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Zentiva SA
Financial statements
FOR THE YEAR ENDED
31 December 2023
Prepared in accordance with Order of the Minister of Public Finance no. 2844/2016
approving the accounting regulations compliant with the International Financial
Reporting Standards, with subsequent amendments
Translation of the Company’s financial statements and management report
issued in the Romanian language.

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ZENTIVA SA
FINANCIAL STATEMENTS
Prepared in accordance with
Minister of Public Finance Order 2844/2016
for the year ended 31 December 2023
TABLE OF CONTENTS
STATEMENT OF COMPREHENSIVE INCOME........................................................................................... 3
STATEMENT OF FINANCIAL POSITION ..................................................................................................... 4
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY ...................................................................... 5
STATEMENT OF CASH FLOWS .................................................................................................................. 7
1. INFORMATION ABOUT THE COMPANY ................................................................................................ 8
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS ........................................................... 9
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS ............................23
4. STANDARDS, AMENDMENTS AND NEW INTERPRETATIONS OF STANDARDS ............................24
5. SALES OF GOODS AND RENDERING OF SERVICES AND RAW MATERIAL AND CONSUMABLES
EXPENSES .................................................................................................................................................27
6. OTHER INCOME / OTHER EXPENSES AND ADJUSTMENTS ............................................................29
7. CURRENT TAX AND DEFERRED TAX .................................................................................................32
8. EARNINGS PER SHARE ........................................................................................................................33
9. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS .............................................34
10. INTANGIBLE ASSETS ..........................................................................................................................38
11. GOODWILL AND CUSTOMER RELATIONSHIPS ...............................................................................38
12. INVENTORIES ......................................................................................................................................40
13. TRADE RECEIVABLES AND OTHER RECEIVABLES; ADVANCES AND PREPAYMENTS .............41
14. CASH AND CASH EQUIVALENTS .......................................................................................................43
15. CASH POOLING INTERCOMPANY RECEIVABLE .............................................................................43
16. ISSUED CAPITAL AND RESERVES ....................................................................................................44
17. DIVIDENDS DISTRIBUTED AND PAID ................................................................................................45
18. PROVISIONS ........................................................................................................................................46
19. PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS ...................................................47
20. TRADE PAYABLES AND OTHER PAYABLES ....................................................................................49
21. RELATED PARTY DISCLOSURES ......................................................................................................50
22. CONTINGENCIES .................................................................................................................................53
23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES .....................................................55
24. STATUTORY AUDITOR EXPENSES ...................................................................................................58
25. EVENTS OCCURRING AFTER THE REPORTING PERIOD ..............................................................58

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ZENTIVA SA
STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
Explanatory notes from 1 to 25 form an integral part of these financial statements.
3
STATEMENT OF COMPREHENSIVE INCOME
Notes
2023
2022
RON
RON
Revenue from sales of goods
5.1
894,066,595
704,706,902
Revenue from rendering of services
5.1
59,566,489
54,923,968
Revenue
5.1
953,633,084
759,630,870
Other operating income
6.1
395,084
3,366,161
Changes in inventories of finished goods and work in progress
18,373,825
9,170,800
Raw material expenses, merchandise, consumables used and
utilities
5.2
(451,621,314)
(370,732,616)
Employee benefits expenses
6.5
(162,197,973)
(135,032,946)
Depreciation, amortization and impairment
9 - 11
(31,701,874)
(30,296,757)
Marketing and advertising expenses
6.6
(9,924,589)
(5,968,891)
Reversal of/ (expenses with) provisions
18,19
1,117,499
(3,205,975)
Other operating expenses
6.2
(133,558,810)
(140,600,303)
Operating profit
184,514,933
86,330,344
Financial Income
6.4
41,829,109
35,258,118
Financial Expenses
6.3
(4,518,761)
(6,603,544)
Profit before income tax
221,825,281
114,984,918
Income Tax Expense
7
(29,209,449)
(15,519,714)
Net profit for the year (A)
192,615,832
99,465,204
Other comprehensive income:
Other comprehensive income that will not be reclassified to
profit or loss in subsequent periods:
Impact from revaluation of land and buildings
9.1
-
10,884,283
Deferred tax impact on pension/revaluation recognized in equity
7.2
174,384
(1,741,485)
Other comprehensive income items
19
(882,309)
(26,037)
Other comprehensive income net of tax (B)
(707,925)
9,116,761
Comprehensive income for the year (A) + (B)
191,907,906
108,581,965
Net earnings per share (RON/share)
8
0.28
0.14
The financial statements from page 3 to page 58 were approved by the Board of Directors and were
authorized to be issued in accordance with the resolution of the Directors dated 27 March 2024.
Administrator,
Simona Cocos
Signature
Company stamp

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ZENTIVA SA
STATEMENT OF FINANCIAL POSITION
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
Explanatory notes from 1 to 25 form an integral part of these financial statements.
4
STATEMENT OF FINANCIAL POSITION
Notes
31 December
2023
31 December
2022
Assets
Non-current assets
Property, plant and equipment
9.1
220,505,720
212,594,512
Advances for equipment
9.1
8,652,051
5,907,878
Right-of-use assets
9.2
21,092,139
18,681,887
Goodwill
11
11,649,100
11,649,100
Customer relationships
11
16,925,260
20,374,470
Other intangible assets
10
2,948,351
3,114,287
Total Intangible assets
31,522,711
35,137,857
281,772,621
272,322,135
Current assets
Inventories
12
191,883,609
173,060,231
Trade receivables and other receivables
13
410,875,837
151,446,752
Advances and prepayments
13
3,847,896
13,642,385
Cash pooling intercompany receivables
15
583,820,497
583,511,187
Cash and cash equivalents
14
27,302,728
11,190,679
1,217,730,566
932,851,234
Total assets
1,499,503,187
1,205,173,370
Equity
Issued share capital
16
69,701,704
69,701,704
Share premium
16
24,964,506
24,964,506
Legal and other reserves
16
155,961,510
146,399,175
Revaluation reserve
16
67,069,892
67,069,892
Retained earnings
16
873,564,853
691,219,282
Total equity
1,191,262,465
999,354,559
Non-current liabilities
Contract liability
5.1
-
4,282,372
Employee benefit liability
19
7,173,565
5,947,909
Deferred tax liability
7.2
5,556,704
7,138,545
Lease liabilities
9.2
13,894,126
12,999,385
Provisions
18
1,265,568
1,265,568
Total non-current liabilities
27,889,963
31,633,780
Current liabilities
Contract liability
5.1
4,623,319
4,070,598
Trade payables and other payables
20
210,988,922
115,095,577
Income taxes payable
7.1
7,641,646
3,028,357
Short-term lease liabilities
9.2
7,261,482
5,811,596
Other current liabilities
20
46,251,580
41,593,377
Short-term provisions
18
3,583,810
4,585,527
Total current liabilities
280,350,759
174,185,032
Total liabilities
308,240,722
205,818,811
Total liabilities and equity
1,499,503,187
1,205,173,370
The financial statements from page 3 to page 58 were approved by the Board of Directors and were
authorized to be issued in accordance with the resolution of the Administrators dated 27 March 2024.
Administrator,
Simona Cocos
Signature

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ZENTIVA SA
STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
Explanatory notes from 1 to 25 form an integral part of these financial statements.
5
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
2023
Share capital
Share
premium
Legal and
other
reserves
Revaluation
reserve
Retained
earnings
Total
Opening balance at 1 January 2023
69,701,704
24,964,506
146,399,175
67,069,892
691,219,282
999,354,559
Profit for the year
-
-
-
-
192,615,832
192,615,832
Other comprehensive income:
Deferred tax impact of other comprehensive income items
-
-
-
-
174,383
174,383
Other comprehensive income
-
-
-
-
(882,308)
(882,308)
Total other comprehensive income
-
-
-
-
(707,925)
(707,925)
Total comprehensive income
-
-
-
-
191,907,906
191,907,906
Reserve for reinvested profit
-
-
9,562,335
-
(9,562,335)
-
Closing balance at 31 December 2023
69,701,704
24,964,506
155,961,510
67,069,892
873,564,853
1,191,262,465
The financial statements from page 3 to page 58 were approved by the Board of Directors and were authorized to be issued in accordance with the resolution of
the Directors dated 27 March 2024.
Administrator,
Prepared by
Simona Cocos
Daniel Nitulescu
Chief Financial Officer
Signature
Company stamp
Signature

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ZENTIVA SA
STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 December 2022
(amounts are expressed in RON, unless specified otherwise)
Explanatory notes from 1 to 25 form an integral part of these financial statements.
6
STATEMENT OF CHANGES IN SHAREHOLDRES EQUITY
2022
Share capital
Share
premium
Legal and
other
reserves
Revaluatio
n reserve
Retained
earnings
Total
Opening balance at 1 January 2022
69,701,704
24,964,506
121,743,815
57,927,094
616,435,475
890,772,593
Profit for the year
-
-
-
-
99,465,204
99,465,204
Other comprehensive income:
Increase in reevaluation reserve
-
-
-
10,884,283
-
10,884,283
Deferred tax impact on revaluation
-
-
-
(1,741,485)
-
(1,741,485)
Other comprehensive income
-
-
-
-
(26,037)
(26,037)
Total other comprehensive income
-
-
-
9,142,798
(26,037)
9,116,761
Total comprehensive income
-
-
-
9,142,798
99,439,167
108,581,965
Reserve for reinvested profit
-
-
24,655,360
-
(24,655,360)
-
Closing balance at 31 December 2022
69,701,704
24,964,506
146,399,175
67,069,892
691,219,282
999,354,559
The financial statements from page 3 to page 58 were approved by the Board of Directors and were authorized to be issued in accordance with the resolution of
the Directors dated 27 March 2024.
Administrator,
Prepared by
Simona Cocos
Daniel Nitulescu
Chief Financial Officer
Signature
Company stamp
Signature

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ZENTIVA SA
STATEMENT OF CASH FLOWS
for the financial year ended 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
Explanatory notes from 1 to 25 form an integral part of these financial statements.
7
STATEMENT OF CASH FLOWS
Note
31 December
2023
31 December
2022
Cash flows from operating activities:
Profit before tax
221,825,281
114,984,918
Depreciation and amortization
9,10,11
30,772,848
30,893,505
Impairment on property, plant and equipment
9.1
929,026
-
Reevaluation impact on property, plant and equipment
-
(596,748)
Allowance for trade and other receivables
13,15
251,807
(1,823,546)
Inventory allowance movement
12
(4,848,676)
(9,351,919)
Movements in provisions for risks and charges
18
(1,001,717)
790,168
Loss on sale of non-current assets
6.1
24,897
28,423
Write off of old advances paid to suppliers and trade payables, net
-
(212,678)
Interest revenues
6.4
(37,877,564)
(31,614,121)
Interest expenses
6.3
1,380,300
437,136
Operating profit before working capital changes
211,456,202
103,535,137
Change in inventories
(13,974,701)
(39,145,176)
Change in trade, other receivable and advances
(252,630,576)
(63,228,667)
Change in trade and other payable
96,715,915
35,066,115
Interest paid
(1,380,300)
(437,136)
Cash generated from operating activities
40,186,540
35,790,274
Income tax paid
7.1
(26,003,618)
(15,199,349)
Net cash from operating activities
14,182,922
20,590,925
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets
9.1,10
(28,319,718)
(27,415,096)
Cash pooling movement
(309,310)
(70,877,522)
Interest received
37,877,564
31,614,121
Net cash from/ (used) in investing activities
9,248,537
(66,678,496)
Cash flows from financing activities
Dividends paid
-
-
Lease payments
9.2
(7,319,410)
(5,319,378)
Net cash used in financing activities
(7,319,410)
(5,319,378)
Net increase (decrease) in cash and cash equivalents
16,112,049
(51,406,949)
Cash at the beginning of the period 1 January
11,190,679
62,597,628
Cash at the end of the period 31 December
27,302,728
11,190,679
The financial statements from page 3 to page 58 were approved by the Board of Directors and were
authorized to be issued in accordance with the resolution of the Directors dated 27 March 2024.
Administrator,
Simona Cocos
Signature
Company stamp

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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
8
1. INFORMATION ABOUT THE COMPANY
These financial statements of Zentiva SA (the "Company") for the year ended on 31 December 2023 are
authorized for publication in accordance with the Board of Directors' Decision dated 27 March 2024.
The Company, previously named SICOMED SA Bucharest ("Sicomed") was founded in 1962 as
Intreprinderea de Medicamente BUCURESTI (“IMB”). The current registered office of the Company is
located in B-dul Theodor Pallady nr.50, Bucharest. The Company is registered with the Trade Register
under no. J40/363/1991.
In 1990, Sicomed became a joint stock company by incorporating and taking over all the assets of the
former IMB in accordance with the Government Decision. The initial share capital was the result of the
difference between assets, including specific valuations of land and buildings donated by the State to the
Company in accordance with the Government Decision, and liabilities held as of the same date.
In October 2005, the majority stake in the company was acquired by Zentiva Group (a group in the
pharmaceutical industry operating in Central and Eastern Europe) by acquiring shares held in Venoma
Holdings Limited. Zentiva Group has control over the Company's operations.
Starting with 24 January 2006, the Company changed its name from Sicomed SA to Zentiva SA.
Starting with 11 March 2009, there was a change in the shareholding structure at the group level (Sanofi
Aventis acquired 97% of Zentiva NV shares - parent of the Company).
The main activity of the Company is the production and marketing of preparations and medicines for human
use.
Starting with 2007, a decision was taken at the Zentiva Group level, and as a result the Company started
its trading operations through its subsidiary in Romania, namely Zentiva International (incorporated in
Slovakia) ("ZIRO") and, as such, the Romanian market (i.e. distributors) was supplied with the Company's
products through ZIRO. Starting with 1 October 2011, sales are made directly through Sanofi Romania SRL
entity and after that date, ZIRO became an entity with no activity, and was to be liquidated.
On 20 February 2018, Zentiva SA launched the public purchase offer by Zentiva NV of the shares owed by
minority shareholders, in a percentage of 18.4067% at a purchase price of RON 3.5 / share. The public
purchase offer was concluded on 5 April 2018. The shares redeemed through this offer were primarily the
ones owned by KJK Fund II, the NN Optional Active Pension Fund, the NN Optional Optimal Pension Fund
and the NN Privately Administered Pension Fund.
At the end of October 2016, Sanofi Group announced, after an analysis of all the available options, the
initiation of its European generic medicine’s division carve out.
As of that date, Zentiva SA was included in this separation process that was finalized on
September 30, 2018, when Advent International NV purchased the European generic medicine division of
Sanofi Group.
Starting with 1 September 2018, Sanofi Romania SRL, who was up until that time the distributor of generic
medicine produced by Zentiva SA on the Romanian market, transferred its distribution activity to Zentiva
SA, based on the distribution activity transfer contract, which was approved on 7 March 2019 by the General
Meeting of the Shareholders of Zentiva SA.
Following this, Zentiva started the direct distribution in Romania of generic medicines both produced in
Romania, as well as imported from other entities from the Group. The local market distribution is done by
local distributors - for more details please go to the comments included in Note 11 – Goodwill and Customer
Relationship.

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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
9
1. INFORMATION ABOUT THE COMPANY (continued)
The Company is listed on Bucharest Stock Exchange.
The Company has no investments in subsidiaries or associated companies as of 31 December 2023. The
Company is part of a group and is at its turn consolidated in the Group's Financial Statements, the
consolidated parent company being AI Sirona (Luxembourg) Acquisition S.a.r.l.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
Statement of compliance
The Company's financial statements have been prepared in accordance with the provisions of Order No.
2844/2016 approving the accounting regulations compliant with the International Financial Reporting
Standards applicable to companies whose securities are admitted to trading on a regulated market with all
subsequent amendments and clarifications. These provisions are in line with the provisions of the
International Financial Reporting Standards endorsed by the European Union, except for the provisions of
IAS 21 The Effects of Changes in Foreign Exchange Rates regarding the functional currency, of IAS 20
Accounting of Government Grants regarding the recognition of revenue form green certificates, with the
exception of IFRS 15 - Revenue from Contracts with Customers regarding the revenue from distribution
network connection charges. In order to prepare these financial statements, in accordance with the
Romanian legal provisions, the functional currency of the Company is considered to be the Romanian Leu
(RON).
2.1 Going Concern
These financial statements have been prepared on a going concern basis, which assumes that the
Company will continue its activity in the foreseeable future. To assess the applicability of this assumption,
the management analyses the forecasts of future cash inflows.
As of 31 December 2023, current assets of the Company exceed current liabilities by RON 937,379,807
(as of 31 December 2022 current assets exceeded current liabilities by RON 758,666,203). At the same
date, the Company recorded a profit for the year of RON 192,615,832 (2022: RON 99,465,204).
The budget prepared by the management of the Company for the year 2024, indicates positive cash flows
from the operating activities, an increase in sales and profitability from the direct distribution on the
Romanian market of generic medicine produced locally as well as the ones imported from other entities of
the Group to which the Company belongs.
The ongoing war in Ukraine and the related sanctions targeted against the Russian Federation have a
continuous impact on the European economies and globally. The entity does not have any significant direct
exposure to Ukraine, Russia or Belarus or Gaza/Hamas. However, the impact on the general economic
situation may require timely revisions of certain assumptions and estimates (cost of energy, cost of raw
materials and the overall impact of inflation pressure).
The management considers that the Company will be able to continue its activity in the foreseeable future
and therefore the application of the going concern principle in the preparation of the financial statements is
reasonable.

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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
10
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
2.2 Summary of accounting policies
The following are the material accounting policies applied by the Company in preparing its financial
statements:
➢ Foreign currency translations
The Company's financial statements are presented in RON, which is also the functional currency.
Foreign currency transactions are translated into RON using the exchange rate prevailing at the transaction
date. Monetary assets and liabilities expressed in foreign currency at the end of the period are assessed in
RON using the exchange rate prevailing at the end of the financial year. The gains and losses realized or
unrealized are charged to the profit or loss. The exchange rates as of 31 December 2023 were RON / EUR
4.9746 and RON / USD 4.4958. The exchange rates as of 31 December 2022 were RON / EUR 4.9474
and RON / USD 4.6346.
The exchange rates differences, favorable or unfavorable, between the exchange rate at the recording date
of the receivables and payables in foreign currency or the exchange rate at which they were reported in
previous financial situations and the exchange rate at the end of the fiscal year, shall be recorded under
financial income or expense, where appropriate.
➢ IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers establishes a five steps model to account for revenue
arising from contracts with customers. Under IFRS 15, revenue is recognized at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods or services to a
customer.
Revenue from sales of goods
In accordance with IFRS 15, the revenue is recognized when control of the goods is transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in
exchange for those goods. The Company delivers goods (mainly generic medicines) under contractual
conditions based on internationally accepted delivery conditions (INCOTERMS). The point in time when
the customer obtains control over the goods is considered to be substantially the same for most of the
Company's contracts under IFRS 15.
The Company concluded that revenue should be recognized at a point in time when asset control is
transferred to the customer, generally on delivery of the goods.
Variable consideration
Some client contracts involve rebates for volume, financial discounts, price concessions, or the right of
return for quality claims. Currently, the revenue from these sales is recognized based on the price specified
in the contract, net of returns and allowances, trade discounts, and volume rebates booked on an accrual
basis when a reasonable estimate of the revenue adjustments could be made.
In accordance with IFRS 15, it is necessary to estimate the variable consideration at the inception of the
contract. The revenue is recognized to the extent that it is highly probable that a significant reversal of the
amount of recognized cumulative revenue will not occur. Consequently, for those contracts for which the
Company is not able to make a reasonable estimate of the discounts, revenue will be recognized earlier
than when the return period lapses or when a reasonable estimate can be made. In order to estimate the
variable consideration to which it would be entitled, the Company applied the expected value method. At
the same time, cases of quality claims (rights of return) are isolated and insignificant, based on the
information from past periods, so that the Company cannot make a reasonable estimate of such revenue
reversals at the end of the year.

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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
11
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Principal versus agent considerations
In accordance with IFRS 15, the assessment is based on whether the Company controls specific goods
before transferring them to the end customer, rather than whether they have exposure to significant risks
and rewards associated with the sale of goods. The Company have concluded that they are the principal
in most of the contractual sales arrangements because they are the primary obligor in all revenue
arrangements, have pricing latitude and are exposed to inventory risks. In the specific cases of the
contractual arrangements where the Company does not control the goods before being transferred to the
end customer, it acts as an agent.
Recognition of revenue from distinct performance obligations
The Company have analyzed its contracts with the clients in order to determine all its performance
obligations and they have not identified any new performance obligation that should be accounted for
separately in accordance with IFRS 15.
The Company provides various services as secondary activity. The revenue is evaluated at the expected
value of the consideration received or to be received. In accordance with IFRS 15, the total consideration
in the services contracts is allocated to all services based on their standalone selling prices. The individual
selling prices are set based on the list prices at which the Company sell the services in separate
transactions. Based on the evaluation of the Company the value allocated based on to the relative individual
selling prices of the services and the standalone selling prices of the services are broadly similar.
Revenue from Rendering of services
The Company is engaged in providing certain support function services to its affiliated companies (i.e. its
customers). Revenue from these contracts is recognized when control of services is transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in
exchange for those services.
The Company recognises revenue from these services over time, as it progresses towards complete
satisfaction of the service, because the customer simultaneously receives and consumes the benefits
provided by the Company. If the contracts include fees for various activities performed, revenue is
recognised in the amount to which the Company has a right to invoice. Revenues related to services
rendered are recognised in the period in which the services were rendered based on statements of work
performed, regardless of when paid or received, in accordance with the accrual basis.
➢ Other operating income
Other operating income includes income/gains from all other operating activities which are not related to
the ordinary activities of the Company, such as gains/losses from sales of assets, etc.
➢ Interest income
The income from interest is accrued on a time basis, by reference to the principal and at the applicable
effective interest rate, meaning the rate that exactly discounts future cash receipts estimated over the
expected life of the financial assets to the net carrying amount of the financial assets at the date of its initial
recognition. The income from interest is included in the profit or loss under financial income.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
12
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
➢ Taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the reporting date in Romania.
Current income tax relating to items recognized directly in equity is recognized in equity and not in the profit
or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amount for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, unless:
➢ The deferred tax liability arises from the initial recognition of the goodwill or an asset or a liability in
a transaction that is not a business combination and, at the time of the transaction, does not affect
either the accounting profit or the taxable profit or loss.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable
that taxable profit will be available against which the deductible temporary differences and the carry forward
of unused tax credits and unused tax losses, can be utilized, except:
➢ When the deferred tax asset related to deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, does not affect either the accounting profit or the taxable profit or loss.
Deferred tax assets and liabilities are assessed at the tax rates that are expected to apply in the period
when the asset is realized or the liability is settled based on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting date.
Deferred tax on elements recognized outside profit or loss is recognized outside profit or loss. Deferred tax
items are recognized in correlation to the underlying transaction in other comprehensive income or directly
in equity.
The Company offsets deferred tax assets and deferred tax liabilities in the statement of financial position,
since a legally enforceable right exists for the Company to offset current tax assets against current income
tax liabilities and the deferred taxes relate to the same taxation authority.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
13
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Value added tax
Income, expenses and assets are recognized net of VAT, with the exception of:
➢ Where the sales tax applicable to a purchase of assets or services is not recoverable from the
taxation authority, in which case the sales tax is recognized as part of the cost of acquiring the
asset or as part of the expenditure item, as the case may be.
➢ Where receivables and payables are disclosed at a value including the sales tax.
The net amount of the sales tax recoverable from or payable to the taxation authority is included as part of
the receivables and payables in the statement of financial position.
Property, plant and equipment
Initial recognition
Tangible assets are valued at cost, net of accumulated depreciation and / or accumulated impairment
losses, if any.
This cost includes the cost of replacing the part of the property, plant and equipment and borrowing costs
for long-term construction projects if the recognition criteria are met.
When significant parts of property, plant and equipment have to be replaced at certain intervals, the
Company recognizes those parts as individual assets with a specific useful life and depreciates them
accordingly. Also, when carrying out a general inspection, its cost is recognized in the carrying amount of
the tangible assets as a replacement if the recognition criteria are met. All other repair and maintenance
costs are recognized in the profit or loss as incurred. The present value of expected costs for
decommissioning an asset after its use is included in the cost of that asset if the criteria for recognizing a
provision are met.
The cost of an item of property, plant and equipment consists of:
➢ its purchase price, including import duties and non-refundable purchase taxes, after deduction of
trade discounts and rebates.
➢ any costs that can be attributed directly to bringing the asset to the location and condition necessary
to enable it to function as intended by the management.
➢ the initial estimate of the costs of dismantling and moving the item and restoring the site where it
is located, the obligation of the entity when acquiring the item or as a consequence of using the
item for a specified period for purposes other than producing inventories during that period.
Subsequent measurement
Land and buildings are valued at fair value less accumulated depreciation on buildings and impairment
losses recognized as at the valuation date. Valuations are performed with sufficient frequency to ensure
that the fair value of the revalued assets does not differ significantly from their net book value.
A revaluation surplus is recorded in other comprehensive income and credited to the assets revaluation
reserve, in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously
recognized in the profit or loss, the increase is recognized in the profit or loss. A revaluation deficit is
recognized in the profit or loss if it does not offset an existing surplus on the same asset recognized in the
assets revaluation reserve. Additionally, accumulated depreciation as at the revaluation date is eliminated
from the carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
The revaluation reserve that relates to an asset being sold or discarded is transferred to retained earnings
in that year.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
14
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Land and buildings owned by the Company were revalued on 31 December 2022 by an independent
valuation specialist.
The other categories of property, plant and equipment are valued at historical cost, less any depreciation
and any impairment adjustments.
Depreciation method
Depreciation is calculated using:
➢ the straight-line method for buildings and equipment not related to production capacity;
➢ the reducing balance for equipment related to the production capacity.
Useful lives
The economic useful life is the period of time over which an asset is expected to be used by a company.
The economic useful life of property, plant and equipment was determined by specialized employees.
The land is not depreciated.
The average useful life’s by categories of property, plant and equipment are as follows:
Years
Buildings
30 - 50
Production equipment
5 - 20
Vehicles
5
The Company estimates the useful life of the property, plant and equipment elements in line with the
consumption/ usage rate for those assets. Residual values, useful lives and methods of depreciation
methods of property, plant and equipment are reviewed at the end of each financial year and adjusted
accordingly. In particular, the Company considers the impact of health, safety and environmental legislation
in its assessment of expected useful lives and estimated residual values. Furthermore, the Company
considers climate-related matters, including physical and transition risks. Specifically, the Company
determines whether climate-related legislation and regulations might impact either the useful life of residual
values, e.g., by banning of restricting the use of the Company`s fossil fuel-driven machinery and equipment
or imposing additional energy efficiency requirements on the Company`s buildings and office properties.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefit
is expected from its use or at disposal. Any gain or loss arising on derecognition of an asset (calculated as
the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
profit or loss when the asset is derecognized.
➢ Leases
The Company assesses at the commencement of the contract whether the contract is or contains a lease,
i.e., whether the contract conveys the right to control the use of an identified asset for a certain period of
time in exchange for consideration.
The Company as a lessee
The Company applies a single recognition and assessment approach for all leases, except for short-term
leases and leases of low-value underlying assets. The Company recognizes lease liabilities for performance
of lease payments and the right-of-use assets which represent its right to use the underlying assets.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
15
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Recognition of the right-of-use assets
The Company recognizes the right-of-use assets at the commencement date of the lease (i.e., the date on
which the underlying asset is available for use). The right-of-use assets are measured at cost, less any
accumulated amortization and cumulated impairment losses and adjusted for any revaluation of lease
liabilities. The cost of the right-of-use assets includes the amount of the initial valuation of lease liabilities,
the initial direct costs incurred, and the lease payments made at or before the commencement date, less
any lease incentives received.
The right-of-use assets are depreciated over the shorter of the lease term or the estimated useful life of the
assets, as follows:
Years
Buildings
3
Machinery, tools and equipment
3 - 7
If the ownership right over the leased asset is transferred to the Company at the end of the lease term or
the cost reflects the exercise of a purchase option, the amortization is calculated using the estimated useful
life of the asset.
The right-of-use assets are also subject to impairment, according to the policy for impairment of non-
financial assets described below.
Lease liabilities
On the commencement date of the lease, the Company recognizes lease liabilities measured at the present
value of lease payments to be made over the term of the lease. Lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments are
based on an index or rate and amounts expected to be paid under residual value guarantees. Lease
payments also include the exercise price of a purchase option, if the Company is reasonably certain to
exercise that option and payment of penalties for terminating the lease, if the lease term reflects the
Company exercising an option to terminate the lease. Variable lease payments that are not based on an
index or rate are recognized as expenses in the period in which the event or condition triggering the
payment takes place.
When calculating the present value of the lease payments, the Company uses the incremental borrowing
rate at the commencement date of the lease agreement, if the implicit interest rate on the lease agreement
cannot be easily determined. After the lease commencement date, the value of lease liabilities is increased
to reflect the interest and decreased with the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a change in the lease term, a change in lease payments (for
example, changes in future payments resulting from a change in the index or rate used to determine those
lease payments) or a change in the assessment of a purchase option for the underlying asset.
Short-term lease and leases of low-value assets
As at 31 December 2023 and 2022, the Company does not have any short-term leases and leases of low-
value underlying assets.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
16
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
➢ Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less any accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs,
are not capitalized and expenditure is reflected in profit or loss in the period in which the expenditure is
incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortization period and the
amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortization period or method, as
appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible
assets with finite lives is recognized in the profit or loss under the line ”Depreciation, amortization and
impairment” .
Years
Software
3
Research and development costs
3
Customer relationship
10
Licenses
2 - 10
Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are
recognized as intangible assets when the Company can demonstrate:
➢ The technical feasibility of completing the intangible asset so that the asset will be available for use
or sale;
➢ Its intention to complete the intangible asset and its ability to use or sell the asset;
➢ How the intangible asset will generate future economic benefits;
➢ The availability of resources to complete the asset;
➢ The ability to measure reliably the expenditure during the intangible development.
The amortization of the intangible begins when the development is complete and the asset is available for
use.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
17
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Goodwill and customer relationships
The goodwill generated by a business combination is carried at cost as it was established at the acquisition
date of the business less accumulated impairment losses, if any. For the purpose of impairment testing, the
goodwill is allocated to each cash generating unit (or group of cash generating units) that is expecting to
benefit from the synergies of the combination. A cash generating unit that has been allocated goodwill is
tested for impairment annually or more frequently when there is indication that the unit may be impaired. If
the recoverable amount of the cash generating unit is less than its carrying amount, impairment is allocated
first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the
unit pro rata based on the carrying amount of each asset in the unit. Any impairment for the goodwill is
recognized directly in profit or loss in the statement of comprehensive income. The recognized impairment
for goodwill is not reversed in subsequent periods. At the date of the disposal of the relevant cash
generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on
disposal.
The intangibles acquired in a business combination and recognized separately from the goodwill are initially
recognized at their fair value at the acquisition date (which is considered their cost).
The goodwill and customer relationships of the Company are related to transfer of distribution activity from
Sanofi Romania as part of a carve-out process performed in 2018 by Sanofi Group, which included the
transfer of the Generics distribution business from Sanofi Romania to Zentiva. The amortization period for
customer relationships was determined to be 10 years.
Derecognition of intangible assets
An intangible asset is derecognized on disposal or when no future economic benefits are expected form its
use or disposal. The gains or losses arising from the derecognition of an intangible asset, measured as the
difference between the net proceeds from sales and the net carrying amount of the asset, are recognized
in profit or loss when the asset is derecognized.
➢ Financial instruments – initial recognition and subsequent measurement
1) Financial assets
The financial assets of the Company are classified as financial assets at amortized cost and are
represented by cash pooling, trade receivables and other receivables, cash and cash equivalents.
Except for trade receivables that do not contain a significant financing component or for which the Company
has applied the practical expedient, the Company initially measures a financial asset at its fair value plus
transaction costs. The trade receivables that do not contain a significant financing component for which the
Company applied the practical cost are measured at their transaction price determined according to IFRS
15.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
18
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Financial assets at amortized cost are subsequently measured using the effective interest rate (EIR) and
are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized,
modified or impaired.
For more information on receivables, see Note 13 - Trade receivables and other receivables. Receivables
due in a period of less than 12 months are not discounted.
Derecognition
A financial asset (or, if applicable, part of a financial asset or part of a group of similar financial assets) is
derecognized when the rights to receive the cash flows arising from the asset have expired.
2) Impairment of financial assets
The Company recognizes a provision for expected credit losses (ECLs) for all its financial assets. ECLs are
based on the difference between the contractual cash flows due under the contract and all cash flows that
the Company expects to receive, discounted at an approximation of the original effective interest rate of the
asset.
The Company applies a simplified approach in calculating ECLs. Respectively, the Company does not track
changes in credit risk, but instead recognizes a provision based on data on lifetime expected losses at each
reporting date. The company analyzes the receivables on an individual basis and takes into account the
effect of the financial guarantees received from the insurers in the calculation of ECLs.
3) Financial liabilities
Company’s financial liabilities consist of trade and other payables. They are recognised initially at fair value,
net of directly attributable transaction costs, if any. They are derecognized when the liability is discharged,
cancelled or expires.
4) Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount reported in the statement of financial
position only if there is a current enforceable legal right to offset the recognized amounts and an intent to
settle on a net basis or realize the assets and settle the liabilities simultaneously.
➢ Inventories
The main categories of inventories are raw materials, work in progress, semi-finished products, finished
products, commodities, spare parts, consumables and packaging materials.
The cost of inventories includes all purchase costs, production costs (including all direct and indirect costs
attributable to the operational activity of production) and other costs incurred in bringing the inventories to
their present condition and location.
The value of finished goods and work in progress includes costs of raw materials, direct labor, direct
production costs and production overheads, including depreciation. Financing costs (interest expense) are
not included in the value of stocks.
The cost of inventory is determined based on the weighted average method.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
19
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Inventories are measured at the lower of cost and net realizable value. Net realizable value is the estimated
sale price under normal operating conditions, less the estimated completion costs and sale costs. The
Company periodically analyzes inventories to determine if they are damaged, obsolete, slow moving, or if
the net realizable value has dropped, making the necessary adjustments.
➢ Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be
impaired. If any indication exists or when annual impairment testing for an asset is required, the Company
estimates the recoverable amount of the asset. The recoverable amount of an asset is the higher of the fair
value of an asset (or a cash-generating unit) less the costs to sell and its value in use. This is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of
those of other assets or groups of assets. When the carrying amount of an asset or a cash-generating unit
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount.
In assessing the value in use, estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of time value of money and asset-specific
risks. In determining the fair value less costs to sell, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or
other available fair value indicators.
Impairment loss of continuing operations is recognized in the profit or loss in the expense category
consistent with the classification of the impaired asset, except for a property that was previously revalued,
and the revaluation was accounted for in other comprehensive income. In this case, impairment is also
recognized in other comprehensive income up to the amount of any previous revaluation.
Goodwill is subject to annual impairment testing. For the purpose of impairment testing, goodwill is allocated
to the cash generating unit (CGU) representing Company’s single reportable segment (the production of
medicines). The recoverable amount of the CGU is determined on the basis of assessment of the present
value of the future cash flows expected to be derived from the CGU and is assessed internally by the
management. The assessment takes into account cash flow projections and the business plan and is based
on past experience, as well as on anticipated future market trends. A long-term growth rate is calculated
and applied to project future cash flows beyond the period covered by the business plan.
In each reporting period, an assessment is made to determine whether there are any indicators that
previously recognized impairment losses may no longer exist or may have decreased. If such an indication
exists, the Company estimates the recoverable amount of the asset or of the cash-generating unit. An
impairment loss previously recognized is reversed only if there has been a change in the assumptions used
to determine the recoverable amount of the asset. The reversal is limited so that the asset's carrying amount
does not exceed its recoverable amount and does not exceed the carrying amount of the asset if it had not
been previously impaired. Such a reversal is recognized in the profit or loss unless the asset has been
revalued, in which case the reversal is treated as a revaluation increase.
➢ Cash and short-term deposits
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand
and short-term deposits with an initial maturity of three months or less that are held to meet the cash
commitments in the short term.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
20
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
Cash deposits with an initial maturity of three months or less that are not held to meet the Company's short-
term cash commitments are not cash equivalents, but receivables.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits as defined above, net of outstanding bank overdrafts.
➢ Provisions
General
Provisions are recognized when the Company has a present obligation (legal or constructive) arising from
a prior event, it is probable that an outflow of resources embodying economic benefits is required to settle
the obligation and the amount of the liability can be reliably estimated. If the Company expects some or all
of a provision to be reimbursed, for example, under an insurance agreement, the reimbursement is
recognized as a separate asset, but only if the reimbursement is virtually certain. The expense related to
any provision is presented in the profit or loss, net of any reimbursement.
Provisions are reviewed at each balance sheet date and adjusted to reflect the best current estimate of
management in this respect. If an outflow of resources is no longer probable to be needed to settle the
obligation, the provision is reversed and it is recognized as revenue.
If the effect of time value of money is material, provisions are discounted using a pre-tax rate that reflects,
if applicable, the specific to the liability. When the discount is applied, the increase in the provision as a
result of time passage is recognized as financing cost.
Environment provision
Environmental provision is recognized when water and soil contamination occur and there is a legal
obligation to decontaminate or it is recognized when there is a constructive obligation, if the Company's
policy is to carry out decontamination works even if there is no legal obligation (past event is the
contamination, and public expectations are created by the Company's policy).
The Company plans to make ecological remediations that will have the effect of monitoring soil and
underground water.
The impact of climate-related matters, such as changes in environmental regulations and other relevant
legislation, is considered by the Company in estimating the environmental provision.
Litigation provisions
Litigation provisions are recognized when management estimates as probable cash outflows as a result of
unfavorable disputes.
➢ Pensions and other post-employment benefits
As part of its current activity, the Company makes payments to the Romanian State budget on behalf of its
employees for post-employment benefits (retirement). All employees of the Company are included in the
pension scheme of the Romanian State. The Company does not operate any other pension scheme except
for the benefits on retirement presented below in this note and, consequently, has no obligation regarding
pensions. In addition, the Company is not required to provide additional benefits to existing or current
employees other than those described below:
According to the Collective Labor Agreement, the company grants employees a variable number of salaries
according to their length of service within the company. This is a defined benefit post-employment scheme.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
21
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
At the date of retirement, retraces receive a bonus depending on their length of service within the Company
as follows:
➢ Up to 10 years in the Company, ½ average gross salary at company level;
➢ 10 - 20 years within the Company, 1 average gross salary at company level;
➢ 20 - 30 years within the Company, 2 average gross salary at company level;
➢ Over 30 years within the Company, 3 average gross salaries at company level.
In addition, when employees turn 50, in case the employees have completed 5 years of continuous service
in the company, they receive a bonus based on their length of service within the Company as follows (these
being treated as other long-term employee benefits):
➢ 5 - 15 years in the Company, ½ average gross employee salary;
➢ Over 15 years in the Company, one average gross employee salary.
At the same time, depending on the length of service at the Company, the employees receive some benefits
in fixed amounts, which start with 400 RON upon completion of 2 years in the Company and reach 3,800
RON upon completion of 36 years in the Company.
Provisions for post - employment benefits and other long-term employee benefits are estimated based on
the Company's Collective Labor Agreement by external actuaries.
The Company uses the projected credit factor method actuarial assessment, designed to assess the post-
employment benefits and the cost of the related current services. This implies the use of demographic
assumptions about future employees, current employees, and former employees who are eligible for these
benefits (mortality rate, employee turnover rate, etc.), as well as financial assumptions (inflation rate, salary
growth rate). If adjustments to key assumptions are required, the amounts of post-employment benefits
may be materially affected.
Actuarial gains and losses related to the post-employment benefit plan are recognized in full in the period
in which they arise in other comprehensive income. These actuarial gains and losses are recognized in
retained earnings and are not reclassified to profit or loss in subsequent periods.
Past service costs are recognized as an expense on a straight-line basis over the remaining average period
until the benefits vest. Past service costs are immediately recognized if the benefits have already vested,
following the introduction or adjustment of the retirement plan. Interest expense is included in the profit or
loss, in the Financial Expenses category.
The Company policy for other long-term employee benefits is to recognize the actuarial gains and losses
in the period they incur in full, in the profit or loss.
➢ Related parties
Parties are considered related when one party, either through ownership, contractual rights, family
relationships, or otherwise, has the ability to significantly control / influence the other party. Related parties
also include members of the management, members of the Board of Directors and members of their
families, parties with joint control over other companies, post-employment benefit plans for Company
employees.
➢ Retained earnings
The accounting profit remaining after the allocation of the 5% share to the legal reserve, up to the limit of
20% of the share capital, is recorded in the opening retained earnings of the following reporting period,
when the profit appropriation takes place.
The appropriation of the profit is therefore made in the following financial year, after approval of the
appropriation by the Shareholders General Meeting, e.g.: the dividends approved and setting-up of other
reserves according to legal provisions.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
22
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
➢ Climate-related matters
In line with the EU's strategy to promote sustainable finance, which introduced transparency requirements
on how financial market participants integrate ESG factors into their investment decision-making processes,
the management recognizes the importance of Environmental, Social, and Governance factors in creating
sustainable value for the Company's stakeholders. The Company is aware of its impact towards the society
and towards the environment and clear about our responsibility as a corporate citizen. This is why it has
committed itself to a comprehensive climate strategy to limiting the temperature increase by mid-century to
no more than 1.5 degrees Celsius as defined in the Paris agreement.
The actions are framed around the 3 pillars – People, Partners and Planet. The Company has committed
to be Carbon neutral in Scope 1 and 2 by 2030 and to work on the optimization of consumption of energy
and water and invests into Circular Economy.
The Company considers climate-related matters in estimates and assumptions, where appropriate. This
assessment includes a wide range of possible impacts on the Company due to both physical and transition
risks. The Company is in process of implementing reporting process to monitor the planet-related initiatives
and their impact in the financial statements in detail. Sustainability related costs and expenditures were
reported as incurred in 2023. Approved projects and already known relevant assumptions and estimates
were incorporated into cash flow projections.
Even though the Company believes its business model and products will still be viable after the transition
to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions
underpinning several items in the financial statements. Even though climate-related risks might not currently
have a significant impact on measurement, the Company is closely monitoring relevant changes and
developments, such as new climate-related legislation. In particular, the Company considers the impact of
health, safety and environmental or other related legislation in its assessment of expected useful lives and
estimated residual values of fixed assets, in estimating the environmental provisions or cash flow
projections used to evaluate impairments.
The people-related initiatives are integral to the Company´s operations and require no material one-off
compliance or inclusivity-related investments and are not expected to have a material impact on the Group's
consolidated financial statements.
The potential impacts of transition risk related to the Partners and Planet pillars have been analysed in the
context of the 2023 Company's financial statements and impairment calculations are based on the best
estimate assumptions available as of the date of preparation of financial statements. Based on information
available as at 31 December 2023 no material impact has been identified either on the useful life or on the
value of the fixed assets, on environmental provisions or on the cash flows generated by existing activities.
The scope of Company's commitments to carbon neutrality was considered when carrying out the sensitivity
tests as part of the annual impairment testing at the cash-generating unit level. The goodwill impairment
test conclusions as of December 31, 2023, were not sensitive to assumption ranges that are considered
reasonably possible.
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ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
23
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements of the Company requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities,
and the accompanying disclosures, and the disclosure of contingent liabilities at the end of the reporting
period. Nevertheless, uncertainty regarding these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of the asset or the liability affected in the future periods.
Judgements
In the course of the application of the Company's accounting policies, the management made the following
judgements, which have the most significant effect on the amounts recognized in the financial statements:
➢ The Company’s management has carried out an analysis on the presentation of the claw-back tax
and decided that it would be more suitable to classify it as a revenue reduction; the alternative
would have been for this tax to be considered as an operational expense. Management has
considered that this is more similar to a rebate, or a contingent adjustment on the sales made.
➢ The Company has assessed the purpose of the cash pooling deposits held at AI Sirona
(Luxembourg) Acquisition SARL and has concluded that they are held to generate an investment
return. In accordance with the provisions of the cash pooling agreement at any time the Company
may, by thirty days prior notice to the treasury group entity, request payment of the credit balance
maintained and therefore the Company’s management have assessed that the presentation as
short term is appropriate.
Estimates and assumptions
The main assumptions regarding the future and other important sources of estimation uncertainty at the
reporting date, which have a significant risk of causing a material adjustment to the carrying amounts of the
assets and liabilities in the next financial year, are presented below:
Duties, taxes and tax provisions
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and
the amount and timing of future taxable income. All amounts due to State authorities have been paid or
accrued at the balance sheet date. The Romanian fiscal system is undergoing a consolidation process and
is being aligned with European legislation. Different interpretations may exist at the level of the fiscal
authorities in relation to the fiscal legislation, which may result in additional taxes and penalties payable.
Where the State authorities have findings from reviews relating to breaches of Romania’s fiscal laws, and
related regulations these may result in: confiscation of the concerned amounts; additional tax liabilities
being payable; fines and penalties (that are applied on the total outstanding amount). As a result the fiscal
penalties resulting from breaches of the legal provisions may result in a significant amount payable to the
State. At the end of each financial year, the Company makes an estimate of the potential fiscal risks to
which it may be subject and determines the potential risk level, using their best estimates possible, and, as
a result, recognizes a specific provision in the financial statements if appropriate. Further details on taxes
and tax provisions are disclosed in Notes 18 and 22.
Net realizable value of the inventories
The finished goods, merchandise and work in progress are recorded at the lower of their costs and their
net realizable value. Management analyzes the age of the stocks, the expiration date of the products, the
quality of the products and any potential nonconformity issues, products that cannot be sold afterwards or
can be rejected based on quality issues and takes into consideration their implications for the purposes of
establishing the net realizable value of old stocks. The net realizable value is the sale price under in the
ordinary course of business, less all estimated costs of completion and costs necessary to make the sale,
including marketing and distribution. For the products with an expiration date below 6 months, blocked or
with quality issues, a provision is set for their entire value, for the products with expiring date between
6 - 12 months a provision of 75% of their value is set, for the products with expiring date between
12 – 18 months a provision of 25% of their value is set.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
24
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)
Management has analyzed monthly the net realizable value of the finished goods and work in progress,
considering the market selling prices, as well as the regulations specific to the industry in which it operates.
For raw materials, a specific analysis is made taking into consideration the age, expiration date, any
potential quality problems of the recorded items. For the products with an expiration date below a year, or
with quality issues, a provision is set for their entire value. All the assumptions are reviewed on an annual
basis. Further details are included in Note 12.
Provisions for the environment and litigation
The Company recognizes provisions for the environment in relation to ecological rehabilitation, soil and
underground water monitoring. In determining the carrying value of the provision, assumptions and
estimates are made in relation to effective costs of works to be performed and the expected timing of these
costs. Further details are included in Note 18.
The Company recognizes provisions for litigation related to the risk identified regarding certain trials going
on in court, with uncertain results. Further details are included in Note 18.
Sales deductions for estimated sales returns, rebates and discounts
The sales returns, discounts, incentives and rebates related to sales are recognized as reductions of
revenue in the same period when the related sales were recognized. These are recognized according to
commercial offers containing monthly, quarterly and annual gross and net value targets (net targets are
calculated after deducting from gross sales inclusively the discounts and claw back tax as communicated
by State authorities 45 days after the end of the reference period) and which are estimated at the level of
product, portfolio, sales channel (retail independent pharmacies, retail chain of pharmacies, hospitals) and
according to concerned sales transactions. The estimated discounts accruals are subject to a continuous
review and adjustment process based on the most recent available information and negotiations.
4. STANDARDS, AMENDMENTS AND NEW INTERPRETATIONS OF STANDARDS
4.1 New modifications brought in the accounting policies starting with 1 January 2023
The accounting policies adopted are consistent with those of the previous financial year except for the
following amended IFRSs which have been adopted by the Company as of 1 January 2023:
• IFRS 17: Insurance 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 and 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. 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.
Management has assessed its accounting policies disclosures and updated them to address these
amendments in the current year financial statements.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
25
4. STANDARDS, AMENDMENTS AND NEW INTERPRETATIONS OF STANDARDS (continued)
• IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates (Amendments)
Management has assessed that the application of these changes has no impact on the Company's financial
statements or performance.
• IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments)
Management has assessed that the application of these changes has no impact on the Company's financial
statements or performance.
• IAS 12 Income taxes: International Tax Reform - Pillar Two Model Rules (Amendments)
The amendments are effective immediately upon issuance, but certain disclosure requirements are
effective later. The Organisation for Economic Co-operation and Development’s (OECD) published the
Pillar Two model rules in December 2021 to ensure that large multinational companies would be subject to
a minimum 15% tax rate. On 23 May 2023, the IASB issued International Tax Reform—Pillar Two Model
Rules – Amendments to IAS 12. The amendments introduce a mandatory temporary exception to the
accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules
and disclosure requirements for affected entities on the potential exposure to Pillar Two income taxes. The
Amendments require, for periods in which Pillar Two legislation is (substantively) enacted but not yet
effective, disclosure of known or reasonably estimable information that helps users of financial statements
understand the entity’s exposure arising from Pillar Two income taxes. To comply with these requirements,
an entity is required to disclose qualitative and quantitative information about its exposure to Pillar Two
income taxes at the end of the reporting period. The disclosure of the current tax expense related to Pillar
Two income taxes and the disclosures in relation to periods before the legislation is effective are required
for annual reporting periods beginning on or after 1 January 2023, but are not required for any interim period
ending on or before 31 December 2023.
The Company has applied the mandatory exception to recognising and disclosing information about
deferred tax assets and liabilities arising from Pillar Two income taxes, as per the amendments to IAS 12.
Pillar Two legislation has been enacted close to the reporting date. Therefore, the Company is still in the
process of assessing the potential exposure to Pillar Two income taxes as at 31 December 2023. The
potential exposure, if any, to Pillar Two income taxes is currently not known or reasonably estimable. The
Company expects to be in a position to estimate the potential exposure during the year 2024.
4.2 New standards, modifications and interpretations issued, but not yet effective for the
financial exercise starting 1st of January 2023 and not early adopted
The standards and interpretations that are issued, but are not effective, and have been endorsed by the
European Union up to the date of issuance of the Company's financial statements, are described below.
The company intends to adopt these standards, as appropriate, when they enter into force.
• 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.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
26
4. STANDARDS, AMENDMENTS AND NEW INTERPRETATIONS OF STANDARDS (continued)
Management has assessed that the application of these changes is not expected to have an impact on
the Company's financial position or performance.
• 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. Management has assessed that the application of these changes is not
expected to have an impact on the Company's financial position or performance.
4.3 The standards/amendments that are not yet effective and they have not yet been endorsed by
the European Union
• IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure - Supplier
Finance Arrangements (Amendments)
Management has assessed that the application of these changes is not expected to have an impact on the
Company's financial position or performance.
• IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
(Amendments)
Management has assessed that the application of these changes is not expected to have an impact on the
Company's financial position or performance.
• 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
Management has assessed that the application of these changes is not expected to have an impact on the
Company's financial position or performance.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
27
5. SALES OF GOODS AND RENDERING OF SERVICES AND RAW MATERIAL AND
CONSUMABLES EXPENSES
5.1 Revenues
For management purposes, the Company is organized in business units based on its products and services.
The Company has a single reportable segment, namely the production of medicines.
The Company’s management monitors the operating results of the business for the purpose of making
decisions regarding the allocation of resources and the assessment of performance. Performance is
assessed based on the operating profit or loss, the profit before tax and it is quantified consistently with the
operating profit or the loss in the financial statements.
The Company monitors the sales transactions, considering the domestic and external sales.
1 January -
31 December
2023
1 January -
31 December
2022
Sales – domestic*
536,495,256
447,289,671
Sales – external*
417,137,828
312,341,199
Total revenue
953,633,084
759,630,870
Sales of goods, including:
894,066,595
704,706,902
Sales of finished goods
741,933,823
638,559,594
Sales of merchandise
205,240,164
112,140,202
Residual products
85,163
2,506,862
Claw back tax
(53,192,555)
(48,499,755)
Revenue from rendering of services
59,566,489
54,923,968
Total revenue
953,633,084
759,630,870
*Sales of the company are within European Union, external sales being represented mainly by sales to
Czech Republic.
Clawback tax
Starting the last quarter of the financial year ended 31 December 2009, in the pharmaceutical industry, for
the companies holding Marketing Authorizations (MA) for certain medicines, a new tax was introduced and
referred to as” claw-back tax”. For the purpose of funding the public health expenses, MA holders included
in the national health programs have the obligation to pay the claw-back tax quarterly for the concerned
sales of medicines related to the concerned quarter based on the notifications received by the Company
from the National Health Insurance House Fund (CNAS).
The contribution (the claw-back tax) is paid by the MA holders or by their legal representatives, if these
medicines are:
➢ Prescribed within the healthcare system in Romania.
➢ Used in the ambulatory treatment (with or without a patient’s contribution) based on a medical
prescription and are available in pharmacies, hospitals or used as part of the medical treatment in
dialysis clinics.
Starting 2020, following several legal amendments brought by Law 53/2020 approving Ordinance no.
85/2019, differentiated claw-back contribution by types of medicines was introduced.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
28
5. SALES OF GOODS AND RENDERING OF SERVICES AND RAW MATERIAL AND
CONSUMABLES EXPENSES (continued)
Specifically, for type I medicines (innovative medicines), the quarterly contribution is calculated by applying
25% on the value related to their centralized consumption (as communicated by the National Health
Insurance Fund, after VAT deduction), while for type II (medicines produced in Romania, both innovative
and generic) and type III medicines (generic medicines / any other medicines not classified as type I or II),
the contribution is calculated by applying 15% and 20%, respectively.
In October 2023, Government Ordinance no. 88/2023 was published approving the amendment of art. 3^8
of Government Ordinance no. 77/2011, so that starting from Q3 2023, the quarterly clawback contribution
is calculated and due differentiated depending on the classification of medicines into «type I medicines»
and «type II medicines».
The list containing the classification of type I and type II medicines is approved quarterly by Minister of
Health order, up to and including the 15th of the second month following the end of the quarter for which
the contribution is due. The classification of medicines in the categories mentioned above is carried out by
the National Agency of Medicines and Medical Devices in Romania.
Most of the medicines Zentiva have in its portfolio are classified under type II medicines, so the related
clawback contribution is calculated by applying 15%.
The category “Rendering of services” includes the revenues from the rendering of quality review services
in relation to the products from outside the European Union that are to be sold on EU markets by partners
within the Company’s Group, as well as the revenues from certain production services provided to third
parties.
This category includes also revenues from support services provided by Zentiva employees to the Group
companies, mainly to: Labormed Pharma Trading SRL, Zentiva Group AS, and Labormed Pharma SA,
which are generally services related to the commercial activity of the Group, advertising of generic products
and support services for the Headquarter.
Contract liabilities in amount of RON 4,623,319 (2022: RON 8,352,970) represent non-cash consideration
in the form of a manufacturing equipment received from a client (“Biotehnos SA”). The contract liability was
measured at the fair value of the equipment received. During 2023, the Company recognized revenue in
amount of RON 3,729,652 as products were delivered to the client, while the remaining contract liability
amount is expected to be recognized as revenue over next year.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
29
5. SALES OF GOODS AND RENDERING OF SERVICES AND RAW MATERIAL AND
CONSUMABLES EXPENSES (continued)
5.2. Raw material expenses, merchandise, consumables used and utilities
Notes
1 January -
31 December
2023
1 January -
31 December
2022
Raw materials
a
210,480,053
187,153,558
Merchandise
114,212,299
78,835,616
Packaging materials
b
76,699,977
56,476,312
Auxiliary materials
c
20,161,555
15,340,124
Utilities
d
21,693,081
24,655,006
Other material expenses
e
8,374,349
8,272,000
Total
451,621,314
370,732,616
The amounts mentioned in the above table on the reference lines a, b, c represent mainly expenses with
raw materials and direct materials, packaging and auxiliary materials, used in the production activity.
The amounts mentioned on reference line d – utilities - refer mainly to the expenses with energy, gas and
water.
e – this category includes mainly the expenses with materials not on stock used by the department in charge
with the certification of the products originating from Turkey and India, which are going to be distributed on
the EU market, as well as with the certification of the products existing in the Zentiva SA portfolio.
6. OTHER INCOME / OTHER EXPENSES AND ADJUSTMENTS
6.1 Other operating income
Other operating income
1 January –
31 December
2023
1 January –
31 December
2022
Gain/ loss from disposal of non-current assets
24,897
28,423
Other operating income
370,186
3,337,738
Total
395,084
3,366,161
6.2 Other operating expenses
Other operating expenses
1 January –
31 December
2023
1 January –
31 December
2022
Support services received from Zentiva Group
48,249,810
61,158,451
Repairs
7,985,315
8,586,843
Royalties – Zentiva trademark
6,678,484
5,551,218
Travel expenses
3,742,182
2,033,818
Write-off of inventories
24,398,026
15,839,464
Taxes, registration fees
3,057,633
4,020,059
Professional fees
1,786,067
1,485,909
Other expenses
42,390,064
53,100,005
Net allowance for inventories
(4,848,676)
(9,351,919)
Net allowance for trade receivables and other receivables
119,904
(1,823,546)
Total
133,558,810
140,600,303
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
30
6. OTHER INCOME / OTHER EXPENSES AND ADJUSTMENTS (continued)
The expenses with support services from the Group include a large variety of services (see below) and
have decreased in 2023 compared to the previous year:
• Management and development of the products portfolio (monitoring, assistance regarding
transfers, projects for Company production process optimization), for the procurement process
(suppliers monitoring, negotiating the main contracts for raw material), legal support (international
review and support / complex situations related to the business environment in Romania) and
financial services (sales monitoring, support in production cost planning and optimization, defining
the production flow for the local production capacity).
• In addition to services mentioned above in this category are also included IT support services (SAP
and other apps used by all entities within the group), operational services and support for daily
activities regarding the IT infrastructure and software used, and IT project management and
execution relevant on a local level.
Repairs services include: repair services related to the production equipment and repairs related to the
cars fleet.
Other Expenses include:
Other expenses
1 January –
31 December
2023
1 January –
31 December
2022
Freight costs on sales
8,047,931
6,623,228
External salesforce
5,515,707
5,114,707
Distribution and external storage costs
1,753,886
2,361,793
Telecommunication expenses
551,269
483,416
Cleaning expenses
2,540,376
1,991,874
IT projects consultant fees
2,009,182
3,964,108
Intercompany technical support expenses
1,579,697
1,425,913
Events – travel and accommodation
6,685,600
3,573,837
Speaker fees
2,548,263
2,074,888
Site facility management & services
1,280,896
1,185,888
Fines and penalties
2,106,476
717,352
Reversals
(227,423)
(212,678)
Other expenses
7,765,581
9,729,336
Bank commissions – factoring*
232,623
14,066,344
Total Other Expenses
42,390,064
53,100,005
* Factoring agreement with Factofrance SA was closed in March 2023.
6.3 Financial expenses
Financial expenses
1 January -
31 December
2023
1 January -
31 December
2022
Foreign exchange differences expense
3,138,461
6,166,409
Interest expenses
1,380,300
437,136
Total
4,518,761
6,603,544
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
31
6. OTHER INCOME / OTHER EXPENSES AND ADJUSTMENTS (continued)
6.4 Finance Income
Financial Income
1 January -
31 December
2023
1 January -
31 December
2022
Foreign exchange differences gain
3,925,933
3,643,997
Interest income
37,903,176
31,614,121
Total
41,829,109
35,258,118
Interest income is the interest earned on the cash pooling account - for more details see Note 15.
6.5 Employee benefits expenses
Employee benefits expenses
1 January -
31 December
2023
1 January -
31 December
2022
Wages and salaries
146,846,638
123,672,296
Social security costs
7,772,834
5,831,991
Post-employment benefits and other long-term benefits - net impact
165,130
174,393
Other short-term benefits (*)
7,413,371
5,354,266
Total
162,197,973
135,032,946
(*) this expense is the amount of the meal vouchers granted.
6.6 Marketing and advertising expense
The Company recognizes the expenses with TV advertising campaigns and other media advertising as
marketing and advertising expenses.
During the current year, the main expense types recorded under this line represent only expenses for
promotional activities for the Company products in pharmacy chains and other expenses for this activity.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
32
7. CURRENT TAX AND DEFERRED TAX
Income tax expense
1 January -
31 December
2023
1 January -
31 December
2022
Current income tax
30,616,907
17,288,731
Deferred tax (7.2) expense/ (income)
(1,407,458)
(1,769,017)
Total
29,209,449
15,519,714
The main components of corporate tax expense and the reconciliation between tax expense, accounting
profit and tax profit for the year ended 31 December 2023 and 2022 are:
Tax reconciliation
1 January -
31 December
2023
1 January -
31 December
2022
Profit before income taxes
221,825,281
114,984,918
Income tax calculated at the tax rate applicable in Romania of 16%
35,492,045
18,397,587
Non-taxable income
(4,984,990)
(818,083)
Non-deductible expenses for tax calculation
5,254,561
1,510,601
Fiscal credit
(6,552,167)
(3,570,390)
Income tax expenses reported in profit or loss
29,209,449
15,519,714
The fiscal credit includes amounts from sponsorships, reinvested profit, as well as capital adjustment
incentive calculated according to Government Ordinance no. 153/2020.
7.1 Income tax - current
Movement in the current income tax during the year
1 January –
31 December
2023
1 January –
31 December
2022
Balance on 1 January
3,028,375
938,975
Income tax expenses for the current year
30,616,907
17,288,731
Income tax paid during the year
(26,003,618)
(15,199,349)
Balance at 31 December
7,641,646
3,028,357
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
33
7. CURRENT TAX AND DEFERRED TAX (continued)
7.2 Deferred tax
The Company offsets deferred tax assets and liabilities if and only if it has a legally enforceable right to set
off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities and
relate to income taxes levied by the same tax authority.
Deferred tax relates to the following:
Deferred income tax
31 December
2023
31 December
2022
Movement in profit or
loss / other
comprehensive income
2023
2022
Deferred tax assets
Employee benefit liabilities
1,322,154
951,655
370,488
419,835
Allowances and provisions
2,193,512
1,924,272
269,240
(889,689)
Accrual for employee bonuses and for leaves not taken
3,163,499
2,339,358
824,142
542,385
Total (a)
6,679,165
5,215,295
1,463,870
72,530
Deferred tax liabilities
Property, plant and equipment and intangible assets
(12,235,869)
(12,353,840)
117,970
(44,999)
Total (b)
(12,235,869)
(12,353,840)
117,970
(44,999)
Net deferred tax (a) - (b)
(5,556,704)
(7,138,545)
1,581,841
27,532
The deferred tax-liabilities related to property, plant and equipment are generated by the temporary
difference between fiscal and accounting base of the carrying value, because the Company uses different
useful lives and impairment methods in the accounting ledger than the fiscal one, and because of
revaluations.
The Company recognizes tax items in Statement of Comprehensive Income, as follows:
2023
2022
Deferred tax
Recognized in profit or loss (7.1)
(1,407,458)
(1,769,017)
Recognized in other comprehensive income
(174,383)
1,741,485
Total
(1,581,841)
(27,532)
8. EARNINGS PER SHARE
The number of shares related to the period ended on 31 December 2023 and 31 December 2022 is
697,017,040 which generated 0.28 RON / share (2022: 0.14 RON / share).
31 December
2023
31 December
2022
Profit attributable to ordinary equity holders
192,615,832
99,465,204
Number of ordinary shares
697,017,040
697,017,040
Earnings per share, basic and diluted (RON/share)
0.28
0.14
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
34
9. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS
9.1 PROPERTY, PLANT AND EQUIPMENT
Land
Buildings
Machinery,
tools and
equipment
Constructions
in progress
Total
Gross value 1 as of January 2023
57,988,369
56,850,095
243,245,736
24,842,447
382,926,649
Additions
-
-
-
27,977,711
27,977,711
Disposals
-
-
(2,778,659)
-
(2,778,659)
Transfers
-
2,653,043
15,107,397
(17,760,440)
-
Gross value as of
31 December 2023
57,988,369
59,503,139
255,574,474
35,059,718
408,125,701
Depreciation as of 1 January 2023
-
-
(169,722,258)
(609,878)
(170,332,137)
Depreciation in the year
(300,151)
(3,847,978)
(14,967,476)
-
(19,115,605)
Impairment
-
(929,026)
-
-
(929,026)
Other movements
10
(282)
-
-
(272)
Disposals
-
-
2,757,059
-
2,757,059
Depreciation as of
31 December 2023
(300,141)
(4,777,286)
(181,932,675)
(609,878)
(187,619,981)
Net book value as of
31 December 2023
57,688,228
54,725,853
73,641,799
34,449,840
220,505,720
Land
Buildings
Machinery,
tools and
equipment
Constructions
in progress
Total
Gross value 1 as of January 2022
53,101,955
58,589,228
246,394,324
5,809,384
363,894,891
Additions
-
-
-
27,109,730
27,109,730
Impact through revaluation reserve
5,137,903
5,746,380
-
-
10,884,283
Impact from revaluation in profit and
loss
-
596,748
-
-
596,748
Cancelled depreciation upon
reevaluation
(251,261)
(8,411,308)
-
-
(8,662,569)
Disposals
(229)
-
(10,896,206)
-
(10,896,435)
Transfers
-
329,048
7,747,618
(8,076,666)
-
Gross value as of
31 December 2022
57,988,369
56,850,095
243,245,736
24,842,447
382,926,649
Depreciation as of 1 January 2022
(14,191)
(2,688,781)
(165,810,418)
(609,878)
(169,103,268)
Depreciation in the year
(237,069)
(5,722,527)
(14,926,955)
-
(20,886,552)
Cancelled depreciation upon
reevaluation
251,261
8,411,308
-
-
8,662,569
Other movements
-
-
125,195
-
125,195
Disposals
-
-
10,889,920
-
10,889,920
Depreciation as of
31 December 2022
-
-
(169,722,258)
(609,878)
(170,332,137)
Net book value as of
31 December 2022
57,988,369
56,850,095
73,523,478
24,232,570
212,594,512
The value of fully depreciated assets as of 31 December 2023 is RON 134,457,486
(2022: RON 125,080,879).
At 31 December 2023, the Company recorded an impairment allowance for a building that is in progress of
being demolished in amount of RON 929,026.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
35
9. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS (continued)
Revaluation of land and buildings
As of 31 December 2022, the Company revalued the existing land and buildings in the Company's
patrimony. The revaluation was made by an independent valuer in accordance with the International
Valuation Standards.
The net impact following the revaluation was in the amount of RON 11,481,031, of which in the revaluation
reserve it was registered the amount of RON 10,884,283.
Also, in 2022, as a result of the revaluation, the amount of RON 596,748 was recorded as an impact on the
profit for the year - on the line of “Depreciation and impairment”; 1,305,483 RON representing the reversal
of impairment losses related to buildings resulting from the revaluation from 31 December 2017 and
31 December 2020 and 708,735 RON impairment losses resulted from 31 December 2022 revaluation.
Fair value was determined by reference to market information, using the net rental income capitalization
approach as the main method in valuing buildings and special constructions and the market approach
(direct comparison method), as a method for land valuation. The cost replacement approach was also
applied as a secondary valuation method for the buildings valuation.
Valuation techniques are selected by the independent valuer in accordance with the International Valuation
Standards, the type of property and the purpose of the valuation. Applying techniques and methods of
measurement are in line with common practice for the type of asset valued.
Fair value is generally determined by using inputs on level 3 of the fair value measurement hierarchy.
The inputs used in the valuation were:
a. For buildings and special constructions:
➢ level 3 inputs representing replacement costs, historic costs, historic cost update indexes,
impairment adjustments - most of these being derived based on publicly available technical studies,
respectively IROVAL Catalogues and the National Institute of Statistics (as opposed to data taken
directly from the market), with impairment estimated by the valuer.
b. For land:
➢ level 3 inputs representing sale prices taken from sale offers for similar pieces of land, publicly
available, with adjustments made by the valuer depending on their comparability with the measured
pieces of land.
The result of the evaluation was influenced by the main market inputs used, mainly: market value per square
meter for land (estimated at EUR 149 / sqm), estimation of net rental revenues for buildings (estimating a
monthly market rent, the occupancy rate of the property, the operating expenses, respectively the property
tax, the insurance premium, administrative expenses and expenses for capital repairs and a capitalization
rate of 9.5%).
The fair value of the Company’s land of 77,877 sqm was determined by the valuer to be EUR 149/sqm.
The total fair value of the measured assets was RON 114,838,475. The sensitivity analysis of the overall
value of the valued asset base, performed by using the main inputs under the income approach in the range
- / + 1% for the capitalization rate and (3%) / + 5% in the degree of vacancy (cumulative sensitivity of the
two basic indicators), indicated an interval of RON 108,1m - RON 121,1m.
As at 31 December 2023, the independent valuer reassessed the fair value using updated market estimates
and concluded that there are no significant variations compared to the fair values estimated as at 31
December 2022.
If the Company would have accounted land and buildings using the historic cost method the net book value
of the land and buildings as of 31 December 2023 would have been RON 35,945,200 (2022 RON
35,312,958).
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
36
9. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS (continued)
Construction in progress and downpayments
Construction in progress as of 31 December 2023 are in amount of RON 34,449,840
(2022: RON 24,232,570) and include mainly equipment related to the production capacity and laboratory
design works that will be finalized and put in function in first half of 2024. The main project is the Aseptic
line for ampoules and will be put in function in April 2024.
At 31 December 2023 and 31 December 2022, the Company recorded an accumulated impairment
allowance for construction in progress in amount of RON 609,878 for old items that were not completed by
this date.
During 2023 some of the investments started during the year and in the previous periods were completed,
being transferred from the category of tangible assets under construction into machines, machinery and
equipment. Their total value was RON 17,760,440 (2022: RON 8,076,666).
As at 31 December 2023, the company has paid advances for equipment in amount of RON 8,652,051
(2022: RON 5,907,878).
9.2 RIGHT-OF-USE ASSETS
Buildings
Machinery
Tools and
Equipment
Total
Net book value as of 1 January 2023
4,027,495
14,654,393
18,681,888
Additions during the year
-
10,183,437
10,183,437
Disposals
-
(73,096)
(73,096)
Depreciation in the year
(1,332,607)
(6,367,482)
(7,700,089)
Net book value as of 31 December 2023
2,694,889
18,397,251
21,092,140
Buildings
Machinery
Tools and
Equipment
Total
Net book value as of 1 January 2022
784,647
8,184,266
8,968,913
Additions during the year
4,490,111
10,245,738
14,735,849
Additions IBR change
227,414
128,540
355,954
Disposals
-
(62,993)
(62,993)
Depreciation in the year
(1,474,677)
(3,841,158)
(5,315,835)
Net book value as of 31 December 2022
4,027,495
14,654,393
18,681,888
Right of use assets for the buildings refer to the lease contract for the storage premises owned by FM
Logistic, whilst right of use assets for machinery tools and equipment are related to car leasing, lease of a
packing line and lease for IT equipment.
The leases for vehicles have a lease term of 48 months. The Company’s obligations under the lease
contracts are secured by the lessor’s title to the leased assets.
The Company has a lease for a warehouse used for medicines storage, that includes the termination option.
This option is negotiated by the Company’s management to provide flexibility in the management of the
leased asset and align with the Company’s business needs. The Company’s management applies
judgement to determine whether it is reasonably certain to exercise termination option.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
37
9. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS (continued)
The table below shows the carrying amount of the lease liability and movements in this category during
the financial year 2023 and respectively 2022:
2023
2022
As of 1 January
18,810,981
9,323,786
Additions during the period
10,183,437
14,735,849
Interest on the lease liability
921,171
252,616
Early termination of car leases
(71,157)
(63,070)
Lease payments
(7,319,410)
(5,319,378)
Interest paid
(921,171)
(252,616)
Forex impact
(448,242)
133,794
As of 31 December
21,155,608
18,810,981
Out of which:
Short term lease liability
7,261,482
5,811,596
Long term lease liability
13,894,126
12,999,385
The following expenses represent the amounts recognized in the Statement of Comprehensive Income in
relation to leases in 2023 and respectively in 2022:
2023
2022
Depreciation of right-of-use assets
7,700,089
5,315,835
Interest expense on the lease liability
921,171
252,616
Total expenses recognized in the Statement of Comprehensive Income
8,621,260
5,568,451
Lease commitments
In 2023 a new lease agreement was signed with FM Logistic for Industrial Affairs business, but up until the
end of the year the space was not made available for use. The estimated discounted value of the future
lease payments as of 31 December 2023 is RON 9,452,000 for the office space and RON 746,000 for the
related equipment.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
38
10. INTANGIBLE ASSETS
Other intangible
assets
Intangibles
in progress
Total
Costs at 1 January 2023
9,349,869
5,364
9,355,232
Additions
-
342,007
342,007
Disposals
(199,164)
-
(199,164)
Transfers
264,971
(264,971)
-
Costs at 31 December 2023
9,415,675
82,399
9,498,075
Amortization and impairment at 1 January 2023
(6,240,945)
-
(6,240,945)
Amortization in the year
(507,943)
-
(507,943)
Other movements
-
-
-
Disposals
199,164
-
199,164
Amortization and impairment at 31 December 2023
(6,549,723)
-
(6,549,723)
Net value at 31 December 2023
2,865,952
82,399
2,948,351
Other intangible
assets
Intangibles
in progress
Total
Costs at 1 January 2022
10,511,054
45,499
10,556,553
Additions
-
305,366
305,366
Disposals
(1,506,686)
-
(1,506,686)
Transfers
345,501
(345,501)
-
Costs at 31 December 2022
9,349,869
5,364
9,355,232
Amortization and impairment at 1 January 2022
(5,903,584)
-
(5,903,584)
Amortization in the year
(1,241,907)
-
(1,241,907)
Other movements
(602,140)
-
(602,140)
Disposals
1,506,686
-
1,506,686
Amortization and impairment at 31 December 2022
(6,240,945)
-
(6,240,945)
Net value at 31 December 2022
3,108,924
5,364
3,114,287
11. GOODWILL AND CUSTOMER RELATIONSHIPS
Goodwill
Customer
relationships
Total
Cost at 1 January 2023
11,649,100
34,492,101
46,141,201
Additions
-
-
-
Disposals
-
-
-
Transfers
-
-
-
Cost at 31 December 2023
11,649,100
34,492,101
46,141,201
Amortization and impairment at 1 January 2023
-
(14,117,631)
(14,117,631)
Amortization in the year
-
(3,449,210)
(3,449,210)
Disposals
-
-
-
Amortization and impairment at 31 December 2023
-
(17,566,841)
(17,566,841)
Net value at 31 December 2023
11,649,100
16,925,260
28,574,360
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
39
11. GOODWILL AND CUSTOMER RELATIONSHIPS (continued)
Goodwill
Customer
relationships
Total
Cost at 1 January 2022
11,649,100
34,492,101
46,141,201
Additions
-
-
-
Disposals
-
-
-
Transfers
-
-
-
Cost at 31 December 2022
11,649,100
34,492,101
46,141,201
Amortization and impairment at 1 January 2022
-
(10,668,421)
(10,668,421)
Amortization in the year
-
(3,449,210)
(3,449,210)
Disposals
-
-
-
Amortization and impairment at 31 December 2022
-
(14,117,631)
(14,117,631)
Net value at 31 December 2022
11,649,100
20,374,470
32,023,570
The goodwill and customer relationships of the Company are related to transfer of distribution activity from
Sanofi Romania as part of a carve-out process performed in 2018 by Sanofi Group, which included the
transfer of the Generics distribution business from Sanofi Romania to Zentiva.
The Company performed an impairment testing on goodwill as of 31 December 2023 and respectively as
of 31 December 2022 in accordance with IAS 36. The recoverable value of the CGU to which goodwill is
allocated was significantly higher than the carrying value, so no impairment adjustments were identified.
No reasonably possible change in the key assumptions on which management has based its determination
of the recoverable value would cause the CGU’s carrying amount to exceed its recoverable amount.
The recoverable value was determined based on the value in use following the application of the discounted
cash flow method within the income approach, using management’s assumptions, namely: future cash
flows estimated by the management for 9 years (2024 – 2032) determined taking into account an average
annual growth rate of net sales of 7.5% (2022: 7.4%), a perpetuity growth rate of 2.5% (2022: 2.5%),
operating margin of 3.0% (2022: 4.5%) and a WACC of 14.5% for 2024, 11.6% for 2025 and 10.5% for the
period 2026 - 2032.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
40
12. INVENTORIES
Inventories
31 December
2023
31 December
2022
Merchandise
42,934,535
27,880,610
Finished goods and semi-finished goods
57,681,841
55,002,377
Raw materials
83,160,193
90,332,051
Packaging materials
21,823,278
18,410,109
Minus:
Allowance of inventories
(13,716,239)
(18,564,915)
Total
191,883,609
173,060,231
Changes in allowance per inventory category
31 December
2023
31 December
2022
Balance on 1 January
(18,564,915)
(27,916,834)
Net movement
4,848,676
9,351,919
Balance at 31 December
(13,716,239)
(18,564,915)
Allowance per inventory category
31 December
2023
31 December
2022
Finished goods, semi-finished goods and merchandise
(7,242,079)
(12,112,580)
Raw materials
(5,849,707)
(5,336,569)
Packaging materials
(624,452)
(1,115,766)
Total
(13,716,239)
(18,564,915)
The Company has no inventories pledged in favor of third parties as of 31 December 2023 and
31 December 2022 respectively.
The amount of the write-down of inventories recognised as an expense in the period is disclosed in
Note 6.2.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
41
13. TRADE RECEIVABLES AND OTHER RECEIVABLES; ADVANCES AND PREPAYMENTS
Trade receivables and other receivables
31 December
2023
31 December
2022
Total trade receivables, net, out of which:
409,688,292
148,849,848
Trade receivables
279,501,113
129,671,535
Trade receivables from related parties
130,761,721
19,495,809
Less
Allowance for expected credit losses
(574,542)
(317,495)
Total other receivables- net, out of which:
1,187,545
2,596,904
Recoverable taxes
1,343,305
2,273,005
Sundry debtors
3,290
488,189
Less
Allowance for doubtful foreseen losses from other receivables
(159,050)
(164,290)
Total Trade receivables and other receivables
410,875,837
151,446,752
31 December
2023
31 December
2022
Advances and prepayments of which:
3,847,896
13,642,385
Advances paid – current
1,072,091
1,128,508
Advances paid to related parties – current
-
-
11,736,473
Prepayments
1,637,924
777,405
Prepayments to related parties
1,137,881
-
Total advances and prepayments current
3,847,896
13,642,385
In January 2019, the Company signed with Factofrance SA a non-recourse factoring contract to finance
the local receivables with the main Romanian distributors by buying on a non-recourse basis all the
available receivables subject to the maximum limit covered by the Credendo and Coface insurer.
Starting October 2022, the Company decided to stop selling new receivables to Factofrance. In the period
following October 2022, only repayments were made. In March 2023 the factoring agreement with
Factofrance was closed.
Trade receivables are not interest-bearing and are generally on 60 - 120 days terms (2022: 60 - 120 days
terms).
The trade receivables are presented net of the accrual for commercial discounts amounting RON 33 million
at year end 31 December 2023 (2022: RON 37 million), for which the Company will issue credit notes
throughout the year 2024.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
42
13. TRADE RECEIVABLES AND OTHER RECEIVABLES; ADVANCES AND PREPAYMENTS
(continued)
See below for the movements in the allowance for trade and other receivables:
Value adjustments
31 December
2023
31 December
2022
Balance as of 1 January
(481,785)
(3,375,700)
Set-up
(257,047)
(858,355)
Uses
5,240
3,752,270
Balance as of 31 December
(733,592)
(481,785)
Year 2023
The Company has trade receivables to be recovered from Group companies, and payables to those
companies. Offsetting of the amounts is planned to be done on a regular basis.
The majority of trade receivables from third parties are insured against the default risk by Credendo and
Coface, companies with an AA rating according to S&P.
As at 31 December 2023, for estimating the expected credit losses ("ECL") related to the receivables of the
company, an analysis has been made to assess the credit risk in terms of probability of default, determined
based on creditworthiness of Credendo and Coface. The probability of default parameter was derived from
external agency ratings. Last identified rating is Moody’s B3 rating. For the purpose of IFRS 9, the standard
ECL formula and a forward looking correction were applied.
As a result of this IFRS 9 analysis, the Company estimates an impairment of trade receivables from third
parties and group companies in amount of RON 574,542.
Year 2022
The Company has trade receivables to be recovered from Group companies, and payables to those
companies. Offsetting of the amounts is planned to be done on a regular basis.
The majority of trade receivables from third parties are insured against the default risk by Credendo and
Coface, companies with an AA rating according to S&P.
As at 31 December 2022, for estimating the expected credit losses ("ECL") related to the receivables of the
company, an analysis has been made to assess the credit risk in terms of probability of default, determined
based on creditworthiness of Credendo and Coface. The probability of default parameter was derived from
external agency ratings. Last identified rating is Moody’s B3 rating. For the purpose of IFRS 9, the standard
ECL formula and a forward looking correction were applied.
As a result of this IFRS 9 analysis, the Company estimates an impairment of trade receivables from third
parties and group companies in amount of RON 317,495.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
43
14. CASH AND CASH EQUIVALENTS
31 December
2023
31 December
2022
Cash at banks and on hand
27,302,728
11,190,679
Total
27,302,728
11,190,679
Cash in the bank is interest-bearing at the daily interest rate when the deposits are set. Short-term deposits
are made for different periods of time between 1 day and 3 months, depending on the Company's cash
requirements and accrues interest at the appropriate interest rates.
As of 31 December 2023, the Company had letters of guarantee issued in favor of third parties amounting
to RON 26,160 (2022: RON 19,105).
As of 31 December 2023 and 31 December 2022 respectively, the Company has an unused credit facility
of RON 10,000,000 at BNP Paribas. The interest rate is 1-month ROBOR + 1.30% pa.
15. CASH POOLING INTERCOMPANY RECEIVABLE
In 2023 and 2022 the Company participated in a cash pooling agreement with AI Sirona (Luxembourg)
Acquisition SARL (the ultimate parent entity of Zentiva Group, a.s.). Through the cash pooling
arrangements AI Sirona (Luxembourg) Acquisition SARL manages centrally the surplus cash and the short-
term liquidity needs of the subsidiaries. The cash deposits/drawdowns under the cash pooling agreement
are subject to interest rates based on 3M ROBOR rate and applicable mark-up based on valid Group
transfer pricing policy.
The total interest income for cash-pooling transactions during the year is in the amount of RON 37,877,564
(2022: interest income in the amount of RON 31,614,121) and is presented in Note 6.4 Financial income.
In estimating the expected credit losses ("ECL") related to the cash pooling contract and ability of the
ultimate parent company to be able to repay the cash deposits on demand, if required by the Company
within its local business, the Company took into account the rating of the Zentiva Group as well as its
sufficient liquidity from a) Revolving Credit Facilities and b) cash balance and concluded that no significant
credit risk exists for this financial instrument. As at 31 December 2023, the company booked a ECL
provision in amount of RON 938,466 (31 December 2022: RON 1,070,369).
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
44
16. ISSUED CAPITAL AND RESERVES
Authorized shares
31 December
2023
31 December
2022
Ordinary shares of RON 0.1 each
697,017,040
697,017,040
Ordinary shares issued and fully paid
Number
Value
On 31 December 2023
697,017,040
69,701,704
On 31 December 2022
697,017,040
69,701,704
Redeemable shares: The Company has no redeemable shares on 31 December 2023 (2022: no
redeemable shares).
Share capital
31 December
2023
31 December
2022
Issued share Capital
69,701,704
69,701,704
Total share capital
69,701,704
69,701,704
As of December 31, 2023, Zentiva Group a.s. held 95,9486% of the Company's shares (31 December
2022: 95,9486%), the reminder of the shares being held by other minority shareholders.
Share premium
31 December
2023
31 December
2022
Inflated share premiums
Share premiums (nominal value)
9,863,684
9,863,684
Hyperinflation adjustment on share premiums*
15,100,822
15,100,822
Total inflated share premiums
24,964,506
24,964,506
* For conversion to IFRS in 2011, the Company recorded a hyperinflation adjustment for the share premiums for the period 1992 -
2003 when Romania was considered to be a hyperinflationary economy.
Revaluation reserves
The revaluation reserve is considered to be realized when the correspondent asset is disposed of or sold.
Once the revaluation reserve becomes realized, it can be distributed. As at 31 December 2023, the
Company has revaluation reserves in amount of RON 67,069,892 (2022: RON 67,069,892).
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
45
16. ISSUED CAPITAL AND RESERVES (continued)
Legal and other reserves
Total other reserves included in the capital components:
31 December
2023
31 December
2022
Legal reserves (i)
13,940,341
13,940,341
Other reserves (other funds) (ii)
142,021,169
132,458,834
Total other reserves
155,961,510
146,399,175
(i) The company sets its legal reserves under the Companies Law, which requires that 5% of the annual
accounting profit before taxes is transferred to „Legal Reserves” until the balance of this reserve reaches
the threshold of 20% of share capital. Legal reserves are not distributable. On 31 December 2020, the legal
reserves of the Company reached the threshold of 20% from the share capital. In 2022 and 2023, the
company didn’t set legal reserves.
(ii) Other reserves include RON 104,406,145 undistributed profits from the years 2004 - 2008, 2012 – 2013,
2015 – 2016, that are available for distribution as dividends and RON 37,615,024 reserves from reinvested
profits (2022: RON 28,052,689). When the reserves from reinvested profit are used, they become taxable.
The company is required to keep the assets, for which the tax benefit was obtained, in its patrimony for at
least a period equal to half the period of economic use of the asset, but not more than 5 years.
17. DIVIDENDS DISTRIBUTED AND PAID
During 2023, the Company did not distribute dividends (2022: the Company did not distribute dividends).
In 2023, the Company made no dividend payments to the Company’s shareholders (2022: RON 0 dividend
payments).
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
46
18. PROVISIONS
Other provisions
31 December
2023
31 December
2022
Provisions for litigations
-
-
Provisions for taxes
(3,583,810)
(3,583,810)
Other provisions
-
(1,001,717)
Environmental provision
(1,265,568)
(1,265,568)
Total
(4,849,378)
(5,851,095)
Provisions for
litigations
Provisions
for taxes
Environment
al provision
Other
provisions
Total
On 1 January 2023
-
3,583,810
1,265,568
1,001,717
5,851,095
Increase
-
-
-
-
-
Reversal
-
-
-
(1,001,717)
(1,001,717)
On 31 December 2023
-
3,583,810
1,265,568
-
4,849,378
Current
-
3,583,810
-
-
3,583,810
Long term
-
-
1,265,568
-
1,265,568
Provisions for
litigations
Provisions
for taxes
Environmental
provision
Other
provisions
Total
On 1 January 2022
211,549
3,583,810
1,265,568
-
5,060,927
Increase
-
262,800
-
1,913,472
2,176,272
Reversal
(211,549)
(262,800)
-
(911,755)
(1,386,104)
On 31 December 2022
-
3,583,810
1,265,568
1,001,717
5,851,095
Current
-
3,583,810
-
1,001,717
4,585,527
Long term
-
-
1,265,568
-
1,265,568
Provisions for taxes
As at 31 December 2023, the balance of the tax provision is in amount of RON 3,583,810.
The provisions for taxes are set for the amounts payable to the State Budget, provided that the respective
amounts do not appear as a liability in relation to the State.
Environmental provisions
The environmental provision was reassessed by specialists during the year 2021 and the balance of the
provision as of 31 December 2022 and 31 December 2023 is in amount of RON 1,265,568. This represents
expenses related to ecological rehabilitation and soil and underground water monitoring.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
47
19. PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
As detailed in the accounting policy, the Company applies an employee defined benefit plan. The plan
requires the Company to pay social security contributions for the employees in the public pension fund.
In the normal course of business, the Company makes payments to the Romanian State for on behalf of
its employees. All Company employees are members of the Romanian State pension plan. The Company
does not operate any other pension plan or post-retirement benefit plan except for the retirement benefits
plan detailed below and, consequently, has no obligation concerning pensions. In addition, the Company
is not under the obligation to provide additional benefits to former or current employees.
Benefits granted upon retirement:
According to the Collective Labor Agreement, the Company grants to its employees a variable number of
salaries depending on length of service within the Company.
According to P1 Plan, upon retirement, retirees receive a bonus depending on their length of service within
the Company as follows:
➢ Up to 10 years in the Company, ½ average gross salary at company level;
➢ 10 - 20 years within the Company, 1 average gross salary at company level;
➢ 20 - 30 years within the Company, 2 average gross salary at company level;
➢ Over 30 years within the Company, 3 average gross salaries at company level.
In addition, according to P2 Plan, when employees turn 50, in case the employees have completed 5 years
of continuous service in the company, they receive a bonus based on their length of service within the
Company as follows:
➢ 5 - 15 years in the Company, ½ average gross employee salary;
➢ Over 15 years in the Company, one average gross employee salary.
At the same time, depending on the length of service at the Company, the employees receive some benefits
in fixed amounts, which start with 400 RON upon completion of 2 years in the Company and reach 3,800
RON upon completion of 36 years in the Company.
Provisions for pensions and other similar obligations are estimated based on the collective labor agreement
of the Company by a third-party specialist.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended on 31 December 2023
(amounts are expressed in RON, unless specified otherwise)
48
19. PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS (continued)
Below we summarize the components of the net benefit recognized in the Statement of Comprehensive Income:
Post-employment benefits
31 December
2023
31 December
2023
Total
31 December
2022
31 December
2022
Total
Post-
employment
benefits (P1)
Jubilee Plan
(P2)
Post-
employment
benefits (P1)
Jubilee Plan
(P2)
Benefit obligation at the beginning of the year
2,907,000
3,041,000
5,948,000
2,669,000
655,000
3,324,000
Current service cost
213,000
410,000
623,000
199,000
95,000
294,000
Financial cost - interest (on the benefit)
235,000
225,000
460,000
149,000
33,000
182,000
Paid benefits
(695,000)
(959,000)
(1,654,000)
(519,000)
(863,000)
(1,382,000)
Termination benefits
309,000
-
309,000
384,000
-
384,000
Amendments to the plan
-
-
-
-
2,180,000
2,180,000
Actuarial gain / loss – experience
504,000
436,000
940,000
321,000
943,000
1,264,000
Actuarial gain / loss – changes in financial assumptions
378,000
170,000
548,000
(295,000)
(2,000)
(297,000)
Benefit obligation at the end of the year
3,851,000
3,323,000
7,174,000
2,907,000
3,041,000
5,948,000
The net benefit liability recognized in the statement of financial position
3,851,000
3,323,000
7,174,000
2,907,000
3,041,000
5,948,000
Changes in actuarial gains
31 December
2023
31 December
2023
Total
31 December
2022
31 December
2022
Total
Retirement
benefit plan
(P1)
Jubilee bonus
plan (P2)
Retirement
benefit plan
(P1)
Jubilee bonus
plan (P2)
Actuarial gains / losses accumulated at the beginning of the year
944,000
1,284,000
2,228,000
917,000
343,000
1,260,000
Actuarial (gain) / losses following changes in employee experience
504,000
436,000
940,000
321,000
943,000
1,264,000
Actuarial (gain) / losses following changes in financial assumptions
378,000
170,000
548,000
(295,000)
(2,000)
(297,000)
Actuarial gains / losses accumulated at the end of the year
1,826,000
1,890,000
3,716,000
944,000
1,284,000
2,228,000
Assumptions to determine the defined benefit obligation
Discount rate
7.00%
7.00%
-
8.10%
8.10%
-
Compensation increase rate
5.50%
5.50%
-
5.50%
5.50%
-
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
49
20. TRADE PAYABLES AND OTHER PAYABLES
Other current liabilities
31 December
2023
31 December
2022
Wages and salaries payable
19,650,365
16,727,645
Social security contributions and salary taxes
4,380,866
5,341,031
Claw-back tax (*)
14,164,344
13,091,407
Other taxes
3,078,401
2,796,582
Other liabilities
4,977,605
3,636,712
Total
46,251,580
41,593,377
(*) Claw-back
31 December
2023
31 December
2022
Initial estimate of the tax liability to the State Budget for the last quarter
14,376,332
15,207,825
Regularization of the claw-back tax for the last quarter, according to
the notification received from the CNAS
(211,988)
(2,116,418)
Total
14,164,344
13,091,407
The terms and conditions of the trade payables mentioned above:
Trade payables are not interest-bearing and are usually settled within 30 - 90 days.
For the terms and conditions regarding affiliates and related parties, see Note 21.
For explanations regarding the Company's liquidity risk management processes, see Note 23.
Trade payables and other payables
31 December
2023
31 December
2022
Trade payables
83,782,862
82,127,427
Trade payables to related parties at the end of year
127,206,060
32,968,150
Total
210,988,922
115,095,577
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
50
21. RELATED PARTY DISCLOSURES
21.1 Nature of the transactions with related parties (“affiliated entities and other related parties”)
An entity is “ related party “ of another entity if:
a) directly or indirectly, through one or more entities:
• it controls or it is controlled by the other entity or it is it is subject to the joint control of the other
entity (including the parent companies, the subsidiaries or member subsidiaries);
• it has an interest in the respective entity, which gives a significant influence on it; or;
• it holds joint control on the other entity;
b) it represents an entity associated to the other entity;
c) it represents a joint venture with the other entity as shareholder;
d) it represents a member of the entity or the parent company key management;
e) it represents a close family member of the person mentioned at points a) or d);
f) it represents an entity which is controlled, jointly controlled or significantly influenced or for which the
significant voting right is granted, directly or indirectly, by any of the persons mentioned at points d)
or e); or
g) the entity represents a post-employment benefits plan for the other entity employees or for the
employees of any other entity related to such an entity.
➢ Details about other affiliated parties:
Company name
Nature of relation
Transaction type
Country of
origin
Registered
office
AI Sirona (Luxembourg)
Acquisition S.à.r.l
Parent of Zentiva
Group AS
Holds cash pooling
Luxemburg
Luxemburg
Labormed Pharma Trading SRL
Company under
common control
Sale of goods and services
Romania
Bucharest
Labormed Pharma SA
Company under
common control
Provision of services
Romania
Bucharest
Solacium Pharma SRL(absorbed
by Labormed Pharma Trading as
of 31 December 2022)
Company under
common control
Provision of services
Romania
Bucharest
Zentiva Group AS
Majority shareholder
Purchases /revenue from
services
Czech
Republic
Prague
Zentiva Italia
Company under
common control
Purchases of goods
Italy
Milan
Zentiva K.S.
Company under
common control
Purchases/ Sale of goods
and provision of services
Czech
Republic
Prague
Zentiva Pharma GMBH
Company under
common control
Purchases/ Sale of goods
and provision of services
Germany
Frankfurt
Zentiva Private LTD
Company under
common control
Purchases of goods
India
Mumbai
Zentiva Pharma UK Limited
Company under
common control
Provision of services
UK
London
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
51
21. RELATED PARTY DISCLOSURES (continued)
21.2 Payables and receivables from affiliated entities and other related parties
➢ Receivables from affiliated entities / other related parties
Balance as of
31 December
2023
Balance as of
31 December
2022
Labormed Pharma Trading SRL
14,143,516
15,382,705
Labormed Pharma SA
1,773,605
3,098,789
Solacium Pharma SRL
-
-
Zentiva K.S.
100,409,533
272,196
Zentiva Group A.S.
14,416,422
725,459
Zentiva Pharma UK Limited
18,645
18,645
Zentiva Private LTD
-
(1,985)
Trade receivables from related parties
130,761,721
19,495,809
Zentiva Group A.S. – advances paid
-
11,736,473
Zentiva K.S. – prepayments
1,137,881
-
Total
131,899,602
31,232,281
Al Sirona (Luxembourg) Acquisition S.à.r.l – cash pooling
583,820,497
583,511,187
➢ Payables to the affiliated entities / other related parties
Balance as of
31 December
2023
Balance as of
31 December
2022
Labormed Pharma Trading SRL
14,407,094
10,972,707
Labormed Pharma SA
4,059,371
1,718,903
Solacium Pharma SRL
-
-
Zentiva K.S.
75,221,926
12,428,076
Zentiva Group A.S.
31,931,012
6,845,584
Zentiva Pharma GMBH
325,058
323,281
Zentiva Italia
507,890
229,627
Zentiva Private LTD
753,709
380,511
Al Sirona (Luxembourg) Acquisition S.à.r.l
-
69,462
Total
127,206,060
32,968,150
21.3 Information regarding the transactions with the affiliated entities and other related parties
➢ Sales of goods and services
Financial year
ended at
31 December 2023
Financial year
ended at
31 December 2022
Labormed Pharma Trading SRL
34,472,680
18,608,732
Labormed Pharma SA
4,786,899
3,801,066
Solacium Pharma SRL
-
7,213,298
Zentiva K.S.
368,220,773
273,865,627
Zentiva Group AS
14,416,422
15,616,526
Zentiva Pharma UK Limited
-
18,645
Total
421,896,774
319,123,893
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
52
21. RELATED PARTY DISCLOSURES (continued)
From the total sales to the group for the year 2023 are eliminated and are not included in the table above
26,679,224 RON (2022: RON 24,720,735) representing sales to Zentiva KS of goods originating in Turkey
and certified for export to the European Union for which the Company acts as an agent. Sales are offset
against the cost of the related goods. These are flows of transactions where the Company acts as an agent
and not as principal. The transactions refer mainly to products acquired from Zentiva k.s. from factories
outside European Union and for which the Company performs as local level quality and certifications
procedures in order to be in compliance with sales regulations imposed by European Union.
The sales disclosed above do not include the claw-back tax impact, as presented under Note 5.1 Revenues.
➢ Purchase of goods and services
Financial year
ended at
31 December 2023
Financial year
ended at
31 December 2022
Labormed Pharma Trading SRL
10,666,474
4,970,584
Labormed Pharma SA
2,012,680
2,297,479
Solacium Pharma SRL
-
1,613,766
Zentiva K.S.
152,683,517
86,415,562
Zentiva Group A.S.
53,923,356
40,142,710
Zentiva Private LTD
1,879,041
1,163,888
Zentiva Italia
276,432
-
Al Sirona (Luxembourg) Acquisition S.à.r.l
-
69,462
Total
221,441,500
136,673,451
From the total group purchases for 2023 are eliminated and are not included in the table above
RON 26,679,224 (2022: RON 24,720,735) representing sales to Zentiva KS of goods originating from
Turkey and certified for export to the European Union for which the Company acts as an agent. The
purchases are offset against the sales of the related goods. These are flows of transactions where the
Company acts as an agent and not as principal. The transactions refers mainly to products acquired from
Zentiva k.s. from factories outside European Union and for which the Company performs as local level
quality and certifications procedures in order to be in compliance with sales regulations imposed by
European Union.
Information about the Company's transactions with related parties can also be found in:
• Note 5.1 "Revenues",
• Note 6.2 "Other operating expenses",
• Note 6.4 “Financial income” related to cash pooling account interest.
The ultimate parent of the Company
The Company is part of the AI Sirona (Luxemburg) Acquisition S.a.r.l group, with the registered office in
rue des Capucins 5, L - 1313 Luxemburg.
AI Sirona (Luxemburg) Acquisition S.a.r.l has as ultimate shareholder multiple investment funds controlled
by Advent International.
There are no transactions, other than those described between the Company and the Zentiva Group during
the financial years 2023 and 2022.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
53
21. RELATED PARTY DISCLOSURES (continued)
Compensations granted to the key management of the Company
Directors, managers and the supervisory body
In 2023 the Company granted the following gross amounts to the members of the Board of Directors which
include fixed remuneration and bonuses:
Financial year
ended at
31 December 2023
Financial year
ended at
31 December 2022
Members of the Board of Directors
2,896,972
2,261,071
Total
2,896,972
2,261,071
The Board of Directors consists of 5 people of which only 4 people are remunerated.
Two persons are part of the executive management, and their remuneration is included in the amounts
above. The audit committee consists of the other 3 non-executives members.
As of 31 December 2023 and 2022, the Company had no obligations related to pension payments to the
former members of the Board of Directors, executive management and to the members of the supervisory
body.
There are no guarantees or future obligations undertaken by the Company on behalf of the directors or the
managers at the end of the financial year.
22. CONTINGENCIES
Taxation
All the amounts owed to the State for taxes and charges have been paid or accrued at the balance sheet
date. The tax system in Romania undergoes a consolidation process and is being harmonized with the
European legislation. Different interpretations may exist at the level of the tax authorities regarding the tax
legislation, which may result in additional taxes and penalties payable. Where the State authorities have
findings from reviews relating to breaches of Romania’s tax laws, these may result in: seizure of the
amounts involved additional tax liabilities being payable; fines and penalties (that are applied on the total
outstanding amount). As a result, the fiscal penalties resulting from breaches of the legal provisions may
result in significant amounts payable to the State budget.
The Company believes to have paid in due time and in full all applicable taxes, penalties and penalty
interests, in the applicable extent.
The Romanian tax authorities have completed reviews of corporate tax and VAT up to December 2016.
Starting with 18 September 2023, the Company is subject to a general fiscal control related to corporate
income tax and VAT for the period 2017 - 2020. At this moment the fiscal control is ongoing, there are no
communications from the authorities at this time, or discussions that could indicate the existence of a fiscal
risk that could affect the current result.
In Romania, a financial year remains open to further verification for 5 years.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
54
22. CONTINGENCIES (continued)
Transfer price
According to the applicable relevant Romanian legislation, the tax assessment of related party transactions
is based on the concept of market value for the respective transfers. Following this concept, the transfer
prices should be adjusted so that they reflect the market prices that would have been set between unrelated
companies acting independently (i.e. based on the “arm’s length principle”).
It is likely that transfer pricing reviews will be undertaken in the future in order to assess whether the transfer
pricing policy observes the “arm’s length principle” and therefore no distortion exists that may affect the
taxable base of the Romanian tax payer.
Legal claims (including the estimated value)
As at December 31, 2023, the Company is involved in several disputes, of which the most significant are
listed below:
• The Company was involved in several disputes with the National Health Insurance House ("CNAS")
following a challenge filled on the VAT paid, related to the clawback tax for the period Q1 2012 - Q4
2012, as well as on the method of calculating the individual consumption communicated for determining
the clawback tax for the period Q1 2013 - Q3 2013 and Q1 2020, requesting the cancellation of the
Notifications received from CNAS related to the previously mentioned periods. Currently, the Company
is involved in a single litigation, which is ongoing against CNAS, namely- case file no. 7592/2/2020 - for
Q2 2020, while the other 6 disputes in which the Company has been involved in the past were definitively
settled as at the date of this Report.
*the trial in file no. 7592/2/2020 is suspended considering the Romanian Constitutional Court was
requested to solve the exception of unconstitutionality of the phrase “starting with the first quarter
of 2020” within paragraph 1 of art. 37 of GEO no. 77/2011. According to the Romanian law, the
case was suspended on the merits and no appeal. As at December 31, 2023, the file registered
with the Romanian Constitutional Court is still in the preliminary report phase.
Thus, so far, the Company has won in court the recovery of the VAT related to the clawback tax for the
period Q1 2012 - Q4 2012 and for Q2 2013 - Q3 2013 (for Q1 2013, the Company's action was rejected
in its entirety) and is investigating the possibilities of recovery or compensation with other tax obligations
of the amounts thus recovered. For all these cases, the decisions of the court are final.
• In August 2019, ALPHA TRANSCORD SRL filed, through its judicial administrator, a summons against
the Company. The case, had as subject matter a contractual obligation consisting in the binding of the
Defendants, including the Company, to pay the amount of RON 2,262,332.27, related to the road
transport services. On 9 November 2021 the court allowed the action in part and ordered the Defendant
to pay the Claimant the amount of EUR 21,928.70 (excluding VAT), representing the value of the unpaid
invoices. Also, the court ordered ALPHA TRANSCORD SRL to pay the amount of RON 72,655 as court
costs to the Defendant.
Alpha Transcord filled an appeal against the above mentioned solution, on June 22, 2023.
At the court hearing held on 17 November 2023, the court maintained the solution of the first court.
This decision is pronounced on appeal and can be appealed (in Romanian, recurs) within 30 days from
the communication of the decision’s reasoning. On 31 December 2023, the decision’s reasoning was
not communicated to the Company.
The Company’s management considers that the respective litigations will not significantly impact the
Company’s operations and financial position.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
55
23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to the credit risk, the liquidity risk and the market risk (mainly, foreign exchange
risk). The Company management oversees the management of these risks.
The Board of Directors reviews and agrees to the policies of managing each of these risks which are
summarized below.
Market risk
The market risk is the risk that the fair value of the future cash flows of an instrument will fluctuate because
of the changes of the market prices. The market prices have four types of risks: interest rate risk, currency
risk, commodity price risk and other price risk, such as the equity price risk. The financial instruments
affected by the market risk include credits and loans, deposits, trade receivables and payables.
The sensitivity analyses in the following sections relate to the position as of 31 December 2023 and 2022.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
On 31 December 2023, the Company has no loans received and has a cash pooling agreement with the
parent company, at a variable interest rate (as detailed in Note 14, 15 and it has a debit balance as at 31
December 2023 and 2022).
The Company's exposure to the risk of changes in market interest rates is presented below:
Interest rate risk sensitivity
The following table demonstrates the sensitivity to a reasonable potential change in the ROBOR 3M
interest rate by +/- 10%, with all other variables held constant, of the Company's profit before tax. The
Company's exposure to changes in interest rates is presented below:
Change in ROBOR rate (+ / - 10%)
Effect on profit before tax
2023
3,864,892
2022
3,617,769
Currency risk
The currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in the foreign exchange rates. The Company's exposure to the risk of the changes in
foreign exchange rate mainly refers to the operating activities of the Company (when the receivables or
payables are expressed in a currency different from the functional currency of the Company).
The company has transactions in currencies other than its functional currency (RON).
The exposure to the foreign exchange risk (due mainly to the EUR and USD currencies) is not material,
and the Company does not use hedging instruments.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
56
23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
The detail of financial instruments in foreign currencies is presented as follows (the amounts are expressed
in the RON equivalent):
31 December 2023
EUR
USD
RON
CZK
GBP
Total
Trade receivables and other
receivables
21,200,843
-
388,487,449
-
-
409,688,292
Cash pooling intercompany
receivable
20,665,215
-
563,155,282
-
-
583,820,497
Cash and cash equivalents
326,315
176,861
26,799,552
-
-
27,302,728
Total assets (1)
42,192,373
176,861
978,442,283
-
-
1,020,811,517
Trade payables – suppliers
76,637,275
11,909,926
122,440,313
1,409
-
210,988,923
Lease liabilities
21,155,608
-
-
-
-
21,155,608
Total liabilities (2)
97,792,883
11,909,926
122,440,313
1,409
-
232,144,531
Difference (1)- (2)
(55,600,510)
(11,733,065)
856,001,970
(1,409)
-
788,666,986
31 December 2022
EUR
USD
RON
CZK
GBP
Total
Trade receivables and other
receivables
11,384,874
-
137,464,974
-
-
148,849,848
Cash pooling intercompany
receivable
19,843,754
-
563,667,433
-
-
583,511,187
Cash and cash equivalents
159,573
105,443
10,925,662
-
-
11,190,679
Total assets (1)
31,388,201
105,443
712,058,070
-
-
743,551,714
Trade payables – suppliers
36,327,305
13,686,281
65,055,001
-
26,989
115,095,577
Lease liabilities
18,810,981
-
-
-
-
18,810,981
Total liabilities (2)
55,138,286
13,686,281
65,055,001
-
26,989
133,906,558
Difference (1)- (2)
(23,750,085)
(13,580,838)
647,003,068
-
(26,989)
609,645,156
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonable potential change in the exchange rate for
US dollar and EUR, with all other variables held constant, of the Company's profit before tax and equity
(due to changes in the values of monetary assets and liabilities). The Company's exposure to foreign
currency changes is presented below:
Change in EUR rate (+10%) -
Effect on profit before tax
and equity
Change in USD rate (+10%) -
Effect on profit before tax and
equity
Change in CZK rate (+10%) -
Effect on profit before tax
and equity
2023
(5,560,051)
(1,173,307)
-
2022
(2,375,008)
(1,358,084)
-
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities
(mainly for trade receivables) and from its financing activities, including deposits with banks and financial
institutions and cash pooling intercompany receivable, foreign exchange transactions and other financial
instruments.
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
57
23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Trade receivables
Customer credit risk is managed by the Company, subject to the established policy; nonetheless, the
Company considers that the credit risk on receivables is low (mainly intra-Group receivables).
Outstanding customer receivables are monitored at the end of each reporting period and any subsequent
collections are analyzed.
The impairment indicators are analyzed at each reporting date.
The Company credit risk mainly relates to the receivables from related parties, for which the impairment
probability is considered low. The maximum exposure to credit risk at the reporting date is the carrying
value of each class of financial assets disclosed in Note 13, 14 and Note 15.
The Company assesses the concentration of the risk with respect to trade receivables as low due to the
fact most of third party receivables are insured.
Financial instruments and cash deposits
The credit risk from the balances with banks and financial institutions is managed by the treasury
department of the Company, in accordance with the Company's policies. The maximum exposure of the
Company to the credit risk for the components of the statement of financial position is the carrying amounts
as illustrated in Note 14 and 15.
Liquidity risk
The Company monitors its risk to a shortage of funds using a recurring liquidity planning tool.
The Company has no long-term financing (neither trade, nor liabilities to financial institutions).
The Company's financial liabilities with maturities over 1 year are represented by lease liabilities.
The table below details the maturity profile of Company’s undiscounted payments of trade payables and
financial liabilities:
As of 31 December
2023
<30 days
30 – 60
days
60 - 180
days
180 – 360
days
>1 year
Total
Trade payables
121,874,566
23,297,376
48,212,241
17,604,739
-
210,988,923
Lease liabilities
692,269
1,384,538
2,076,807
4,153,613
14,669,420
22,976,647
Total liabilities
122,566,835
24,681,914
50,289,048
21,758,352
14,669,420
233,965,570
For 2023 year the undiscounted payments of lease liabilities above 5 years are RON 640,166.
As of 31 December
2022
<30 days
30 – 60
days
60 - 180
days
180 – 360
days
>1 year
Total
Trade payables
103,375,560
1,742,620
9,977,397
-
-
115,095,577
Lease liabilities
584,040
717,206
2,155,047
3,246,615
13,009,696
19,712,604
Total liabilities
103,959,600
2,459,825
12,132,444
3,246,615
13,009,696
134,808,181
Graphics
ZENTIVA SA
NOTES TO THE FINANCIAL STATEMENTS
for the financial year concluded on 31 December 2023
(all amounts are presented in RON, unless otherwise stated)
58
23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Capital management
Capital includes shares and equity attributable to shareholders. The primary objective of the Group’s capital
management is to ensure that it maintains a strong credit rating and healthy capital ratios to support its
business and maximize the shareholder’s value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic
conditions. No changes were made in the objectives, policies or processes of managing capital during the
financial years ended 31 December 2023 and 2022.
24. STATUTORY AUDITOR EXPENSES
In 2023, the statutory auditor Ernst & Young Assurance Services SRL. Auditor had a contractual fee of
EUR 130,200 for the statutory audit of the individual annual financial statements of the company, and EUR
8,000 for other reports required by the regulations in place.
25. EVENTS OCCURRING AFTER THE REPORTING PERIOD
There were no subsequent events that would affect the financial statements of the Company as of
December 31, 2023.
The financial statements from page 3 to page 58 were approved by the Board of Directors and were
authorized to be issued in accordance with the resolution of the Directors, dated 27 March 2024.
Administrator,
Prepared by,
Simona Cocos
Daniel Nitulescu
Chief Financial Officer
Signature
Signature
Company stamp