Board, including executive and non-executive offices in the Board of non-profit companies and institutions, shall be revealed to the shareholders and potential investors prior to nomination and in the course of their mandate.

MedLife meets this requirement. The biographies of the BD members are published on the Company's website, each member having the responsibility to keep their professional biography up to date.

6. Any member of the Board must present to the Board information on any report with a shareholder that holds directly or indirectly, shares representing over 5% of all voting rights.

MedLife meets this requirement. The members of the BD have, according to the law, duties of diligence and loyalty to the Company, provided both in the Articles of Association of the Company and in the Internal Regulations of the BD. The company has implemented internal regulations on how to address situations of conflict of interest. There are professional relations between the members of the Board and the Chairman of the Board, who holds more than 5% of the voting rights, but these do not affect and have not affected the position of the board members regarding issues decided by the Board.

7. The company shall assign a secretary of the Board responsible with supporting the activity of the Board.

MedLife fulfils this requirement. The company has a General Secretary, a lawyer by profession, that reports, from a functional perspective, towards the BD.

8. The statement on corporate governance shall inform whether there has been an evaluation of the BD under the leadership of the president or of the nominating committee and, in case so, shall brief the key measures and resulting changes. The company should have a policy / guide regarding evaluation of the Board comprising the purpose, criteria and frequency of the evaluation process.

MedLife meets this requirement. The company has a self-assessment guide that sets out the purpose, criteria and frequency of such assessment. This guide is an internal document. The CA performs an annual self-assessment process.

9. The Statement on corporate governance shall contain information on the number of meetings of the BOD and of the committees, in the course of the last year, the attendance of the directors (in person and in absence) and a report of the BD and of the committees, regarding their activities.

The Company's Executive Committee meets regularly (at least once every two weeks, but usually once a week), and the BD meets whenever necessary, but at least once every three months. In 2020, 4 Board meetings and 3 meetings of the Audit Committee took place. More details on their attributions are presented in the Annual Report.

10. The Statement regarding corporate governance must include information regarding the exact number of independent members of the Board of directors.

Out of the 4 non-executive members of the BoD, 3 members are independent.

11. The Board of directors from the Premium Category shall establish a nomination committee, formed from non-executive members, that shall lead the procedure to nominate new members in the BOD and shall make recommendations to the BOD regarding appointment and revocation of the General Manager and of the management team, the Majority of the members of the nominating committee should be independent.

MedLife partially meets this requirement, having set a Remunaration Committee made of 3 non-executive members of the BoD, out of which 2 members are independent.

Section B Risk management and internal controlling system

1.The Board shall establish an audit committee, in which at least one member shall be an independent non-executive director. The majority of members, including the president, shall be proven as having the relevant adequate qualification for the committee's functions and responsibilities. At least one member of the audit committee shall have the proven and appropriate audit or accounting experience. In case of companies from the Premium Category, the audit committee shall be formed of at least three members and the majority of the members of the audit committee shall be independent.

MedLife meets this requirement. MedLife's Articles of Incorporation, in conjunction with the Corporate Governance Statute, provide for the existence of the Audit Committee, its structure, as well as its responsibilities. The committee consists of 3 non-executive and independent members. The BD approved the Regulation of this committee.

2. The president of the audit committee shall be an independent non-executive member.

In February 2021, the Board of Directors elected as chairman of the Audit Committee Mrs. Mihaescu Ana-Maria, independent non-executive board member.

3. Within its responsibilities, the audit committee shall perform an annual evaluation of the internal control system.

4. The evaluation shall consider the efficiency and inclusion of the internal audit function, the degree of adequacy of risk management and internal control reports presented by the audit committee of the Board, the expediency and efficiency with which the executive leadership solves deficiencies or weaknesses identified pursuant to internal control and the presentation of relevant reports to the attention of the Board.

5. The Audit Committee shall evaluate conflicts of interests in connection to the companies' transactions and those of its subsidiaries with affiliated parties.

6. The Audit Committee shall evaluate the efficiency of the internal control system and of the risk management system.

7. The Audit Committee shall monitor application of legal standards and of generally accepted internal audit standards. The Audit Committee shall receive and evaluate the reports of the internal audit team.

The BoD set up an Audit Committee and approved its Regulation. The audit committee has mainly the following responsibilities:

• to examine and review the individual and consolidated annual financial statements and the profit distribution proposal;

• to carry out annual evaluations of the internal control system;
• to evaluate the effectiveness of the internal control system and the risk management system;
• to monitor the application of generally accepted legal standards and internal audit standards;
• to assess conflicts of interest in related party transactions;

• to analyze and review transactions with related parties that exceed or can be expected to exceed 5% of the company's net assets in the previous financial year;

• to make recommendations to the BD

The Internal Audit Department assessed the effectiveness of the internal control system for MedLife at the time of this report, and currently provides consultancy in order to increase the effectiveness of this system. The evaluation report for 2020 was presented to and discussed by the members of the Audit Committee.

1. Anytime the Code mentions reports or analyses initiated by the Audit Committee, these shall be followed by periodic reportings (at least annual) or ad-hoc that shall be subsequently forwarded to the BOD.

The Audit Committee periodically sends to the BD reports on the specific issues assigned to it, as appropriate.

9. None of the shareholders may be granted preferential treatment with respect to other shareholders, in connection to transactions and agreements concluded by the company with shareholders and their affiliates.

MedLife meets this requirement. The Company adopted a Code of Ethics and Conduct on February 28, 2017, which is available on the Company's website. The company applies equal treatment to all its shareholders.

10. The Board shall adopt a policy by which to insure that any transaction of the company, with any of the companies with which it has close relations, the value of which is equal to or higher than 5% of the net assets of the company (as per the latest financial report) is approved by the BOD, pursuant to a mandatory opinion of the audit committee and correctly revealed to the shareholders and potential investors, to the extent in which these transactions fall under the category of events that make the object of reporting requirements.

The Company has implemented an internal Related Party Transaction Policy, which sets out the key principles for reviewing, approving and disclosing related party transactions, in accordance with applicable regulations and the Company's corporate documents, including that the Company's related party transactions exceed or it is estimated that they may exceed, individually or in aggregate, an annual value of 5% of the Company's net assets in the previous financial year, must be approved by the Board following their approval by the Executive Committee and based on the opinion of the Audit Committee.

The Company also periodically submits reports on related party transactions to the Financial Supervisory Authority and the Bucharest Stock Exchange. These reports are reviewed semiannually by the independent financial auditor in accordance with the relevant legislation in force.

11. Internal audit shall be performed by a structurally separate division (internal audit department) within the company or by hiring an independent third-party entity.

The internal audit is performed by a separate division within the Company, respectively by the Internal Audit Department.

12. In order to insure fulfilling the main functions of the internal audit department, the latter shall report, from a functional standpoint, towards the BD, by means of the Audit Committee. For administrative purposes and within the leadership's obligations to monitor and reduce risks, the former shall report directly to the General Manager.

The Internal Audit Department reports to the BD from a functional standpoint, by means of the Audit Committee, and administratively, towards the General Manager.

Section C. Appropriate reward and incentive

1. The company shall publish on its internet webpage the remuneration policy and shall include, in the annual report, a statement regarding the implementation of the remuneration policy within the course of the annual period that is object of the analysis.

The remuneration policy shall be drafted such that it allows shareholders to understand the principles and arguments that form the basis of the remuneration for members of the BOD and of the General Manager, as well as of members of the Directorate, in a dualist system. The former shall describe the method of process management and decision making regarding remuneration, shall detail the component of remuneration of the executive leadership (such as salaries, annual bonuses, long term incentives related connected to the value of shares, benefits in kind, pensions and others) and to describe the purpose, principles and assumptions that underline the base of each component (including the general performance criteria subsequent to each variable remuneration form). Furthermore, the remuneration policy shall specify the duration of the contract for the executive manager and the period of prior notice provided in the agreement, as well as any compensation for revocation without just cause.

The report regarding remuneration shall present implementation of the remuneration policy for individuals identified in the remuneration policy, in the course of the annual period that is object of the analysis.

Any essential change arisen in the remuneration policy shall be published in due time on the company's webpage.

MedLife meets this requirement at the date of this report. The company has a remuneration policy in place, available on the website. The amount of the remuneration of the members of the BD of the Company, as well as the members of the Executive Committee is published on the company's website and is subject to the approval of the annual Ordinary GMS.

Section D Adding value by investor relations

D1. The company shall organise a service of Investor Relations – indicating to the general public the individual/individuals responsible or the organization unit. Outside of the mandatory information as per legal provisions, the company shall include on its webpage a section dedicated to Investor Relations, in Romanian and English language, with all the relevant information of interest to investors, including:

D.1.1. The main corporate regulations: constitutive document, procedures regarding general meetings of the shareholders;

D.1.2. Professional resumes of the members of the company's leadership bodies, other professional commitments of the members of the Board, including executive and nonexecutive offices in boards of directors in companies or non-profit institutions;

D.1.3. Current reports and periodical reports (quarterly, semestrial and annual);

D.1.4. Information regarding the general meetings of the shareholders;

D.1.5. Information regarding corporate events;

D.1.6. Names and contact details of an individual that may provide relevant information, on demand;

D.1.7. Company presentations (such as presentations for investors, presentations on quarterly results etc.), financial statements (quarterly, semestrial, annual), audit reports and annual reports.

The company has both a department dedicated to Investor Relations, which can be contacted at the email address investors@medlife.ro, and a section dedicated to investor relations on its website, both in Romanian (www.medlife.ro/relatia -with-investors), as well as in English (www.medlifeinternational.com/investor-relations). This section contains all relevant information of interest to investors and shareholders, including the above.

D2. The company shall have a policy regarding annual distribution of dividends or other benefits towards the shareholders, proposed by the General Manager or by the Executive Committee and adopted by the BOD, under the form of a set of guidelines which the company intends to follow regarding distribution of the net profit. The principles of annual distribution policy towards the shareholders shall be published on the company's webpage.

The objective of the Board of Directors is to create value for the Company's shareholders. Thus, the Board of Directors, focused on the continuous expansion of the Group's profitability for the benefit of shareholders, proposes not to distribute dividends to shareholders, as long as the Group's growth rate is in line with historical evolution. The Company's Dividend Policy is detailed in the Annual Report.

D3. The company shall adopt a policy in connection to the forecasts, whether they are made public or nor. The forecasts refer to quantified conclusions of studies targeting stability of the global impact of a number of factors regarding a future period (so-called hypotheses). By its nature, such projection holds a high level of uncertainty, as the actual results may vary significantly from the initially presented forecasts. The policy regarding forecasts shall establish the frequency, considered period and content of forecasts. If published, forecasts may be included only in the annual, semestrial or quarterly reports. The policy regarding forecasts shall be published on the company's webpage.

The Company has implemented a Forecast policy, which is published on its website, in the Investor Relations section, Corporate Governance subsection, Corporate Governance Documents.

D4. Rules of the general meetings of the shareholders shall not limit participation of shareholders to the general meetings and exercise of their rights. Amendments of rules shall enter into effect, at the earliest, starting with the following meeting of the shareholders.

The rules of the general meeting of the shareholders are mentioned in each summoning notice, published as per legal requirements, at least 30 days before each meeting. The rules for organizing general meetings are included in the Procedure for organizing and holding General Shareholders' Meetings, published on the company's website, in the Investor Relations section, Corporate Governance subsection, Corporate Governance Documents.

D5. External auditors shall be present at the general meeting of the shareholders when their reports are presented within the respective meetings.

Independent external financial auditors usually participate in the Ordinary GMS in which the individual and consolidated annual financial statements are submitted for approval, and their reports are presented. In the current epidemiological context, the presence at the GMS was kept to a minimum, at the GMS participating the Chairman of the Board and the technical secretaries of the meeting, with the virtual participation of the financial auditors.

D6. The Board shall present to the annual general meeting of the shareholders a brief evaluation on the internal control and significant risks management systems, as well as opinions on matters subjected to the decision of the general meeting.

The company meets this requirement. The individual and consolidated annual financial statements present a brief assessment of the internal control and significant risk management systems and are subject to the approval of the GMS at least 30 days before the date of the GMS meeting.

D7. Any specialist, consultant, expert or financial analyst may attend the meeting of the shareholders, based on a prior invitation by the BOD. Accredited journalists may also attend the general meeting of the shareholders, with the approval of the President of the BOD.

The company meets this requirement. Any specialist, consultant, expert or financial analyst can participate in the GMS based on a prior invitation from the Board. Accredited journalists may also participate in the GMS, unless the Chairman of the Board decides otherwise. These provisions are included in the Procedure for organizing and holding General Shareholders' Meetings, published on the company's website, in the Investor Relations section, Corporate Governance subsection, Corporate Governance Documents.

D8. Quarterly and semestrial financial reports shall include information both in Romanian, as well as in English, regarding key factors that influence amendments at the level of sales, of operational profit, net profit and of other relevant financial indicators, both from one quarter to another, as well as from one year to another.

The company meets this requirement. The quarterly and half-yearly financial reports include information in both Romanian and English on key factors that determine changes in sales, operating profit, net profit and other relevant financial indicators, both on a quarterly on quarterly basis, as well as from one year to another.

D9. A company shall organize at least two hearings / teleconferences with analysts and investors every year. The information presented on such occasions shall be published in the section investor relations of the company's webpage on the date of the hearings / teleconferences.

MedLife meets this requirement. The company organizes quarterly teleconferences with analysts and investors to present financial results. The presentations made during the teleconferences are published on the company's website.

D10. In case a company supports various forms of artistic and cultural expression, sporting activities, educational or scientific activities and considers that their impact on the company's innovating nature and its competitiveness are part of its development mission and strategy, it shall publish the policy regarding its activity in such field.

The Company carries out various activities related to education, social responsibility, environment and governance, supporting the local communities in which the Company operates. Also, the Company has implemented a social responsibility code, which can be found on the company's website, in the Investor Relations section, Corporate Governance subsection, Corporate Governance Documents.