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

5

22

23

23

23

24

25

25

28

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

6

2023

2022

104,269,629

443,801,945

443,801,945

These separate financial statements have been approved to be issued by management at March 21, 2024:

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

7

Note

1. GENERAL INFORMATION

ELECTROMAGNETICA SA is a company organized according to Romanian legislation that was founded in 1930 and operates in

several fields, the most important being:

assurance. The main products are as follows:

• LED lighting systems

• electric car charging stations

• electrical and electronic subassemblies, automotive, etc

• metal and plastic subassemblies

• railway traffic safety equipment

The headquarters of the company is located in Calea Rahovei no.266-268, 5

district, Bucharest.

0.2240

0.1856

The evolution of the average number of employees of Electromagnetica was as follows:

2022

368

These separate financial statements of Electromagnetica have been authorized for issuance by management on March 13,

Declaration of conformity

The company's separate financial statements were prepared in accordance with the International Financial Reporting Standards

adopted by the European Union ("IFRS") in force at the company's reporting date, namely 31 December 2023 and in accordance

with the provisions of the Order of the Minister of Public Finance no. 2844/2016, for the approval of accounting regulations in

accordance with International Financial Reporting Standards, applicable to companies whose securities are admitted to trading on a

regulated market, with subsequent amendments and clarifications. These provisions comply with the requirements of International

Financial Reporting Standards adopted by the European Union.

The Company also prepares consolidated financial statements, as it holds investments in subsidiaries.

2. BASICS OF PREPARATION (continued)

Declaration of conformity (continued)

The financial statements were prepared based on the principle of business continuity, which implies that the company will be able

to realize its assets and pay off its debts under normal business conditions.

Basics of preparation

Separate financial statements were prepared on the basis of historical cost, with the exception of fixed assets and fixed

investments that are presented using the revaluation method. Historical cost is generally based on the fair value of consideration

made in return for assets.

Transactions denominated in foreign currency are recorded in RON at the official exchange rate as of the settlement date of the

transaction. The monetary assets and liabilities recorded in foreign currency at the date of the Financial Statement are expressed in

RON at the rate of that day. Gains or losses from their settlement and the conversion of monetary assets and liabilities

denominated in foreign currency using the exchange rate at the end of the period under review shall be recognised in the year-end

result. Non-monetary assets and liabilities that are valued at historical cost in foreign currency are recorded inron at the exchange

rate from the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency that are measured at

fair value are recorded in RON at the rate of the date on which the fair value was determined.

Conversion differences are shown in the profit or loss account.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Leasing

assets (less than RON 24,500).

For these leases, the company recognizes payments as operating expenses linearly over the duration of the lease.

Electromagnetics frames as leases those aimed at renting premises. Since the lease is carried out for periods of one year or more

they are treated in a unitary manner by recognising a right of use of the asset and a lease liability.

The company evaluates whether a contract is or contains a lease clause at the beginning of the contract.

At the start date of the lease, the company recognizes the lease liabilities, measured at present value with the marginal borrowing

to the right to use the underlying asset during the lease that are not paid at the date of commencement of the lease:

lease term; or

described in IFRS 16 in the context of an option to buy.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Leasing (continued)

determines the revised lease payments to reflect the change in amounts that are expected to be due under the residual value

guarantee.

including, for example, a change reflecting changes in market rates of rents as a result of a review of market rents. The lessee

must reassess the debt arising from the lease to reflect those revised lease payments only when a change in cash flows occurs

(i.e. when the adjustment of lease payments occurs). The company determines revised lease payments for the remainder of

Borrowing costs consist of interest on loans that are directly attributable to the acquisition, construction or production of a long

production cycle asset and are capitalised until the asset is ready for pre-determined use or sale.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Employee benefits

unemployment fund, in the course of normal activity. All employees of the company are members and have the obligation to

contribute to the pension system of the Romanian state. All related contributions are recognised in the profit and loss account of

the period when they are made. The company has no other additional obligations. Obligations with short-term benefits granted to

Deferred tax is made up of temporary differences in assets and liabilities.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Property, plant and equipment

The cost of self-built assets includes wage, material, indirect production costs and other costs directly attributable to bringing the

assets to their current location and condition.

The company opted to use for valuation after initial recognition of tangible assets the model of reassessment.

Land and buildings used in the production activity or for the supply of goods and services, or for administrative purposes are

presented in Statement of financial position at cost minus cumulative depreciation and minus cumulative impairment losses.

If the cost of the land includes costs of decommissioning, removal, restoration, these costs are amortized during the period when

benefits are obtained as a result of carrying out these costs.

for the purposes for which they were intended.

Depreciation also begins when assets are available for use.

Land and buildings are separable assets and are accounted for separately even when acquired together.

Owned land does not pay off.

The residual value, estimated useful life and amortisation method shall be reviewed at the end of each reporting period, any

change of which shall be accounted for prospectively.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Investment property

Intangible assets

Intangible assets with a finite life that are purchased separately are initially recognized at cost and are subsequently accounted for

at cost minus cumulative depreciation and impairment loss. Depreciation is recognized linearly throughout their useful lives. The

useful life for this group of fixed assets is from 3 to 5 years. Their useful life and depreciation method are reviewed at the end of

each reporting period, with the effect that any changes in estimates are accounted for on a forward-looking basis.

An Internally Generated body immobilisation resulting from development (or from the development stage of an internal project) is

recognised if all of the following criteria have been demonstrated:

intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised,

development expenses are recognised in profit and loss during the period in which they are incurred.

After initial recognition, internally generated intangible assets are incurred at cost less cumulative amortization and cumulative

impairment loss on the same basis as separately acquired intangible assets.

An intangible asset is derecognised upon disposal or when it is expected that no benefit will be derived from its use or disposal.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Impairment of tangible and intangible assets

For assets representing tangible assets, if there is an indication or when an annual impairment test is required, the company

estimates the recoverable value of the asset as the greater of fair value less selling costs and its use value.

In the use value assessment, estimated future cash flows are discounted to present value using a discount rate that reflects current

market assessments of the time value of money and the risks specific to the asset or cash generating units.

Where the net carrying value of an asset or cash-generating unit exceeds its recoverable value, the asset is considered impaired

and an impairment loss is recognised to reduce the asset value to the level of recoverable value.

Major maintenance and repairs

Capital inspection and repair costs are separate components of the corresponding assets or groups of assets. Capitalized capital

repair costs are amortized using the amortization method for the underlying asset until the next repair.

Costs of major repair activities include the cost of replacing assets or parts of assets, inspection costs and capital repair costs.

These costs are capitalized if an asset or part of an asset that has been separately depreciated is replaced and it is likely that it will

bring future economic benefits. If a part of the replaced asset has not been considered a separate component and has therefore

not been written off separately, the replacement value shall be used to estimate the net carrying value of the replaced asset that is

Inventories

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Inventories (continued)

For inventories of raw materials and materials, as well as for the inventories of finished products, adjustments shall be made on the

basis of the approved provisioning policy. The establishment and resumption of adjustments for depreciation of inventories are

booked in the statement of profit and loss of the period.

Prepayment expenses

Prepayment expenses are amounts usually paid in advance for services that cover a period of up to a year or more. The part aimed

at the period up to one year is reflected in the statement of financial position to current assets. The portion exceeding one year is

reflected in non-current assets.

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. Financial instruments are recognised on the balance sheet when the company becomes a party to the contractual

obligations of the instrument. The company determines the classification of its financial assets and liabilities upon initial

recognition.

For a financial asset to be classified and measured at amortized cost or fair value by comprehensive result, it must give rise to cash

flows that are exclusively principal and interest payments on the outstanding principal amount. This assessment is referred to as

the SPPI test and is performed at the instrument level.

For assets measured at fair value, gains and losses will be recorded in the profit and loss account, or overall result. For investments

in equity instruments that are not held for trading, this will depend on whether the company made an irrevocable choice at the

time of initial recognition to account for the equity investment at fair value through another comprehensive income (FVOCI).

A financial asset and a financial liability are offset and the net amount is reported in the statement of financial position if, and only

if, the company has a legally enforceable right to offset the amounts recognized and intends to either settle on a net basis or realize

the asset and extinguish the liability simultaneously.

the rights to receive cash flows from the asset have expired; or the company has transferred its rights to receive cash flows from

agreement; and either: (a) the company has transferred substantially all the risks and benefits of the asset; or (b) the company has

neither transferred nor substantially withheld all risks and benefits of the asset, but transferred control over the asset.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Financial instruments (continued)

Cash and cash equivalents

Cash and cash equivalents include highly liquid investments that are easily convertible into cash and are subject to insignificant risk

of change in value. Such an investment includes cash, cash balances with banks and short-term bank deposits with a maturity of up

to one year.

Cash and cash equivalents are subject to depreciation calculations, however, the amounts are insignificant, since the amounts are

held at such reputable banks as BCR, OTP.

Other financial assets at amortized costs

Commercial and other receivables

Trade receivables assessed in accordance with IFRS 9 are amounts owed by the company's customers for products sold by the

company in the normal course of business. They are generally due for settlement within 30-120 days and are therefore all classified

as current. Trade receivables are initially recognised at consideration under IFRS 15 which is unconditional unless they contain

significant funding components, in which case they are recognised at fair value at the date of initial recognition. The company holds

the trade receivables with the objective of collecting the contractual cash flows and therefore subsequently assesses them at

amortized cost using the effective interest method.

the profit and loss account. The expected credit losses over the lifetime of the receivables, as well as the adjustments recorded for

receivables older than 90 days analyzed individually and those for specific losses recorded in the current year, are classified as other

expenses.

more than one year, they are classified as non-current assets.

The fair value of financial instruments that are not traded on an active market is determined using valuation techniques. The

company uses its reasoning to select a variety of methods (including investee performance, annual budget and plan, external equity

transactions of investees and enterprise value using future cash flows) and to make assumptions that are based primarily on

market conditions at the end of each reporting period.

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Financial instruments (continued)

substantially changed, such exchange or change shall be treated as derecognition of the original liability and recognition of a new

liability , and the difference between those carrying amounts shall be recognised in profit or loss.

Interest-bearing loans and loans

All loans are initially recognized at the fair value of the consideration received, net of transaction costs, and are subsequently

measured at amortized cost using the effective interest rate method. The effective interest rate is the rate that exactly updates the

expected future cash payments over the expected life of the financial debt or, as the case may be, over a shorter period. The

calculation takes into account any discount on the purchase and includes transaction costs and commissions that are an integral

part of the effective interest rate.

difference between the fair value of the proceeds (net of transaction costs) and the redemption amount is recognized as an

expense over the period of the loans.

Derivatives

Derivatives are initially recognised and subsequently revalued at fair value. The company has no significant derivatives.

Government subsidies

Under IAS 20, government subsidies are only recognised when there is sufficient certainty that all the conditions attached to

the company will be required to extinguish the obligation, and a credible estimate of the amount of the obligation can be made. .

The amount recognised as a provision is the best estimate of the consideration required to extinguish the obligation at the end of

Provision for customer guarantees it is formed according to the estimates made by the management and the departments sales,

technical and quality on the level of expenses for repairs within the warranty period. The level of repair expenses during the

4. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

4.1. Significant accounting policies (continued)

Provisions (continued)

receive compensation for the termination of their activity, implicit expenses, the date on which the restructuring plan

will be implemented

implementation of that restructuring plan or by communicating its main characteristics to those who will be affected by

the restructuring process.

The restructuring provision includes only direct restructuring-related expenses.

Segment reporting

Takink into account that the shares of the Parent Company are traded on the Bucharest Stock Exchange and that it applies IFRS, it is

presented in the annual financial statements as well as in the interim reports made according to IAS 34 – Interim Financial

Reporting, information about the activity segments, about their products and services and about the main customers.

According to IFRS 8-business segments, a business segment is a component of an entity:

income related to transactions with other components of the same entity);

on the allocation of resources by segment and assessing its performance, and

Dividends

Dividends are recorded as liabilities in the company's financial statements during the period in which they are approved by the

company's shareholders and are appropriately reflected by the decrease inretained earnings.