The English version of the consolidated financial statements represents a translation of the original consolidated financial statemetns issued in Romanian language
MED LIFE S.A.
AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
PREPARED IN ACCORDANCE WITH ORDER OF THE MINISTRY OF PUBLIC FINANCE NO.
2844/2016 APPROVING THE ACCOUNTING REGULATIONS COMPLIANT WITH THE
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The English version of the consolidated financial statements represents a translation of the original consolidated financial statemetns issued in Romanian language
Name of the issuing company: Med Life S.A.
Registered Office: Bucharest, 365 Calea Griviței, District 1, Romania
Fax no.: 0040 374 180 470
Unique Registration Code at the National Office of Trade Registry: 8422035
Order number on the Trade Registry: J40/3709/1996
Subscribed and paid-in share capital: RON 33,217,623
Regulated market on which the issued securities are traded: Bucharest Stock Exchange
CONTENTS:PAGE:
STATEMENT OF FINANCIAL POSITION 2
STATEMENT OF COMPREHENSIVE INCOME 3
STATEMENT OF CASH FLOWS 4
STATEMENT OF CHANGES IN EQUITY 5 – 6
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS 7 – 51
MED LIFE S.A.
STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 2
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Dece mber 31,January 1,
Note 2022 2022
Curre nt Asse ts
Inventories 6
Trade Receivables 7
Loans granted to related parties 23
Other assets 7
C ash and cash equivalents 8
Prepayments 9
Total Curre nt Asse ts
TOTAL ASSETS
10 122,505,239
14 9,894,800
13 26,229,711
80,151,836
9,896,200
23,791,932
14 31,933,045
43,215,074
Curre nt Liabilitie s
Trade and other payables
Overdraft
C urrent portion of lease liability
C urrent portion of interest-bearing loans and
borrowings
Loans received from related parties
C urrent tax liabilities
Provisions
Other liabilities
Total Curre nt Liabiliti e s
TOTAL LIABILITIES
SHAREHOLDER’S EQUITY
Share capital and Share premium
Treasury shares
Reserves
Retained earnings
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
ASSETS
Non-curre nt Asse ts
Intangible assets 5
Property, plant and equipment 5
Right-of-use asset 13, 14
Other financial assets 4
Total Non-Curre nt Asse ts
14,665,892
342,815,667
71,911,269
413,831,251
843,224,079
12,513,597
66,525,981
162,430,816
18,251,900
15,141,431
2,674,932
277,538,657
1,120,762,736
LIABILITIES & SHAREHOLDER’S EQUITY
Non-Curre nt Lia bilitie s
Lease liability 13, 14
Other long term debt 14
Interest-bearing loans and borrowings 14
Deferred tax liability 24
Total Non-Curre nt Liabilitie s
50,184,177
12,651,217
508,264,032
19,052,772
590,152,198
23 12,632,124
24 980,993
12 3,480,319
11 17,677,023
225,333,254
815,485,452
15 83,812,556
15 (3,219,221)
16 141,003,106
83,680,844
305,277,285
1,120,762,736
9,895,358
244,673,659
68,420,689
257,432,358
580,422,064
10,038,916
56,744,097
106,337,549
25,421,897
38,629,900
2,608,350
239,780,709
820,202,773
50,129,780
-
322,115,156
11,457,413
383,702,349
441,238
122,115
3,145,135
16,156,461
176,919,991
560,622,340
82,395,091
(4,015,977)
101,127,471
80,073,849
259,580,434
820,202,773
Mihail Marcu,
CEO
Alina Irinoiu,
CFO
MED LIFE S.A.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 3
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Note 2022
2021
(81,748,854)
(96,288,600)
Revenue from contracts with customers
Other operating revenues
Ope rating Income
C onsumable materials and repair
materials
Third party expenses
19(205,746,479)
(179,709,262)
(148,780,015)
21
(173,443,751)
21 (6,090,747)
5, 13 (57,865,833)
(5,391,095)
(49,814,097)
(4,934,093)
16 47,470,993
24 (7,595,359)
-
-
Salary and related expenses
Social contributions
Depreciation and amortization
Impairment losses and gains (including
reversals of impairment losses)
Other operating expenses
Ope rating expe nse s
Ope rating Profit
Finance income
Finance cost
Other financial expenses
F inancial re sult
Re sult Before Taxes
Income tax expense
Net Result
Othe r compre he nsi v e income ite ms
that w ill not be re classifie d to profit
or loss
Revaluation of land and buildings
Deferred tax on other comprehensive
income components
TOTAL OTHER COMPREHENSIVE
INCOME
39,875,634
-
7
(889,139)
20 (44,119,711)
(569,904,514)
23,488,263
22 6,922,660
22 (21,855,297)
22 (2,752,063)
(17,684,700)
5,803,563
24 (2,196,569)
3,606,994
12 months e nd e d Dece mbe r 31,
17 586,566,266
18 6,826,511
593,392,777
601,508,195
4,057,881
605,566,076
(35,885,636)
(520,802,798)
84,763,278
3,473,598
(16,196,020)
(5,979,555)
(18,701,977)
66,061,301
(10,576,871)
55,484,430
TOTAL COMPR EHENSIVE INCOME 43,482,628 55,484,430
MihailMarcu,
CEO
Alina Irinoiu,
CFO
MED LIFE S.A.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 4
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Note
2022
2021
Ne t profit be fore tax e s
Adjustm e nts for
Depreciation and amortization 5, 13
Interest expense 22
Allowance for doubtful debts and receivables written-off 7
Provisions for liabilities and charges 12
Other non-monetary gains 18
Unrealised exchange loss 22
Interest revenue 22
Ope rating ca sh flow be fore w ork ing ca pital cha nge s
78,966,362
137,495,129
Decrease / (increase) in accounts receivable
Decrease / (increase) in inventories
Decrease / (increase) in prepayments
Increase / (decrease) in accounts payable
Ca sh ge ne ra ted from w orking capital cha nge s
37,511,600
823,501
Ca sh ge ne ra ted from ope rations
Income tax paid
Interest paid
Ne t cash from op e rating acti v ities
Purchase of investments
Payment of loans assigned from former shareholders
Purchase of intangible assets
Purchase of property, plant and equipment
Loans granted to Group C ompanies
Ne t cash use d in in v e sting a cti v itie s
14(32,704,054)
14(27,431,784)
14 204,845,867
15 (7,851,828)
(40,519,720)
(22,934,963)
33,951,383
(3,669,570)
23 8,523,000
(487,509)
Payment of loans
Lease payments
Proceeds from loans
Payments for purchase of treasury shares
Increase/ (Decrease) from loans obtained from Group
C ompanies
Ne t cash from/(us e d in) financing a cti v itie s
Ne t cha nge in cash and ca sh e qui v a le nts
(23,488,469)
4,894,454
C ash and cash equivalents beginning of the period
Ca sh a nd ca sh e qui v ale nts e nd of the pe riod
15,141,431
38,629,900
57,865,833
21,855,297
889,139
335,184
(3,612,057)
2,752,063
(6,922,660)
(3,501,026)
(2,474,681)
(66,582)
43,553,889
116,477,962
24 (1,337,691)
14 (17,016,867)
98,123,404
4 (149,251,414)
(16,746,241)
5 (10,712,880)
5 (70,010,600)
23 (20,271,938)
(266,993,073)
145,381,201
8 38,629,900
12 months e nde d Dece mbe r 31,
5,803,563
66,061,301
49,814,097
16,196,020
4,934,093
260,082
(2,276,421)
5,979,555
(3,473,598)
15,102,443
3,185,097
(1,282,688)
(16,181,351)
138,318,630
(14,284,255)
(17,750,515)
106,283,860
(23,423,949)
-
(2,771,220)
(33,169,175)
(8,364,683)
(67,729,027)
(33,660,379)
33,735,446
Mihail Marcu,
CEO
Alina Irinoiu,
CFO
MED LIFE S.A.
STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 5
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Share Ca pital
Tr e asury
share s
Re v alua tion
Reser v e
Accumulated
Results
Total Equity
Balance a t January 1, 2022
33,217,623
(4,015,977)
49,177,468
34,538,597
66,588,874
80,073,849
259,580,434
-
-
-
-
-
3,606,995
3,606,995
Profit of the year
Revaluation of land and buildings
(Note 16)
-
-
-
-
47,470,993
-
47,470,993
Deferred tax related to other
comprehensive income (Note 24)
-
-
-
-
(7,595,358)
-
(7,595,358)
Total compre he nsi v e income
Increase from own shares acquisition
(Note 15)
-
(7,851,828)
-
-
-
-
(7,851,828)
Net release of own shares used for
acquiring additional N C I (Note 15)
-
8,648,583
-
-
-
-
8,648,583
Increase in premiums due to
difference between fair value and cost
of own shares when the exchange was
made (Note 15)
-
-
1,417,465
-
-
-
1,417,465
Balance a s a t Dece mbe r 31, 2022
33,217,623
(3,219,221)
50,594,933
34,538,597
106,464,509
83,680,844
305,277,284
Ge n e ra l
Share r e se r ve s and
pre mium othe r
r e ser ve s
-
-
-
-
39,875,635
3,606,995
43,482,630
During 2022, the Company performed a revaluation for land and buildings, please refer to Note 5 and Note 24 for more details.
Mihail Marcu,
CEO
Alina Irinoiu,
CFO
MED LIFE S.A.
STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 6
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Share Ca pital
Tr e asury
share s
Re v alua tion
Reser v e
Accumulated
Results
Total Equity
Balance a t Janaury 1, 2021
Increase from own shares acquisition
-
(3,669,511)
-
-
-
-
(3,669,511)
-
320,158
-
-
-
-
320,158
-
-
368,079
-
-
-
368,079
-
-
-
10,527,608
-
(10,527,608)
-
Balance a s a t Dece mbe r 31, 2021
33,217,623
(4,015,977)
49,177,468
34,538,597
66,588,874
80,073,849
259,580,434
Ge n e ra l
Share r e se r ve s and
pre mium othe r
r e ser ve s
33,217,623
(666,624)
48,809,389
24,010,989
66,588,874
35,117,028
207,077,279
Net release of own shares used for
purchase of additional shares in other
entities
Increase in premiums due to
difference between fair value and cost
of own shares when the exchange was
made
Other reserves, including revaluation
reserve
Total compre he nsi v e income
Profit of the year
-
-
-
-
-
-
-
-
-
-
55,484,429
55,484,429
55,484,429
55,484,429
Mihail Marcu,
CEO
Alina Irinoiu,
CFO
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 7
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
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
3.19 and Note 16) through medical centres located in Bucharest, Cluj, Braila, Timisoara, Iasi, Galati, Ploiesti, Constanta
and Targu Mures.
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.
2.ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)
2.1 Changes in accounting policy and disclosures
The accounting policies adopted are consistent with those of the previous financial year except for the following IFRS
amendments which have been adopted by the Company as of 1 January 2022:
-
IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent
Liabilities and Contingent Assets as well as Annual Improvements 2018-2020 (Amendments)
The amendments are effective for annual periods beginning on or after 1 January 2022 with earlier application
permitted. The IASB has issued narrow-scope amendments to the IFRS Standards as follows:

IFRS 3 Business Combinations (Amendments) update a reference in IFRS 3 to the previous version of the
IASB’s Conceptual Framework for Financial Reporting to the current version issued in 2018 without significantly
changing the accounting requirements for business combinations.

IAS 16 Property, Plant and Equipment (Amendments) prohibit a company from deducting from the cost of
property, plant and equipment any proceeds from the sale of items produced while bringing the asset to the
location and condition necessary for it be capable of operating in the manner intended by management. Instead, a
company recognizes such sales proceeds and related cost in profit or loss.

IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendments) specify which costs a
company includes in determining the cost of fulfilling a contract for the purpose of assessing whether a contract
is onerous. The amendments clarify, the costs that relate directly to a contract to provide goods or services
include both incremental costs and an allocation of costs directly related to the contract activities.

Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of
International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the
Illustrative Examples accompanying IFRS 16 Leases
-
IFRS 16 Leases-Cοvid 19 Related Rent Concessions beyond 30 June 2021 (Amendment)
The Amendment applies to annual reporting periods beginning on or after 1 April 2021, with earlier application
permitted, including in financial statements not yet authorized for issue at the date the amendment is issued. In
March 2021, the Board amended the conditions of the practical expedient in IFRS 16 that provides relief to lessees
from applying the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the
covid-19 pandemic. Following the amendment, the practical expedient now applies to rent concessions for which any
reduction in lease payments affects only payments originally due on or before 30 June 2022, provided the other
conditions for applying the practical expedient are met.
The amendments had no impact on the financial statements of the Company.
2.2 Standards issued but not yet effective and not early adopted
-
IFRS 17: Insurance Contracts
-
The standard is effective for annual periods beginning on or after 1 January 2023 with earlier application permitted,
provided the entity also applies IFRS 9 Financial Instruments on or before the date it first applies IFRS 17. This is a
comprehensive new accounting standard for insurance contracts, covering recognition and measurement,
presentation and disclosure. IFRS 17 applies to all types of insurance contracts issued, as well as to certain
guarantees and financial instruments with discretional participation contracts.
The company does not issue contracts in scope of IFRS 17; therefore, its application does not have an impact on the
company’s financial performance, financial position or cash flows
.
-
IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
policies (Amendments)
The Amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application
permitted. The amendments provide guidance on the application of materiality judgements to accounting policy
disclosures. In particular, the amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting
policies with a requirement to disclose ‘material’ accounting policies. Also, guidance and illustrative examples are
added in the Practice Statement to assist in the application of the materiality concept when making judgements
about accounting policy disclosures.
-
IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (Amendments)
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 8
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
The amendments become effective for annual reporting periods beginning on or after January 1, 2023 with earlier
application permitted and apply to changes in accounting policies and changes in accounting estimates that occur on
or after the start of that period. The amendments introduce a new definition of accounting estimates, defined as
monetary amounts in financial statements that are subject to measurement uncertainty, if they do not result from a
correction of prior period error. Also, the amendments clarify what changes in accounting estimates are and how these
differ from changes in accounting policies and corrections of errors.
-
IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments)
The amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application
permitted. The amendments narrow the scope of and provide further clarity on the initial recognition exception under
IAS 12 and specify how companies should account for deferred tax related to assets and liabilities arising from a
single transaction, such as leases and decommissioning obligations. The amendments clarify that where payments
that settle a liability are deductible for tax purposes, it is a matter of judgement, having considered the applicable tax
law, whether such deductions are attributable for tax purposes to the liability or to the related asset component. Under
the amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise
to equal taxable and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability
(or decommissioning liability and decommissioning asset component) give rise to taxable and deductible temporary
differences that are not equal. s
-
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current
(Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier
application permitted, and will need to be applied retrospectively in accordance with IAS 8. The objective of the
amendments is to clarify the principles in IAS 1 for the classification of liabilities as either current or non-current. The
amendments clarify the meaning of a right to defer settlement, the requirement for this right to exist at the end of the
reporting period, that management intent does not affect current or non-current classification, that options by the
counterparty that could result in settlement by the transfer of the entity’s own equity instruments do not affect current
or non-current classification. Also, the amendments specify that only covenants with which an entity must comply on
or before the reporting date will affect a liability’s classification. Additional disclosures are also required for non-
current liabilities arising from loan arrangements that are subject to covenants to be complied with within twelve
months after the reporting period. The amendments have not yet been endorsed by the EU.
-
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier
application permitted. The amendments are intended to improve the requirements that a seller-lessee uses in
measuring the lease liability arising in a sale and leaseback transaction in IFRS 16, while it does not change the
accounting for leases unrelated to sale and leaseback transactions. In particular, the seller-lessee determines ‘lease
payments’ or ‘revised lease payments’ in such a way that the seller-lessee would not recognize any amount of the gain
or loss that relates to the right of use it retains. Applying these requirements does not prevent the seller-lessee from
recognizing, in profit or loss, any gain or loss relating to the partial or full termination of a lease. A seller-lessee applies
the amendment retrospectively in accordance with IAS 8 to sale and leaseback transactions entered into after the date
of initial application, being the beginning of the annual reporting period in which an entity first applied IFRS 16. The
amendments have not yet been endorsed by the EU.
-
Amendment in 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 The
amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in
dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main
consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business
(whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets
that do not constitute a business, even if these assets are housed in a subsidiary. In December 2015 the IASB
postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity
method of accounting. The amendments have not yet been endorsed by the EU.
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, except for the effects of IAS
12 amendment where the analysis of impact is ongoing as of 31 December 2022.
3.SIGNIFICANT ACCOUNTING POLICIES
The individual financial statements (“financial statements”) of the Company have been prepared in accordance with the
provisions of Ministry of Finance Order no. 2844/2016 approving the accounting regulations compliant with the
International Financial Reporting Standards, with all subsequent modifications and clarifications.
The Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, is in accordance with the
International Financial Reporting Standards (IFRS) adopted by the European Union (EU), except for IAS 21 The effects of
changes in foreign exchange rates regarding functional currency, except for the provisions of IAS 20 Accounting for
Government Grants regarding the recognition of revenue from green certificates, except for the provisions of IFRS 15
Revenue from contracts with customers regarding the revenue from taxes of connection to the distribution grid. These
exceptions do not affect the compliance of the financial statements of the Company with IFRS adopted by the EU.
The Company also prepares consolidated financial statements in accordance with IFRS as endorsed by the EU, which are
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 9
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
available on the Company’s website.
The accounting policies applied in these financial statements are the same as those applied in the Company’s annual
individual financial statements as at and for the year ended 31 December 2021, except for the adoption of new standards
effective as of January 1st 2022.
The financial year corresponds to the calendar year.
3.1 Basis of preparation
The financial statements of the Company are presented in RON (“Romanian Leu”), using going concern principles. All
values are rounded to the nearest two decimals. The financial statements have been prepared on the historical cost
basis, except for certain items that have been measured at fair value, such as certain non-current assets and financial
instruments, as presented in the notes to the financial statements.
The Company maintains the accounting books in accordance with the Regulations on Accounting and Reporting issued
by the Ministry of Finance in Romania.
3.2 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 2023
across all revenue streams has been in line with the modelled scenarios.
As a result of the recent signing of the refinancing syndicated loan contract, the Group has also undrawn facilities of an
amount of EUR 50.7m, which along with other liquidity of the Group, will be used for possible new acquisition
opportunities on the market.
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. Cash an d available facilities have remained
decreased at RON 15.1m at year-end, compared to RON 38.6m at 31 December 2021, mainly due to the intensified
projects of acquisitions of new subsidiaries in the Group.
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.
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.
3.3 Significant judgements, estimates and assumptions
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.
3.4.1. Judgements
In the process of applying the Company’s accounting policies, the following judgments were made, particularly with
respect to the following:
Determining the lease term of contracts with renewal and termination options – Med Life as a lessee
Med Life determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised. The Company has lease contracts which include extension and
termination options.
The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to
renew or terminate the lease. When determining the lease term to be used for the measurement of the lease, the
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 10
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Company takes into account all the relevant facts and circumstances that create an economic incentive for exercising
either the extension or termination option of the lease term.
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 Company is typically reasonably certain
to extend (or not terminate).
-
If any leasehold improvements are expected to have a significant remaining value, the Company is typically
reasonably certain to extend (or not terminate).
-
Otherwise, the Company 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.
-
In case of lease term in relation to indefinite lease contracts the assumption applied was that the lease term will be
similar to other contracts signed with the same provider or based on the relevant period beyond which the exercise of
any option becomes uncertain.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Company 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. Please see
note 13.
Capitalisation of major inspections or components replacement (including spare parts)
The Company exercises judgement in deciding whether or not there are items that should be capitalised as items of
property, plant and equipment. In case of major inspections, the cost can be recognised in the carrying amount of the item
of property, plant and equipment, as a replacement, if the recognition criteria are satisfied. Individual components of a
significant amount in the total value of an equipment may be replaced, as well as spare parts which in aggregate can
become of a significant value that satisfy the recognition criteria. Management performs an assessment whether the
replacement increases the performance of the asset or increases its useful life and capitalises the costs incurred if the
recognition criteria are met.
Cash generating units
Management exercises judgement in determining the appropriate level of grouping assets into CGUs, based on the fact
that they share significant common infrastructure.
Contingencies
By their nature, contingencies will only b e resolve d whe n on e or more future events occu r or fail t o occur. The assessment of
contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events.
Please see note 28.
3.4.2. Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Company based its assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances and assumptions about future developments, however, may
change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.
Revaluation of Land and Buildings
The Group accounts for land and building using the fair value approach based on market comparative valuations
performe d b y certifie d ANEVA R professional as pe r revaluation report s conclude d a s a t 3 1 Decembe r 2022. Th e valuations
conform to International Valuation Standards. Please refer to Note 5 for further information.
Impairment of non-financial assets
The Company bases its impairment calculation on most recent budgets and forecast calculations, which are prepared
separately for each of the Company’s CGUs to which the individual assets are allocated. These budgets and forecast
calculations generally cover a period of five or six years. A long-term growth rate is calculated and applied to project
future cash flows after the fifth year.
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based
on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market
prices less incremental costs of disposing of the asset. The value in use calculation is based on a DCF model. The
cas h flow s ar e derive d fro m the budge t for the nex t fiv e years an d d o no t includ e restructuring activitie s that the Company is
not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being
tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future
cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other
intangibles with indefinite useful lives recognised by the Company. The key assumptions used to determine the
recoverable amount for the various cash-generating units, including a sensitivity analysis, are calculated and
explained below in Note 20.
Allowance for expected credit losses of trade receivables
The Company always recognises lifetime expected credit losses (ECL) for trade receivables. The expected credit losses
are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 11
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
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 judgement 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.
Leases - Estimating the incremental borrowing rate
The Company cannot readily determine the interest rate implicit in its leases. Therefore, it uses the relevant incremental
borrowin g rates t o measur e lease liabilities. Thes e incremental borrowin g rate s wer e determined takin g int o consideration
factors such as the credit risk, currency in which the lease was denominated and economic environment.
Provision for untaken holidays
The Company recognizes a provision for untaken holidays equal to the number of unused leave multiplied by the relevant
employee’s gross salary at the reporting date. Please see note 12.
3.4 Foreign currency and translation
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 as announced by the National Bank of Romania on 31 December 2022 were RON 4.9474 for EUR 1 (31
December 2021: RON 4.9481 for EUR 1), respectively 1.2354 for HUF 100 (31 December 2021: RON 1.3391 for 100 HUF).
The average exchange rates for the period of 12 months 2022 were 4.9315 RON for 1 EUR (12 months 2021: 4.9204
RON for 1 EUR), respectively 1,2648 RON for 100 HUF (12 months 2021: 1.3733 for 100 HUF).
Translation of foreign currencies
Transactions in foreign currencies are translated to the respective functional currency of the Company at the exchange
rate ruling at the time of the transaction. Foreign currency monetary assets and liabilities are retranslated into the
functional currency at rates of exchange ruling at the reporting date. The foreign exchange differences arising on these
translations are recognised as other financial income/expense in the income statement.
3.5 Property, plant and equipment
Property, plant and equipment under the revaluation model
Land and buildings held for use in the supply of services, or for administrative purposes, are stated in the balance sheet at
their fair value, being the revalued amount at the date of revaluation, less any subsequent accumulated depreciation and
subsequent accumulated impairment losses, if any.
The value of land and buildings owned presented in these financial statements is based on the valuation reports which
were prepared as of December 31, 2022 by independent valuators certified by ANEVAR. The following steps were taken to
estimate the market value of the assets: analysis of assets subject to valuation; the evaluation approaches and the
valuation methods applied were based on the category of assets analysed, their location, their characteristics, specific
marke t information; application of appropriate valuation methods fo r each asset categor y(i.e. land and buildings)subject to
evaluation and estimation of the fair value of the assets analysed at the valuation date, 31 December 2022. The land is not
depreciated.
Valuations are performed with sufficient frequency to ensure that the carrying amount of a revalued asset does not differ
materially from its fair value.
Accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and
the net amount is restated to the revalued amount of the asset.
A revaluation surplus is recorded in OCI and credited to the asset revaluation surplus in equity. However, to the extent that
it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit
and loss. A revaluation deficit is recognised in the statement of profit or loss, except to the extent that it offsets an existing
surplus on the same asset recognised in the asset revaluation surplus.
The Company transfers the revaluation surplus included in equity in respect of an item of property, plant and equipment
directly to retained earnings when the asset is derecognised (i.e., retired or disposed of).
Property, plant and equipment using the cost model
Leasehold improvements fall in this category and are stated at cost less accumulated depreciation and accumulated
impairment losses. Depreciation is recognised on a straight-line basis over the estimated useful life. The estimated useful life
for this type of asset is usually over the life of the lease, considering any potential contract prolongations.
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 12
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Installations and equipment are also stated at cost, less accumulated depreciation and accumulated impairment losses,
if any.
Assets under construction are recorded at cost, less accumulated impairment losses and depreciated once they become
available for use.
An item of property, plant and equipment is initially recorded at cost. Cost includes all costs necessary to bring the asset to
working condition for its intended use. This includes not only its original purchase price, but also costs of site
preparation, delivery and handling, installation, related professional fees for architects and engineers, and the estimated
cost of dismantling and removing the asset and restoring the site, if the case.
Proceeds from selling items produced while bringing an item of property, plant and equipment to the location and
condition necessary for it to be capable of operating in the manner intended by management are not deducted from the cost
of the item of property, plant and equipment, but recognised in profit or loss.
An entity evaluates under the recognition principle all its property, plant and equipment costs at the time they are
incurred. These costs include costs incurred initially to acquire or construct an item of property, plant and equipment and
costs incurred subsequently to add to, or replace part of it.
A condition of continuing to operate an item of property, plant and equipment may be performing regular major
inspections for faults regardless of whether parts of the item are replaced.
Costs with capital repairs are included in the carrying amount 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 repairs are depreciated over the remaining useful period of the respective asset.
When each major inspection is performed, its cost is recognised in the carrying amount of the item of property, plant and
equipment as a replacement if the recognition criteria are satisfied. Any remaining carrying amount of the cost of the
previous inspection (as distinct from physical parts) is derecognised. This occurs regardless of whether the cost of the
previous inspection was identified in the transaction in which the item was acquired or constructed. If necessary, the
estimated cost of a future similar inspection may be used as an indication of what the cost of the existing inspection
component was when the item was acquired or constructed.
Expenses for repairs and maintenance are recognized in the profit or loss account when incurred.
In case of replacements, cost includes the cost of replacing part of the plant or equipment when that cost meets the
recognition criteria. If an item of property, plant and equipment consists of several components with different estimated
useful lives, the individual significant components are depreciated over their individual useful lives.
Item s such as spare parts, stand-b y equipment an d servicing equipment are recognised a s property, plant an d equipment
when they meet the definition, considering the aggregation and materiality criteria. Otherwise, such items are classified as
inventory.
Depreciation is calculated on a straight-line basis over the estimated useful lives 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:
Years
Buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
10 – 50 years
Term of the lease contract
3 – 15 years
3 – 15 years
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal (i.e., at
the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain
or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of profit or loss when the asset is derecognised.
3.6 Intangible assets
Intangible assets acquired separately are measured at initial recognition at cost. Following initial recognition, intangible
assets are stated 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.
Internall y generated intangibles, excludin g capitalise d development costs, are not capitalised and the related expenditure
is reflected in profit or loss in the period in which the expenditure is incurred.
Company’s intangible assets are represented by software licenses, concessions, patents and other intangible assets
that are amortized on a straight-line basis over a period of 3 years. Please see Nota 5.
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 13
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
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 are recognized in profit or loss when the asset is
derecognized.
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 non-financial assets
At the end of each reporting period, the Company reviews whether there is an indication that an asset may be impaired.
If any such indication exists, the recoverable amount of the asset is estimated.
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 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. The Company bases its impairment calculation on most recent budgets an d forecast calculations.
These budgets and forecast calculations generally cover a period of six years. A long-term growth rate is calculated and
applied to project future cash flows after the fifth year.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than it 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 asset is previously revalued with the revaluation taken to OCI, in
which case the impairment loss is recognized in OCI up to the amount of any previous revaluation.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised
impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assets or
CGU’s recoverable amount. 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.
3.7 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. 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.
3.8 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 maturities of three months or less.
3.9 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 where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with.
The Company has chosen to present grants related to income to be deducted in reporting the related expense.
The Company has elected to present government grants relating to the purchase of property, plant and equipment in the
statement of financial position as deferred income, which is recognised in profit or loss on a systematic and rational basis
over the useful life of the asset.
3.10 Financial instruments – initial recognition and subsequent measurement
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 14
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
3.10.1 Financial assets
Investments in subsidiaries
In the individual financial statements investments in subsidiaries are stated at historical cost less accumulated
impairment losses.
Dividends from subsidiaries
Dividends on equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is
established.
Initial recognition and classification
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.
This classification on initial recognition depends on the Company’s business model with regard to the management of
financial assets and on the financial asset’s contractual cash flows characteristics.
With the exception of trade receivables that do not contain a significant financing component, the Company initially
measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss,
transactio n costs.Trade receivables tha t d o no t contai na significan t financin g componen t are measure d a t the transaction
price as disclosed in note 3.20. Revenue from contracts with customers recognition.
Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at
fair value through profit or loss) are added to or deducted from the fair value of the financial assets, as appropriate, on
initial recognition.
A financial asset is measured at amortized cost if both of the following conditions are met:
-
the financial asset is held using a business model that aims to hold financial assets to collect contractual cash flows;
and
-
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely repayments of
principal and interest on the principal outstanding.
The Company has only recognised and subsequently measured financial assets at amortised cost.
Subsequent measurement
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject
to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
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. 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 tha t hav e subsequentl y become credit-impaired.Fo r financia l sets tha t have subsequentl y becom e 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.
The Company’s financial assets at amortized cost include the following: trade receivables, other receivables, other
financial assets, cash and cash equivalents.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Company’s statement of financial position) when:
-
The contractual rights to receive cash flows from the asset have expired or
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 15
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
-
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of
the asset, the Company continues to recognise the transferred asset to the extent of its continuing involvement. In that
case, the Company also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Company could be required to
repay.
Impairment
The Company recognises an allowance for expected credit losses (ECLs) for all financial assets not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the
Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each
reporting date. The Company has established a provision matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the debtors and the economic environment.
The Company considers a financial asset in default when contractual payments are over 95 days past due. However, in
certain cases, the Company may also consider a financial asset to be in default when internal or external information
indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any
credit enhancements held by the Company.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows, 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 Company’s recovery procedures, taking into account legal advice
where appropriate. Any recoveries made are recognised in profit or loss.
The Company 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.
3.10.2 Equity instruments and financial liabilities
Classification as equity or debt
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.
a) 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.
b) Financial liabilities
Initial recognition and classification
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, or payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
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.
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
other long-term debt.
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 16
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. A
contingent consideration classified as a financial liability is subsequently remeasured to fair value with the changes in fair
value recognised in profit or loss.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified as financial liabilities at amortised cost. The
Company has not designated any financial liability as at fair value through profit or loss.
This is the category most relevant to the Company and it includes loans and borrowings. After initial recognition, interest-
bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense 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 (where
appropriate) a shorter period, to the amortised cost of a financial liability.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss. This category
generally applies to interest-bearing loans and borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the
statement of profit or loss.
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.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.
3.11 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.
3.12 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
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 temporary 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.
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 17
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the
liability is settle d or the asset realized, based on tax rates (and tax laws) that have been enacted or substantivel y 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.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.
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.
3.13 Share capital
Ordinary shares are classified as equity. Med Life 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.
Treasury Shares
Own equity instruments that are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or
loss i s recognize d i n profi t or los s o n the purchase,sale, issue or cancellatio n of th e Company’s ow n equit y instruments. Any
difference between the carrying amount and the consideration, if reissued, is recognized in share premium.
3.14 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.
3.15 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. The revaluation reserve is transferred to retained earnings
upon disposal of assets.
3.16 Provisions for risks and charges
Provisions are recognized when the Company has a legal or constructive obligation, as a result of a past event, it is
probable that there will be a future outflow of resources in order to settle this obligation and a reliable estimate can be
made of the amount of the obligation. Provisions for risks and charges are assessed at the end of each period and
adjusted in order to present management’s best estimate.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
Liabilities provided for legal matters require judgements regarding projected outcomes and ranges of losses based on
historical experience and recommendations of legal counsel. Litigation is however unpredictable and actual costs
incurred could differ from those estimated at the reporting date.
Liabilities for compensated absences refer to the entitlement for employees to accumulate vested leave benefits. The
Company recognises a liability for compensated absences as it has an obligation to compensate employees for future
absences attributable to employees’ services already rendered, the obligation relates to rights that accumulate from
period to period, it is probable that the amount will be paid and a reliable estimate can be made of the amount of the
obligation.
A vesting obligation is where employees are entitled to a cash payment for unused leave entitled upon leaving the entity. The
amount of the obligation will therefore be equal to the number of unused leave multiplied by the relevant employee’s gross
salary at the reporting date.
The obligation is initially recognised during the vesting period based on the best available estimate of the accumulated
leave expected to vest. The estimate is revised each period end if subsequent information indicates that the accumulated
leave expected to vest differs from previous estimates. On vesting date, the Company revises its estimate to equal the
accumulated leave that ultimately vested.
3.17 Revenue from contracts with customers recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those
goods or services.
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 18
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Revenue is recognised over time where (i) there is a continuous transfer of control to the customer in the case of goods
provided or the consumption of the benefits for the services provided takes place over time; 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 goods transfers to the customer, or in the case of services
provided, when the customer receives and consumes the benefits provided.
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.
Med Life’s core activities
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 (“NHIH”) 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 receive 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 98
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 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 Company’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.
The revenues are recognised at a point in time when the customer receives and consumes the benefits provided.
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, microbiolog y and toxicology. Sampling points are
locations where the Company collects blood and other samples from patients. The Laboratories business line sources the
bul k of it s revenue fro m FFS clients, and th e revenu e i s recognised a ta point i n 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, not immediately after the laboratory tests are performed, when the Company has an
enforceable right to payment for performance completed up to date. From IFRS 15 perspective, the revenue is
recognised at a point in time (at the end of the month).
Hospitals
Hospital services provided to patients are regarded as a bundle of services which comprise medical care, 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 revenues are recognised at a point in
time, when the consumption of the benefits for the services provided is accomplished.
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 19
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
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, the Company 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 the Company as the Standard HPP.
The HPPs offered by the Company 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 Company’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) on the Company’s 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
receive d consideratio n from the customer.Where th e customer pays consideratio n befor e the Company transfer s 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 10) on the Statement of Financial position.
Using the practical means of IFRS 15, the Company does not adjust the promised amount of consideration for the effects of a
significant component of financing if it expects, at the beginning of the contract, that the period between the transfer of the
promised service to the client and when the client pays for that service will be one year. less. All contracts are under one
year.
Contracts are for periods of less than one year or are billed based on the services performed. As permitted by IFRS 15,
the transaction price allocated to these unfulfilled contracts is not disclosed.
3.18 Employee benefits
The Company, 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 statement of
comprehensive income 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 short-term incentives. The
amounts payable to employees in respect of the short-term incentive schemes are determined based on annual business
performance targets.
3.19 Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique.
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
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 20
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
valuation.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Additional information on the assumptions made in measuring fair values is included in Note 5.
3.20 Segment information
The core business activity of Med Life refers to the provision of healthcare services, as a result of completion of the
medical act. This process usually involves multiple stages, starting from physical examinations, laboratory tests, set-up of
a diagnosis, offering treatment, supply of medical equipment, surgeries and other medical interventions, nursing care,
follow-up in the recovery process.
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 Company has identified five core business lines, which comprise the following major categories: clinics, stomatology,
hospitals, laboratories and corporate. For further details on disaggregation of revenue streams, please refer to Note 3.18.
The core purpose of Med Life is to enhance the quality of life for individuals, the ultimate end users of healthcare services,
therefore setting the patient as first priority in all activities performed.
According to IFRS 8, segment information on operating segments is to be presented in accordance with the internal
reporting to the chief operating decision maker (management approach).
In determining Med Life’s operating segments, management has primarily considered the financial information in internal
reports that are reviewed and used by the Board of Directors (who together are the chief operating decision maker of the
Company) in assessing performance and in determining the allocation of resources.
The Board of Directors represents the chief decision-making body, in which the strategic decisions are made for the
entire Company and to which the key parameters of performance are reported.
Each reporting made to the Board of Directors includes the five business lines. Managements costs are fully distributed to
the operative business lines. The monthly target-to-actual and actual-to-actual comparison in the report to the Board of
Directors serves to control the targets published in the Med Life’s annual forecast, in particular the total revenue figure and
EBITDA margin.
Given our understanding of an integrated healthcare services offering, we do not make any distinction in control by
whether the services as defined in Romanian social insurance legislation are attributed to the inpatient or the outpatient
sector, for example in the hospitals business line. All expenses and income which are directly or indirectly related to
patients are included under the operating segments.
The characteristics of healthcare services are around physical facilities staffed by professionals in direct contact with
patients, diagnosing, monitoring and treating patients. The payment for these services is either direct payment by the
patient or indirect via an employer paid benefit/insurance and in much smaller degree by public health funds. In all these
cases the beneficiary of the service is always the individual patient. Because of the specific nature of the source of funds that
finance the provision of medical services to the end users (i.e., patients) the correct allocation of profitability for each
business line is limited considering that they are complementary in servicing the patient: one would originate whereas
the other might render the medical services. In this respect, the business lines could not operate on their own, proving,
once again, their high interdependent nature.
The following operating segments are aggregated into one reporting segment, being the provision of healthcare services,
since they exhibit similar economic characteristics: clinics, stomatology, hospitals, laboratories and corporate. As a result of
the same structural framework conditions, the operations of the Company with the healthcare services provided are
characterised by a similar risk and rewards profile whose economic environment is largely regulated by legislation. It is
thus possible for the operations to achieve similar EBITDA margins on the long term. We thus continue to have only one
reportable segment that aggregates the above-mentioned operating segments.
3.21 Leases
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 this respect, the management has evaluated its options for early termination as well as the existence of the Company’s
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 21
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
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.
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 th e date at which the leased asset is available for use by th e 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 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 to be made over the lease term:
-
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;
-
Amounts expected to be paid under residual value guarantees;
-
Lease payments to be made over the contractual lease term, if there are extension options included.
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.
After initial recognition, right-of-use assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities.
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.
The following useful lives on average are used in the calculation of depreciation for right-of-use assets, determined based
on the lease term of the contractual agreements:
Years
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 22
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Buildings
Medical equipment
Vehicles
6 – 10 years
3 – 4 years
3 – 5 years
4.FINANCIAL ASSETS
The Company holds significant investments in other companies.
Carr y ing amount
C ost of investments in other companies
Long-term loans granted to group companies
Other financial assets
TOTAL
31 Decembe r
2022
398,886,091
13,129,180
1,815,980
413,831,251
January 1,
2022
242,878,520
12,921,654
1,632,184
257,432,358
Cost of in v estments
Balance at the beginning of the year
Investments recognised during the year
TOTAL
31 December
2022
242,878,520
156,007,571
398,886,091
January 1,
2022
222,209,791
20,668,729
242,878,520
During 2022, Med Life signed the sale contract for the purchase of shares in the capital of the following companies
(percentages below represent equity interest):
-
Acquisition of 50% shares in MNT Healthcare Europe (Neolife), in February 2022;
-
Acquisition of 50% shares in MNT Asset Management (Neolife), in February 2022;
-
10% subsequent acquisition of shares in Almina Trading in February 2022;
-
10% subsequent acquisition of shares in Genesys Medical Clinic in March 2022;
-
4% subsequent acquisition of shares in Oncoteam Diagnostic in April 2022;
-
30.32% subsequent acquisition of shares in RMC Group in April and May 2022;
-
Acquisition of 51% shares in SanoPass, in September 2022;
-
Acquisition of 60% shares in Sweat Concept gyms network, in September 2022;
-
Acquisition of 80% shares in Medici’s and Micro-Medic, in October 2022 (following approval by the Competition
Council);
-
Acquisition announcement of 99.67% shares in Muntenia Medical Competences SRL, in July 2022 (transaction
approved by the Competition Council and completed in January 2023);
-
Acquisition announcement of 51% shares in Provita Group, in October 2022 (approved by the Competition
Council in 2023, in process of closing as at the date of this reporting).
The following table includes the list of Med Life subsidiaries as well as entities that are indirectly controlled, as follows:
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 23
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
No. Entity
M a in acti v ity
Loc a tion
31 D ecemb e r
2022
1
J a nu ar y
2022
Medical Services
Brasov, Romania
83%
83%
1
Policlinica de Diagnostic
Rapid S A
2 Medapt S RL (indirect)*
3 Histo S RL (indirect)*
Medical Services
Medical Services
Brasov, Romania
Brasov, Romania
83%
50%
83%
50%
4
Policlinica de Diagnostic
Rapid Medis S RL (indirect)*
Medical Services
Sfantu Gheorghe,
Romania
66%66%
5
Bahtco Invest S A
Development of building
projects
100%100%
6
M e d Life Ocupational S RL Medical Services
Bucharest,
Romania
Bucharest,
Romania
100%100%
7
Bucharest,
Romania
100%100%
8
Bucharest,
Romania
99%99%
9
Arad, Romania
83%73%
10
Arad, Romania
83%73%
11
Deva, Romania
83%73%
12
(indirect)*
Distribution of
Pharmalife-Med S RL Pharmaceutical Products in
specialised stores
M e d Life Broker de
Asigurare si Reasigurare Insurance broker
SRL
Accipiens S A Rental activities
Genesys Medical C linic S RL
Medical Services
(indirect)*
Bactro S RL (indirect)* Medical Services
Transilvania Imagistica S A
Medical Services
Oradea, Romania
83%73%
13
Arad, Romania
100%100%
14
(indirect)*
Distribution of
Biofarm Farmec S RL
Pharmaceutical Products in
specialised stores
R UR Medical S A (indirect)* Medical Services
83%83%
15
Biotest M e d S RL Medical Services
100%100%
16
17
Brasov, Romania
Bucharest,
Romania
Iasi, Romania
C raiova, Romania
100% 100%
90% 90%
18
indirect)*
Vital Test S RL Medical Services
C entrul Medical Sa m a S A Medical Services
Ultratest S A (direct si
Medical Services
C raiova, Romania
92%92%
19
D iam e d C enter S RL Medical Services
100%100%
20
Prima Medical S RL Medical Services
100%100%
21
S t e m C ells Bank S A Medical Services
100%100%
22
Dent Estet C linic S A Dental healthcare
60%60%
23
31%31%
24
60%60%
25
31%31%
26
32%32%
27
(indirect)*
Green Dental C linic S RL
Dental healthcare
(indirect)*
Dentist 4 Kids S RL
Dental healthcare
(indirect)*
Dent A Porter S RL
Dental healthcare
(indirect)*
Dentestet Kids S RL
Dental healthcare
SRL (indirect)*
Aspen Laborator Dentar
Dental healthcare
45%45%
28
C entrul Medical Panduri S A Medical Services
100%100%
29
Almina Trading S A Medical Services
90%80%
30
100%100%
31
100%100%
32
33
34
Services S RL
Anima Specialty Medical
Medical Services
Medical Services
Anima Promovare si
Vanzari S RL (indirect)*
Valdi Medica S A Medical Services
C linica Polisano S RL Medical Services
Solom e d C linic S A Medical Services
Bucharest,
Romania
C raiova, Romania
Timisoara,
Romania
Bucharest,
Romania
Bucharest,
Romania
Bucharest,
Romania
Bucharest,
Romania
Bucharest,
Romania
Bucharest,
Romania
Bucharest,
Romania
Targoviste,
Romania
Bucharest,
Romania
Bucharest,
Romania
C luj, Romania
Sibiu, Romania
Pitesti, Romania
55% 55%
100% 100%
80% 80%
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
No.
Entity
Main
acti v ity
Location
31
December
2022
1
January
2022
Medical
Services
Pitesti,
Romania
80%
80%
35
Solomed
Plus
SRL
(indirect)*
36
Ghencea
Medical
C enter
SA
Medical
Services
100%
100%
37 Sfatul
medicului
SRL
Medical
Platform
100%
100%
38 RMC
Dentart
(indirect)*
Dental
healthcare
81%
51%
39 RMC
Medical
(indirect)*
Medical
Services
81%
51%
40 RMC
Medlife
Holding
81%
51%
41 Badea
Medical
SRL
Medical
Services
65%
65%
42 Oncoteam
Diagnostic
SA
Medical
Services
79%
75%
Medical
Services
100%
100%
Medical
Services
Bucharest,
Romania
Bucharest,
Romania
Budapesta,
Ungaria
Budapesta,
Ungaria
Budapesta,
Ungaria
C luj,
Romania
Bucharest,
Romania
Piatra
Neamt,
Romania
Targu
Neamt,
Romania
100%
100%
Medical
Services
Bacau,
Romania
100%
100%
Medical
Services
Roman,
Romania
100%
100%
Medical
Services
Roznov,
Romania
100%
100%
Medical
Services
Ploiesti,
Romania
100%
100%
Medical
Services
Bacau,
Romania
100%
100%
Medical
Services
100%
100%
43
44
45
46
47
49
50
51
C entrul
medical
Micromedica
SRL
Micromedica
Targu
Neamt
SRL
(indirect)*
Micromedica
Bacau
SRL
(indirect)*
Micromedica
Roman
SRL
(indirect)*
Medrix
C enter
SRL
(indirect)*
48 Spitalul
Lotus
SRL
Labor
Maricor
SRL
(indirect)*
C entrul
Medical
Matei
Basarab
SRL
(indirect)*
Pharmachem
Distributie
SRL
Bucharest,
Romania
Bucharest,
Romania
75%
75%
52
C ED
Pharma
SRL
(indirect)*
Bucharest,
Romania
100%
100%
53
Leti
Pharm
2000
SRL
(indirect)*
Bucharest,
Romania
100%
100%
54
Monix
Pharm
SRL
(indirect)*
Distribution
of
Pharmaceutical
Products
Distribution
of
Pharmaceutical
Products
in
specialised
stores
Distribution
of
Pharmaceutical
Products
in
specialised
stores
Distribution
of
Pharmaceutical
Products
in
specialised
stores
Bucharest,
Romania
100%
100%
55
KronDent
SRL
(indirect)*
Dental
healthcare
Brasov,
Romania 36%36%
56
Medical
Services
Sibiu,
Romania 60%60%
57
Dental
healthcare
Ploiesti,
Romania 31%31%
58
Medica
SA
Dent
Estet
Ploiesti
SRL
(indirect)*
The
Lab
Stomestet
SRL
(indirect)*
Dental
healthcare
C luj,
Romania 36%36%
59
Stomestet
SRL
(indirect)*
Dental
healthcare
C luj,
Romania 36%36%
60
C luj,
Romania
36%36%
61
Oradea,
Romania
36%36%
62
Galati,
Romania
76%76%
63
Ilfov,
Romania
50%0%
64
50%0%
65
Bucharest,
Romania
Bucharest,
Romania
100%0%
66
Iasi,
Romania
60%0%
67
Brasov,
Romania
83%0%
68
Brasov,
Romania
83%0%
69
(indirect)*
Stomestet
Plus
SRL
Dental
healthcare
(indirect)*
C ostea
Digital
Dental
SRL
Dental
healthcare
Medical
Services
SRL
Expert
Med
C entrul
Medical
Irina
(indirect)*
MNT
Healthcare
Europe
Medical
Services
Holding
(indire
t)*
(indirec
)*
Holding
(indirect)*
MNT
Asset
Management
SRL
(indirect)*
C linica
c
Life-Med
SRL
Medical
Services
Pro
Life
t
C linics
SRL
Medical
Services
Onco
C ard
SRL
(indirect)*
Medical
Services
Onco
C ard
Invest
SRL
(indirect)*
Tomorad
Expert
SRL
Medical
Services
66%0%
70
IT
Repair
SRL
(indirect)*Medical
Services
The accompanying notes are an integral part of the indivudual financial statemetns. | page 24
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Sfantu
Gheorghe,
Romania
Targu
Mures,
Romania
50%0%
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 25
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
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. The impairment test is performed at the level of each company with significant cost of investment, that
represents a CGU from the perspective of the Med Life Group.
The recoverable amount is based on fair value less cost of disposal (FVLCOD) of the underlying assets. There are 43
CGUs included in the valuation process, as the remaining ones have a carrying amount that is not considered to be
significant in comparison with the Company’s total carrying amount of cost of investment in other companies.
The discounted future Cash flows of the CGUs, using the DCF method, are determined on the basis of the approved
business plans that forecast financial position and results of operations take into account historical values and estimated
performance. Cash flows are estimated in RON, having a nominal value. The results are then extrapolated for six
additional years using bottom-up, six-year planning that reflects the future development of the CGUs under current
conditions.
After th e six-year tim e period,a perpetuit y value i s calculated usin ga conservativ e Group-wid e growt h rate. T o determine
the present value of future Cash flows, a discount rate based on the weighted average cost of capital (WACC) is applied.
The valuation is considered to be level 3 in the fair value hierarchy due to unobservable inputs used in the valuation.
There are a number of key sensitive judgements made in determining the inputs into these models which include:
-Revenue growth considered for the next years and also the perpetual growth rate -
Operating margins and
-The discount rates applied to the projected future cash flows.
The following data provides information on key assumptions used to compile corporate planning:
-Expected development of sales revenue (new customers, market development in general); Group’s own
estimates referring to past experiences and expected market trends, market potential analysis. External market studies are
also used, if available.
-Application of current and historical organic growth rates for business units or business areas. -
Consideration of regulatory changes affecting the development of business units.
-Development of purchased services based on current circumstances (e.g., contractual basis, strategic business
model) and the anticipated development of sales activities (expected revenue situation).
-Expected development of personnel expenses and other operating expenses, based on demand analyses,
contractual framework and statistical procedures (e.g., inflation).
The estimated future Cash flows are derived from the business plans approved by the responsible bodies. The
assumptions underlying the main planning parameters take into account not only past experience and aspects arising
from the operating business.
The operating margin results from the application of the assumed planning assumptions. For the subsequent years, an
average of the operating margins is assumed (continuation planning period), adding a slight increase.
Cash flow s beyon d the six-year period are extrapolated usin g an estimated growth rate, which is consistent with forecasts
included in industry reports specific to the industry in which each CGU operates.
The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the specific
risks of the CGU. WACC (weighted average cost of capital) is used to estimate the rate. The discount rate is independent of
the companies’ capital structure and how the companies financed the purchase of the asset, because future cash flows
No.
Entity Main
activity Location
31
December
2022
1
January
2022
71
Medici’s
SRL
*
Medical
Services
80%0%
72
Micro-Medic
SRL
*
Medical
Services
80%0%
73
Sweat
C oncept
One
SRL
*
Wellness
Timisoara,
Romania
Timisoara,
Romania
Bucharest,
Romania
60%0%
74
Medical
Services
Brasov,
Romania
50%0%
75
Medical
Services
Brasov,
Romania
50%0%
76
77
Medical
Services
Medical
Services
83%
0%
83%
0%
78
Medical
Services
Oradea,
Romania
Oradea,
Romania
Timisoara,
Romania
80%0%
79
Medical
Services
Pitesti,
Romania
80%0%
80
Medical
Services
Arad,
Romania
71%0%
81
Dental
healthcare
60%0%
Opti C ristal
C onsult
SRL
(indirect)*
Alinora
Optimex
SRL
(indirect)*
Medicris
SRL
(indirect)*
Triamed
SRL
(indirect)*
SC
M-Profilaxis
SRL
(indirect)*
Vita C are
Flav
SRL
(indirect)*
Dent
Estet
Genesys
SRL
(indirect)*
Aspire
Dental
SRL
(indirect)*
Bucharest,
Romania
Targo
vis
82 Sanopass
SA Medical
Platform
Romaniat
e,
51%0%
*These companies are subsidiaries in other subsidiaries in the Group and are included in the consolidation as they are controlled by the
entities which are subsidiaries of the ultimate parent
MED LIFE S.A.
NOTES TO THE AUDITED INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 26
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
expected to arise from an asset do not depend on how the companies financed the purchase of that asset.
In the case of CGUs subject to the impairment test, the discount rates considered are higher than the average industry-
level data in emerging European countries to take into account country risk, currency risk, and CGU’s size. On average,
depending on the particularities of each CGU, the discount rate varies, for the most significant entities in the Group
between 8.4% and 20.5%.
Estimates of future cash flow management are based on the most recent 6-year forecasts (2023-2028).
The estimation of the terminal value was made based on the hypothesis of continuing the activity. The final value is
given by the capitalization of the available cash flow with the capitalization rate which has in view a perpetual increase in
close relation with the GDP growth and inflation forecast for Romania.
The analysis o f the results,excep t Neolife,show s tha t fo r the CGU s subjec t t o th e impairmen t test,the relate d recoverable
amount is higher than their net book value, with sufficient headroom and, therefore, there will be no impairment of the
investment.
The sensitivity analysis that evaluates the sensitivity of the recoverable amount was performed according to the changes of
the main factors: WACC discount rate plus 2 percent, operating margin decrease with 20 percent and perpetual growth rate
decrease with 1 percent.
In performing the sensitivity analysis, except for Neolife cash generating unit, an increase in WACC of 2 percent would
give rise to a reduction in the Group-wide surplus with 21%.
Except for Neolife cash generating unit, a decrease in the operating margin of 20 percent would give rise to a reduction
in the Group-wide surplus with 25%.
Except for Neolife cash generating unit, a decrease with 1 percentage point in the perpetual growth rate would give rise
to a reduction in the Group-wide surplus with 8%.
For Neolife cash generating unit, an increase in WACC of 2 percent or a decrease of 1 percentage point in the perpetual
growth rate would not give rise to an impairment. A decrease in the operating margin of 20 percent would give rise to an
impairment of 7 mil RON.
Nevertheless, Neolife is a new acquisition completed in 2022. Management is confident that the business plan used in
impairment testing followed a conservative approach, while negative developments in the analysed parameters are
unlikely to materialize. No impairment is expected in the future.
Management has engaged external specialists to assist with the impairment analysis, the entire valuation process being
performed by certified ANEVAR valuators. There were no changes in the valuation techniques compared to prior year.
Long-term loans granted to other Group companies
As of December 31, 2022, the Company presents long-term loans granted to Bahtco Invest SA and Medlife Ocupational
SRL. Please refer to Note 23 for more details.
Other financial assets
Other financial assets represent mainly rent deposits with a maturity longer than one year.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 27
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
5.INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
Intangibles
Land
Constructions
Leasehold
improvements
Vehicles
and
equipment
Construction
in
progress
Total
1
January
2022
Additions
Transfers
Disposals
Reclassifications
during
the
year
Revaluation
impact
(accumulated
depreciation
and
impairment
eliminated
against
cost)
-
-
(27,669,933)
-
-
-
(27,669,933)
(27,669,933)
Revaluation
impact
recognised
in
O C I
-
31,429,171
16,041,822
-
-
-
47,470,993
47,470,993
31
December
2022
Intangibles
Land
Constructions
Leasehold
improvements
Vehicles
and
equipment
Construction
in
progress
Total
39,251,431
5,942,347
-
-
-
-
23,248,125
4,421,808
-
45,133,799
2,742,062
-
126,754,174
17,812,156
(594,835)
-
-
-
195,136,098
24,976,025
(594,835)
234,387,528
30,918,372
(594,835)
Depreciation
1
January
2022
C harge
of
the
year
Disposals
Revaluation
impact
(accumulated
depreciation
and
impairment
eliminated
against
cost)
-
-
(27,669,933)
-
-
-
(27,669,933)
(27,669,933)
Impairment
losses
recognized
in
profit
or
loss
-
-
-
-
-
-
-
-
31
December
2022
Net
Book
Values
1
January
2022
31
December
2022
Property,
plant
and
equipment
Intangible
assets
49,146,788
10,712,881
-
-
-
12,792,780
15,657,715
35,416,298
-
-
168,752,018
1,021,908
(30,871,520)
-
-
56,733,687
10,267
10,792,480
-
803,853
179,330,519
46,952,748
-
(1,284,111)
-
22,200,752
11,900,090
(15,337,258)
(10,267)
-
Total
Property,
plant
and
equipment
439,809,756
75,542,729
-
(1,294,378)
803,853
59,859,669
95,295,965
127,274,295
68,340,287
224,999,157
18,753,317
534,663,021
Total
Property,
plant
and
equipment
45,193,778
-
-
47,875,860
143,971,495
-
191,847,355
9,895,358
14,665,892
12,792,780
95,295,965
145,503,893
127,274,295
11,599,888
20,464,427
52,576,345
81,027,662
22,200,752
18,753,317
244,673,659
342,815,667
488,956,544
86,255,610
-
(1,294,378)
803,853
594,522,690
237,041,133
254,569,016
357,481,557
During 2022, the costs incurred with the website implementation were capitalised as a new intangible asset, which is amortized over a period of 3 years.
The amortization of intangible assets is presented in the line depreciation and amortization in the statement of profit or loss.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 28
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Intangibles
Land
Constructions
Leasehold
impro v ements
Vehicles and
equipment
Construction
in progress
Total
1 January 2021
Additions
Transfers
Disposals
Reclassifications during the year
31 Dece mber 2021
Intangibles
Land
Constructions
Leasehold
impro v ements
Vehicles and
equipment
Construction
in progress
Total
Depreciation
1 January 2021
C harge of the year
Disposals
Reclassifications during the year
31 Dece mber 2021
Net Book Values
1 January 2021
31 Dece mber 2021
Propert y, plant and e quipment
Intangible
assets
44,106,270
5,047,641
-
(7,123)
-
12,792,780
-
-
-
-
159,483,468
3,690,375
5,578,175
-
-
55,739,284
-
994,403
-
-
182,652,542
19,858,258
-
(6,460,529)
(16,719,752)
19,152,788
9,620,542
(6,572,578)
-
-
Total
Propert y,
plant and
equipment
429,820,862
33,169,175
-
(6,460,529)
(16,719,752)
49,146,788
12,792,780
168,752,018
56,733,687
179,330,519
22,200,752
439,809,756
Total
Propert y,
plant and
equipment
33,430,377
5,828,177
(7,123)
-
39,251,431
-
-
-
-
-
17,532,633
5,715,492
-
-
23,248,125
42,970,556
2,163,242
-
-
45,133,799
124,319,606
13,885,759
(6,460,529)
(4,990,662)
126,754,174
-
-
-
-
-
184,822,795
21,764,494
(6,460,529)
(4,990,662)
195,136,098
10,675,893
9,895,358
12,792,780
12,792,780
141,950,835
145,503,893
12,768,728
11,599,888
58,332,936
52,576,345
19,152,788
22,200,752
244,998,067
244,673,659
473,927,132
38,216,816
-
(6,467,652)
(16,719,752)
488,956,544
218,253,173
27,592,670
(6,467,652)
(4,990,662)
234,387,528
255,673,960
254,569,016
The amortization of intangible assets is presented in the line depreciation and amortization in the statement of profit or loss.
During 2021, the Company has reclassified leased assets with a total net carrying amount of RON 10,019,385 to Right-of-use assets from Property, plant and equipment. No changes were
made in the presentation for the financial year ended as of 31 December 2020. The net carrying amount of leased assets presented as Property, plant and equipment as of 31 December
2020 was RON 11,437,490.
The Company made this reclassification for a fair presentation of right-of-use assets in accordance with the requirements of IFRS 16. The change in presentation has no effect on
other items mentioned in the consolidated statement of financial position or the consolidated statement of comprehensive income for the year ended 31 December 2021.
*Leasehold improvements were presented in the financial statements for the year ended 31 December 2021 as part of Constructions.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 29
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
5.1.Land and buildings carried at fair value
The value of land and buildings of the Company 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 Company’s freehold land and buildings as at 31 December 2022 were performed by
independent valuers not related to the Company. They are certified by ANEVAR and have appropriate qualifications and
recent experience in the fair value measurement of properties in the relevant locations.
The tota l revaluation difference wa s in amoun t o f RO N 47,470,993.Th e difference wa s recorde d in th e revaluatio n reserve
in amount of RON 47,470,993 as a surplus.
Land
Buildings
TOTAL
N et book v alue (“N BV”) 31 December 2022
NBV before
re v aluation
63,866,793
111,232,473
175,099,266
NBV after
re v aluation
95,295,965
127,274,295
222,570,259
Re v aluation
differences
31,429,171
16,041,822
47,470,993
The fair value was determined by reference to market-based evidence, using the market comparable method, the cost and
income approach. The valuation techniques are selected by the independent appraiser, in accordance with
International Valuation Standards.
The fair value is overall determined to be Level 3 in the fair value measurement hierarchy. The inputs used in the
valuation were:
- Level 2 inputs based on the IFRS 13 classification (e.g., current rents, prices per sqm, yields, occupancy rates, etc.
publicly available on the market for similar assets and other market-corroborated inputs), or
- Level 3 (unobservable) inputs through which Group develops unobservable inputs using the best information available in
the circumstances, which might include the entity’s own data, rather than direct inputs from the market, with orderly
adjustments performed by the appraiser in order to determine fair value.
The fair value of the free land was determined based on the market price comparison method. This method was
considered appropriate due t o the nature of the assets valued, which have an active market. An active market is a market
that simultaneously meets the following three conditions: goods traded on the market are homogeneous, buyers and
sellers can be found at any time on the market and prices are available to the public.
In estimating the value, it was taken into account the physical condition indicated by the company’s representatives and
found at the time of the field valuation of the assets, as well as the information available in relation to the analysed
assets and data extracted from the market analysis. Assets were compared with other similar assets and adjustments
were made accordingly to indicate the current value.
The cost approach was chosen exclusively for properties that, although directly generating profit, have a unique nature,
specia l destination an d physical characteristics. Th e assets which wer e value d with cost approac h refer s mostl y t o hospital
buildings. The lack of hospital facilities on the market makes the Income or Market approach very difficult to apply due to
absence of market comparable or, if any exist, they are extremely limited and insignificant in terms of equipment or
involved surface areas.
The cost method reflects the costs which a market participant would incur to construct or acquire assets of similar utility
and age, adjusted for obsolescence and other relevant forms of depreciation.
The income approach is based on the idea that the real estate being appraised can be a revenue-generating investment. The
rental value is obtained through direct comparisons from the appraiser’s database or information obtained from real estate
agencies, using the average rental values identified in the market, or, if the situation of the building requires it, the closest
rental value can be selected by considering the similarity of comparable properties.
Direc t capitalization is the method used to transform the estimated level of net income int o a propert y valuation indicator.
Considering the fact that certain buildings with clinical functionality can be converted into office spaces, the appraiser
used the income approach. Thus, comparable rental and sale market data for relatively similar buildings were extracted to
generate both an average rent and an average capitalization rate, which in turn led to a value for the analysed
property. The reported rents are of a contractual nature, therefore, the facilities granted by the owner (such as free rent
months or the owner’s contribution to the space arrangement) are not taken into account.
For the sensitivity analysis two important elements of the income approach were analysed, namely:
-Losses due to vacancy
-Capitalization rate
Losses due to vacancy represent the loss of potential gross income in case the property that is intended to be rented
cannot be rented, rent is not paid or the tenant is changed. It generally represents the ratio between demand and supply in
the real estate market at a given time. + 2.1% percentages were used, which represent a period of one week that is added
to the vacancy loss considered valid for each property, taking into account both the type of building and the size of the city.
As a result, the value of the properties appraised through income approach decreased by RON 1,297,562.
The capitalization rate (yield) expresses the ratio between the expected net operating income for one year and the total
value of the property obtained from the transaction. This does not express the performance of the investment, but it can be
an indicator of the real estate market performance at a given time. The capitalization rate may fluctuate depending on the
income forecast and the change in property value. For the sensitivity analysis was subtracted - 0.25% from the
capitalization rate identified by the market, resulting in a potential negative variation of rental values. The overall effect
resulted in a decrease of RON 1,673,468 in the fair value of the buildings.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 30
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
If the lands and buildings of the Company had been valued at historical cost, their book value would have been the one
presented below:
Land
Buildings
TOTAL
Carr y ing amount w ithout
re v a luation
Decembe r 31,
2022
52,421,011
14,098,512
66,519,524
January 1,
2022
1,346,998
43,948,124
45,295,122
Constructions do not include Leasehold improvements as they were presented separately starting with 2022. Also, during
2022, the Company has presented accordingly the split between Land and Constructions and has made a transfer of RON
35,416,298 from Land to Constructions.
5.2.Other intangibles
All the other intangibles are depreciated on a straight-line basis, over a period of 3 years. The capitalized cost for
intangible assets recognized during the year is included in the other intangible assets on the balance sheet
.
6.INVENTORIES
C onsumables
Materials in the form of inventory items
Inventory in transit
TOTAL
31 Decembe r
2022
12,174,959
337,718
920
12,513,597
January 1,
2022
9,966,821
68,919
3,176
10,038,916
The cost of inventories recognised as an expense in 2022 is RON 900,203 (2021: RON 827,296) in respect of write-
downs of inventory to net realisable value.
7.TRADE RECEIVABLES AND OTHER ASSETS
December
31,
January
1,
2022
2022
Trade
receivables
93,838,389
83,167,366
Allowance
for
doubtful
receivables
TOTAL
(27,312,408)
66,525,981
(26,423,269)
56,744,097
The Company’s total Trade receivables from related parties are in the amount of RON 21,898,256 (31 December 2021:
RON 15,406,993) and were presented on Note 23.
Credit risk for MedLife primarily relates to trade receivables in the ordinary course of 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, or subsidiaries of MedLife, may have longer payment
terms and services may continue to be delivered when amounts are overdue, based on 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, which also represents the average contractual term.
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.
Based on the assessed credit risk of the customers, the Company`s trade receivables are split between individually
assessed and collectively assessed.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 31
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Dec e mb e r 31, 2022
Trade receivables
(9,631,518)
(17,680,890)
(27,312,408)
Allowance for doubtful
receivables
TOTAL
January 1, 2022
Trade receivables
(10,194,912)
(16,228,357)
(26,423,269)
Allowance for doubtful
receivables
Total
Indi v idu a lly
ass e ssed
49,378,641
Coll e cti v e ly
ass e ssed
44,459,748
Total
93,838,389
39,747,123
26,778,858
66,525,981
Indi v idu a lly
ass e ssed
40,929,369
Coll e cti v e ly
ass e ssed
42,237,997
Total
83,167,366
30,734,457
26,009,640
56,744,097
Individually assessed trade receivables include mainly accrued income, trade receivables from National Health Insurance
House and subsidiaries of MedLife, for which due to management`s assessment of a lower credit risk, no allowance for
doubtful receivables in deemed necessary.
As an exception, as accrued income, it is included an amount 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
booked this amount in the previous years.
The company has also commenced court proceedings in the past 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 in
the previous years. As of 31 December 2022, and 31 December 2021, the amounts, both the receivable and the 100%
allowance are still in balance.
The allowance for doubtful receivables for individually assessed trade receivables include the value adjustment
aforementioned as well a s allowance for certain customers fo r which management assessed hig h credi t risk an d computed
allowance for doubtful receivables 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.
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 for doubtful receivables involves forecasting future macroeconomic conditions for 2023,
compared to the average during 2019-2021.
The allowance for doubtful receivables collectively assessed based on the Company’s provision matrix arising from the ECL
was determined as follows; the provision for receivables older than 365 days was computed based on a mix of
percentages, provisioned in stages ranging from 48.5% in 2021 up to 100% in 2015 and older.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 32
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
December
31,
2022
Current
<30
days
<
90
days
>365
days
Total
Expected
credit
loss
rate
C ustomers
0.45%
20,245,087
5.46%
597,555
8.27%
852,037
13.23%
713,979
39.35%
957,985
80.67%
21,093,104
44,459,748
(90,329)
(32,623)
(70,459)
(94,489)
(376,941)
(17,016,049)
(17,680,890)
Allowance
for
doubtful
receivables
TOTAL
Current
<30
days
<
90
days
>365
days
Total
January
1,
2022
Expected
credit
loss
rate
C ustomers
0.50%
18,892,251
12.20%
422,934
16.30%
755,672
22.70%
665,454
43.70%
1,249,934
75.36%
20,251,752
42,237,997
(94,461)
(51,598)
(123,174)
(151,058)
(546,221)
(15,261,845)
(16,228,357)
Allowance
for
doubtful
receivables
TOTAL
<180
da y s
<365
da y s
20,154,759
564,932
781,578
619,490
581,044
4,077,055
26,778,858
<180
da y s
<365
da y s
18,797,790
371,336
632,498
514,396
703,713
4,989,908
26,009,640
For Customers in ">365 days" category, the expected credit loss rate of 80.67% represents an average of expected
credit loss rates, depending on the aging of the receivables. Expected credit loss rates range from 48.5% for receivables
from 2021 gradually increasing to 100%.
A reconciliation of the allowance for doubtful receivables is presented as follows:
As
at
1
January
Recognised
in
income
statement
Amounts
written
of
As
at
31
December
2022
26,423,269
889,139
-
27,312,408
2021
21,489,176
4,934,093
-
26,423,269
Other Assets
In the Other assets category are included advances in the amount of RON 5,718,526 (31 December 2021: RON
5,051,253), amounts for to be received for medical leaves in the amount of RON 2,753,455 (31 December 2021: RON
5,274,602) and also an intercompany amount with Pharmachem Distributie as a result of assigned recevables of RON
7,914,243 (31 December 2021: RON 7,914,243), after the acquisition took place in 2021.
8. CASH AND CASH EQUIVALENTS
31 Decembe r
2022
January 1,
2022
C ash in bank
C ash in hand
C ash equivalents
TOTAL
14,149,971
556,456
435,004
15,141,431
37,564,319
744,789
320,792
38,629,900
For the carrying value of cash pledged to secure the borrowings please refer to Note 14.
9.PREPAYMENTS
As of December 31, 2022 the Company has prepayments in amount of RON 2,674,932 (RON 2,608,350 as of January 1,
2022). The prepayments balance as of December 31, 2022 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.TRADE AND OTHER PAYABLE
Suppliers
Fixed assets suppliers
C ontract liability
TOTAL
31 Decembe r
2022
105,588,173
14,431,608
2,485,458
122,505,239
January 1,
2022
68,532,718
8,899,480
2,719,638
80,151,836
The balance of the suppliers account consist of debts for the acquisition of consumables, materials and commodities.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 33
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Fixed assets suppliers account consists of debts for the acquisition of medical equipment.
The Company’s total Trade payables due to related parties are in the amount of RON 50,151,209 (31 December 2021:
RON 21,739,167) and were presented on Note 23.
11.OTHER LIABILITIES
Salary and related liabilities (incl. contributions)
Other liabilities
TOTAL
31 December
2022
13,672,405
4,004,618
17,677,023
January 1,
2022
9,204,927
6,951,534
16,156,461
On the Other liabilities account it is included the amount of RON 1,761,907 (31 December 2021: 1,761,907) in relation to
an intercompany investment that was transferred from Policlinica Diagnostic Rapid in the past. The amount is
presented on the Note 23 for related parties.
990,497
-
(655,313)
3,480,319
12.PROVISIONS
Dece mbe r 31,
2022
Janu a ry 1,
2022
3,145,135
2,885,053
As at 1 January
C harged/(credited) to profit or loss
- additional provisions recognised
- unused amounts reversed
Amounts used during the year
As at 31 Dec e mber
1,100,160
-
(840,078)
3,145,135
Provisions booked as of 31 December 2022 and 31 December 2021 refer to provisions related to untaken holidays, which
cover 100% from total balance. The total balanced has increased with 335,184 RON compared with prior year.
13.LEASE
Leasing facilities refer to buildings, vehicles and medical equipment.
Amounts recognised in the bala nce
shee t
Right-of-use asse t
Cost
Value at 1 January 2022
Additions
Disposals
Value at 31 Decembe r 2022
Accumulated depre ciation
Value at 1 January 2022
C harge for the year
Disposals
Value at 31 Decembe r 2022
Carr y ing a mount
Value at 1 January 2022
Value at 31 Decembe r 2022
Non-curr e nt - L e a s e Lia biliti e s
Curr e nt po rtion – L ea s e Li a biliti e s
T O TAL
Buildings
Vehicle s
Equipment
Total
98,650,940
24,143,316
(1,808,301)
120,985,954
11,809,642
3,028,630
-
14,838,272
19,434,147
3,898,006
-
23,332,153
129,894,728
31,069,952
(1,808,301)
159,156,379
49,183,243
20,856,957
(1,176,391)
68,863,810
4,068,516
2,921,110
-
6,989,626
8,222,279
3,169,395
-
11,391,674
61,474,039
26,947,462
(1,176,391)
87,245,110
49,467,697
52,122,144
7,741,126
7,848,646
11,211,868
11,940,479
68,420,690
71,911,270
Dece mbe r 31,
2022
50,184,177
January 1,
2022
50,129,780
26,229,711
76,413,888
23,791,932
73,921,712
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 34
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
26,947,462
22,221,427
Depreciation charge of right-of-use
assets
Interest expense on lease liabilities
(included in finance cost)
2,819,366
2,754,783
C ovid (Gain) Foregiveness amount
-
-
-
-
95,110
1,339,781
PL (Gain) from contracts terminated
earlier
Foreign exchange loss in relation with
Lease Liabilities
Income tax expense in relation with
Lease Liabilities
-
-
Expense relating to short-term leases
(included in rent expenses)
77,237
109,712
Expense relating to leases of low-value
assets that are not shown above as
short-term leases (included in rent
expenses)
533,767
509,642
Other categories
3,100,673
2,816,399
2022
2021
Amounts re cognis e d in the
sta te me nt of profit or loss
12 months e nde d Dece mbe r
The total cash outflow for leases amount to RON 30,251,150 (2021: RON 25,689,746) for contracts that fall under IFRS 16
(which refer to rental of buildings, vehicles and equipment), out of which RON 27,431,784 refer to payments of principal
and RON 2,819,366 refer to payments of interest.
Extension and termination options
Extension and termination options are only included in the lease term when the Company has the right to unilaterally
extend/terminate and judges that this right is reasonably certain to be exercised. For some of the Company’s lease
agreements with extension options, these criteria are considered met and the extension option is therefore included in the
lease term.
Some of the real estate leases within the Company contain termination options with a purpose to achieve operational
flexibility. For most of these agreements, the Company is reasonabl y certain that the termination option will be exercised.
Consequently, the lease liability does not include future rental payments in the period after the earliest termination date.
14.FINANCIAL DEBT
31 December
2022
January 1,
2022
C urrent portion of long-term loans
Non-current portion of long-term loans
TOTAL
31,933,045
508,264,032
540,197,077
43,215,074
322,115,156
365,330,230
C ash
and
cash
equivalents
Borrowings
(including
overdraft)
Lease
liabilities
Net
debt
Current
debt
Overdraft
(9,894,800)
(9,896,200)
C urrent
portion
of
lease
liability
(26,229,711)
(23,791,932)
C urrent
portion
of
long
term
debt
(31,933,045)
(43,215,074)
Long
Term
Debt
Lease
liability
(50,184,177)
(50,129,780)
Long
term
debt
(508,264,032)
(322,115,156)
December
31,
2022
January
1,
2022
15,141,431
(550,091,877)
38,629,900
(375,226,430)
(76,413,888)
(73,921,712)
(611,364,334)
(410,518,242)
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 35
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Increases in credit facility during 2022
On 13 December 2022, following the approval of the General Meeting of Shareholders on 21 November 2022, MedLife,
together with co-borrowers BAHTCO INVEST S.A., ACCIPIENS S.A., POLICLINICA DE DIAGNOSTIC RAPID S.A., CLINICA
POLISANO S.R.L., DENT ESTET CLINIC S.A., GENESYS MEDICAL CLINIC S.R.L., CENTRUL MEDICAL SAMA S.A., VALDI
MEDICA S.R.L., PHARMALIFE MED S.R.L., PRIMA MEDICAL S.R.L., ANIMA SPECIALTY MEDICAL SERVICES S.R.L., CED
PHARMA S.R.L., BADEA MEDICAL S.A., CENTRUL MEDICAL MICROMEDICA S.R.L., SOLOMED CLINIC S.A., VITA CARE
FLAV S.R.L., PHARMACHEM DISTRIBUTIE S.A., SANO PASS S.A., MNT ASSET MANAGEMENT S.R.L., MNT HEALTHCARE
EUROPE S.R.L., SWEAT CONCEPT ONE S.A., ONCO CARD S.R.L., ONCOCARD INVEST S.R.L., DIAMED CENTER S.R.L.,
STEM CELLS BANK S.A. and SFATUL MEDICULUI.RO S.A., signed with Banca Comercială Română, as lead arranger, a
syndicated credit facility in the total amount of 228 million euros for the refinancing and increase of the existing credit of
50.7 million euros. The bank syndicate that signed the new credit granted to the MedLife Group is comprised of Banca
Comerciala Romana, as coordinator, lead arranger, documentation agent, facility and guarantee agent, and financier,
Raiffeisen Bank, BRD Groupe Societe Generale, Banca Transilvania, ING Bank N.V. Amsterdam Branch Bucharest, and
Erste Group Bank AG, as lead arrangers and financiers.
The syndicated credit contract involves a refinancing agreement for existing facilities, extending the financing period,
rearranging terms and conditions, as well as an additional increase of 50.7 million euros, which will be in the form of a
term facility, used by MedLife, along with other liquidity of the Group, for possible new acquisition opportunities on the
market.
As at December 31, 2022, the Company’s drawn and undrawn financing facilities also included the following:
-a guaranteed overdraft facility between Garanti Bank S.A. and Med Life S.A., the amount drawn on December 31,
2022, is of RON 9,894,800;
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 6M for the amounts in EUR or ROBOR 6M for the amounts in RON.
As of 31 December 2022, in relation to the loans with balance of RON 550,091,877 the Company has pledged the
property, plant and equipment with a carrying value of RON 247,132,612. The Company has also pledged cash in a total
amount of RON 6,263,774 and pledged receivables of RON 10,512,520 at 31 December 2022.
The Company has pledged shares in relation with the companies acquired until December 31, 2022 and pledged assets
in relation to the other loans presented in Note 14.
As at December 31, 2022 the Company was not in breach of any applicable term of the financing facilities.
A reconciliation of cash and non-cash movements of loans payable, lease liabilities and other assets is presented in the
following table:
C ha nge s in liabilitie s a rising from financing acti v itie s
Ne t de bt as at 31
Dec e mbe r 2021
(365,330,230)
(73,921,712)
(9,896,200)
(449,148,142)
C ash mo v e m e nts
C ash flows net related to
principal
Payments of interest
(172,141,813)
14,197,502
27,431,784
2,819,366
-
175,458
(144,710,029)
17,192,326
-
(30,021,560)
-
(30,021,560)
(401,808)
95,110
1,400
(305,299)
N on-cash mo v e m e nts
New leases
Foreign exchange
adjustments
Other changes (non-cash
movements)
(16,520,728)
(2,816,876)
(175,458)
(19,513,061)
Ne t de bt as at 31
Dec e mbe r 2022
L iabilities from financing acti v itie s
Borrowings Lease s Ov e rdraft Total
(540,197,077)
(76,413,888)
(9,894,800)
(626,505,765)
*Other changes (non-cash movement) contains the accrued interest expense.
15.SHARE CAPITAL AND SHARE PREMIUM
The issue d share capita l i n nomina l terms consists o f 132,870,49 2 ordinar y shares as a t 3 1 Decembe r 202 2(3 1 December
2021: 132,870,492) 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,
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 36
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
except for treasury shares.
The total number of issued ordinary shares of the Company after the share capital increase was RON 132,870,492.
Share capital
Share premium
TOTAL
31 Decembe r
2022
33,217,623
50,594,933
83,812,556
January 1,
2022
33,217,623
49,177,468
82,395,091
During 2022 the Group reacquired own equity instruments (treasury shares) in a total amount of RON 7,851,828 and
released shares in total value of RON 8,648,583, net of commissions. The difference between the fair value and cost of own
shares when the change was made is in a total amount of RON 1,417,465 and was included as an increase on the share
premium account.
16.RESERVES
The structure of the Company’s reserves is presented below:
General reserves (i)
Other reserves (ii)
Revaluation reserves (iii)
TOTAL
(i), (ii) Ge ne ra l re s e r v es and
othe r r e s e r ve s
34,538,597
24,010,989
Bala nce a t b e ginning of the
y e a r
Movements
Bala nce a t the e nd of the y e a r
(iii) Re v aluation r e se r v e s
66,588,874
66,588,874
-
-
Bala nce a t b e ginning of the
y e a r
Decrease arising revaluation
correction
Increase due to revaluation
Deferred tax related to revaluation
Bala nce a t the e nd of the y e a r
6,643,525
27,895,072
106,464,509
141,003,106
-
34,538,597
47,470,993
(7,595,359)
106,464,509
Dec e mbe r 31,
2022
Janua ry 1,
2022
6,643,525
27,895,072
66,588,874
101,127,471
10,527,608
34,538,597
-
-
66,588,874
On the General reserves account there are legal reserves registered in the amount of RON 6,643,525 (2021: RON
6,643,525).
The properties revaluation reserve arises on the revaluation of land and buildings. During 2022, the Med Life SA engaged an
independent appraiser t o determine th e fair valu e for land an d buildings as of 3 1 Decembe r 2022.The tota l revaluation
difference that was recorded as a revaluation surplus in the statement of changes in equity is in the amount of RON
47,470,993. Please refer to Note 5 for more details.
When revalued land or buildings are sold or otherwise disposed of, 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, resulting from the revaluation of property, plant and equipment are recognized and
disclosed in accordance with IA S 1 2 Income Taxe s(please see Not e 24). Deferred ta x recognise d on other comprehensive
income as a result of revaluation of Land and Buildings is in the amount of RON 7,595,359 (please refer to Note 24).
17.REVENUE FROM CONTRACTS WITH CUSTOMERS
Turnover for the 12 months period ended December 31, 2022 was 586,566,266 RON (12 months ended December 31,
2021: 601,508,195 RON) and consists 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. Of the total sales in
2022, around 10% come from the treatment of patients insured through the Health Insurance House. The Company’s
revenues are generated in Romania. The entire amount included in contractual obligations at the beginning of the year
(Note 10) was recorded as income in 2022.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 37
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
18.OTHER OPERATING REVENUES
12 months 2022 12 months 2021
Other operating revenues
C apitalized cost of intangible assets
TOTAL
3,214,454
3,612,057
6,826,511
1,781,460
2,276,421
4,057,881
19.THIRD PARTY EXPENSES
Medical services
Other services
C leaning and laundry
C onsulting services
Legal services
Others
Security and safety
Waste collection and sanitation
Logistics and telecommunications services
IT services
Storage and archiving services
Accreditations and authorizations
TOTAL
12 months 2022
186,545,976
1,944,448
4,686,886
2,928,256
1,097,423
3,635,933
1,795,876
1,739,195
85,294
565,444
347,870
373,878
205,746,479
12 months 2021
160,594,374
3,416,516
3,244,280
3,089,318
2,811,334
2,636,363
1,723,232
1,328,249
402,454
286,238
88,590
88,314
179,709,262
20.OTHER OPERATING EXPENSES
12 months 2022
12 months 2021
Utilities
Repairs maintenance
Rent
Insurance premiums
Promotion expense
C ommunications
Other administration and operating expenses
TOTAL
8,918,081
5,424,966
3,711,677
2,655,158
11,240,283
2,193,123
9,976,423
44,119,711
5,141,142
5,982,815
3,435,753
2,409,000
9,443,037
2,285,233
7,188,656
35,885,636
21.SALARY AND RELATED EXPENSES AND SOCIAL CONTRIBUTIONS
The structure of Med Life personnel is described below:
The short-term benefits (salary expenses) paid by the Company, by type of personnel are described below:
Management
Staff
Total
179,534,498
154,171,110
22,381,073
157,153,425
Dece mb e r 31,
2022
January 1,
2022
18,238,995
135,932,115
Loss from foreign exchange rate impact
Finance cost
Bank commissions
Interest income
F INANCIAL NET LOSS
22.FINANCIAL NET RESULT
12 months 2022 12 months 2021
(2,752,063)
(17,076,816)
(4,778,481)
6,922,660
(17,684,700)
(5,979,555)
(13,980,755)
(2,215,265)
3,473,598
(18,701,977)
Management
Staff
Total
2,027 1,963
December 31,
2022
January 1,
2022
48 47
1,979 1,916
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 38
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
23.RELATED PARTIES
(a) Main shareholders
As of December 31, 2022, the shareholders’ structure of Med Life SA is as presented below:
Legal entities
Marcu Mihail
C ristescu Mihaela Gabriela
Marcu Nicolae
Others
132,870,492
100.00%
33,217,623
TOTAL
Number of shares
72,263,633
19,932,307
18,660,690
13,835,400
8,178,462
%
54.39%
15.00%
14.04%
10.41%
6.16%
Value
18,065,908
4,983,077
4,665,173
3,458,850
2,044,616
As of December 31, 2021, the shareholders’ structure of Med Life SA is as presented below:
(b) Executive Committee and Board of Directors’ compensation
Compensations granted to the members of the Executive Committee were as follows:
12 months 2022 12 months 2021
Executive C ommittee 7,953,552 7,319,579
Executiv e Committee compensation includes th e payment s towar d members of the top management under their mandate
contracts concluded with the Company for a period of 4 years.
As at December 31, 2022, the Company’s Executive Committee consisted of ten managers remunerated based on
mandate agreement. Considering the termination, by mutual agreement, of the mandate contract of Mr. Adrian Paul
Lungu as MedLife CFO and member of the Executive Committee of the Company on 30 September 2022, a new Executive
Committee member and CFO of the Group was appointed starting October 1st 2022, respectively Ms. Alina-Oana Irinoiu.
During the year 2022 there have been no amendments to the composition of Medlife’s Board of Directors, their mandates
ending December 20, 2024.
Med Life SA Board of Directors consists of 7 members under administration agreements concluded with the Company,
approved by the General Shareholders Meeting.
Members’ mandate for a period of 4 years, starting December 21
st
, 2020 and ending December 20
th
, 2024. No loans
were granted to managers and administrators in 2022 and 2021.
(c) Balances and transactions with subsidiaries and other related parties
Balance of receivables and payables from/to subsidiaries and other related parties:
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.
The Company’s total Trade receivables from related parties are in the amount of RON 21,898,256 (31 December 2021:
RON 15,406,993) and are part of Trade receivables on the balance sheet.
The Company’s total Trade payables due to related parties are in the amount of RON 50,151,209 (31 December 2021:
RON 21,739,167) and are part of Trade and other payables on the balance sheet.
Legal entities
Marcu Mihail
C ristescu Mihaela Gabriela
Marcu Nicolae
Others
TOTAL
132,870,492
100.00%
33,217,623
Number of shares
70,466,706
20,552,307
18,660,690
14,034,400
9,156,389
%
53.03%
15.47%
14.04%
10.56%
6.89%
Value
17,616,677
5,138,077
4,665,173
3,508,600
2,289,097
Compensations granted to the members of the Board of Directors were as follows:
12
months
2022
Board
of
Directors 3,828,027
12
months
2021
3,909,013
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 39
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
C entrul Medical Panduri S.A.
Almina Trading S.A.
Anima Speciality Medical Services S.R.L.
Pharmalife Med S.R.L.
Biofarm Farmec S.R.L.
Policlinica de Diagnostic Rapid S.A.
Histo S.R.L.
Genesys Medical S.R.L.
Policlinica de Diagnostic Rapid Medis S.R.L.
Accipiens S.A.
Biotest Med S.R.L.
Vital Test S.R.L.
C entrul Medical Sama S.A.
Ultratest C raiova S.A.
Bahtco Invest S.A.
Medapt S.R.L.
RUR Medical S.A.
Bactro S.R.L.
Transilvania Imagistica S.R.L.
Diamed C enter S.R.L.
Stem C ells Bank S.A.
Dent Estet C linic S.R.L.
Medlife Ocupational S.R.L.
Solomed C linic S.A.
C linica Polisano S.R.L.
Prima Medical S.R.L.
Aspen Laborator Dentar S.R.L.
Solomed Plus S.A.
Valdi Medica S.R.L.
Ghencea Medical C enter S.A.
Sfatul Medicului S.R.L.
Spital Lotus S.R.L.
C entrul Medical Micromedica S.R.L.
Onco Team Diagnostic S.R.L.
Badea Medical S.R.L.
RMC Medlife Holding Kft.
C entrul Medical Matei Basarab
C ED Pharma S.R.L.
Pharmachem Distributie S.R.L.
Dent Estet Ploiest S.R.L.
Expert Med C entrul Medical Irina S.R.L.
Nautic Life S.R.L.
Dietlife Food S.R.L.
Black Sea Magic S.R.L
Dr. C ristescu I. Mihaela-Gabriela
852,421
404,159
973,646
-
-
4,610,825
1,233
860,122
419,894
6,692
543,024
-
1,298,434
38,109
-
-
244,108
-
-
3,019,672
2,994,128
29,329
55,990
1,497,557
2,578,089
46,639
2,422
1,156
607,214
-
179,046
290,033
198,928
-
-
-
105,171
-
4,570
312
-
-
206
10,290
24,839
369,649
2,169,693
632,339
-
-
664,203
1,233
2,574,672
161,324
6,692
163,175
-
566,264
38,109
-
-
244,108
-
-
2,836,353
1,511,177
16,079
55,990
804,307
1,507,100
45,176
730
1,156
358,680
-
169,500
387,135
39,604
-
-
-
44,283
402
-
-
-
-
208
32,812
4,839
4,451,008
384,428
4,427,353
352,510
8,887
7,157,549
380,375
3,693,285
2,679,766
-
6,016,780
1,223,199
2,622,081
-
2,289,740
832,033
1,134,616
-
83,060
82,166
-
117,693
-
1,326,125
1,643,340
324,838
5,335
978,995
91,437
-
8,046
390,791
1,704,577
2,254,706
51,398
-
-
-
3,338,587
-
38,105
0
-
-
58,400
2,484,802
193,795
2,173,613
64,106
8,887
621,020
291,514
644,459
2,429,204
-
4,565,041
1,223,199
378,207
-
1,513,598
832,033
1,134,616
-
29,719
20,468
-
49,328
-
485,791
227,721
269,380
5,335
707,019
-
-
8,782
75,901
338,599
802,747
40,551
-
-
-
58,717
-
-
2,616
--
58,400
Total
21,898,256
15,406,993
December 31,
2022
January 1,
2022
December 31,
2022
January 1,
2022
Recei v ables from Pa y able s to
50,151,209
21,739,167
Other liabilities from related parties
On the Other liabilities account it is included the amount of RON 1,761,907 (31 December 2021: 1,761,907) in relation
to Policlinica Diagnostic Rapid, please refer to Note 11.
Other receivables from related parties
On the Other assets is included an intercompany amount with Pharmachem Distributie as a result of assigned receivables of
RON 7,914,243 (31 December 2021: RON 7,914,243), after the acquisition took place in 2021. Please refer to Note 7.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 40
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Valdi Medica S.R.L.
Policlinica de Diagnostic Rapid S.A.
Bahtco Invest S.A.
MedLife Ocupational S.R.L.
Vital Test S.R.L.
Stem C ells Bank S.A.
C linica Polisano S.R.L.
Diamed C enter S.R.L.
Ghencea Medical C enter S.A.
Sfatul Medicului S.R.L.
Pharmalife Med S.R.L.
RMC Medlife Holding Kft.
C ED Pharma S.R.L.
LETI Farm 2000 S.R.L.
Badea Medical S.R.L.
MNT Healthcare Europe S.R.L
Sanopass S.A.
Solomed C linic S.A.
Sweat C oncept One S.R.L.
2022 2022
1,870,000 1,870,000
12,050 11,364
43,846,376 41,430,158
708,319 1,100,814
- -
15,373,186 10,825,186
28,380,363 28,380,363
2022 2022
255,271 141,204
-
7,266,694 5,376,872
420,702 364,606
269 269
1,382,509 605,389
4,555,198 2,823,995
10,353,605
60,000
3,376,500
9,706,088
346,318
630,000
103,270
607,860
4,490,384
4,326,101
9,172,690
12,420,140
11,546,605
100,000
2,876,500
9,546,088
346,367
630,000
103,270
-
-
-
-
-
1,537,575
14,310
288,468
745,766
41,421
47,485
7,783
17,804
93,923
67,238
262,138
231,077
881,007
10,557
94,619
161,351
22,081
9,055
1,484
-
-
-
-
-
Loans granted to subsidiaries
Outstanding bala nce of:
Loans granted to:Interest re cei v able from:
Dece mbe r 31,January 1, Decembe r January 1,
Total
145,783,250
108,766,715
17,235,631
10,492,489
The balances of the loans granted to the affiliated parties also include the amount of RON 13,239,277 (2021: RON
12,921,654), values that are found in the balance sheet on the line of Other financial assets.
Total interest income recognized in the period was in amount of RON 6,911,404.
Loans obtained from subsidiaries
-
-
-
-
-
-
Almina Trading S.R.L.
Genesys Medical S.R.L.
Micromedica Bacau S.R.L.
Spital Lotus S.R.L.
900,000
5,323,000
1,200,000
3,484,000
11,732
57,243
4,613
69,189
Total
Outstanding balance of:
Loans obtained from:Interest pa y able to:
Dece mber 31,January 1,Dece mber January 1,
2022 2022 2022 2022
Policlinica de Diagnostic Rapid S.A.
- - 1,624 1,624
Policlinica de Diagnostic Rapid Medis S.R.L.
- - 39,160 39,160
Asilife S.R.L.
159,000 159,000 47,693 37,992
Prima Medical S.R.L. 1,265,413 165,413 69,457 38,049
12,331,413
324,413
300,711
116,825
Total interest expense recognized in the period was in amount of RON 20,309.
The management has calculated the impact of accounting for amortized cost and concluded that the ECL impact is
immaterial.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 41
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Policlinica de Diagnostic Rapid S.A.
Prima Medical S.R.L.
Pharmalife Med S.R.L.
Almina Trading S.R.L.
Genesys Medical S.R.L.
Micromedica Bacau S.R.L.
Spital Lotus S.R.L.
Total
- -
1,100,000 -
- -
900,000 -
5,323,000 -
1,200,000 -
3,484,000 -
- 382,922
- 104,587
--
--
--
--
--
Mo v e me nt in:
Borro w ings rece i v ed
2022 2021
Reimbursments paid
2022 2021
8,523,000-
-487,509
Bahtco Invest S.A.
Diamed C enter S.R.L.
Ghencea Medical C enter S.A.
MedLife Ocupational S.R.L.
Policlinica de Diagnostic Rapid S.A.
Pharmalife Med S.R.L.
RMC Medlife Holding Kft.
Stem C ells Bank S.A.
Sfatul Medicului S.R.L.
C ED Pharma S.R.L.
Leti Farm 2000 S.R.L.
Badea Medical S.R.L.
MNT Healthcare Europe S.R.L
Sanopass S.A.
Solomed C linic S.A.
Sweat C oncept One S.R.L.
Total
4,547,459
1,357,000
-
7,500
1,950
6,775,500
8,792
4,693,000
500,000
-
-
607,860
4,520,580
4,326,101
9,630,690
12,420,140
4,978,730
2,316,888
-
-
1,576
8,918,150
6,426
4,163,000
1,554,000
630,000
103,270
-
-
-
-
-
2,129,592
2,550,000
40,000
400,000
1,264
6,615,500
8,841
145,000
-
-
-
-
30,196
-
458,000
-
11,967,689
-
50,000
400,000
523
2,073,500
917
-
-
-
-
-
-
-
-
-
Borrow ings granted
2022 2021
Mo v e me nt in:
Reimbursme nts re c e i v e d
2022 2021
49,396,572
22,672,039
12,378,393
14,492,630
For Sanopass and Sweat Concept, the loans are assigned from former shareholders, after the acquisition of the
companies. The intercompany loan with Sanopass is included in Other assets (please relate to Note 4) and the one with
Sweat Concept is included in the Other long term debt on the balance sheet.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 42
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Transactions with subsidiaries:
Sales and purchases
Total
Policlinica
de
Diagnostic
Rapid
S.A.
Policlinica
de
Diagnostic
Rapid
Medis
S.R.L.
2021
2,182,797
-
Bahtco
Invest
S.A.
Genesys
Medical
S.R.L.
Biotest
Med
S.R.L.
C entrul
Medical
Sama
S.A.
Ultratest
C raiova
S.A.
Prima
Medical
S.R.L.
Diamed
C enter
S.R.L.
Aspen
Laborator
Dentar
S.R.L.
Almina
Trading
S.A.
C entrul
Medical
Panduri
S.A.
Dentestet
4
Kids
S.R.L.
Dent
Estet
C linic
S.R.L.
Green
Dental
S.R.L.
C linica
Polisano
S.R.L.
Solomed
C linic
S.A.
Anima
Speciality
Medical
Services
S.R.L.
Stem
C ells
Bank
S.A.
Valdi
Medica
S.R.L.
Sfatul
Medicului
S.R.L.
Pharmalife
Med
S.R.L.
Ghencea
Medical
C enter
S.A.
C entrul
Medical
Micromedica
S.R.L.
Onco
Team
Diagnostic
S.R.L.
Spital
Lotus
S.R.L.
C entrul
Medical
Matei
Basarab
S.R.L.
Green
Dental
Dent
Estet
Ploiesti
C ED
Pharma
S.R.L.
Leti
Farm
2000
S.R.L.
Monix
Pharm
S.R.L.
Krondent
S.R.L.
C ostea
Digital
Dental
S.R.L.
Pharmachem
Distributie
S.R.L.
SC
M-Profilaxis
S.R.L.
Badea
Medical
S.R.L.
Transilvania
Imagistica
S.R.L.
Histo
S.R.L.
Solomed
Plus
S.R.L.
Tomorad
Expert
S.R.L.
Opti C ristal
C onsult
S.R.L.
DIETLIFE
FOOD
S.R.L.
BLA C K
SEA
MAGIC
S.R.L
LIFE
RESORT
S.R.L.
DR.
C RISTES C U
I.
MIHAELA-GABRIELA
-
2,793,137
379,846
732,177
1,442
1,463
183,319
3,530
1,429,549
482,771
14,035
87,671
1,809
1,070,989
693,250
341,307
1,164,561
432,727
9,545
-
-
159,328
12,000
1,918,897
60,891
-
2,930
4,806
1,029
860
4,317
2,173
39,305
94,598
-
-
-
-
-
-
2,486
---
-
3,843,923
214,136
807,997
-
-
526,261
-
1,530,905
486,214
13,703
109,896
-
1,070,966
985,017
822,503
1,037,587
55,246
9,745
5,455
3,749
154,766
-
1,022,371
44,282
1,957
579
2,808
602
502
-
-
-
-
-
-
-
-
-
-
30,721
1,250
1,200
-
Sales
2022
3,946,623
258,569
16,331,940
14,967,138
2021
2,426,115
3,577,790
15,990,768
3,048,826
2,906,692
2,243,886
-
55,458
262,406
3,140
944,408
3,266,206
-
336,647
-
1,445,531
840,336
2,783,727
-
102,383
24,266
410,893
-
1,365,979
2,667,449
317,559
-
-
-
2,699
10,957
-
-
-
4,293,257
-
68,825
53,341
88,862
271,974
1,479
10,264
-
22,522
-
700,800
19,490,892
2,336,573
2,767,053
1,479,251
30,122
45,147
285,230
1,415
621,545
3,735,075
-
255,472
-
813,602
730,770
2,651,039
-
-
8,710
289,093
-
744,175
1,729,903
229,311
-
-
-
-
-
-
-
-
-
-
6,100
37,035
49,657
200,527
-
-
-
-
-
700,800
Purchases
2022
6,536,529
250,562
51,328,631
45,242,402
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 43
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Tax expense using the statutory rate of 16%
928,570
10,569,808
1,267,999
-
-
-
-
923,458
-
(513,898)
(520,265)
(2,067,638)
-
1,153,649
-
1,031,757
Income tax for the current y e a r
2,196,569
10,576,871
Income tax liabilities as at January 1
122,115
3,829,499
Income tax paid in the current year
(1,337,691)
(14,284,255)
Income tax payable in the current year
Curr e nt tax liabilitie s
980,993
122,115
24.TAXATION
Dec e mb e r 31,
2022
January 1,
2022
C urrent income tax expense
Deferred tax expense
Total income tax e x pe nse
Profit be fore tax
2,196,569
-
2,196,569
5,803,563
10,576,871
-
10,576,871
66,061,301
Fiscal effect of non-deductible expenses
Fiscal effect of non-taxable income
Fiscal effect of deductible legal reserve
Sponsorship/other compensation
Reinvested profit and other fiscal facilities
Adjustments in respect of current income tax
of previous years
Other elements (including different fiscal
treatment)
Dec e mb e r 31,
2022
January 1,
2022
2,196,569
10,576,871
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 44
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Compone nts of de fe rr e d tax
-
-
-
1,258,534
-
1,258,534
Def e rre d tax a sse ts
Non-current assets
Amount related to untaken
holidays provisions
Total de f e rre d tax a sse t
Def e rre d tax liability
104,870
-
104,870
Other elements
Revaluation of land and buildings
Total de f e rre d tax lia bility
Ne t de fe rr e d ta x liability
Compone nts of de fe rr e d tax
-
-
-
1,258,534
-1,258,534
Def e rre d tax liability
Other elements
Revaluation reserve
1,258,534
-
20,206,435
20,311,305
19,052,772
7,595,359
7,595,359
7,595,359
Def e rre d tax a sse ts
Non-current assets
Amounts that refer to the provision
for untaken holidays
Total de f e rre d tax a sse t
1,258,534
Dec e mbe r 31,
2022
Cha nge in
d e f e rr e d ta x
Janua ry 1,
2022
1,258,534
Dec e mbe r 31,
2022
Cha nge in
d e f e rr e d ta x
Janua ry 1,
2022
12,611,076
12,715,946
11,457,413
Dec e mbe r 31,
2021
Cha nge in
d e f e rr e d ta x
Janua ry 1,
2021
-1,258,534
Dec e mbe r 31,
2021
104,870
12,611,076
Cha nge in
d e f e rr e d ta x
-
-
Janua ry 1,
2021
104,870
12,611,076
Total de f e rre d tax lia bility
Ne t de fe rr e d ta x liability
12,715,946
11,457,413
-
-
12,715,946
11,457,413
The Company 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, 2022, 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.
25.CAPITAL 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 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 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.
The Company is the Parent entity of Medlife Group. The Group has grown in 2022 principally through acquisitions and less
through organic development. In expanding organically, the Group is exposed to potential loss of capital if the
expansion or new activities do not immediately meet their financial objectives.
The Company’s objectives have been to balance the cash generation from established business units into higher risk
investments in new activities. This has left the equity levels of the Company as a buffer to protect the Company in case of
variations in performance that could impact the established activities. The Company has used debt funding for
acquisitions of businesses due to the historically low cost of debt funding and availability of liquidity on the financial
markets. When assessing the adequacy of the Company’s equity for the activities and exposures the Company analyses the
ratio of loans payable net of cash and liquid short-term investments to total equity as presented in the following table:
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 45
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
540,197,077
365,330,230
Interest-bearing loans and borrowings without overdraft
C ash and cash equivalents
Loans payable net of cash
Total Equity
Ratio Loans pa y able s net of cash to Total Equity
15,141,431
525,055,646
305,277,285
1.72
Dece mbe r 31,
2022
January 1,
2022
38,629,900
326,700,330
259,580,434
1.26
The medium-term aim of the Company is to keep this ratio at acceptable levels by continuing to invest in new business
development and acquisitions to maintain a balanced capital structure between debt and equity.
26.RISK MANAGEMENT
The Company’s Board of Directors has the overall responsibility for the establishment and oversight of the Company’s
risk management framework.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits.
The Audit Committee is responsible for monitoring and addressing issues concerning the effectiveness and efficiency of
the Company’s internal controls, regulatory compliance and risk management.
In th e cours e of it s busines s the Company i s exposed t o a number of financial risks, including credit, interest rate,liquidity
and foreign currency risks. This note presents the Company’s objectives, policies and processes for managing these risks
and methods used to measure risks.
The central treasury function has an important role in managing the Company’s financial risks with the aim to control
and manage the Company’s financial exposure and financial costs with a balance between risk and costs.
(a)Credit risk
Financial assets that potentially give rise to concentrations of credit risk consist principally of cash, short-term deposits,
trade and other receivables and other financial assets, as well as intercompany loans. The Company’s cash equivalents and
short-term deposits are placed with reputable financial institutions with a high credit rating in Romania.
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 cash-based 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 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. The Company has only
10%of its sales durin g 2022 deriving from the treatment o f NHIH insured patients (concentration o f credit risk) – reliance on
major customers.
At 31 December 2022 and 31 December 2021, the Company did not consider there to be a significant concentration of
credit risk. Please see Note 7, for further details regarding credit risks of trade and other receivables and expected credit loss
allowance and also 3.11.1 Financial assets, for further details of accounting policies used by the Company.
(b)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
Company is exposed to interest rate risk because it borrows funds at 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 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
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 46
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
considered for the sensitivity on interest rate computation. These amounts which were included in the analysis cover
more than 98% of the total outstanding balances for both borrowings and leases.
A 10% percent 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 Company’s profit for the year
ended 31 December 2022 would decrease by RON 1.868.471 RON (2021: decrease with RON 857,190). An equal positive
variance would occur for a 10% decrease of interest rate. This is mainly attributable to the Company’s exposure to interest
rates on its borrowings and leases.
Amounts
exposed
to
interest
rate
risk
Short-Term
and
Long-Term
portions
of
leases
76,413,888
C ontracts
that
refer
to
rent
of
buildings,
equipment
and
vehicles
which
fall
under
IFRS
16
65,849,672
86%
2,576,297
3,019,338
443,042
9,896,200
2021
Overdraft
Short-Term
and
Long-Term
portions
of
loans
365,330,230
Short-Term
and
Long-Term
portions
of
leases
73,921,712
C ontracts
that
refer
to
rent
of
buildings,
equipment
and
vehicles
which
fall
under
IFRS
16
64,310,182
87%
2,511,339
2,735,695
224,356
Profit
or
loss 1,868,471
857,190
LIABILITIES Total
Variation
that
affects
the
profit
and
loss
%account
when
the
interest
rate
increases
by
10%
Short-Term
Interest
Interest
expenses
per
expenses
per
year
at
the
year
at
the
Out
of
w hich
included
in
the
current
interest
rate
sensiti v ity
anal y sis
interest
rate
increased
by
for
the
10%
for
the
selected
selected
portion
portion
2022
Overdraft 9,894,800
Long-Term
and
540,197,077
C lub
loan 540,061,143
98%14,254,294 15,679,724 1,425,429
portions
of
loans
C lub
loan
365,991,087
98%
11,398,911
12,031,745
632,834
December
31,
2022
January
1,
2022
(c)Liquidity risk
Ultimate responsibility for liquidity risk management rests with the executive committee, 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, 2022
and December 31, 2021. 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 FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 47
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
2022
Weighted
a v e rage
effe cti v e
interest
rate
Carr y ing
amount
Total Year
1 Year
2 Year
3 Year
4 Year
5>
Year
5
Non-interest
bearing
instruments
122,505,239
122,505,239
122,505,239
-
-
-
-
-
Trade
payables
Interest
bearing
instruments
Overdraft
9,894,800
9,894,800
9,894,800
-
-
-
-
-
C lub
Loan
EURIBOR
6M
/
ROBOR
6M
+
margin
540,197,077
667,316,208
53,306,387
57,462,984
71,121,905
58,756,129
64,789,076
361,879,727
Lease
contracts
Total
2021
Weighted
a v e rage
effe cti v e
interest
rate
Carr y ing
amount
Total
Year
1
Year
2
Year
3
Year
4
Year
5
>
Year
5
Non-interest
bearing
instruments
80,151,836
80,151,836
80,151,836
-
-
-
-
-
Trade
payables
Interest
bearing
instruments
Overdraft
9,896,200
9,896,200
9,896,200
-
-
-
-
-
C lub
Loan
EURIBOR
6M
/
ROBOR
6M
+
margin
365,330,230
406,620,115
40,362,235
40,677,472
49,869,019
38,716,075
37,943,730
199,051,584
Lease
contracts
Total
76,413,888
749,011,004
82,481,117
882,197,364
27,085,437
212,791,863
17,702,598
75,165,582
12,923,679
84,045,584
8,640,372
67,396,501
6,622,499
71,411,574
73,921,712
529,299,978
79,814,155
576,482,305
24,387,469
154,797,740
20,611,708
61,289,180
13,121,375
62,990,394
8,820,507
47,536,582
4,834,487
42,778,217
9,506,532
371,386,259
8,038,609
207,090,193
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 48
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
(d)Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the
Company’s operating activities (when revenue or expense is denominated in a foreign currency).
The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:
2022
ASSETS
C ash and cash equivalents
Trade receivables
14,318,149
66,525,981
823,282
-
15,141,431
66,525,981
Receivables from group companies
138,107,539
11,672,060
149,779,599
Long-term loans to group companies
-
13,239,277
13,239,277
Other long term receivables
1,705,883
-
1,705,883
LIABILITIES
Trade payables
Overdraft
122,505,239
-
-
9,894,800
122,505,239
9,894,800
Other long term debt
-
-
-
Short-Term and Long-Term portions of
loans
2,602
540,194,475
540,197,077
491,689
75,922,198
76,413,888
Short-Term and Long-Term portions of
financial leasing
Payables to group companies
12,632,124
-
12,632,124
RON
1 EUR =
4.9474 RON
Tota l
2021
ASSETS
C ash and cash equivalents
Trade receivables
Receivables from group companies
36,372,221
56,744,097
94,950,993
2,257,679
-
11,386,556
38,629,900
56,744,097
106,337,550
Long-term loans to group companies
-
12,921,654
12,921,654
Other long term receivables
1,632,184
-
1,632,184
LIABILITIES
80,151,836
-
-
-
9,896,200
-
80,151,836
9,896,200
-
78,034,292
287,295,938
365,330,230
543,826
73,377,886
73,921,712
Trade payables
Overdraft
Other long term debt
Short-Term and Long-Term portions of
loans
Short-Term and Long-Term portions of
financial leasing
Payables to group companies
441,238
-
441,238
RON
1 EUR =
4.9481 RON
Tota l
The Company is mainly exposed in respect of the exchange rate of the RON versus EUR. The below 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.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 49
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
Decembe r 31,
Janua ry 1,
Profit or loss 60,027,685 40,516,247
2022
2022
(e)Climate change risk
The Company is subject to transitional and physical risks related to climate change. Transitional risks include, for
example, a disorderly global transition away from fossil fuels that may result in increased energy prices; customer
preference for low or no-carbon providers of medical services; stakeholder pressure to decarbonize assets; or new legal or
regulatory requirements that result in new or expanded carbon pricing, taxes, restrictions on greenhouse gas
emissions, and increased greenhouse gas disclosure and transparency. These risks could increase operating costs,
including the cost of the Company’s electricity and energy use, or other compliance costs.
The Company monitors energy consumption relative to area and to the type of activity carried out in each location. The
main consumption is in respect of natural gas, electricity and fuel, and the main sources of consumption are: air
conditioning system, MRI machines and other large imaging machines (radiotherapy, radiology, angiography, CT and
PET-CT).
Also, the Company is concerned with the reduction energy consumption through implementation energy efficiency
measures. Over time the Company has implemented technology LED used in 99% of the cases. Halls of surgery within
hospitals and not only, were equipped with devices that allow LED lighting and effective point settings have been
implemented from an energy point of view for heating, ventilation and air conditioning, thus reducing the energy used. LED
lighting is also used in elevators and areas waiting for patients. Currently, a set of intelligent control measures are
implemented at the level of consumers of various types of energy (thermal, electrical, etc.), renewal cooling aggregates
(chillers), 2 installations being replaced so far. The possibility of using photovoltaic panels is also considered for the
future.
I n terms o f GHG emissions,the Company has the lega l obligatio n t o repor t thes e emissions,the mai n source o f generation
being thermal power plants powered by gas, followed by emissions generated by the leased car fleet.
Physical risks to Company’s operations include water stress; wildfires; extreme temperatures and storms, which could
impact the pharmaceutical distribution, increase costs, or disrupt supply chains of medicines for patients on a global
level, which also could further affect the pharmacy segment.
To carry out the activities the Company consumes water that is captured exclusively from the public network. The
Company monitors water consumption monthly, and through internal work procedures ensures that any risk of biological
contamination of the water spilled is eliminated.
Our supply chain is likely subject to these same transitional and physical risks and would likely pass along any increased
costs to us.
The improvement of the corporate governance framework is continued. At the basis of this improvement stands the
materiality analysis performed by the Company through a complex process consisting of several stages, as follows:
identification and prioritization of stakeholders - which allowed us to better understand who we affect and who can
influence our work, identify and analysed best practices in the global and national health sector, consult with the most
significant internal and external stakeholders and prioritize sustainability issues in terms of the impact of our activities on
the environment, stakeholder expectations about how we manage environment issues, as well as the sustainability risks
that can affect our position and the development of our business.
As at 31 December 2022 the Company does not anticipate that these risks will have a material financial impact in the
near term.
(f)Ongoing military conflict
The crisis started in February 2022 and was generated by the invasion of Russia in Ukraine, which led to a sharp increase in
energy prices, both in Romania and in other European countries. The invasion created a refugee crisis with the fastest
growth in Europe and a global food crisis. At the same time, at the regional level, a resource crisis was created due to the
imposition of a series of restrictions on the international level, Russia being an important player in the natural gas market
in Europe. Continued and/or intensified disruptions in Russian commodity flows to Europe could result in further increases
in European energy prices.
The Company does not own subsidiaries and affiliated entities on the territory of Ukraine, nor does it have any other
relevant exposures in the countries directly involved in this conflict. From an operational point of view, the purchases of
energy and natural gas are mainly made from the domestic market; availability, provenance and delivery of resources
could be influenced by the dynamics of the conflict from region.
The consequences of the ongoing conflict in Ukraine, the European energy crisis and resulting regulatory measures and
other economic disruptions currently being observed, and further regulatory interventions, as well as the extent and
duration of their economic impact cannot be reliably estimated at this stage. The Company is responding to the situation
with targeted measures to safeguard its economic stability. Because events are ongoing, the long-term impact can affect
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 50
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
cash flows and profitability. However, at the date of these financial statements, the geopolitical context driven by the
ongoing conflict in Ukraine has no significant negative impact on the financial statements as of December 31, 2022.
(g)
Macroeconomic environment
Global and regional economic conditions, respectively the economic context at national and regional international level
that may negatively influence the Company’s activity refer to factors such as: inflation, recession, changes in fiscal and
monetary policy, tighter lending, higher interest rates, new or rising tariffs, currency fluctuations, raw material price
(electricity, natural gas), etc.
The last quarter of 2022 was further marked by the spillover effects of the ongoing war in Ukraine and by the persistent
inflationary pressures that reached a significant level both globally and locally, in the context of a global economic
slowdown.
On the local level, the latest figures on the dynamics of Romania’s GDP have shown an economic growth of 4.8% in
2022, marked by a slowdown in consumption, but with an accelerated investment component.
From the unemployment rate point of view, Romania ended 2022 with an unemployment rate of 5.6% and approx.
10,000 fewer unemployed than a year ago, supporting that the labor market remains robust. Inflation has remained at a
particularly high level of 16.4% in December and expectations are that it will return to a downward trend from the
beginning of next year. However, over the medium term, inflation is likely t o remain significantly above the central bank’s
target level, which will continue to put pressure on the monetary policy.
To continue the efforts to temper further price increases, the Board of Governors of the NBR decided in the meetings of
October and November new increases in the monetary policy rate, ending the fourth quarter with a key rate of 6.25%.
However, given the current level of inflation and the current uncertainties in the economy, further increases in the
monetary policy rate are expected. The EUR/RON exchange rate registered a slight increase in the fourth quarter of the
year, fluctuating, on average, around the 4.92 level.
The Company’s income or the value of its holdings can be affected by the particular movements in the global financial
markets. As a result of the higher interest rates resulting on the market during 2022, the discount rates used in the
impairment tests have increased, compared with the previous year (between 8.4% and 18.0% compared with the prior
year, between 8.6% and 12%). However, as a result of the sensitivity analysis performed, the Company considers that it
has sufficient headroom in case of a potential increase above these numbers, with no material impact on the financial
statements.
Also, the revaluation process held at the en d of 2022 on all owned Land and Buildings, which generated an overall surplus at
the Company level, brings sufficient confidence over the value of the assets held, being stated at their current fair value
in these financial statements.
The Company revises quarterly its sensitivities to interest rates and foreign currency fluctuations. At the date of these
financial statements, the Company considers that the impact of these changes would not affect the ability as a going
concern, with appropriate measures undertaken in order to reduce any potential risks.
27.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. These are presented at amortised cost. The estimated fair
values of these instruments approximate their carrying amounts, largely due to the short-term maturities of these
instruments, except for loans.
The carrying amount of loans approximate their fair value considering the refinancing of the syndicated loan at the end of
2022, in which all the credit facilities were re-arranged in terms of both maturities and interest rates. The syndicated loan
covers around 98% of the total Company debt position 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 classified in the category of assets: 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 2022:
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 51
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
ASSETS
C ash and cash
equivalents
Amortized cost
15,141,431
15,141,431
15,141,431-
-
Trade Receivables
Amortized cost
66,525,981
66,525,981
--
66,525,981
Other financial assets
Amorti
z
ed cost 70,786,052 70,786,052--70,786,052
LIABILITIES
Trade and other
payables
Overdraft
Amortized cost
Amortized cost
122,505,239
9,894,800
122,505,239
9,894,800
- - 122,505,239
- - 9,894,800
Other long term debt
Amorti
z
ed cos
t
-----
Lease liability
Amortized cost
76,413,888
76,413,888
--76,413,888
Long term debt
Amortized cost
540,197,077
540,197,077
--540,197,077
Cla ssification
unde r I F RS 9 Carr y ing amount F air v alue
Le v e l 1 Le v e l 2 Le v e l 3
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 Company 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 3.20.
31 December 2022
Land and buildings
31 December 2021
Land and buildings
Note Le v el 1 Le v el 2
5 - -
Le v el 3
222,570,259
Note Le v el 1 Le v el 2
5 - -
Le v el 3
158,296,673
During 2022, we have included a separate presentation for Leasehold improvements, apart from the Constructions
category.
There were no transfers between levels during the year.
-Valuation techniques used to determine level 3 fair values are presented in note 5. -
Valuation inputs and relationships to fair value are presented in note 5.
28.COMMITMENTS AND CONTINGENCIES
Contingent liabilities are not recognized in the individual 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 individual
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, 2022 and December 31, 2021, the Company 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 Company 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 9,554,521 out of which in EUR 91,309
as of December 31, 2022 (December 31, 2021: RON 1,887,804, equivalent of EUR 110,182).
In relation with further acquisition of companies, on 4 October 2022 the Company, as part of the Group Medlife, signed the
sale-purchase agreement with Ovidiu Nicolae Palea, Ada Palea and Nicolae Palea regarding the acquisition of 51% shares
in Centrul de Diagnostic si Tratament Provita SRL also known as Nord Group. The transaction was approved by the
Competition Council and the closing process is currently ongoing as of the date of this reporting.
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.
MED LIFE S.A.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless otherwise specified)
The accompanying notes are an integral part of the indivudual financial statemetns. | page 52
The English version of the consolidated financial statements represents a translation of the original individual financial statemetns issued in Romanian language
In Romania the statute of limitation for tax controls (audits) is of 5 years. During 2021, the Company had a tax control
which covered period from 2016 to 2020. The control was finalised during 2021 and the results were booked in
accounting. 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 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. Transactions with related parties and group companies are carried out on the basis of 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 consolidated
financial statements.
29.FEES TO AUDITORS
Starting with 2021, the auditor of the Company is Ernst & Young Assurance Services SRL.
The fee for the audit services of the consolidated financial statements as of December 31, 2022 of the Group prepared in
accordance with IFRS as adopted by EU and the individual financial statements as of December 31, 2022 of Med Life SA
prepared in accordance with IFRS in line with the provisions of Ministry of Finance Order number 2844/2016, as well as
th e audi t service s of th e other individua l financial statements of subsidiarie s prepare d i n accordanc e with th e provisions of
Ministry of Finance Order number 1802/2014 was EUR 292,775 excluding VAT and other expenses.
The fee for other non-audit services performed in 2022 (in accordance with ISRS 4400) was EUR 18,525, excluding VAT.
30.EVENTS AFTER THE BALANCE SHEET DATE
There were no significant events subsequent to December 31, 2022.
These financial statements, comprising the individual statement of financial position, the individual statement of
comprehensive income, the individual statement of changes in equity, the individual statement of cash flows and notes,
were approved on March 27, 2023.
Mihail Marcu,
CEO
Alina Irinoiu,
CFO