AGEL a.s. ANNUAL REPORT AGEL Group CONSOLIDATED ANNUAL REPORT

Transcription

1 2012 AGEL a.s. ANNUAL REPORT AGEL Group CONSOLIDATED ANNUAL REPORT

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3 Table of contents of the AGEL a.s. s Annual Report for the Year Ended 31 December Introduction of the Chairman of the Company s Board of Directors 2. The Board of Directors Report on Major Events of the Previous Calendar Year 3. Organisational Structure of AGEL a.s., Organigram of the AGEL Group as of 31/12/ Identification Details of the Company, Statutory Bodies, Company management, Audit Committee 5. The auditor s report 6. Financial Part I Financial Statements for the year ended 31/12/ Balance Sheet full version Profit and Loss Account Statement of Changes in Equity Cash Flow Statement (cash flow) Footnotes to the Financial Statements 7. Financial Part II 2012 Consolidated Financial Statements Consolidated Balance Sheet full version Consolidated Profit and Loss Account Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement (cash flow) Footnotes to the Consolidated Financial Statements 8. Report on the Company s business activity and the balance of its assets as of 31/12/2012, activities regarding protection of the environment, research and development activities, activities regarding employment relations 9. Report on Related Party Transactions for the year ended 31 December The Company s Supervisory Board s Report 11. Audit Committee Report 12. Estimated development of the company in 2013 and the following years

4 Introduction of the Chairman of the Board of Directors 1.0 Ladies and Gentlemen, Dear Business Partners, On behalf of the AGEL a.s s Board of Directors, I am pleased to present you with the Annual Report of AGEL a.s. and the AGEL group, which brings an overview of the results achieved in Predominantly, the Annual Report has an evaluating character, but it also shows our vision, trends and objectives for the upcoming years. In 2012, we managed to consolidate our position in the provision of healthcare in the territory of the former Czechoslovakia. Our group has undoubtedly proved that a well-managed private company may be very successful in the competition of healthcare providers. Despite an on-going decline in payments from health insurance providers, the majority of our companies demonstrated positive results. This created the conditions necessary for the continual growth of average wages, which exceeded the guaranteed projections given by the Holding Company Collective Agreement, and thereby contributed to the personnel stabilisation of the entire Group. Our human resources policy has been confirmed with the awarding of the title of Best Employer of the Olomouc Region and the national award for Most Progressive Employer in the Czech Republic. It is very pleasing that even in our current uneasy times we have managed to continually improve the technical level of our workplaces as well. As a private healthcare facility, we must constantly struggle with the natural scepticism of those around us, and for this reason, it is essential to confirm and improve awareness of our high levels of competency in the provision of healthcare. Our healthcare facilities achieve significant success in the technical sphere as well, whether through the discovery of the hitherto unknown form of fibrinogen in Šumperk or the implementation of mechanical cardiac support methods in the Cardiology Centre in Podlesí. Many of our colleagues conduct scientific research and submit their experience to the students of medical schools in Olomouc and Ostrava. In connection with these activities Vzdělávací institut AGEL, o.p.s. has been transformed into Vzdělávací a výzkumný institut AGEL, o.p.s., which will coordinate all scientific research activity in our Group. Most of all, AGEL a.s. has ensured the management and coordination of the entire Group; either directly or through its subsidiaries it has managed a group of 36 subjects engaged in the provision of healthcare or the support of these activities, as well as the AGEL organisational unit. The most important value and result achieved from our efforts is the satisfaction of our patients and clients. Permanent improvement of the standard and quality of healthcare is guaranteed by the fact that all our healthcare facilities have successfully passed the accreditation procedure of the Joint Accreditation Committee of the Czech Republic. It is a testimony to how much our efforts are appreciated by our patients as well that we have once again been awarded top rankings in the annual Hospital of the Year survey conducted by HCI. In the previous year, AGEL a.s. once again traditionally organised the sixth year of the Science Symposium. Almost 400 specialists from the ranks of doctors and nurses met at the beginning of October 2012 at the NH Hotel Congress Centre. 2

5 Úvodní slovo předsedy představenstva 1.0 The common theme was the issues of minimally invasive approaches in medicine, while the newest findings in cardiology, orthopaedics, oncology, and other fields were also discussed. The programme including tens of specialist lectures was even this year divided into the sections for physicians and nurses. Among the lecturers were, for example, MUDr. Pavel Dungl, DrSc., Chairman of the Orthopaedics Association, and MUDr. Michael Aschermann, DrSc., Vice Chairman of the Cardiology Association. The dean of the Medical Faculty of Palacký University Olomouc, Prof. MUDr. Milan Kolář, Ph.D., also participated, confirming the very good cooperation between AGEL Group healthcare facilities and the medical faculty. These personalities also guaranteed the high specialisation and quality of this year s symposium. At the symposium the current grants which support scientific research within the AGEL group were also presented. The level of this support is ever greater year after year. I owe my gratitude to all members of the AGEL a.s. s Supervisory Board without whose active engagement, personal commitment, and flexible cooperation it would have been much harder for us to achieve such successful results, this year and the year before. I would also like to thank our employees, without whose effort and dedication we would not be able to maintain the high professional and human standard of our Company. MUDr. Filip Horák, MBA Chairman of the Board of Directors of AGEL a.s. 3

6 The Board of Directors Report on Major Events of the Previous Calendar Year 2.0 As of 1 January 2012, the commercial name of Radioterapie, a.s. was changed to Nemocnice Nový Jičín a.s. and on the same day Nemocnice Nový Jičín a.s. started to operate defunct Nemocnice s poliklinikou v Novém Jičíně p.o. As of 1/1/2012, Dopravní zdravotnictví a.s. purchased a general practitioner s surgery for adults based at Přerov, Velké Novosady 8, from MUDr. Marie Pastuchová. Thereby it expanded the offer of its services at this address, where it has been already operating other surgeries. In January 2012, in Nemocnice Valašské Meziřičí a.s., a new Centre for the Weight Reduction and Preventive Medicine aimed at the groups of patients with overweight and slight obesity was opened. This Centre also concentrate on exclusion of pathological metabolic reasons of obesity, capture of potentially risky persons and early prevention of lifestyle diseases. Mgr. Libor Vrba. a new member of the AGEL a.s. Board of Directors was elected on 27/2/2012 with effect from 1/3/2012. Upon the decision of the promoter of AGEL a.s., dated 27/2/2012, a new trading company was established with the commercial name AGEL SERVIS a.s., based at Prostějov, Mathonova 291/1, Postcode: A reconstructed outpatient part of the surgical specialisations pavilion had a grand opening in Nemocnice Přerov, which is a part of Středomoravská nemocniční a.s., New modern equipment was installed in the surgeries, a new reception was established and a patient call system system was introduced. A total investment amounted to CZK 12,738 thousand. Reconstructed Surgeries of Nemocnice Přerov Under the Project of Demerger by Spin off through Amalgamation, the medical part of the company being demerged ARTUR KOBLITZ, s.r.o., based at Brno, Okružní 875/19a, Postcode: , Identification No was transferred to Kardiologické centrum AGEL s.r.o. 4

7 The Board of Directors Report on Major Events of the Previous Calendar Year 2.0 In April 2012, a comprehensive revitalisation of surgical pavilions, gynaecological-obstetric and internal medicine pavilions, the headquarters and pavilion with the child daycare facility in Vítkovická nemocnici a.s. A part of the renewal was a complete thermal insulation of buildings and roofs, replacement of windows and doors and a new facade. A total investment amounted to CZK 48 million. On 23/5/2012, pursuant to the Deed of Foundation between AGEL a.s. and Reprofit International, s r.o., based at Brno-Černá Pole, Provazníkova 1241/23, Postcode , Identification No , a new company, IVF Clinic a.s., was established, whose purpose will be the provision of healthcare services in the the area of gynaecology and obstetrics and reproductive medicine. From May to October, a complete reconstruction of two inpatient stations of the internal medicine department in Nemocnice Přerov, Středomoravská nemocniční a.s. was carried out Two- and three-bed rooms with individual sanitary facilities were completed, an above-standard room and isolation room were established on each floor. The grand opening of the reconstructed premises in the presence of the governor of the Olomouc Region was held on 24/9/2012. The AGEL Group takes pride in the title the Best Employer of the Region in the Olomouc Region in On 7 October 2012, Ing. Iveta Ostruszková, MBA, a member of the AGEL a.s. s Board of Directors, took over a prestigious prize in a respected Sodexo competition, Employer of the Year In addition, AGEL a.s. obtained the 1st place in the category The Progressive Employer of the Year 2012 in the same competition. 5

8 The Board of Directors Report on Major Events of the Previous Calendar Year 2.0 In August 2012, Nemocnice Prostějov obtained a certificate on the fulfillment of conditions for providing the second-degree cerebrovascular care, the so-called the Stoke Centre, from the Ministry of Health of the Czech Republic and become a part of the national network of centres providing specialised treatment. It is the second workplace of such specialisation in the Olomouc Region. At the end of August 2012, the existing branch of MARTEK MEDICAL a.s. in Jesenice u Prahy was relocated to the new warehouse on the premises of the Airport Logistic Park in Prague Kněževes. More than 1,000 pallet places were created at the total area of 2,300 m 2. The WMS (Warehouse Management System) a system for the optimisation of stock management and logistics was also applied here. On 4 October, Diagnostické a liečebné centrum Zvolen s.r.o. opened a new public pharmacy Nová lekáreň upon the permission for operation obtained from the Banskobystrický Self-Governing Region. Nearly 400 specialists from amongst physicians as well as nurses from the Czech Republic and Slovakia gathered on 4 and 5 October in the NH Oloumouc Congress Hotel, in the fifth year of the AGEL Scientific and Research Symposium. In addition to the specialised papers, the continuing grants which support scientific activities in AGEL were also presented in the symposium. In 2012, the Ministry of Education, Youth and Physical Education of the Czech Republic, within the Education for Competitiveness Operational Programme, granted to Vzdělávací institut AGEL, o.p.s. the funds for the implementation of the Healthy Society Project, subtitled Learn-Try out-pass on, which is focused on the strengthening of a responsible approach to one s health, support of a healthy lifestyle, motivation to its preservation and interest in the healthy environment. Financial support aimed at education of broad public, will continue in 2013 as well. At the end of 2012, on the premises of Nemocnice Nový Jičín a.s., a baby box was installed and put into operation, which is already the 53rd box in the Czech Republic. A complete reconstruction of the angiological theatre in Nemocnici Podlesí a.s. is a significant event of A total investment in the equipment and construction work exceeded the amount of CZK 25 million. The above-mentioned amount was provided on the basis of a loan, which was granted for the purchase of technologies and construction work within the investment project Angiographic line/angiological theatre in Nemocnice Podlesí a.s. A new Angiographic line Angiographic set, Philips Allura Xper FD20/10, belongs to the state-of-the-artequipment for heart treatment in the Czech Republic. The Angiological Theatre in Nemocnice Podlesí We also decided to integrate pharmacies within Repharm, a.s. under the single brand LÉKÁRNA AGEL, so that the network of our pharmacies would obtain much greater purchasing and marketing strength and the overall image of the pharmacies under the AGEL brand would be supported. As a result, all of the pharmacies in the AGEL Group were rebranded in

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10 Organisational Structure of AGEL a.s. as of 31/12/

11 Organigram of the AGEL Group as of 31/12/

12 Identification Details of the Company Statutory Bodies, Company Management, Audit Committee as of 31/12/ Commercial name: AGEL a.s. Date of record: 14 June 1990 With effect since 1 July 2009 (after the change of the Company s registered office), AGEL a.s. has been recoded by the Regional Court in Brno, Section B, Inset No Identification No: Registered office: Prostějov, Mathonova 291/1, Postcode: Legal form: Joint stock company Major scope of business as of 31/12/2012: production, trade and services not specified in Annexes No. 1 to 3 of the Trades Licensing Act Share capital: CZK 100,000,000; % paid up Shares: 1,000 registered ordinary shares in the certificate form at the nominal value of CZK 100,000 each Transfer of shares is conditioned by the Supervisory Board s consent. Method of dealing on behalf of the company: In each case, two Board of Directors members jointly deal on behalf of the Company. 10

13 Identification Details of the Company Statutory Bodies, Company Management, Audit Committee as of 31/12/ The Supervisory Board as of 31/12/2012 Eng. David Hercky, MBA Member Ing. Tomáš Chrenek, Ph.D. Chairman PhDr. Dušana Chreneková, MBA Member MUDr. Martin Polach, MBA Vice Chairman MUDr. Dana Polachová Member Hana Tůmová Member Ing. TOMÁŠ CHRENEK, Ph.D. MUDr. MARTIN POLACH, MBA Eng. DAVID HERCKY, MBA Chairman of the Supervisory Board Vice Chairman of the Supervisory Board Member of the Supervisory Board PhDr. DUŠANA CHRENEKOVÁ, MBA MUDr. DANA POLACHOVÁ HANA TŮMOVÁ Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board 11

14 Identification Details of the Company Statutory Bodies, Company Management, Audit Committee as of 31/12/ Company s Board of Directors as of 31/12/2012 MUDr. Filip Horák, MBA Chairman Ing. Iveta Ostruszková, MBA Member MUDr. Milan Leckéši Vice Chairman Ing. Roman Gavanda Member Ing. Karel Kantor Vice Chairman Mgr. Libor Vrba Member MUDr. FILIP HORÁK, MBA MUDr. MILAN LECKÉŠI Ing. KAREL KANTOR Chairman of the Board of Directors Vice Chairman of the Board of Directors Vice Chairman of the Board of Directors Ing. IVETA OSTRUSZKOVÁ, MBA Ing. ROMAN GAVANDA Mgr. LIBOR VRBA Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors 12

15 Identification Details of the Company Statutory Bodies, Company Management, Audit Committee as of 31/12/ Audit committee as of 31/12/2012 Ing. Dana Trezziová MUDr. Martin Polach, MBA Ing. Eva Kalinová Chairwoman Vice Chairman Member Ing. DANA TREZZIOVÁ MUDr. MARTIN POLACH, MBA Ing. EVA KALINOVÁ Chairwoman of the Audit Committee Vice Chairman of the Audit Committee Member of the Audit Committee 13

16 A Branch of a Foreign Entity AGEL a.s. based at: Prostějov, Mathonova 291/1, Postcode: , Identification No.: Identification of the branch: AGEL a.s. branch Registered office of the branch: Bratislava, Prepoštská 2088/6, Postcode Scope of Business Activity: Purchase of goods for resale to the end user (retail) or to other traders (wholesale): Retail and wholesale of paper products, books, printed matter, school and office supplies, the press, magazines, newspapers, books, audio and audiovisual records, unrecorded record carriers, office supplies, school supplies, wallpapers, special paper, paper sanitary products. Intermediation activity in services: Intermediation activities in advertising; Intermediation activities in automated data processing; and Intermediation activities in research, development, natural, technical and social sciences. Business, financial, organisation and economic advisory: Marketing consulting; Media advisory; Consulting and certification in management and quality systems; Consulting and certification in service and personal quality; Consulting in healthy lifestyle and healthy nutrition; Consulting in human resources management; and Consulting, advisory and training services in the development of human resources (coaching). Bookkeeping. Performance of after-school educational activities: Organising training courses and seminars; and Organising training activities in sales, production and business support. Performance of training programmes in social services oriented to the performance of selected working activities and follow-up training. 14

17 A Branch of a Foreign Entity AGEL a.s. based at: Prostějov, Mathonova 291/1, Postcode: , Identification No.: Advertising and marketing services: Production, processing and distribution of advertising material; Organising advertising campaigns; Distribution of advertisement using different channels (newspapers, periodicals, radio, television, the internet and other media) placing outdoor adverts billboards, panels, notice boards, stands (gluing, hanging ); Lease of advertising spaces; Arranging marketing campaigns; Point-of-sale marketing, marketing consulting services; and Advertising. Research and development in natural sciences. Research of the market and public opinion: identification of the market potential, degree of awareness, acceptation of and acquaintance with the goods and services, purchasing patterns of customers in order to promote sales and development of new goods and services, analyses of results. Head of the branch: MUDr. Milan Leckéši, residing at: Valašské Meziříčí, Třanovského 1331, Postcode: The head of the branch is entitled to take all and any legal acts relating to the branch on behalf of the foreign legal entity. When signing documents in the name of the foreign entity in the scope relating to the branch, the head of the brand attaches his signature to the printed or written commercial name of the foreign legal entity with the identification of the branch. Duration of the branch: The branch of the foreign legal entity with the commercial name AGEL a.s. branch, is established for an indefinite period of time, in accordance with the laws applicable in the Czech Republic. Founder and its legal form: AGEL a.s. Based at: Prostějov, Mathonova 291/1, Postcode: , Identification No.: , registered in the Commercial Register maintained by the Regional Court in Brno, Section B, Inset No

18 The auditor s Report

19 The auditor s Report

20 18 6.5

21 Financial Part I Financial Statements for the Year ended 31/12/ Balance Sheet Full Version 6.2. Profit and Loss Account 6.3. Statement of Changes in Equity 6.4. Cash Flow Statement 6.5. Footnotes to the Financial Statements for the Year Ended 31 December

22 Financial Part I Financial Statements for the Year ended 31/12/ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012 Name of the Company: Registered Office: Legal Status: AGEL a.s. Mathonova 291/1, Prostějov Joint Stock Company Corporate ID: Components of the Financial Statements: Balance Sheet Profit and Loss Account Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements These financial statements were prepared on 17 May Statutory body of the reporting entity Signature MUDr. Filip Horák, MBA Chairman of the Board of Directors Ing. Karel Kantor Vice-Chairman of the Board of Directors 20

23 Balance Sheet Full Version as of AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Gross Adjustment Net Net TOTAL ASSETS B. Fixed assets B.I. Intangible fixed assets B.I.1. Start-up costs B.I.3. Software B.I.4. Valuable rights B.I.6. Other intangible fixed assets B.I.7. Intangible fixed assets under construction B.II. Tangible fixed assets B.II.2. Structures B.II.3. Individual movable assets and sets of movable assets B.II.7. Tangible fixed assets under construction B.II.8. Prepayments for tangible fixed assets B.II.9. Valuation difference on acquired assets B.III. Non-current financial assets B.III.1. Equity investments subsidiary (controlled entity) B.III.2. Equity investments in associates B.III.5. Other non-current financial assets B.III.6. Acquisition of non-current financial assets C. Current assets C.II. Long-term receivables C.II.2. Receivables controlled or controlling entity C.II.5. Long-term prepayments made C.III. Short-term receivables C.III.1. Trade receivables C.III.2. Receivables controlled or controlling entity C.III.6. State tax receivables C.III.7. Short-term prepayments made

24 Balance Sheet Full Version as of Gross Adjustment Net Net C.III.8. Estimated receivables C.III.9. Other receivables C.IV. Current financial assets C.IV.1. Cash on hand C.IV.2. Cash at bank D. I. Other assets D.I.1. Deferred expenses D.I.3. Accrued income

25 Balance Sheet Full Version as of AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) TOTAL LIABILITIES & EQUITY A. Equity A.I. Share capital A.I.1. Share capital A.II. Capital funds A.II.2. Other capital funds A.II.3. Gains or losses from the revaluation of assets and liabilities A.III. Statutory funds A.III.1. Statutory reserve fund/indivisible fund A.III.2. Statutory and other funds A.IV. Retained earnings A.IV.1. Accumulated profits brought forward A.V. Profit or loss for the current period (+ -) B. Liabilities B.II. Long-term liabilities B.II.9. Other payables B.II.10. Deferred tax liability B.III. Short-term liabilities B.III.1. Trade payables B.III.2. Payables controlled or controlling entity B.III.4. Payables to partners and association members B.III.5. Payables to employees B.III.6. Social security and health insurance payables B.III.7. State tax payables and subsidies B.III.10. Estimated payables B.III.11. Other payables B.IV. Bank loans and borrowings B.IV.1. Long-term bank loans B.IV.2. Short-term bank loans C. I. Other liabilities 233 C.I.2. Deferred income

26 Profit and Loss Account Year ended AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Year ended Year ended II. Production II.1. Sales of own products and services B. Purchased consumables and services B.1. Consumed material and energy B.2. Services Added value C. Staff costs C.1. Payroll costs C.2. Remuneration to members of statutory bodies C.3. Social security and health insurance costs C.4. Social costs D. Taxes and charges E. Depreciation of intangible and tangible fixed assets III. Sales of fixed assets and material III.1. Sales of fixed assets F. Net book value of fixed assets and material sold F.1. Net book value of sold fixed assets G. Change in reserves and provisions relating to operating activities and complex deferred expenses IV. Other operating income H. Other operating expenses * Operating profit or loss VI. Proceeds from the sale of securities and investments J. Cost of securities and investments sold VII. Income from non-current financial assets VII.1. Income from equity investments in subsidiaries and associates X. Interest income N. Interest expenses XI. Other financial income

27 Profit and Loss Account Year ended Year ended Year ended O. Other financial expenses * Financial profit or loss Q. Income tax on ordinary activities Q 1. due Q 2. deferred ** Profit or loss from ordinary activities *** Profit or loss for the current period (+/-) **** Profit or loss before tax

28 Statement of Changes in Equity Year ended AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Share capital Capital funds Statutory funds Accumulated profits brought forward Accumulated losses brought forward Profit or loss for the current period TOTAL EQUITY Balance at 31 December IKIS merger impact Balance at 1 January Distribution of profit or loss Dividends and directors' fees paid Revaluation gain or loss on financial investments Payments from other funds Profit or loss for the current period Balance at 31 December Distribution of profit or loss Dividends and directors' fees paid Revaluation gain or loss on financial investments Gifts received Payments from other funds Profit or loss for the current period Balance at 31 December

29 Cash Flow Statement Year ended AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Year ended Year ended P. Opening balance of cash and cash equivalents Cash flows from ordinary activities Z. Profit or loss from ordinary activities before tax A.1. Adjustments for non-cash transactions A.1.1. Depreciation of fixed assets A.1.2. Change in provisions and reserves A.1.3. Profit/(loss) on the sale of fixed assets A.1.4. Revenues from dividends and profit shares A.1.5. Interest expense and interest income A.* Net operating cash flow before changes in working capital A.2. Change in working capital A.2.1. Change in operating receivables and other assets A.2.2. Change in operating payables and other liabilities A.** Net cash flow from operations before tax and extraordinary items A.3. Interest paid A.4. Interest received A.5. Income tax paid from ordinary operations A.7. Received dividends and profit shares A.*** Net operating cash flows Cash flows from investing activities B.1. Fixed assets expenditures B.2. Proceeds from fixed assets sold B.3. Loans provided to related parties B.*** Net investment cash flows Cash flow from financial activities C.1. Change in payables from financing C.2. Impact of changes in equity C.2.5. Payments from capital funds C.2.6. Dividends paid C.*** Net financial cash flows F. Net increase or decrease in cash and cash equivalents R. Closing balance of cash and cash equivalents

30 Footnotes to the Financial Statements for the Year Ended 31 December Name of the Company: Registered Office: Legal Status: AGEL a.s. Mathonova 291/1, Prostějov Joint Stock Company Corporate ID: GENERAL INFORMATION Incorporation and Description of the Business Year-on-Year Changes and Amendments to the Register of Companies Organisational Structure Board of Directors and Supervisory Board Group Identification BASIS OF ACCOUNTING AND GENERAL ACCOUNTING PRINCIPLES Tangible and Intangible Fixed Assets Financial Assets Receivables Payables Reserves Loans Taxation Foreign Currency Translation Finance Leases Revenue Recognition Use of Estimates Year-on-Year Changes in Valuation, Depreciation or Accounting Policies Group VAT registration Organisational Branch of AGEL a.s Cash Flow Statement

31 Footnotes to the Financial Statements for the Year Ended 31 December ADDITIONAL INFORMATION Intangible Fixed Assets (Intangible FA) Tangible Fixed Assets (Tangible FA) Assets Held under Finance Leases Non-Current Financial Assets Long-Term Receivables Short-Term Receivables Estimated Receivables Deferred Expenses Equity Long-Term Payables Short-Term Payables Estimated Payables Bank Loans Deferred Income Tax Income from Ordinary Activities Services Employees, Management and Statutory Bodies Taxes and Fees Operating Income and Expenses Financial Income and Expenses Related Party Transactions Off Balance Sheet Commitments Post Balance Sheet Events

32 Footnotes to the Financial Statements for the Year Ended 31 December GENERAL INFORMATION 1.1. Incorporation and Description of the Business AGEL a.s. (hereinafter the Company ) was formed by a Memorandum of Association on 14 May 1990 and was entered in the Register of Companies on 14 June The General Meeting held on 25 March 2003 decided to change the legal status of the Company from AGEL s.r.o. (limited liability company) to AGEL a.s. (joint stock company). This change was entered in Section B, Insert 3941 of the Register of Companies held by the Regional Court in Brno on 15 August Due to the change of its registered office, the Company was registered in the Register of Companies held by the Regional Court in Ostrava, Section B, Insert 2892, from 26 April 2005 to 13 July Given the change in its registered office in 2009 to Mathonova 291/1, Prostějov, the Company has been registered in the Register of Companies of the Regional Court in Brno, File B, insert The activities of the Company include production, trade and services. The following table shows individuals and legal entities and the amount of their equity interest: Shareholder/owner Ownership percentage Ing. Tomáš Chrenek, Ph.D. 75 MUDr. Martin Polach, MBA 25 Celkem Year-on-Year Changes and Amendments to the Register of Companies No changes were made to the Company s corporate details held at the Register of Companies Organisational Structure The Company s organisational structure is provided in Appendix 1 hereto. As of 21 September 2011, the Company formed an organisational branch in Slovakia and the financial statements include consolidated figures for both parts of the Company, refer to Note

33 Footnotes to the Financial Statements for the Year Ended 31 December Board of Directors and Supervisory Board Board of Directors Supervisory Board Position Chairman Vice-Chairman Vice-Chairman Member Member Member Chairman Vice-Chairman Member Member Member Member Name MUDr. Filip Horák, MBA Ing. Karel Kantor MUDr. Milan Leckéši Ing. Roman Gavanda Ing. Iveta Ostruszková, MBA Mgr. Libor Vrba Ing. Tomáš Chrenek, Ph.D. MUDr. Martin Polach, MBA MUDr. Dana Polachová PhDr. Dušana Chreneková, MBA Eng. David Hercky, MBA Hana Tůmová 1.5. Group Identification The Company is the parent company of the AGEL group. The structure of the consolidation group is described in Appendix 2 to these notes. 31

34 Footnotes to the Financial Statements for the Year Ended 31 December BASIS OF ACCOUNTING AND GENERAL ACCOUNTING PRINCIPLES The Company s accounting books and records are maintained and the financial statements were prepared in accordance with the Accounting Act 563/1991 Coll., as amended; the Regulation 500/2002 Coll. which provides implementation guidance on certain provisions of the Accounting Act for reporting entities that are businesses maintaining double-entry accounting records, as amended, and Czech Accounting Standards for Businesses, as amended. The accounting records are maintained in compliance with general accounting principles, specifically the historical cost valuation basis, the accruals principle, the prudence concept, and the going concern assumption. The Company s financial statements have been presented as of the balance sheet date, ie 31 December These financial statements are presented in thousands of Czech crowns ( CZK thousand ), unless stated otherwise Tangible and Intangible Fixed Assets Fixed assets include assets with an estimated useful life greater than one year and an acquisition cost greater than CZK 40 thousand in respect of tangible assets, and CZK 60 thousand in respect of intangible assets, on an individual basis. Fixed assets include assets with the cost between CZK 10 thousand and CZK 40 thousand if they have the characteristics of fixed assets and their useful life exceeds one year. Purchased tangible and intangible fixed assets are stated at cost less accumulated depreciation and provisions, if any. The valuation differences on acquired assets arose from the demerger of Nemocnice Podlesí a.s. through spin-off of part of its net assets and the amalgamation of this part with Agel a.s. and are depreciated on a straight line basis over 180 months. Assets acquired through purchase after the expiration of the lease contract are stated at replacement cost. The cost of fixed asset improvements exceeding CZK 40 thousand for individual tangible assets and intangible assets for the taxation period, increases the acquisition cost of the related fixed asset. Depreciation is charged so as to write off the cost of tangible and intangible fixed assets, other than land and assets under construction, over their estimated useful lives on the following basis: Type of assets Depreciation method Number of years Software Straight line 3 Office and copying technology Straight line 3 32

35 Footnotes to the Financial Statements for the Year Ended 31 December Type of assets Depreciation method Number of years Vehicles Straight line 5 Constructions Straight line 30 Furniture and fixtures Straight line 5 Low value fixed assets Straight line Financial Assets Financial assets with maturity or intent to hold exceeding one year are reported as non-current; financial assets with maturity or intent to hold up to one year are considered current. Valuation of Financial Assets upon Acquisition Upon acquisition, investments, securities and derivatives are stated at cost including the share premium and indirect acquisition costs. Valuation of Financial Assets at the Balance Sheet Date Equity investments in subsidiaries or associates are stated using the equity method of accounting (share of equity of the owned company). Other equity investments are stated at cost less provisions Receivables Upon origination, receivables are stated at their nominal value as subsequently reduced by provisions, if any. Long-term receivables are receivables with maturities exceeding one year at the financial statements date and a deferred tax asset. Short-term receivables are receivables with maturities of one year and shorter as of the financial statements date. Provisioning Provisions against receivables are recognised on the basis of an assessment of their maturity. Receivables past due for more than 180 days are provided for at 50 percent of their carrying amount while receivables past due by more than 365 days are provided for in full Payables Payables are stated at their nominal value. Long-term payables are payables with maturities exceeding one year at the financial statements date and a deferred tax liability. Short-term payables are due within one year. 33

36 Footnotes to the Financial Statements for the Year Ended 31 December Reserves Reserves are intended to cover future risks and expenditure the nature of which is clearly defined and which are likely to be incurred but uncertain as to their amount or as to the date on which they will arise. Reserves are recognised and accounted for through expenses predominantly for potential risks arising from legal disputes as equal to the risk exposure based on the consultation with legal counsel Loans Loans are stated at their nominal value. Short-term loans are loans repayable within one year from the date of their origination. The portion of long-term loans maturing within one year from the balance sheet date is included in short-term loans. Interest on loans is charged to expenses in accordance with the accruals principle Taxation Depreciation of Fixed Assets for Tax Purposes Depreciation of tangible fixed assets is calculated using the accelerated method for tax purposes. Intangible fixed assets are amortised for tax purposes in accordance with Section 32a of the Income Taxes Act. Current Tax Payable The tax liability for the year ended 31 December 2012 was calculated based on tax calculation which follows from its understanding of the interpretation of Czech tax legislation valid at the financial statements date and believes that the amount of tax is correct in compliance with the effective Czech tax regulations. Since various interpretations of tax laws and regulations by third parties, including state administrative bodies, exist, the income tax payable reported in the Company s financial statements may change based on the ultimate opinion of the tax authorities. Deferred Tax Deferred tax is accounted for using the balance sheet liability method Foreign Currency Translation Transactions denominated in foreign currencies during the year are translated using the exchange rate of the Czech National Bank prevailing on the date of the transaction. At the balance sheet date, the relevant assets and liabilities are translated at the Czech National Bank s exchange rate prevailing as of that date. 34

37 Footnotes to the Financial Statements for the Year Ended 31 December Finance Leases A finance lease is the acquisition of a tangible fixed asset such that, over or after the contractual lease term, ownership title to the asset transfers from the lessor to the lessee; pending the transfer of title the lessee makes lease payments to the lessor for the asset that are charged to expenses. The initial lump-sum payment related to assets acquired under finance leases is amortised and expensed over the lease period Revenue Recognition Revenues from management activities (which are invoiced on an upfront payment basis during the year) are recognised monthly always as of the last day in the month as an estimated item. The final amount of the remuneration for provided services is determined and recognised based on the actual supporting documentation identified in the accounting records as of the date of the final version of the financial statements for the calendar year. Other revenues are recognised when the service is rendered (accounting transaction realised) always in the period to which the revenue relates on an accrual basis. Dividend income from investments is recognised when the shareholders rights to receive payment have been established Use of Estimates The presentation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Management of the Company has made these estimates and assumptions on the basis of all the relevant information available to it. Nevertheless, pursuant to the nature of estimates, the actual results and outcomes in the future may differ from these estimates Year-on-Year Changes in Valuation, Depreciation or Accounting Policies There were no year-on-year changes in the valuation or accounting policies in the year ended 31 December Group VAT registration With effect from 1 January 2009, the AGEL group has been registered as a VAT payer in terms of Section 95a of Act No. 235/2004 Coll. on Value Added Tax. AGEL a.s. is the representative member of the group. The group is registered under tax ID CZ Members of the VAT group registration: P&R LAB a.s., Repharm, a.s., Nemocnice Nový Jičín a.s., Nemocnice Český Těšín a.s., Transfúzní služba a.s., Nemocnice Valašské Meziříčí a.s., Středomoravská nemocniční a.s., 35

38 Footnotes to the Financial Statements for the Year Ended 31 December Podhorská nemocnice a.s., MARTEK MEDICAL a.s., Šumperská nemocnice a.s., Nemocnice Podlesí a.s., Vítkovická nemocnice a.s., ZENAGEL a.s., 1.Oční s.r.o., Dopravní zdravotnictví a.s. and Medical Systems a.s. New members of the VAT group registration as of 1 January 2012: Kardiologické centrum AGEL s.r.o. As a result of the group VAT registration, the Company reports a receivable (payable) arising from VAT on behalf of the entire registered group. Relations arising from VAT between the representative member of the group (AGEL a.s.) and other members of the registered group are reported under Receivables controlling entity or Payables controlling entity as appropriate Organisational Branch of AGEL a.s. Pursuant to the resolution of the General Meeting dated 16 August 2011, an organisational branch of AGEL with its registered office at Prepoštská 2088/6, Bratislava was formed. Milan Leckéši was appointed as the head of the organisational branch. The Company provides management for members of the group in Slovakia through the Slovak branch Cash Flow Statement The cash flow statement is prepared using the indirect method. Cash equivalents include current liquid assets easily convertible into cash in an amount agreed in advance. Cash and cash equivalents can be analysed as follows: (CZK 000) Cash on hand Cash equivalents Current bank accounts and cash in transit Term deposits 0 0 Deposit bills of exchange 0 0 Total cash and cash equivalents Cash flows from operating, investment and financial activities presented in the cash flow statement are not offset. 36

39 Footnotes to the Financial Statements for the Year Ended 31 December ADDITIONAL INFORMATION 3.1. Intangible Fixed Assets (Intangible FA) Major additions to intangible FA include (stated at cost): (CZK 000) Item/type of asset Software Other tangible fixed assets Total Tangible Fixed Assets (Tangible FA) Major additions to tangible FA include (stated at cost): (CZK 000) Item/type of asset Constructions 0 71 Machinery and equipment Vehicles Furniture and fixtures Total Major disposals of tangible FA include (stated at net book value upon disposal): (CZK 000) Item/type of asset Machinery and equipment Vehicles Furniture and fixtures Total

40 Footnotes to the Financial Statements for the Year Ended 31 December As of 31 December 2012 (2011), the Company records low value tangible assets of CZK 1,926 thousand (CZK 1,738 thousand) reported off balance sheet. These assets include low value tangible assets which are other movable assets and sets of movable assets with useful lives exceeding one year not reported in fixed assets. These assets are recognised in expenses Assets Held under Finance Leases (CZK 000) Description Total lease value Payments made at 31 Dec 2011 Payments made at 31 Dec 2012 Due in 2013 Due in the following years Vehicles Total Non-Current Financial Assets Equity investments in subsidiaries: Year Ended 31 December 2012 (CZK 000) Name of the entity Registered office Cost Equity Profit or loss Carrying value AGEL POLSKA SA Warszawa AGEL SK a.s. Bratislava Dopravní zdravotnictví a.s. Praha Kardiologické centrum AGEL s.r.o. Pardubice MARTEK MEDICAL a.s. Třinec Medical Systems a.s. Prostějov Nemocnice Český Těšín a.s. Český Těšín Nemocnice Podlesí a.s. Třinec Nemocnice Valašské Meziříčí a.s. Valašské Meziříčí P&R LAB a.s. Nový Jičín Podhorská nemocnice a.s. Rýmařov Oční s.r.o. Ostrava Nemocnice Nový Jičín a.s. Nový Jičín Repharm, a.s. Třinec

41 Footnotes to the Financial Statements for the Year Ended 31 December Name of the entity Registered office Cost Equity Profit or loss Carrying value Středomoravská nemocniční a.s. Prostějov Šumperská nemocnice a.s. Šumperk Transfúzní služba a.s. Šumperk Vítkovická nemocnice a.s. Ostrava ZENAGEL a.s. Ostrava AGEL SERVIS a.s. Prostějov IVF Clinic a.s. Prostějov Avenier, a.s. Brno KTR Servis s.r.o. Ostrava Total Note: The Company holds the 100% equity investment in all entities in the table except for: Kardiologické centrum AGEL s.r.o. 90%, IVF Clinic a.s %, and Avenier, a.s. 80 %. Year Ended 31 December 2011 (CZK 000) Name of the entity Registered office Cost Equity Profit or loss Carrying value AGEL POLSKA SA Warszawa AGEL SK a.s. Bratislava Dopravní zdravotnictví a.s. Praha Kardiologické centrum AGEL s.r.o. Pardubice MARTEK MEDICAL a.s. Třinec Medical Systems a.s. Prostějov Nemocnice Český Těšín a.s. Český Těšín Nemocnice Podlesí a.s. Třinec Nemocnice Valašské Meziříčí a.s. Valašské Meziříčí P&R LAB a.s. Nový Jičín Podhorská nemocnice a.s. Rýmařov Oční s.r.o. Ostrava Radioterapie, a.s. Nový Jičín

42 Footnotes to the Financial Statements for the Year Ended 31 December Name of the entity Registered office Cost Equity Profit or loss Carrying value Repharm, a.s. Třinec Středomoravská nemocniční a.s. Prostějov Šumperská nemocnice a.s. Šumperk Transfúzní služba a.s. Šumperk Vítkovická nemocnice a.s. Ostrava ZENAGEL a.s. Ostrava Celkem Note: The Company wholly owns all the entities listed in the table. Equity investments in associates: Year Ended 31 December 2012 (CZK 000) Name of the entity Registered office Ownership percentage Cost Equity Profit or loss Carrying value Hornická poliklinika s.r.o. Ostrava 48, Total Year Ended 31 December 2011 (CZK 000) Name of the entity Registered office Ownership percentage Cost Equity Profit or loss Carrying value Hornická poliklinika s.r.o. Ostrava 48, Total Long-Term Receivables As of 31 December 2012 (31 December 2011), the Company reports receivables controlled or controlling entity of CZK 17,648 thousand (CZK 31,115 thousand) arising from a provided loan. 40

43 Footnotes to the Financial Statements for the Year Ended 31 December Short-Term Receivables Trade receivables past their due dates amount to CZK 1,298 thousand as of 31 December 2012 (31 December 2011: CZK 3,724 thousand). Receivables controlled or controlling entity as of 31 December 2012 (31 December 2011) of CZK 439,735 thousand (CZK 332,161 thousand) include receivables arising from cashpooling of CZK 363,290 thousand (2011: CZK 293,296 thousand), intercompany loans of CZK 37,811 thousand (31 December 2011: CZK 33,385 thousand) and intercompany receivables arising from the VAT Group settlement of CZK 38,634 thousand (2011: CZK 5,480 thousand) Estimated Receivables As of 31 December 2012 and 31 December 2011 estimated receivables of CZK 163,799 thousand and CZK 68,666 thousand, respectively, predominantly include the recognition of revenues from provided services (refer to Note 2.10) Deferred Expenses As of 31 December 2012 (31 December 2011), deferred expenses predominantly include the prepaid rental of operating premises Equity The structure and changes in equity are presented in the accompanying Statement of Changes in Equity Long-Term Payables Other payables as of 31 December 2012 (2011) of CZK 101,023 thousand (CZK 10,005 thousand) primarily include payables arising from new acquisitions and a payable arising from the customer loan Short-Term Payables Trade payables past their due dates as of 31 December 2012 amount to CZK 1,332 thousand (31 December 2011: CZK 15,939 thousand). Short-term payables controlling entity as of 31 December 2012 (2011) of CZK 870,218 thousand (CZK 706,805 thousand) include payables arising from cashpooling of CZK 820,382 thousand (31 December 2011: CZK 673,570 thousand), intercompany payables arising from the VAT Group settlement of CZK 49,836 thousand (31 December 2011: CZK 33,235 thousand). 41

44 Footnotes to the Financial Statements for the Year Ended 31 December Payables to partners and association members as of 31 December 2012 include payables from the provided loan, including interest, of CZK 197,776 thousand (2011: 142,363 thousand). Other payables as of 31 December 2012 (2011) of CZK 106,357 thousand (CZK 97 thousand) primarily include payables arising from new acquisitions and a payable arising from the customer loan Estimated Payables Estimated payables as of 31 December 2012 primarily include unbilled received services and supplies of energy. As of 31 December 2011, estimated payables primarily include unbilled intragroup services Bank Loans Long-term bank loans include as follows: (CZK 000) Bank/Creditor Currency Balance at 31 Dec 2012 Balance at 31 Dec 2011 Citibank a.s. CZK Citibank a.s. CZK Raiffeisenbank a.s. CZK Total Portions of loans repayable within one year from the balance sheet date are reported as part of short-term bank loans in the balance sheet. Short-term bank loans and short-term bank borrowings include as follows: (CZK 000) Bank/Creditor Currency Balance at 31 Dec 2012 Balance at 31 Dec 2011 Raiffeisenbank a.s. CZK Citibank a.s. CZK Citibank a.s. CZK Raiffeisenbank a.s. CZK Total

45 Footnotes to the Financial Statements for the Year Ended 31 December Deferred Income Tax The aggregate existing deferred tax liability can be analysed as follows: (CZK 000) Balance at 31 Dec 2012 Balance at 31 Dec 2011 Difference between tax and accounting carrying values of fixed assets Unutilised tax losses and tax deduction for research and development 0 0 Difference between the tax and accounting value of estimated social security and health insurance contributions Total temporary differences Total deferred tax asset (liability) Income from Ordinary Activities (CZK 000) Year ended 31 Dec 2012 Year ended 31 Dec 2011 In-country Cross-border Total In-country Cross-border Total Advisory Commission for the mediation of business Total sales of own products and services Services Purchased services in the year ended 31 December 2012 (2011) included leases of CZK 7,809 thousand (CZK 7,033 thousand), costs of repairs and maintenance of CZK 3,921 thousand (CZK 3,502 thousand), costs of the lease of CZK 11,682 thousand (CZK 6,741 thousand), costs of advisory and other professional services of CZK 28,517 thousand (CZK 18,699 thousand), costs of telephones and internet of CZK 2,746 thousand (CZK 2,917 thousand), costs of advertising and promotion of CZK 66,617 thousand (CZK 43,268 thousand) and costs of representation of CZK 10,849 thousand (CZK 8,554 thousand). The information on the fees to the statutory auditors will be disclosed in the notes to the consolidated financial statements. 43

46 Footnotes to the Financial Statements for the Year Ended 31 December Employees, Management and Statutory Bodies Staff costs as of 31 December 2012 and 2011 amounted to CZK 165,622 thousand and CZK 105,312 thousand, respectively. Members of the Board of Directors, Supervisory Board and management received the following payments in addition to staff costs: (CZK 000) 2012 Board of Directors Supervisory Board Audit Committee Bonuses Directors fees Cars/other movable and immovable assets to be used for private purposes (the figure increases the tax base of employees) Total (CZK 000) 2011 Board of Directors Supervisory Board Audit Committee Bonuses Directors fees Cars/other movable and immovable assets to be used for private purposes (the figure increases the tax base of employees) Total Taxes and Fees Taxes and fees principally include VAT from the use of the group coefficient for VAT deduction in respect of inputs with partial VAT deduction claims. However, this is offset by benefits in other items of expenses and income, predominantly in the production item where the billing to the members of the registered group is made under the non-vat regime. 44

47 Footnotes to the Financial Statements for the Year Ended 31 December Operating Income and Expenses Other operating income for the year ended 31 December 2012 (2011) of CZK 30,609 thousand (CZK 40,527 thousand) predominantly includes the rebilling of services and goods, ordered centrally by the parent company, which are allocated to specific subsidiaries. Other operating expenses in the year ended 31 December 2012 (2011) of CZK 5,564 thousand (CZK 26,768 thousand) principally include insurance of assets and corporate liability and provided financial gifts Financial Income and Expenses Sales of securities (sold securities) in the year ended 31 December 2011 include the income (expense) relating to the sale of shares of the remaining 50% shares of the subsidiary. Income from equity investments in subsidiaries and associates for the year ended 31 December 2012 (2011) includes dividends received from subsidiaries Related Party Transactions Income from related party transactions for the year ended 31 December 2012: (CZK 000) Relation to the Company Goods Products Services Financial Other Total at 31 Dec 2012 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total Income from related party transactions for the year ended 31 December 2011: (CZK 000) Relation to the Company Goods Products Services Financial Other Total at 31 Dec 2011 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total

48 Footnotes to the Financial Statements for the Year Ended 31 December Expenses from related party transactions for the year ended 31 December 2012: (CZK 000) Relation to the Company Material and energy Fixed assets Services Financial Other Total 31 Dec 2012 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total Expenses from related party transactions for the year ended 31 December 2011: (CZK 000) Relation to the Company Material and energy Fixed assets Services Financial Other Total 31 Dec 2012 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total Receivables from related parties as of 31 December 2012: (CZK 000) Relation to the Company Short-term trade receivables Other short-term receivables Long-term receivables Loans Other Total 31 Dec 2012 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total

49 Footnotes to the Financial Statements for the Year Ended 31 December Receivables from related parties as of 31 December 2011: (CZK 000) Relation to the Company Short-term trade receivables Other short-term receivables Long-term receivables Loans Other Total 31 Dec 2012 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total Payables to related parties as of 31 December 2012: (CZK 000) Relation to the Company Short-term trade payables Other short-term payables Long-term payables Loans Other Total 31 Dec 2012 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total Payables to related parties as of 31 December 2011: (CZK 000) Relation to the Company Short-term trade payables Other short-term payables Long-term payables Loans Other Total 31 Dec 2012 Parent Consolidated subsidiaries Unconsolidated subsidiaries Total

50 Footnotes to the Financial Statements for the Year Ended 31 December Off Balance Sheet Commitments Legal Disputes As of the balance sheet date, the Company is not involved in any legal dispute as a defendant or plaintiff. Guarantee Statements Issued by the Company The Company provided the following guarantees: Statement of guarantee dated 7 March The Company undertakes that it will ensure timely and due settlement of payables of AGEL SK a.s. arising from Contract for the Overdraft Loan no. 4612/44641 dated 7 March 2011 to Československá obchodná banka, a.s. A letter of comfort to collateralise payables of ZENAGEL a.s to Pharmos a.s. In addition, the Company provided guarantees to collateralise payables of subsidiaries in respect of ČSOB Leasing, a.s. and Raiffeisen Leasing, s.r.o. Statement of guarantee dated 23 March The Company undertakes that it will ensure timely and due settlement of payables of AGEL DIAGNOSTIC a.s. arising from Loan Contract no /CORP/2012 dated 23 March 2012 to UniCreditbank Slovakia, a.s. Environmental Liabilities Management of the Company is not aware of any liabilities pertaining to damage caused by prior activities or liabilities related to the prevention of potential future damage Post Balance Sheet Events Pursuant to the resolution of the extraordinary general meeting of AGEL, a.s. dated 2 April 2013, the number of members of the Board of Directors was increased to seven members. Pursuant to the resolution of the Supervisory Board of AGEL a.s. dated 29 March 2013, Ján Dudra was appointed a new member of the Board of Directors of AGEL a.s. with effect from 2 April

51 Footnotes to the Financial Statements for the Year Ended 31 December Appendix No 1: Organigram of AGEL a.s. as of 31/12/2012

52 Footnotes to the Financial Statements for the Year Ended 31 December Appendix No 2: Organigram of the AGEL Group a.s. as of 31/12/2012

53 Financial Part II 2012 Consolidated Financial Statements Consolidated Balance Sheet Full Version 7.2. Consolidated Profit and Loss Account 7.3. Consolidated Statement of Changes in Equity 7.4. Consolidated Cash Flow Statement 7.5. Footnotes to the Consolidated Financial Statements 51

54 Financial Part II 2012 Consolidated Financial Statements 7.0 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012 Name of the Company: Registered Office: Legal Status: AGEL a.s. Mathonova 291/1, Prostějov Joint Stock Company Corporate ID: Components of the Consolidated Financial Statements: Consolidated Balance Sheet Consolidated Profit and Loss Account Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement Consolidated Notes to the Financial Statements These consolidated financial statements were prepared 30 May Statutory body of the reporting entity Signature MUDr. Filip Horák, MBA Chairman of the Board of Directors Ing. Karel Kantor Vice-Chairman of the Board of Directors 52

55 Consolidated Balance Sheet Full Version as of AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Gross Adjustment Net Net TOTAL ASSETS B. Fixed assets I. Intangible fixed assets Start-up costs Software Valuable rights Goodwill Other intangible fixed assets Intangible fixed assets under construction II. Tangible fixed assets Land Structures Individual movable assets and sets of movable assets Other tangible fixed assets Tangible fixed assets under construction Prepayments for tangible fixed assets Valuation difference on acquired assets negative Valuation difference on acquired assets positive III. Non-current financial assets Other non-current financial assets Acquisition of non-current financial assets IV. Consolidation differences (goodwill) Positive consolidation difference (goodwill) Negative consolidation difference (negative goodwill)

56 Consolidated Balance Sheet Full Version as of Gross Adjustment Net Net V. Securities and equity interests under equity accounting C. Current assets I. Inventories Material Work in progress and semifinished goods Products Goods II. Long-term receivables Trade receivables Estimated receivables Other receivables Deferred tax asset III. Short-term receivables Trade receivables State tax receivables Other prepayments made Estimated receivables Other receivables IV. Current financial assets Cash on hand Cash at bank D. Other assets Deferred expenses Complex deferred expenses Accrued income Control number

57 Consolidated Balance Sheet Full Version as of AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) TOTAL LIABILITIES & EQUITY A. Equity I. Share capital Share capital II. Capital funds Other capital funds Gains or losses from the revaluation of assets and liabilities Gains or losses from the revaluation upon transformations Foreign currency translation gains or losses III. Statutory funds Statutory reserve fund / Indivisible fund Statutory and other funds IV. Profit or loss of previous periods Retained earnings V. Profit or loss for the current period net of minority interest Profit or loss for the period Share of income from associates VI. Consolidation reserve fund B. Liabilities I. Reserves Reserves under special legislation Reserve for pensions and similar liabilities Income tax reserve Other reserves II. Long-term liabilities Trade payables Long-term prepayments received Other payables Deferred tax liability

58 Consolidated Balance Sheet Full Version as of III. Short-term liabilities Trade payables Payables to partners and association members Payables to employees Social security and health insurance payables State tax payables and subsidies Short-term prepayments received Estimated payables Other payables IV. Bank loans and borrowings Long-term bank loans Short-term bank loans Short-term borrowings C. Other liabilities Accrued expenses Deferred income D Minority equity Minority share capital Minority capital funds Minority profit funds incl. retained earnings and accumulated losses Minority profit or loss for the period Control number

59 Consolidated Profit and Loss Account structured by the Nature of expense Method Year ended AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Year ended Year ended I. Sales of goods A. Costs of goods sold Gross margin II. Production Sales of own products and services Change in internally produced inventory Own work capitalised B. Purchased consumables and services Consumed material and energy Services except for costs of insurance claims Added value C. Staff costs Payroll costs Remuneration to members of statutory bodies Social security and health insurance costs Social costs D. Taxes and charges E. Depreciation of intangible and tangible fixed assets KR A. Amortisation of consolidation difference (goodwill) KR 1. Release of negative consolidation difference (negative goodwill) III. Sales of fixed assets and material Sales of fixed assets Sales of material F. Net book value of fixed assets and material sold Net book value of sold fixed assets Book value of sold material G. Change in reserves and provisions

60 Consolidated Profit and Loss Account structured by the Nature of expense Method Year ended Year ended Year ended Change in reserves and provisions relating to operating activities and complex deferred expenses IV. Other operating income H. Other operating expenses * Operating profit or loss VI. Proceeds from the sale of securities and investments J. Cost of securities and investments sold X. Interest income N. Interest expenses XI. Other financial income O. Other financial expenses * Financial profit or loss Q. Income tax on ordinary activities due deferred ** Profit or loss from ordinary activities XIII. Extraordinary income 5 14 R. Extraordinary expenses * Extraordinary profit or loss ** Consolidated profit or loss net of share of income of associates Consolidated profit or loss net of minority interests Minority profit or loss Profit or loss before acquisition * Share of income of associates Profit or loss for the current period (+/-) *** Profit or loss for the current period net of minority interests (+/-) **** Profit or loss for the current period incl. minority interests (+/-) **** Profit or loss for the current period net of minority interests before tax (+/-)

61 Consolidated Statement of Changes in equity Year ended AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Share capital Capital funds Statutory reserve fund Statutory and other unds Accumulated profits brought forward Profit or loss for the current period Consolidation reserve fund TOTAL EQUITY Balance at 31 December Profit for the period Allocation of the prior period's profit Dividends and directors' fees paid Impact of changes in the consolidation group Gains or losses from currency translations and other changes Gifts received Payments from the social fund Other Balance at 31 December Profit for the period Allocation of the prior period's profit Dividends and directors' fees paid Impact of changes in the consolidation group Gains or losses from currency translations Gifts received Payments from the social fund Repayments of loans to the social fund and other changes Balance at 31 December

62 Consolidated Cash Flow Statement Year ended AGEL a.s.; Mathonova 291/1, Prostějov; Corporate ID (in CZK thousand) Year ended Year ended P. Cash and cash equivalents at the beginning of the accounting period Cash flows from ordinary activities Z. Profit/(loss) from ordinary activities before tax A.1. Adjustments for non-cash transactions A.1.1. Amortisation and depreciation of fixed assets (+) except for net book values of fixed assets and the amortisation of goodwill and the depreciation of consolidation differences A.1.2. Change in provisions and reserves, write-off of receivables A.1.3. Profit/(loss) on the sale of fixed assets (-/+), including sale of financial assets A.1.4. Revenues from dividends and profit shares (-), except for those paid from consolidated entities A.1.5. Interest expense (+) excluding capitalised interest and interest income (-) A.1.6. A.* FX differences, change in minority interest, acquisition movements in assets and liabilities and other non-cash transactions Net cash flow from operating activities before tax, movements in working capital and extraordinary items A.2. Change in non-cash component of working capital A.2.1. A.2.2. Change in receivables from operating activities(+/-), deferred expenses, accrued income and estimated assets Change in short-term payables from operating activities (+/-), accrued expenses, deferred income and estimated liabilities A.2.3. Change in inventory (+/-) A.2.4. A.** Change in current financial assets not included in cash and cash equivalents Net cash flow from operating activities before tax and extraordinary items A.3. Interest paid (-), except interest capitalised A.4. Interest received (+) A.5. A.6. Income tax paid from operating activities, additional tax paid for previous periods (-) Receipts and expenditures relating to extraordinary activities, which form extraordinary profit or loss, including income tax paid from extraordinary activities (+/-)

63 Consolidated Cash Flow Statement Year ended Year ended Year ended A.*** Net cash flow from operating activities Cash flows from investing activities B.1. Fixed assets expenditures B.2. Receipts from fixed assets sold B.3. Loans provided to related parties B.4. Cash flows from the acquisition and sale of subsidiaries B.*** Net cash flow from investing activities C.1. Cash flow from financial activities Change in long-term or short-term payables which fall into cash and cash equivalent in financing activities C.2. Impact on cash and cash equivalents due to change in equity C.2.3. Other cash contributions made by partners and shareholders C.2.5. Payments made from funds (-) C.2.6. Dividends and directors' fees paid C.*** Net cash flow from financial activities F. Net increase or decrease of cash and cash equivalents R. Cash and cash equivalents at the end of the accounting period

64 Notes to the Consolidated Financial Statements for the Year Ended Name of the Company: Registered Office: Legal Status: AGEL a.s. Mathonova 291/1, Prostějov Joint Stock Company Corporate ID: GENERAL INFORMATION Incorporation and Description of the Consolidation Group (hereinafter also the Parent Company ) Year-on-Year Changes and Amendments to the Register of Companies Other Changes in the Register of Companies in the Year Ended 31 December Organisational Structure of the Parent Company CONSOLIDATION GROUP (HEREINAFTER ALSO THE GROUP ) Consolidation Group Companies Excluded from the Consolidation Group Changes in the Composition of the Consolidation Group in Disposals Additions Changes in Shareholdings and Other Changes Other Changes in the Consolidation Group Subsidiaries Shares in Associates BASIS OF ACCOUNTING AND GENERAL ACCOUNTING PRINCIPLES Scope of Consolidation and Consolidation Method Full Consolidation Method Consolidation using the Equity Method of Accounting Adjustments to the Financial Statements of Slovak Companies

65 Notes to the Consolidated Financial Statements for the Year Ended INFORMATION ON THE ACCOUNTING METHODS USED AND GENERAL ACCOUNTING PRINCIPLES Tangible Fixed Assets Intangible Fixed Assets Non-Current Financial Assets Inventory Receivables Payables Loans Reserves Foreign Currency Translation Finance Leases Taxation Borrowing Costs Government Grants Revenue Recognition Use of Estimates Extraordinary Expenses and Income Cash Flow Statement ADDITIONAL INFORMATION ON THE CONSOLIDATED BALANCE SHEET Consolidation Acquisition of a Subsidiary Intangible Fixed Assets Tangible Fixed Assets Fixed Assets Pledged as Security Assets Held under Finance and Operating Leases Finance Leases Operating leases Amortisation of Goodwill Arising on Consolidation Non-Current Financial Assets

66 Notes to the Consolidated Financial Statements for the Year Ended Non-current Financial Assets Excluded from Consolidation Non-Current Financial Assets Pledged as Security Inventory Long-Term Receivables (Net of Deferred Tax) Short-Term Receivables Current Financial Assets Deferred Expenses Equity Long-Term Payables Short-Term Payables Ageing of Short-Term Trade Payables Bank Loans and Borrowings Accrued Expenses and Deferred Income Income Taxation Deferred Tax Current Tax Payable Minority Equity Total Costs of Fees to the Audit Company ADDITIONAL INFORMATION ON THE CONSOLIDATED PROFIT AND LOSS ACCOUNT Details of Income by Principal Segment Consumed Purchases (Purchased Consumables and Services) Depreciation and Amortisation of Tangible and Intangible Fixed Assets Change in Reserves and Provisions Relating to Operating Activities and Complex Deferred Expenses Other Operating Income Other Operating Expenses Proceeds of the Sale of Securities and Investments, Securities and Investments Sold Income from Non-Current Financial Assets Interest Income

67 Notes to the Consolidated Financial Statements for the Year Ended Other Financial Income and Income from Derivative Transactions Other Financial Expenses Extraordinary Income and Expenses EMPLOYEES, MANAGEMENT AND STATUTORY BODIES Staff Costs and Number of Employees Loans, Borrowings, and Other Benefits Provided CONTINGENT LIABILITIES AND OFF BALANCE SHEET COMMITMENTS Assessment of Additional Income Tax Legal Disputes POST BALANCE SHEET EVENTS

68 Notes to the Consolidated Financial Statements for the Year Ended GENERAL INFORMATION 1.1. Incorporation and Description of the Consolidation Group (hereinafter also the Parent Company ) AGEL a.s. (the Company ) was formed based on a Memorandum of Association on 14 May 1990 and was entered in the Register of Companies on 14 June The legal status was changed from a limited liability company to a joint stock company based on a decision made by the General Meeting on 25 March 2003 and it was registered in the Register of Companies held by the Regional Court in Brno, Section B, Insert 3941, on 15 August Due to the change of its registered office address, the Company was registered in the Register of Companies held by the Regional Court in Ostrava, Section B, Insert 2892, from 26 April 2005 to 13 July Given the change in its registered office address in 2009 to Mathonova 291/1, Prostějov, the Company has been registered in the Register of Companies of the Regional Court in Brno, File B, Insert The principal activities of the Parent Company include: Production, trading and services not listed in Appendices 1 to 3 to the Trade Licensing Act. The Parent Company s registered office is located at: Mathonova 291/1, Prostějov The Parent Company s corporate ID is: The share capital of the parent company is CZK 100,000 thousand. The consolidated financial statements are presented for the year ended 31 December The following table shows individuals and legal entities with an equity interest in the Parent Company greater than 15 percent and the amount of their equity interest: Shareholder Ownership percentage 2012 Ownership percentage 2011 Ing. Tomáš Chrenek, Ph.D MUDr. Martin Polach, MBA Total

69 Notes to the Consolidated Financial Statements for the Year Ended Year-on-Year Changes and Amendments to the Register of Companies a) Board of Directors Composition of the Board of Directors as of 31 December 2012: Position: Name: Origination of the position: Recorded in the Register of Companies Chairman of the Board of Directors Filip Horák 1 Jan Jan 2011 Vice-Chairman of the Board of Directors Karel Kantor 17 March March 2010 Vice-Chairman of the Board of Directors Milan Leckéši 1 Sept Sept 2011 Member of the Board of Directors Roman Gavanda 17 March Sept 2011 Member of the Board of Directors Iveta Ostruszková 1 Jan March 2011 Member of the Board of Directors Libor Vrba 1 March March 2012 b) Supervisory Board Composition of the Supervisory Board as of 31 December 2012: Position: Name: Origination of the position: Recorded in the Register of Companies Chairman of the Supervisory Board Tomáš Chrenek 26 May May 2011 Vice-Chairman of the Supervisory Board Martin Polach 26 May June 2009 Member of the Supervisory Board Dana Polachová 18 Jan Feb 2010 Member of the Supervisory Board David Hercky 16 March March 2011 Member of the Supervisory Board Dušana Chreneková 18 Jan May 2011 Member of the Supervisory Board Hana Tůmová 7 Dec Jan

70 Notes to the Consolidated Financial Statements for the Year Ended Other Changes in the Register of Companies in the Year Ended 31 December 2012 There were no other changes in the Register of Companies in the year ended 31 December Organisational Structure of the Parent Company The organisational structure of AGEL a.s. is provided in Appendix No. 1. The Parent Company AGEL a.s. was engaged in activities relating to the management of the Group. 2. CONSOLIDATION GROUP (HEREINAFTER ALSO THE GROUP ) 2.1. Consolidation Group Name of the company Registered office Share in share capital (in %) Degree of dependence Consolidation method AGEL a.s. Mathonova 291/1, Prostějov Parent company Full AGEL SERVIS a.s. Mathonova 291/1, Prostějov 100 Controlling influence Full Avenier, a.s. Bidláky 20/837, Brno 80 Controlling influence Full CGB laboratoř a.s. Kořenského 1210/10, Ostrava-Vítkovice 51 Controlling influence Full Dialýza Šumperk, spol. s r.o. Nerudova 640/41, Šumperk 100 Controlling influence Full Dopravní zdravotnictví a.s. Italská 560/37, Praha Controlling influence Full Hornická poliklinika s.r.o. Sokolská tř. 81, Ostrava 48 Controlling influence Equity IVF Clinic a.s. U Spalovny 4582/17, Prostějov 51 Controlling influence Full Kardiologické centrum AGEL s.r.o. Kyjevská 44, Pardubice 90 Controlling influence Full KTR-Servis s.r.o. Stodolní 316/2, Ostrava Moravská Ostrava 100 Controlling influence Full MARTEK MEDICAL a.s. U Spalovny 4582/17, Prostějov 100 Controlling influence Full Medical Systems a.s. Mathonova 291/1, Prostějov 100 Controlling influence Full Nemocnice Český Těšín a.s. Ostravská 785/73, Český Těšín 100 Controlling influence Full Nemocnice Nový Jičín, a.s. Purkyňova 2138/16, Nový Jičín 100 Controlling influence Full Nemocnice Podlesí a.s. Konská 453, Třinec 100 Controlling influence Full Nemocnice Valašské Meziříčí a.s. U Nemocnice 980, Valašské Meziříčí 100 Controlling influence Full P&R LAB a.s. Revoluční 2214/35, Prostějov 100 Controlling influence Full 68

71 Notes to the Consolidated Financial Statements for the Year Ended Name of the company Registered office Share in share capital (in %) Degree of dependence Consolidation method Podhorská nemocnice a.s. Hornoměstská 549/16, Rýmařov 100 Controlling influence Full 1. Oční s.r.o. Zalužanského 1192/15, Ostrava-Vítkovice 100 Controlling influence Full Repharm, a.s. Konská 453, Třinec 100 Controlling influence Full Středomoravská nemocniční a.s. Mathonova 291/1, Prostějov 100 Controlling influence Full Šumperská nemocnice a.s. Nerudova 640/41, Šumperk 100 Controlling influence Full Transfúzní služba a.s. B. Němcové 1006/22, Šumperk 100 Controlling influence Full Vítkovická nemocnice a.s. Zalužanského 1192/15, Ostrava-Vítkovice 100 Controlling influence Full ZENAGEL a.s. Těšínská 1349/296, Ostrava-Radvanice 100 Controlling influence Full AGEL SK a.s. Prepoštská 6, Bratislava, SR 100 Controlling influence Full AGEL DIAGNOSTIC a.s. Prepoštská 6, Bratislava, SR 100 Controlling influence Full MEDI RELAX M+M s.r.o. Prepoštská 6, Bratislava, SR 100 Controlling influence Full Nemocnica Krompachy spol. s r.o. Banícka štvrť 1, Krompachy, SR 100 Controlling influence Full Nemocnica Zvolen a.s. Kuzmányho nábrežie 28, Zvolen, SR 100 Controlling influence Full Všeobecná nemocnica s poliklinikou Levoča, a.s. Probstnerova cesta 2/3082, Levoča, SR 67 Controlling influence Full AGEL Polska Spółka Akcyjna ul. Piłsudskiego 3, Warszawa, PL 100 Controlling influence Full 2.2. Companies Excluded from the Consolidation Group The Group does not include the following companies due to their immateriality: Vzdělávací institut AGEL, o.p.s.(formerly Zdraví pro život, o.p.s. change in the name recorded in the Register of Companies on 11 June 2010): Corporate ID: , based at Mathonova 291/1, Prostějov, Formed on 21 May 2001 The only founder is AGEL a.s. Společnost pro řízenou zdravotní péči v České republice, o.p.s.: Corporate ID: , based at Na zlatnici 7/938, Prague 4 Podolí, Formed on 23 December 2003, the co-founders are Nemocnice Podlesí a.s., KLIENT PRO s.r.o. and Hutnická zaměstnanecká pojišťovna. The company did not report any activity from its formation to 31 December TYMIAN s.r.o. entity fully owned by AGEL SK a.s. 69

72 Notes to the Consolidated Financial Statements for the Year Ended Dom sociálných služieb Krupina n.o.: Corporate ID: , registered office at Kuzmányho nábrežie 28, Zvolen, The only founder is Nemocnica Zvolen a.s. Diagnostické a liečebné centrum Zvolen s.r.o.: Corporate ID: , registered office at Kuzmányho nábrežie 2524/30, Zvolen, Formed on 27 July 2011 The sole owner is Nemocnica Zvolen a.s. Nemocnice Bruntál a.s., Nádražní 991/27, Bruntál , corporate ID: The assets of this entity were declared subject of the bankruptcy proceedings by the Regional Court in Ostrava. The bankruptcy entered into effect on 26 April The bankruptcy was completed on 12 September 2012, the removal from the Register of Companies is currently expected. NADACE AGEL, foundation Corporate ID: , registered office at Mathonova 291/1, Prostějov, Formed on 22 June 2011 The founder is AGEL a.s. The financial statements of all companies, both consolidated and unconsolidated, are available in the registered office of the Parent Company, Mathonova 291/1, Prostějov, for presentation purposes except for the financial statements of Nemocnice Bruntál a.s. in bankruptcy Changes in the Composition of the Consolidation Group in Disposals No entities in the consolidation group were sold during the year Additions Avenier, a.s., in which AGEL a.s. holds an 80% equity investment and KTR - Servis s.r.o., in which AGEL a.s. holds a 100% equity investment, were included in the consolidation group. On 23 May 2012, a new entity IVF Clinic a.s. was formed pursuant to the concluded formation contract between AGEL a.s. and Reprofit International, s r.o. The 50.5 % equity investment is held by AGEL a.s. On 27 February 2012, a new entity AGEL SERVIS a.s wholly owned, was formed pursuant to the resolution of the founder AGEL a.s. 70

73 Notes to the Consolidated Financial Statements for the Year Ended Changes in Shareholdings and Other Changes During 2012, the equity investment in Kardiologické centrum AGEL s.r.o. changed from 100% to 50% on 1 January 2012 due to the demerger through spin-off followed by amalgamation. Subsequently, a 40% equity investment of Kardiologické centrum AGEL s.r.o. was purchased on 1 July The total equity investment in Kardiologické centrum AGEL s.r.o. held by AGEL a.s. as of 31 December 2012 is 90% Other Changes in the Consolidation Group Pursuant to the demerger through spin-off followed by amalgamation project dated 17 April 2012, part of the net assets of the demerged Artur KOBLITZ, s.r.o. with its registered office at Okružní 875/19a, Brno, , corporate ID , recorded in the Register of Companies held by the Regional Court in Brno, File C, Insert 39010, defined in the project was spun off and merged with Kardiologické centrum AGEL s.r.o., with its registered office at Kyjevská 44, Pardubice , corporate ID , recorded in the Register of Companies held by the Regional Court in Hradec Králové, File C, Insert 17603, as the successor company with the effective merger date on 1 January This matter was recorded in the Register of Companies on 1 July Subsidiaries The following table summarises the information about subsidiaries in the consolidation group as of 31 December 2012: Name of the company Place of incorporation/ registration and place of business Ownership interest (in %) Voting rights (in %) Principal activity AGEL SERVIS a.s. Prostějov Servicing company Avenier, a.s. Brno Supplier of vaccines CGB laboratoř a.s. Ostrava Laboratory Dialýza Šumperk, spol. s r.o. Šumperk Medical facility Dopravní zdravotnictví a.s. Praha Medical facility IVF Clinic a.s. Prostějov Medical facility Kardiologické centrum AGEL s.r.o. Pardubice Medical facility KTR-Servis s.r.o. Ostrava Supplier of medical supplies MARTEK MEDICAL a.s. Třinec Supplier of medical supplies and instruments Medical Systems a.s. Prostějov Servicing company Nemocnice Český Těšín a.s. Český Těšín Hospital Nemocnice Nový Jičín a.s. Nový Jičín Hospital Nemocnice Podlesí a.s. Třinec Hospital 71

74 Notes to the Consolidated Financial Statements for the Year Ended Name of the company Place of incorporation/ registration and place of business Ownership interest (in %) Voting rights (in %) Nemocnice Valašské Meziříčí a.s. Valašské Meziříčí Hospital Principal activity P&R LAB a.s. Nový Jičín Laboratory Podhorská nemocnice a.s. Rýmařov Hospital 1. Oční s.r.o. Ostrava Medical facility Repharm, a s. Třinec Supplier of pharmaceuticals and operator of public pharmacies Středomoravská nemocniční a.s. Prostějov Hospital Šumperská nemocnice a.s. Šumperk Hospital Transfúzní služba a.s. Šumperk Medical facility Vítkovická nemocnice a.s. Ostrava Hospital ZENAGEL a.s. Ostrava Supplier of pharmaceuticals AGEL SK a.s. Bratislava, SR Servicing company AGEL DIAGNOSTIC a.s. Bratislava, SR Medical facility MEDI RELAX M+M s.r.o. Bratislava, SR Medical facility Nemocnica Krompachy spol. s r.o. Krompachy, SR Hospital Nemocnica Zvolen a.s. Zvolen, SR Hospital Všeobecná nemocnica s poliklinikou Levoča, a.s. Levoča, SR Hospital AGEL Polska Spółka Akcyjna Warszawa, PL Servicing company 2.5. Shares in Associates The following tables summarise the information about the associate as of 31 December 2012: Name of the company Place of incorporation and place of business Ownership percentage Voting rights Equity as of 31 Dec 2012 Profit or loss for the year ended 31 Dec 2012 Principal activity Hornická poliklinika s.r.o. Ostrava Operation of physician and specialist wards (In CZK thousand) 31 Dec Dec 2011 Cost of investment Share in profit after acquisition net of received dividends and amortisation of goodwill on consolidation

75 Notes to the Consolidated Financial Statements for the Year Ended BASIS OF ACCOUNTING AND GENERAL ACCOUNTING PRINCIPLES The Group s accounting records are maintained and the consolidated financial statements were prepared in accordance with Accounting Act 563/1991 Coll., Regulation 500/2002 Coll. which provides implementation guidance on certain provisions of Accounting Act 563/1991 Coll. for reporting entities that are businesses maintaining double-entry accounting records, as amended; and Czech Accounting Standards for Businesses, as amended. The accounting records are maintained in compliance with general accounting principles, specifically the historical cost valuation basis, the accruals principle, the prudence concept and the going concern assumption. In order to compile the consolidated financial statements of the AGEL a.s. Group, the accounting principles applied by the Group companies were brought into conformity. Significant accounting policies adopted by individual Group companies are set out below. These consolidated financial statements are presented in thousands of Czech crowns ( CZK thousand ). The figures from the financial statements of companies active in Slovakia, which are prepared in EUR, are translated using the Czech National Bank s exchange rate promulgated as of 31 December 2012 (balance sheet items) and the average foreign exchange rate of the Czech National Bank for the year ended 31 December 2012 (profit and loss account items) for consolidation purposes Scope of Consolidation and Consolidation Method Consolidation is performed using the direct consolidation method as appropriate. Direct consolidation involves consolidation of all accounting entities of the Group without using the consolidated financial statements presented for consolidation sub-groups, if any. The Group consists of the Parent Company, AGEL a.s., and its subsidiaries and one associate. The definition of subsidiaries, jointly controlled entities and associates is provided below. a) Subsidiaries Investments in enterprises in which the Parent Company has the power to govern the financial and operating policies so as to obtain benefits from their operations are treated as Equity investments in subsidiaries. For consolidation purposes, a subsidiary is a company where the Parent Company has a controlling influence through: The ownership of more than 50 percent of shares/share capital interests; or Contracts entered into or stipulations in the Articles of Association or in the Memorandum of Association. These companies are consolidated using the full consolidation method. 73

76 Notes to the Consolidated Financial Statements for the Year Ended b) Associates Investments in enterprises in which the Parent Company is in a position to exercise significant influence over their financial and operating policies so as to obtain benefits from their operations are treated as Equity investments in associates. An associate is a company where the Parent Company has significant influence, i.e., it holds more than 20 percent of shares/share capital interests and does not exercise controlling influence. These companies are consolidated using the equity method of accounting Full Consolidation Method a) Description of the full Consolidation Method Full consolidation method involves: Inclusion, after possible reclassifications and adjustments, of each item of the balance sheet and profit and loss account of subsidiaries in the balance sheet and profit and loss account of the Parent Company; Elimination of accounting transactions between accounting entities of the Group which express mutual relations; Presentation of goodwill arising on consolidation, if any, and its amortisation; Allocation of equity of subsidiaries and their profit or loss among the equity interest attributable to the Parent Company and the equity interest attributable to minority holders of equity securities and equity interests issued by consolidated entities; Elimination of equity securities and equity interests issued by the subsidiary and the controlling entity and the equity of the controlling equity which relates to the eliminated equity securities and interests; and Settlement of interrelated equity interests. b) Stages of the Full Consolidation Method Reclassification of and adjustments to items of financial statements of the Parent Company and subsidiaries. The reclassification of the Parent Company s and subsidiaries information will include items added to the consolidated balance sheet and consolidated profit and loss account and their substance. The adjustments will be made following the valuation principles stated in the consolidation rules. These adjustments will only be made in subsidiaries whose valuation principles differ from the valuation principles set by consolidation rules and would have a material impact on the valuation of assets in the consolidated financial statements and the reported profit or loss. Financial statements of subsidiaries whose registered office is abroad and whose accounting records are denominated in a foreign currency are translated using the exchange rate ruling at the consolidated balance sheet date. 74

77 Notes to the Consolidated Financial Statements for the Year Ended Adjustments to the asset and liability valuation of subsidiaries. If there is a significant difference between the valuation of assets and liabilities in the accounting records of subsidiaries and the fair value, the valuation is adjusted to the fair value of assets and liabilities as of the acquisition date or as of the date when the interest in the share capital was increased. The relevant assets and liabilities of the subsidiary are included in the consolidated financial statements at the revalued amounts. If the valuation of assets and liabilities is adjusted as stated above, adjustments reflecting differences arising from transactions made after the acquisition date or the date when the interest in the share capital was increased are made. These adjustments result from the inclusion of the assets or settlement of the liabilities charged or credited to the profit or loss of the subsidiary at the valuation of these items as carried in the accounting records of the subsidiary and these transactions stated pursuant to the revalued amounts of the relevant assets and liabilities for consolidation purposes. Adding the financial statements data of the Parent Company and subsidiaries. The Parent Company adds reclassified and adjusted information from its financial statements to reclassified and adjusted information from the financial statements of its subsidiaries. Elimination of mutual transactions between the Parent Company and its subsidiaries. Elimination of transactions which do not influence profit or loss. Mutual intercompany receivables and payables and expenses and income which have a material impact on assets, liabilities and profit or loss items in the consolidated financial statements are fully eliminated. Elimination of transactions which influence profit or loss. Upon the preparation of the consolidated balance sheet and the consolidated profit and loss account, mutual transactions between the Parent Company and subsidiaries or between subsidiaries which have a material impact on the profit or loss of the Group are eliminated, among others, in the following cases: Intercompany sales and purchases of inventory; Intercompany sales and purchases of fixed assets; Dividends received and declared and shares in profit within the Group; Services provided in the group; and Revaluation gains or losses for fixed assets and their depreciation, if they arose from transformations within the consolidation group. When the full consolidation method is used, mutual transactions between the Parent Company and subsidiaries and between subsidiaries are eliminated. The elimination of mutual transactions which influence the profit or loss is carried out in accordance with the stated consolidation rules. 75

78 Notes to the Consolidated Financial Statements for the Year Ended When the profit or loss arising from intercompany purchases and sales of inventory is eliminated, the valuation of inventory and revenue arising from the sale of inventory is adjusted in the consolidated balance sheet and the consolidated profit and loss account. For the purposes of adjustments of these consolidated financial statements items, in adjusting income from the sale of inventory and the change in the valuation of inventory, the average margin of suppliers of individual customers within the Group is used. When the profit or loss arising from the purchase and sale of fixed assets is eliminated, the revenues and expenses from the sale of assets are eliminated; the acquisition cost of assets at the customer is decreased by the difference between the selling price and the supplier s carrying value. Depreciation of these assets in the reporting period and accumulated depreciation of fixed assets in the consolidated financial statements is also adjusted. The income item of the consolidated profit and loss account is decreased by income on dividends received, shares in profit and the retained earnings are increased in the consolidated financial statements. Goodwill arising on Consolidation Goodwill arising on consolidation represents the difference between the acquisition cost of an investment in a subsidiary and its value determined on the basis of the Parent Company s interest in the fair value of equity which arises as a difference of fair values of assets and fair values of liabilities as of the date of acquisition or as of the date of a further capital increase (a further increase of securities or investments). The acquisition date is the date from which the effectively controlling entity starts to exercise influence over the consolidated company. Goodwill arising on consolidation is amortised on a straight line basis over 20 years. The selected depreciation period is reliably supportable and it does not breach the principle of the true and fair view of the financial position and performance of the entity. Goodwill arising on consolidation is charged to consolidation goodwill in expenses on ordinary activities or credited to negative consolidation goodwill in income on ordinary activities as appropriate. Goodwill on acquisitions effected before 31 December 2001 has been amortised over five years at one fifth of its value each year starting in This goodwill on consolidation was amortised in full by 31 December Amortisation charges of goodwill arising on consolidation are recognised in a special consolidated profit and loss account line item. The same treatment as outlined in the previous three paragraphs is adopted in respect of the increase (additional purchase) of an investment in an already controlled subsidiary. Division of consolidated equity and elimination of equity securities and equity interests. The division of equity in the consolidated balance sheet involves the separation of majority equity interest consisting of the sum of the Parent Company s equity and its interest in the equity of subsidiaries from minority interests, i.e. the remaining equity interests of other shareholders and owners of these consolidated entities. Equity interests issued by a subsidiary and the equity of a subsidiary related to the equity interests held by the Parent Company are eliminated from the consolidated balance sheet. 76

79 Notes to the Consolidated Financial Statements for the Year Ended Minority Equity These are liability balance sheet items where minority equity interests in subsidiaries are presented and classified into interest in share capital, capital funds, funds from profit, retained earnings/accumulated losses and profit or loss for the current period. Distribution of consolidated profit or loss for the current period The Group s profit or loss for the current period is distributed in the consolidated profit and loss account between the consolidated profit or loss for the current period attributable to the Parent Company and the minority share in profit or loss attributable to other subsidiary shareholders and owners as appropriate Consolidation using the Equity Method of Accounting a) Description of Consolidation using the Equity Method of Accounting The equity method of accounting represents the following adjustments to the information about the entity: a) Eliminating equity interests issued by an associate from the balance sheet of the entity exercising controlling influence and replacing them with a stand-alone balance sheet item of interests valued using equity accounting in the amount of equity interests in the associate; b) Settlement of the difference between the valuation of interests and the consolidation balance sheet item of the equity-accounted interest through the recognition of: The consolidation reserve fund which represents accumulated shares in the profit or loss under equity accounting for the prior periods of associates from the date of their acquisition. The consolidation reserve fund also includes subsidiary interests in total changes in other equity (i.e. net of profit or loss) for the relevant period. Goodwill arising from consolidation using equity accounting is also amortised over 20 years. b) Share in profit or loss under equity accounting The share in profit or loss under equity accounting relates to the profit or loss of the associate for the current period and its amount is arrived at based on the investment of the entity exercising controlling influence over the associate and based on the actual profit or loss of the associate for the period from the acquisition date to the end of the reporting period when the associate was acquired. Given that consolidation is carried out using the direct method, the proportionate part of the profit or loss of the associate attributable to the investment of the entity exercising controlling influence over the associate is taken over. If the equity method of accounting is used, clearly determinable mutual relations which have a significant impact on the value of equity and profit or loss of the associate for the current period are eliminated. Shares in profit received from the Group companies consolidated using the equity method of accounting are eliminated from the profit and loss account of the entity exercising controlling influence and are added to the consolidated reserve fund. Goodwill arising on consolidation is treated on the same basis as under the full consolidation method. 77

80 Notes to the Consolidated Financial Statements for the Year Ended Adjustments to the Financial Statements of Slovak Companies Given the different accounting legislation effective in Slovakia, the following adjustments were made to individual financial statements of the Slovak companies. Unbilled supplies: Accounting transactions recognised in Slovak companies as unbilled supplies correspond to Czech transactions recognised under deferrals and accruals. The items of unbilled supplies in the balance sheet were integrated into the consolidated financial statements by their nature as part of accruals and deferrals. Reserves for costs of the period: Accounting transactions recognised in Slovak companies as costs of the period with a corresponding entry to reserves correspond to Czech transactions recognised as estimated payables in certain cases. These cases were integrated into the estimated payables in the consolidated financial statements. Slovak companies are obliged to charge a social fund for the settlement of specifically defined employee benefits. Given that it is not the fund reported in the share capital according to Czech legislation, its balances in the consolidated balance sheet liabilities were reflected in the reserve for pensions and similar liabilities as of the balance sheet date. Finance leases: The Slovak accounting legislation accounts for finance leases by recording the assets at the moment of their receipt in the assets of the lessee with a corresponding entry to long-term payables. Lease instalments include repayment of both the long-term payable (principal) and interest which is included in expenses gradually according to the repayment schedule. Reporting entities depreciate the assets. The consolidated financial statements were adjusted in such a manner that all lease contracts are recognised in accordance with the Czech accounting legislation. This means that all accounting transactions relating to finance leases according to Slovak polices were eliminated in the individual financial statements of Slovak companies and were replaced by entries according to Czech policies. Expenses of transactions of 2011 were corrected against retained earnings; expenses of 2012 were adjusted in the profit or loss of the period. Foreign exchange translations of individual financial statements of Slovak companies: Balance sheet items of Slovak companies were translated using the Czech National Bank s foreign exchange rate as of 31 December 2012, i.e. CZK /EUR. Profit and loss account items of Slovak companies were translated using the average foreign exchange rate of the Czech National Bank for 2012, i.e. CZK /EUR. This translation resulted in the difference between the operating result translated from the balance sheet items and the operating result translated from the profit and loss account items. This foreign exchange rate difference is reported in Gains or losses from foreign currency translations in the equity on the face of the consolidated balance sheet. 78

81 Notes to the Consolidated Financial Statements for the Year Ended Foreign currency translation of the equity of Slovak companies as of the acquisition date and the balance sheet date: The amount of the equity of companies entering in the consolidation group is translated using the Czech National Bank s exchange rate as of the date of the effective exercise of ownership rights in the relevant company. Foreign exchange rate differences between this translation and the balance of the eliminated equity of these companies as of the balance sheet date are posted to Gains or losses from foreign currency translations in the equity of the consolidated balance sheet. 4. INFORMATION ON THE ACCOUNTING METHODS USED AND GENERAL ACCOUNTING PRINCIPLES 4.1. Tangible Fixed Assets Tangible fixed assets include assets with an estimated useful life greater than one year and an acquisition cost greater than CZK 40 thousand on an individual basis. Assets with an acquisition cost between CZK 10 thousand and CZK 40 thousand are also treated as fixed assets if their useful lives exceed one year and their nature is that of fixed assets. Purchased tangible fixed assets are stated at cost less accumulated depreciation and any recognised impairment losses. Tangible fixed assets developed internally are valued at direct costs, incidental costs directly attributable to the internal production of assets (production overheads), or alternatively incidental costs of an administrative character if the production period of the assets exceeds one accounting period. The following tangible fixed assets are stated at replacement cost: tangible fixed assets acquired through donation, tangible fixed assets acquired without consideration on the basis of a contract to purchase a leased asset (accounted for by a corresponding entry in the relevant accumulated depreciation account), fixed assets recently entered in the accounting records (accounted for by a corresponding entry in the relevant accumulated depreciation account), and an investment of tangible fixed assets. Assets acquired after the expiration of a lease with a net book value exceeding nil are also stated at replacement cost (it is accounted for by a corresponding entry in the relevant accumulated depreciation account) to achieve a true and fair presentation of the assets. Replacement cost is arrived at on the basis of an assessment made by the Company s knowledgeable staff. The cost of fixed asset improvements exceeding CZK 40 thousand for the taxation period increases the acquisition cost of the related tangible fixed asset. 79

82 Notes to the Consolidated Financial Statements for the Year Ended Depreciation is charged so as to write off the cost of tangible fixed assets, other than land and assets under construction, over their estimated useful lives, using the straight line method, on the following basis: (In CZK thousand) Assets Depreciation period in years Buildings Medical equipment 3 10 Computer systems 3 5 Vehicles 4 6 Furniture and fixtures 4 6 Fixed assets with an acquisition cost lower than CZK 40 thousand 2 3 Other fixed assets with an acquisition cost lower than CZK 40 thousand 2 6 Other fixed assets with an acquisition cost greater than CZK 40 thousand 5 6 The table summarises general depreciation periods. Assets held under finance leases are depreciated by the lessor. Assets held under an agreement to lease a business or part thereof are depreciated by the Company as the lessee on a contractual basis (except for Středomoravská nemocniční a.s., Dopravní zdravotnictví a.s. and Nemocnice Nový Jičín a.s. where assets are depreciated by the lessor on a contractual basis). The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the net book value of the asset at the sale date and is recognised through the profit and loss account. The valuation difference on acquired assets is composed of a positive or negative difference between the valuation of the business or part thereof and the sum of the carrying values of individual components of assets of the selling entity net of assumed liabilities. A positive difference on acquired assets is amortised to expenses on a straight line basis over 180 months from the acquisition date of the business or part thereof. A negative difference on acquired assets is released into income over 180 months from the acquisition date of the business or part thereof. Any subsequent revaluation of the new asset components referred to above gives rise to an adjustment of the valuation difference amount and amortisation continues with the amortisation period remaining unchanged. The amount of the unamortised positive or negative valuation difference is fully written off on disposal of the last component of intangible and tangible fixed assets to which the valuation difference relates. 80

83 Notes to the Consolidated Financial Statements for the Year Ended When the Company notes that it carries assets at an amount that does not correspond to the actual balance, it recognises a provision against these assets in an amount ensuring that the amount of assets reflecting the economic reality is reported in the financial statements. In 2012, no differences in the valuation of assets and their fair value were identified in the Group companies following the inventory taking, therefore, there was no need to recognise a provision against tangible fixed assets Intangible Fixed Assets Intangible fixed assets include assets with an estimated useful life greater than one year and an acquisition cost greater than CZK 60 thousand in respect of start-up costs, or greater than CZK 60 thousand in respect of other intangible assets on an individual basis. Assets with an acquisition cost between CZK 10 thousand and CZK 60 thousand are also treated as intangible fixed assets if their useful lives exceed one year and their nature is that of fixed assets. Intangible fixed assets also comprise development activities with an estimated useful life greater than one year. Assets arising from development activities are capitalised only if utilised for repeated sale. Expenditure on research activities is recognised as an expense in the period in which it is incurred. The cost of fixed asset improvements exceeding CZK 40 thousand for the taxation period increases the acquisition cost of the related intangible fixed asset. Purchased intangible fixed assets are stated at acquisition cost less accumulated amortisation and impairment loss, if any. Amortisation of intangible fixed assets is recorded on a straight line basis over their estimated useful lives as follows: Intangible Fixed Assets Amortisation period in years Software 2 8 Valuable rights 3 Other intangible fixed assets 4 When the Company notes that it carries intangible assets at an amount that does not correspond to the actual balance, it recognises a provision against these assets in an amount ensuring that the amount of assets reflecting the economic reality is reported in the financial statements. In 2012, no differences in the valuation of assets and their fair value were identified in the Group companies following the inventory taking, therefore, there was no need to recognise a provision against intangible fixed assets. 81

84 Notes to the Consolidated Financial Statements for the Year Ended Non-Current Financial Assets Non-current financial assets principally consist of loans with maturity exceeding one year, equity investments, securities and equity investments available for sale and debt securities with maturity over one year held to maturity, and non-current assets held under a business lease arrangement. Upon acquisition securities and equity investments are carried at cost. The cost of securities or equity investments includes the direct costs of acquisition, such as fees and commissions paid to brokers and advisors. At the consolidated balance sheet date, equity securities which were not subject to full consolidation or consolidation using the equity method are valued using the equity method of accounting Inventory Purchased inventory is valued at acquisition costs. Acquisition cost includes the purchase cost and indirect acquisition costs such as custom fees, freight costs and storage fees during transportation, commissions, insurance charges and discounts. Internally developed inventory is valued at the cost of producing the inventory using costing formulas, which primarily consists of the direct costs of production or any other activity, and/or the portion of indirect costs relating to production. Inventory is issued out of stock using the weighted arithmetic average method. Acquired special medical supplies and drugs, which represent the most important part of the material expenses of hospitals, are largely expensed during the year. Hospitals purchase supplies and drugs for their standard needs rather than for holding in stock. Based on physical stock counts of special medical supplies and drugs, costs are adjusted by unused supplies and drugs at the balance sheet date. Provisioning Pursuant the stock-taking, the Company identified the need of provisioning against inventory in: MARTEK MEDICAL a.s. in the amount of CZK 4,276 thousand (31 December 2011, the balance of the provision against inventory was CZK 3,023 thousand). Avenier, a.s. in the amount of CZK 733 thousand Receivables Upon origination, receivables are stated at their nominal value as subsequently reduced by appropriate provisions for doubtful and bad amounts. Long-term receivables include receivables with maturity over one year as of the balance sheet date, and a deferred tax asset. Short-term receivables are receivables with maturity equal to one year or less as of the balance sheet date. 82

85 Notes to the Consolidated Financial Statements for the Year Ended Provisioning Receivables are provisioned based on the performed analysis, taking into account their period past due and expected collectability and the fact that the debtor is subject to bankruptcy proceedings Payables Payables are stated at their nominal value. Long-term payables include payables with maturity over one year at the balance sheet date, and a deferred tax liability. Short-term payables include payables maturing within one year Loans Loans are stated at their nominal value. The loan that is repayable within one year from the date of its contracting is recorded as a short-term loan. The portion of long-term loans maturing within one year from the consolidated balance sheet date is included in short-term loans. Interest on loans is charged to expenses on an accrual basis Reserves Reserves are intended to cover future risks or expenditure, the nature of which is clearly defined and which are likely to be incurred, but which are uncertain as to the amount or the date on which they will arise. Group entities do not create statutory reserves for repairs of tangible fixed assets Foreign Currency Translation Transactions denominated in foreign currencies during the year are translated using the exchange rate of the Czech National Bank prevailing on the date of the transaction. As of the consolidated balance sheet date, financial assets, receivables and payables denominated in a foreign currency are translated using the effective exchange rate promulgated by the Czech National Bank as of that date. Any resulting foreign exchange rate gains and losses are recorded as the current year s financial expenses or income as appropriate. The figures from the financial statements of the companies based in Slovakia are prepared in EUR and are translated for consolidation purposes using the method described in Note

86 Notes to the Consolidated Financial Statements for the Year Ended Finance Leases A finance lease is the acquisition of a tangible fixed asset such that, over or after the contractual lease term, ownership title to the asset transfers from the lessor to the lessee; pending the transfer of title the lessee makes lease payments to the lessor for the asset that are charged to expenses. The initial lump-sum payment under a finance lease arrangement is amortised and expensed over the lease period. Leasehold improvements are depreciated over the lease term. Following the transfer of ownership title to the leased asset to the lessee, the cost of improvements is added to the value of acquired assets and the depreciation of this increased amount continues. Advances made for future lease instalments are recorded as operating prepayments made and are charged in individual lease instalments Taxation a) Depreciation of Fixed Assets for Tax Purposes For tax purposes, depreciation of fixed assets is calculated using the straight line or accelerated method which is selected individually for each type of asset depending on its estimated use, i.e. the estimated time of use and primarily the intensity of use, considering their physical and moral wear and tear. b) Corporate Income Tax The tax currently payable is based on taxable profit for the reporting period. Taxable profit differs from the net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Group s liability for current tax is calculated using the tax rates that have been enacted by the consolidated balance sheet date. c) Deferred Tax Deferred tax is accounted for using the balance sheet liability method. The balance sheet liability method focuses on temporary differences which are differences between the tax base of an asset or liability and its carrying amount in the balance sheet. The tax base of an asset or liability is the amount that will be deductible for tax purposes in the future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax is charged or credited to the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 84

87 Notes to the Consolidated Financial Statements for the Year Ended Borrowing Costs Borrowing costs arising from loans attributable to the acquisition, construction or production of fixed assets which arise before the assets are brought into use are added to the cost of those assets. All other borrowing costs are recognised in the profit and loss account in the period in which they are incurred Government Grants Grants received to offset costs are recognised as other operating and financial income over the period necessary to match them with the related costs. Grants received to acquire tangible and intangible fixed assets and technical improvements and grants for the settlement of interest expenses added to the cost are deducted in reporting their cost or internal cost Revenue Recognition Revenues are recognised when goods are shipped out of stock and title has passed to the customer or when services are rendered and are reported net of discounts and VAT. Revenue arising from the principal activity (health care covered by insurance companies) is recognised monthly based on fixed payment or a per-intervention payment system, depending on the agreement with the insurance company, and is exempted from VAT. If the insurance company does not settle the provided health care at the balance sheet date, the Company recognises estimated receivables based on its assessment of the relevant contracts. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Dividend income is recognised when the shareholders rights to receive payment have been declared Use of Estimates The presentation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the consolidated balance sheet date and the reported amounts of revenues and expenses during the reporting period. Management of the Group believes that the estimates and assumptions used will not significantly differ from the actual results and outcomes in the following reporting periods Extraordinary Expenses and Income Extraordinary items are income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Group as well as income or expenses from events or transactions that are not expected to recur frequently or regularly, or transactions resulting from corrections of prior periods. 85

88 Notes to the Consolidated Financial Statements for the Year Ended Cash Flow Statement The cash flow statement is prepared using the indirect method. Cash equivalents include current liquid assets easily convertible into cash in an amount agreed in advance. Cash and cash equivalents can be analysed as follows: 31 Dec Dec 2011 Cash on hand Cash equivalents Cash at bank Cash in transit Total cash and cash equivalents Cash flows from operating, investment and financial activities presented in the cash flow statement are not offset. 5. ADDITIONAL INFORMATION ON THE CONSOLIDATED BALANCE SHEET 5.1. Consolidation Acquisition of a Subsidiary In the year ended 31 December 2012, the following companies were included in the consolidation group: Avenier, a.s. 80% held by AGEL a.s. KTR-Servis s.r.o. wholly owned by AGEL a.s. AGEL SERVIS a.s. wholly owned by AGEL a.s. IVF Clinic a.s % held by AGEL a.s. 86

89 Notes to the Consolidated Financial Statements for the Year Ended Intangible Fixed Assets Cost Start-up costs Software Valuable rights Goodwill Other intangible FA Intangible FA under construction Pre-payments made TOTAL Balance at 31 Dec Aditions Changes arising from foreign exchange rate differences Disposals Balance at 31 Dec Accumulated Amortisation Start-up costs Software Valuable rights Goodwill Other intangible FA Intangible FA under construction Pre-payments made TOTAL Balance at 31 Dec Aditions Changes arising from foreign exchange rate differences Disposals Balance at 31 Dec

90 Notes to the Consolidated Financial Statements for the Year Ended Net Book Value 31 Dec Dec 2011 Start-up costs 77 0 Software Valuable rights Goodwill Other intangible FA Intangible FA under construction Prepayments made for intangible FA 0 0 TOTAL Tangible Fixed Assets Cost Land Buildings Individual movable assets Other tangible FA Tangible FA under construction Prepayments for tangible FA Valuation difference TOTAL Balance at 31 Dec Aditions Changes arising from foreign exchange rate differences Disposals Other changes Balance at 31 Dec

91 Notes to the Consolidated Financial Statements for the Year Ended Accumulated Depreciation Land Buildings Individual movable assets Other tangible FA Tangible FA under construction Prepayments for tangible FA Valuation difference TOTAL Balance at 31 Dec Aditions Changes arising from foreign exchange rate differences Disposals Balance at 31 Dec Net Book Value 31 Dec Dec 2011 Land Buildings Individual movable assets Other tangible FA Tangible FA under construction Prepayments for tangible FA Valuation difference on acquired assets TOTAL Based on a contract for the lease of business, Středomoravská nemocniční a.s.(subsidiary) operates three hospitals (Prostějov, Přerov and Šternberk). Pursuant to the contract, the leased assets are depreciated by the lessor, and the Company only records rental payments (the annual amount of rental was agreed to be CZK 52,000 thousand) (in 2011, the rental amounted CZK 52,000 thousand). This as the value added tax base; input VAT reduced using the reduction coefficient recognised as an expense to the rental amounts to CZK 8,320 thousand in the year ended 31 December

92 Notes to the Consolidated Financial Statements for the Year Ended Based on a contract for the lease of business, Dopravní zdravotnictví a.s.(subsidiary)operates health facilities leased from České dráhy. Pursuant to the contract, the leased assets are depreciated by the lessor, and the Company only records rental payments, the annual amount of rental was agreed to be CZK 33,586 thousand (2011: CZK 32,961 thousand). This is a value added tax base; input reduced VAT using the reduction coefficient recognised as an expense for rental amounts to CZK 5,308 thousand in Based on a contract for the lease of business, Nemocnice Nový Jičín a.s. (subsidiary) operates a hospital. Pursuant to the contract, the leased assets are depreciated by the lessor, and the Company only records rental payments, the annual amount of rental was agreed to be CZK 25,250 thousand. This is a value added tax base; input reduced VAT using the reduction coefficient recognised as an expense for rental amounts to CZK 3,990 thousand in Fixed Assets Pledged as Security As of 31 December 2012 Company Description of assets Net book value of assets Description, extent and purpose of pledge/charge Nemocnice Nový Jičín a.s. Clinac ix linear accelerator Loan contract ČSOB Šumperská nemocnice a.s. CT Brilliance Loan contract RFB Vítkovická nemocnice a.s. Building + land Loan contract RFB Vítkovická nemocnice a.s. Building + land Loan contract ČSOB Vítkovická nemocnice a.s. Individual movable assets angiography line Loan contract ČSOB MARTEK MEDICAL a.s. Building + land Loan contract ČSOB MARTEK MEDICAL a.s. PET CT Biograph Loan contract ČSOB MARTEK MEDICAL a.s. PET CT Biograph + CT Brilance Loan contract ČSOB Repharm, a.s. Building + land Loan contract RFB As of 31 December 2011 Company Description of assets Net book value of assets Description, extent and purpose of pledge/charge Nemocnice Podlesí a.s. Building + land Loan contract RFB Radioterapie, a.s. Clinac ix linear accelerator Loan contract ČSOB 90

93 Notes to the Consolidated Financial Statements for the Year Ended Company Description of assets Net book value of assets Description, extent and purpose of pledge/charge Šumperská nemocnice a.s. CT Brilliance Loan contract RFB Vítkovická nemocnice a.s. Building + land Loan contract RFB Vítkovická nemocnice a.s. Individual movable assets angiography line Loan contract ČSOB MARTEK MEDICAL a.s. PET CT Biograph + CT Brilance Loan contract ČSOB MARTEK MEDICAL a.s. Building + land Loan contract ČSOB Repharm, a.s. Building + land Loan contract RFB Assets Held under Finance and Operating Leases Finance Leases Company Total lease value Payments made as of 31 Dec 2011 Payments made in 2012 Due in 2013 Due in the following years AGEL a.s AGEL SERVIS a.s Avenier, a.s CGB laboratoř a.s Dialýza Šumperk, spol. s r.o Dopravní zdravotnictví a.s IVF Clinic a.s Kardiologické centrum AGEL s.r.o MARTEK MEDICAL a.s Medical Systems a.s Nemocnice Český Těšín a.s Nemocnice Nový Jičín a.s Nemocnice Podlesí a.s Nemocnice Valašské Meziříčí a.s

94 Notes to the Consolidated Financial Statements for the Year Ended Company Total lease value Payments made as of 31 Dec 2011 Payments made in 2012 Due in 2013 Due in the following years Podhorská nemocnice a.s Oční s.r.o P&R LAB a.s Repharm, a.s Středomoravská nemocniční a.s Šumperská nemocnice a.s Transfúzní služba a.s Vítkovická nemocnice a.s ZENAGEL a.s AGEL DIAGNOSTIC a.s AGEL SK a.s MEDI RELAX M+M s.r.o Nemocnica Krompachy spol.s.r.o Všeobecná nemocnica s poliklinikou Levoča,a.s Nemocnica Zvolen a.s Total Operating leases In the years ended 31 December 2012 and 2011, none of the consolidation group companies entered into a significant contract for operating leases of assets, except for the above leases of hospitals Amortisation of Goodwill Arising on Consolidation Acquisition As of Goodwill arising on consolidation Accumulated amortisation as of 31 Dec 2011 Amortisation in 2012 Accumulated amortisation as of 31 Dec 2012 Net book value as of 31 Dec 2012 Nemocnice Podlesí a.s Nemocnice Podlesí a.s

95 Notes to the Consolidated Financial Statements for the Year Ended Acquisition As of Goodwill arising on consolidation Accumulated amortisation as of 31 Dec 2011 Amortisation in 2012 Accumulated amortisation as of 31 Dec 2012 Net book value as of 31 Dec 2012 MARTEK MEDICAL a.s Nemocnice Ostrava-jih spol. s r.o. (equity remains in the group due to the merger with Vítkovická nemocnice a.s.) Nemocnice Český Těšín a.s MEDIKOPLAST a.s. (equity remains in the group due to the merger with MARTEK MEDICAL a.s.) MEDICAL-CS s.r.o. (equity remains in the group due to the merger with AGEL a.s.) Nemocnice Podlesí a.s Radioterapie, a.s Hornická poliklinika s.r.o Radioterapie, a.s Tranfúzní služba a.s Radioterapie, a.s Repharm, a.s Vítkovická nemocnice a.s Šumperská nemocnice a.s Dialýza Šumperk, spol. s r.o Repharm, a.s Nemocnice Podlesí a.s MARTEK MEDICAL a.s Podhorská nemocnice a.s Servis Nemocnice Rýmařov s.r.o. (equity remains in the group due to the merger with Podhorská nemocnice a.s.) Vítkovická nemocnice a.s Oční s.r.o Dopravní zdravotnictví a.s Šumperská nemocnice a.s P&R LAB a.s Radioterapie, a.s CGB laboratoř a.s

96 Notes to the Consolidated Financial Statements for the Year Ended Acquisition As of Goodwill arising on consolidation Accumulated amortisation as of 31 Dec 2011 Amortisation in 2012 Accumulated amortisation as of 31 Dec 2012 Net book value as of 31 Dec 2012 Šumperská nemocnice a.s Dialýza Šumperk, spol. s r.o P&R LAB a.s Radioterapie, a.s CGB laboratoř a.s AGEL Insurance a.s. (currently Medical Systems a.s.) MEDI RELAX M+M s.r.o Radioterapie, a.s Laboratoř klinické mikrobiologie s.r.o. (equity remains in the group due to the merger with P&R LAB a.s.) Nemocnica Krompachy spol. s r.o Všeobecná nemocnica s poliklinikou Levoča, a.s ZENAGEL a.s Kardiologické centrum AGEL s.r.o Kardiologické centrum AGEL s.r.o Kardiologické centrum AGEL s.r.o Kardiologické centrum AGEL s.r.o IVF Clinic a.s KTR-Servis s.r.o Avenier, a.s Total The information in this table ties in to the balance sheet line consolidation differences (goodwill). The method of the calculation of the goodwill arising on consolidation is described in Note

97 Notes to the Consolidated Financial Statements for the Year Ended Non-Current Financial Assets Non-current Financial Assets Excluded from Consolidation The following table shows only non-current financial assets which were not consolidated using any consolidation method. Acquisition cost Fair value Balance at 1 Jan 2012 Additions Disposals Balance at 31 Dec 2012 Revaluation at 31 Dec 2012 Balance at 31 Dec 2012 Other non-current securities TOTAL Other non-current financial assets include the investment in Společnost pro řízenou zdravotní péči v České republice, o.p.s. (CZK 100 thousand), Dom sociálnych služeb Krupina n. o. (CZK 129 thousand) and investment in Nadace AGEL, foundation (CZK 500 thousand) not included in the consolidation group Non-Current Financial Assets Pledged as Security 18 shares of Nemocnice Podlesí a.s., with its registered office at Konská 453, Třinec, corporate ID: , held by the Parent Company are pledged as collateral in favour of Raiffeisenbank a.s., Olbrachtova 2007/09, Prague 4, , corporate ID: pursuant to collateral contract no. ZCP152793/2008/01 dated 15 December 2008 and loan contract no. 500/152793/09/ shares of Avenier a.s. with its registered office at Bidláky 837/20,Brno, corporate ID: , held by the parent company AGEL a.s., are pledged as collateral in favour of Raiffeisen bank a.s., Hvězdova 1716/2b, Prague 4, corporate ID: pursuant to collateral contract dated 23 July 2012, no /02/2012 and loan contract no /01/ Inventory Material mainly includes unused inventory of pharmaceuticals and medical supplies in individual hospital departments. Goods include the inventory of pharmaceuticals in individual public and institutional pharmacies of the Company which are part of the consolidation group and goods in warehouses of distribution companies of the consolidation group, specifically MARTEK MEDICAL a.s., Repharm, a.s. and Avenier a.s. 95

98 Notes to the Consolidated Financial Statements for the Year Ended Long-Term Receivables (Net of Deferred Tax) The following shows the summary of long-term receivables. Long-term receivables as of 31 December 2012 predominantly include: Receivable of CZK 24,456 thousand (at 31 Dec 2011 of CZK 27,456 thousand) which arose based on the difference between the assumed components of assets and liabilities arising from the contract for the long-term lease of business in Nemocnice Valašské Meziříčí a.s.; Receivable of CZK 34,215 thousand (at 31 Dec 2011 of CZK 38,016 thousand) which arose on the basis of the difference between the assumed components of assets and liabilities arising from the contract for the long-term lease of business in Středomoravská nemocniční a.s. Receivable of CZK 16,564 thousand (at 31 Dec 2011 of CZK 20,705 thousand) Dopravní zdravotnictví, a.s. which arose on the basis of the difference between the assumed components of assets and liabilities arising from the contract for the long-term lease of business in Dopravní zdravotnictví a.s. Receivable of CZK 243,000 thousand which arose on the basis of the difference between the assumed components of assets and liabilities arising from contract for the long-term lease of business in Nemocnice Nový Jičín a.s. Year Category Less than 2 years Payable 2 5 years Over 5 years TOTAL Gross Provisions Net Gross Provisions Net Short-Term Receivables The following table shows short-term receivables (excluding estimated receivables) as of 31 December Estimated receivables predominantly include receivables from health insurance companies arising from the settlement of healthcare provided by individual consolidation group members. 96

99 Notes to the Consolidated Financial Statements for the Year Ended Year Category Before due date 0 90 days days days Past due date 1 2 years 3 and more years TOTAL past due TOTAL Gross Provisions Net Gross Provisions Net Current Financial Assets Balance at 31 Dec 2012 Balance at 31 Dec 2011 Cash Stamps and vouchers TOTAL cash Current accounts Cash in transit TOTAL cash at bank Short-term securities TOTAL current financial assets Deferred Expenses Deferred expenses predominantly include deferred expenses representing initial lump-sum lease payments and prepaid rentals. 97

100 Notes to the Consolidated Financial Statements for the Year Ended Equity The equity of the consolidation group changed year-on-year predominantly due to the profit of 2012 and the payment of the directors fees and dividends made by the Parent Company. Changes in equity are detailed in the statement of changes in equity which is part of these consolidated financial statements Long-Term Payables The most significant long-term payables include payables arising from customer loans reported in other payables of CZK 121,585 thousand (2011: CZK 113,777 thousand). Other payables additionally include the unsettled part of the purchase price of an acquisition of CZK 100,000 thousand and payables arising from the lease of a business that cover the net book value of the leased fixed assets of CZK 48,585 thousand (2011: CZK 49,695 thousand). Long-term prepayments made of CZK 25,574 thousand include a prepayment received for the rental for the following nine years. A significant item of long-term payables is the deferred tax described in detail in Note Year Category Payable Less than 2 years 2 5 years More than 5 years TOTAL 2011 Long-term trade payables Long-term trade payables Short-Term Payables Ageing of Short-Term Trade Payables Year Payables Before due date 0 90 days days days Past due date 1 2 years 2 and more years TOTAL past due TOTAL 2011 Short-term Short-term None of the companies in the consolidation group records past due payables arising from social security and health insurance of employees or taxes from dependent activities. 98

101 Notes to the Consolidated Financial Statements for the Year Ended As of 31 December 2012, Payables to partners and association members include payables arising from the provided loan together with outstanding interest on this loan of CZK 197,776 thousand (2011: CZK 127,500 thousand) and payables to shareholders from the approved profit distribution of CZK 14,863 thousand. Short-term received prepayments primarily include received prepayments from health insurers. Estimated payables principally include estimated amounts for healthcare fees from health insurance companies and amounts used for the payment of bonuses and benefits relating to 2012 which will be paid in the following reporting period. Other short-term payables predominantly include payables arising from customer loans. Short-term payables include repayments of customer loans payable in 12 months following the balance sheet date Bank Loans and Borrowings As of 31 Dec 2012 As of 31 Dec 2011 Long-term bank loans Short-term bank loans Short-term financial borrowings TOTAL The following table shows long-term and short-term loans of the companies in the consolidation group: Entity Bank/creditor Loan balance at Of the loan balance as of 31 Dec Dec Dec 2011 Long-term portion Short-term portion Vítkovická nemocnice a.s. Raiffeisenbank, a.s Vítkovická nemocnice a.s. ČSOB, a.s Vítkovická nemocnice a.s. ČSOB, a.s Šumperská nemocnice a.s. Raiffeisenbank, a.s Nemocnice Podlesí a.s. Raiffeisenbank, a.s Nemocnice Podlesí a.s. Raiffeisenbank, a.s Nemocnice Podlesí a.s. GE money bank a.s MARTEK MEDICAL a.s. ČSOB, a.s MARTEK MEDICAL a.s. ČSOB, a.s MARTEK MEDICAL a.s. ČSOB, a.s

102 Notes to the Consolidated Financial Statements for the Year Ended Entity Bank/creditor Loan balance at Of the loan balance as of 31 Dec Dec Dec 2011 Long-term portion Short-term portion AGEL SK a.s. ČSOB, a.s AGEL SK a.s. TATRABANKA AGEL DIAGNOSTIC a.s. UniCreditbank, a.s AGEL a.s. Raiffeisenbank, a.s AGEL a.s. Raiffeisenbank, a.s AGEL a.s. Citibank AGEL a.s. Citibank Nemocnice Nový Jičín a.s. ČSOB, a.s Repharm, a.s. Raiffeisenbank, a.s Repharm, a.s. Raiffeisenbank, a.s Repharm, a.s. Raiffeisenbank, a.s Repharm, a.s. Raiffeisenbank, a.s Repharm, a.s. Raiffeisenbank, a.s Medical Systems a.s. Raiffeisenbank, a.s TOTAL Accrued Expenses and Deferred Income As of 31 Dec 2012 As of 31 Dec 2011 Accrued expenses Deferred income TOTAL Accrued expenses as of 31 December 2012 and 2011 predominantly include accrued rentals under lease contracts. Deferred income as of 31 December 2011 and 2012 predominantly includes deferred rental received in advance. 100

103 Notes to the Consolidated Financial Statements for the Year Ended Income Taxation Deferred Tax Matters giving rise to the recognition of deferred taxation in all companies in the consolidation group due to temporary differences between the accounting and tax costs: Difference between the accounting and tax carrying amounts of fixed assets; Difference arising from tax non-deductible provisions which can be reclassified into tax-deductible provisions in the future; and Unutilised tax losses from prior periods considering their possible future usability. Deferred tax breakdown As of 31 Dec 2012 As of 31 Dec 2011 Recognised asset Unrecognised asset 0 Recognised liability TOTAL recognised asset (-liability) Analysis of movements CZK thousand As of 1 Jan Impact of change of rate Impacts of the change in the foreign exchange rate of a foreign currency 76 Impacts of changes in the consolidation group -80 Current changes charged to the profit and loss account Total charges against the profit and loss account Total recorded to equity 233 As of 31 Dec

104 Notes to the Consolidated Financial Statements for the Year Ended Current Tax Payable Profit before tax Items to be added Deductible items Utilised losses Tax base Calculated tax Tax relief Additional taxes Tax payable Effective tax rate 13.04% 11.93% Minority Equity Individual components of minority equity are represented by the share of minority owners in CGB laboratoř spol. s r.o.(minority equity of 49%), Všeobecná nemocnica s poliklinikou Levoča, a.s. (minority equity of 33%) Avenier, a.s. (minority equity of 20%), IVF Clinic a.s. (minority equity of 49.5%) and Kardiologické centrum AGEL s.r.o. (minority equity of 10%) Total Costs of Fees to the Audit Company The costs of the fee to the statutory auditor for the obligatory audit of the financial statements amounted to CZK 5,359 thousand for the year ended 31 December 2012 (2011: CZK 4,995 thousand), other review services amounted to CZK 108 thousand for the year ended 31 December

105 Notes to the Consolidated Financial Statements for the Year Ended ADDITIONAL INFORMATION ON THE CONSOLIDATED PROFIT AND LOSS ACCOUNT The information in the consolidated profit and loss account includes the information from the financial statements consolidated using the full method and financial statements of companies consolidated using the proportionate method (50% of the amounts disclosed in the statements of these companies are included) Details of Income by Principal Segment Year ended 31 Dec Dec 2011 Special medical supplies and drugs Other goods TOTAL goods Blood bank products Provision of health care Rebilling and other provided services Change in the balance of internally produced inventory Capitalisation Other income TOTAL own products and services TOTAL INCOME All income was generated in the Czech Republic and Slovakia. 103

106 Notes to the Consolidated Financial Statements for the Year Ended Consumed Purchases (Purchased Consumables and Services) Consumed purchases Year ended 31 Dec Dec 2011 Material Energy TOTAL material and energy Repairs and maintenance Travel expenses Representation costs Leasing Other rental Advisory and other professional services Communication Other services TOTAL services TOTAL CONSUMED PURCHASES Depreciation and Amortisation of Tangible and Intangible Fixed Assets Depreciation and amortisation of tangible and intangible fixed assets Year ended 31 Dec Dec 2011 Depreciation and amortisation of tangible and intangible FA Amortisation of the positive valuation difference on acquired assets TOTAL amortisation and depreciation

107 Notes to the Consolidated Financial Statements for the Year Ended Change in Reserves and Provisions Relating to Operating Activities and Complex Deferred Expenses Year ended 31 Dec Dec 2011 Change in other reserves Change in the provisions under special legislation Change in the non-tax deductible provisions Complex deferred expenses 0 0 TOTAL change in provisions and reserves Other Operating Income The most important items of sundry operating income are bonuses received from suppliers of pharmaceuticals and medical supplies suppliers, insurance proceeds received from insurance companies arising from damaged assets, income from leased non-residential premises and related services, primarily the rebilling of energies and services, and the release of negative goodwill Other Operating Expenses Year ended 31 Dec Dec 2011 Gifts Fines and default interest Write-offs of receivables and transferred receivables Insurance of assets and liability Provided bonuses Sundry operating expenses TOTAL other operating expenses

108 Notes to the Consolidated Financial Statements for the Year Ended Proceeds of the Sale of Securities and Investments, Securities and Investments Sold Year Selling price Securities sold Net book value 2012 Sold securities and investments Sold securities and investments In 2011, AGEL a.s. sold the remaining 50 % of shares in the certificate form of MARTEK MEDICAL GROUP a.s Income from Non-Current Financial Assets The Company generated no income from non-current financial assets in the years ended 31 December 2012 and Interest Income Year ended 31 Dec Dec 2011 Income on current bank accounts TOTAL interest income Other Financial Income and Income from Derivative Transactions Year ended 31 Dec Dec 2011 Foreign exchange rate gains Income from derivative transactions 0 0 Sundry financial income TOTAL other financial income

109 Notes to the Consolidated Financial Statements for the Year Ended Other Financial Expenses Year ended 31 Dec Dec 2011 Foreign exchange rate losses Banking fees TOTAL other financial expenses Extraordinary Income and Expenses In 2012, the Company reports no extraordinary income and expenses. In 2011, the Company reported extraordinary expenses arising from a change in the method in respect of Medical Systems a.s. in the amount of CZK 1,868 thousand 7. EMPLOYEES, MANAGEMENT AND STATUTORY BODIES 7.1. Staff Costs and Number of Employees Number Payroll costs Social security and health insurance Social costs TOTAL staff costs Staff Managers Bonuses for the members of statutory bodies TOTAL Staff Managers Bonuses for the members of statutory bodies TOTAL

110 Notes to the Consolidated Financial Statements for the Year Ended Loans, Borrowings, and Other Benefits Provided During the years ended 31 December 2012 and 2011, the members of the Company s Board of Directors, Supervisory Board and management received no other loans or charge-free benefits in addition to their salaries and the approved bonuses as presented in the above table, directors fees shown in the below table and except for the contracted use of company cars for private purposes. Directors fees paid in Board of Directors of AGEL a.s Audit Committee Supervisory Board of AGEL a.s TOTAL CONTINGENT LIABILITIES AND OFF BALANCE SHEET COMMITMENTS 8.1. Assessment of Additional Income Tax In 2012, taxation authorities assessed no additional significant income tax payments Legal Disputes Healthcare facilities in the group are involved in several legal disputes for damages and personality protection. Pursuant to the current course of the legal disputes, it can be anticipated that the results of these legal disputes will be favourable for the healthcare facilities. If these healthcare facilities were bound to payment of damages, the potential damage would be covered from the liability insurance of the company. 9. POST BALANCE SHEET EVENTS On 29 March 2012, the Supervisory Board of AGEL a.s. appointed Ján Dudra the seventh member of the Board of Directors. No events occurred subsequent to the balance sheet date that would have an impact on the financial statements as of 31 December

111 Notes to the Consolidated Financial Statements for the Year Ended Appendix No 1: Organigram of AGEL a.s. as of 31/12/2012

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113 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 BUSINESS ACTIVITIES OF THE AGEL GROUP Provision of healthcare is the AGEL Group s major business activity. All of the companies within the AGEL Group have their business plans adjusted to the major objective of the Group, which is quality treatment provided to a satisfied patient. Last year, the AGEL Group concentrated on two major areas. The first one is quality of provided healthcare. Our long-term aim is to have all of the AGEL Group s inpatient healthcare facilities repeatedly certified by the Joint Accreditation Committee (JAC). In AGEL, ensuring supreme quality of the provided healthcare is considered a long-term process and for this reason we will continue pursuing this goal in the following years. The second major area includes standardisation and formalisation of all processes in the individual companies of the Group. When developing methodologies and management steps, we use our internal experience as well as the experience of cooperating external companies. The following text provides characteristics of business activities of individual companies. AGEL a.s. AGEL a.s., the parent company, sets the managing and decision-making processes for the whole Group. The common denominators of all processes are effectiveness and quality. In management, the Company applies the best practices tried and tested over many years of our experience. The Company pursues the value system and organisational culture, which are the basis of the whole Group. 1. Oční s.r.o. The main business activity of the company is in the area of ophthalmology. It provides activities in the area of general ophthalmologic surgeries, activities in the area of eye surgery, focused, above all, on the treatment of cataract and refraction surgery area correction of dioptric eye impairments with the help of laser. Other activities include minor cosmetic interventions, especially adjustment of upper and lower eyelids, lengthening eyelashes, minor skin interventions (removal of entropion, chalarium, etc.) The major events in 2012 include the opening of a new outpatient department on the premises of Nemocnice Nový Jičín a.s., completed in April And also the opening of an office in Vítkov. The success is that we retained the number of operations of cataracts and maintained the proportion of ČPZP patients as a dominant segment, which accounts for ca. 55% of the company s total production. AGEL Diagnostic a.s. The company s mission is the provision of complementary care via the method of positron emission tomography examination (PET CT) for the broad public suffering from oncological diseases as a modern 111

114 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 technology, which significantly speeds up the detection of oncological diseases, and which, thanks to an early oncological care, considerably decreases the risks of morbidity. All of the the mentioned activities are carried out on the basis of cooperation with the Institute of Nuclear and Molecular Medicine with its headquarters in Košice at the PET CT workplaces in Banská Bystrica and Košice. In 2012, AGEL DIAGNOSTIC a.s. operated two workplaces one in Banská Bystrica (in operation since 2011) and the other one in Košice. In January 2012, preparation of the PET CT workplace in Košice was commenced in the building of the Institute of Nuclear and Molecular Medicine in Košice (INMM) on the premises of the Louise Pasteur s University Hospital. The operation of this workplace was launched on 4/4/2012. During 2012, the contracts regarding the provision of healthcare with the Dôvera and Union health insurance companies were still in effect. In effect, this event started off the operation of the PET CT workplace in Košice and further cooperation with the INNM Košice. Despite the fact that the valid amendment to the contract with the General Health Insurance Company was signed, it did not accept the contractual relation subsequently and, as a result, they could only treat patients of the smallest health insurance company, Union. As a result of the small number of interventions, the operation was considerably unprofitable and it was terminated at the end of A total of 1,352 patients were treated in AGEL POLSKA S A The major scope of its activities is thee analysis of conditions and operation of Polish healthcare. AGEL SERVIS a.s. The major mission of AGEL SERVIS a.s. is a methodical support and the provision of facility management supportive activities to all subsidiaries of the AGEL Group, especially, to healthcare facilities, distribution centres and other companies providing services to the broad public, particularly, in healthcare. In 2012, the company focused the major part of its activities on improving processes of buildings administration in subsidiaries and the process of centralisation of selected activities within the AGEL Group with a view to cutting costs. The major and successfully completed projects in the AGEL Group in 2012 include: Tender for a gas and electricity supplier in 2013; Adjustment of prices and contractual relation with a supplier of services in the area of waste disposal; Removal of discrepancies in unit prices for laundering at the existing contractual relations; Setting of lease relations for the use of premises with a company which ensures cleaning jobs; Adjustment and optimisation of the existing contractual relation for thermal energy supplies; Other activities of the previous year include, particularly, methodical assistance and consulting when dealing with the requirements of the individual companies within the AGEL Group regarding buildings administration, implementation of requirements which arise from the amendments to laws and regulations, representation of the individual AGEL Group s healthcare facilities when dealing with services suppliers. 112

115 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 AGEL SK a.s. AGEL SK a.s. provides methodical and managerial activities for subsidiaries in Slovakia, acquisition activities regarding the ensuring and implementation of long-term lease, or the purchase of healthcare facilities in Slovakia and the related provision of comprehensive healthcare. It introduces management principles which proved to be successful in the operation of hospitals in the Czech Republic, with respect to the specifics of the Slovak legislation. Its long-term goal is to provide quality and economically balanced healthcare in the regions where the healthcare facilities operate. Also during 2012, AGEL SK a.s. aimed the major part of its activities at improving quality of management and controlling processes in subsidiaries and a centralisation process of the selected activities within the AGEL Group in Slovakia. The system of central selection and purchase of medical technology was further cultivated, the drug policy management system was developed as well as the special medical material purchase system, which had already been introduced in the previous year. The major investment steps were also carried out, which enabled changes in the hotel background in individual hospitals. Functional mechanisms of the group management of the companies providing healthcare were set up with respect to the specific conditions in Slovakia. The rules of synergy principles and application of common procedures were applied, not only in the area of supplier-customer relations, but also in strategic dealing with healthcare payers. In 2012, owing to centralised management of subsidiaries, for the first time, we succeeded in achieving a positive economic result in all the companies providing impatient care, which is a considerable success in the conditions which the Slovak healthcare is situated in and has to offer services. The applied stabilisation mechanisms of the parent company proved to be correct and effective. CGB laboratoř a.s. The laboratory commenced its activity in 1994; in 2001, it was expanded to include a medical genetics laboratory. Since 2003, the laboratory has been a company with limited liability with a new establishment in Ostrava Vítkovice, Kořenského 10. Since 2006, it is a part of the Oncological Centre Nový Jičín with a close connection to P&R LAB a.s. Since 1/4/2007, the laboratory has been a joint stock company. The major working activities include clinical pathology with the full spectrum of bioptic and cytological examinations, including a range of immunohistochemical methods and molecular pathology methods (fluorescent in situ hybridization so called FISH methods + PCR). The laboratory is largely involved in carcinoma screening of breast, rectum and gynaecological screening of carcinoma of cervix. Necroptic activity is closely connected with pathology. Autopsies are performed for three non-governmental hospitals in the region and in this respect we have been also guaranteed forensic consulting activities from the Institute of Forensic Medicine in the Training Hospital Ostrava. Medical genetics is the most recent specialisation of the laboratory. From the initial spectrum of the basic genetic examinations, the activities have expanded to include methodologies of pre-implantation genetic 113

116 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 diagnostics using fluorescent in situ hybridisation as well as the oncogenetic methodology. Since the relocation to the new place, the full scope of molecular genetic activities have been provided. Comparative genome hybridisation has been introduced as well. In the upcoming period, the introduction of the multicolour FISH is being prepared and modern chip technologies (microarray) will be applied in the future. Being one of the few, this establishment is the owner of the so-called non-contact laser micro-dissection. Diagnostické a liečebné centrum Zvolen s.r.o. Diagnostické a liečebné centrum Zvolen s.r.o.has 16 registered activities in the scope of its business in the combination of activities bound to special permissions operation of healthcare facilities with the special focus on physiatry, balneology and curative rehabilitation, operation of a public pharmacy and activities which are a subject of free trade. Regarding registered free trades, the following trades were actively implemented and brought income: lease of movable items, canteen operation, advertising and marketing services, road transport performed by company cars. The opening of the New Pharmacy in October can be considered the essential, successfully completed event of 2012, which required direct as well as incurred construction investments, the ensuring of personnel, a purchase of equipment and facilities, obtaining necessary approvals and permissions. Dialýza Šumperk, spol. s r.o. Dialýza Šumperk, spol. s r.o. provides specialised healthcare for patients with a nephrological disease in its dialysis centre in the region comprising of Šumperk, Zábřeh and Červená Voda. Patients with a kidney failure are offered haemodialysis treatment including hemodiafiltration. With respect to patients preferences, it also provides peritoneal dialysis. A nephrology surgery is a part of the centre and it provides examination and treatment for patients with kidney disorder of various origins. Further, it prepares patients with deteriorating nephric functions for a dialysis treatment and provides advisory services for the impatient departments of Šumperská nemocnice a.s. Regarding investment projects, in 2012, a total repair of air-conditioning unit was completed. A new digital regulation uses the connection to the existing control centre. This system represents the state-of-the-art trends of regulation management, brings costs savings in energy, ensures comfortable air-conditioning management of a dialysis hall and a pleasant environment for patients. During 2012, there was an increase in the number of new patients dispensarised in the nephrology surgery. Dom sociálnych služieb Krupina n.o. Dom sociálnych služieb Krupina n.o. is a non-profit organisation providing generally beneficial services. As of 31/12/2012, the services included: a) Providing social and humanitarian assistance; b) Education, up-bringing and development of physical culture; 114

117 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Dom sociálnych služieb Krupina n.o. provides social assistance for 25 clients on a year-round stay basis. Clients are provided specialised, auxiliary and other activities, which include care ranging from social consulting and assistance when a person relies on the assistance of another person, to accommodation, food, cleaning and interest activities. The capacity of the establishment was occupied with 21 clients as of 31/12/2012. Dopravní zdravotnictví a.s. Společnost Dopravní zdravotnictví a.s. provides healthcare services, especially in the area of primary and outpatient care and in the area of complementary services as well as in the area of occupational medical services. In 2012, the company continued in the process of improving quality and the extent of its services. Therefore, it invested more than CZK 25 million in the reconstruction and modernisation of its property. The major investment projects in 2012 include improvement of common premises and reconstruction of the ground floor at the Health Centre in Prague, Italská Str., where the space was created for a new childern s and VIP outpatient surgery as well as the central reception. Dopravní zdravotnictví a.s. also continued in modernisation of the machine equipment. Replacement and RTG digitalisation took part at Poliklinika in Ostrava. The area of diagnostic medicine was further strengthened by the purchase of several quality ultrasound devices for different specialisations (cardiology, gynaecology and others). The major investments also include completion of the development of software for the organisation of occupational medical care, which enabled improving the provision of such services. Also as a result of this investment, in 2012, Dopravní zdravotnictví a.s. won several major tenders for providing occupational medical care. Kardiologické centrum AGEL s.r.o. Kardiologické centrum AGEL s.r.o.provides invasive and intervention and arrythmologic specialised cardiologic treatment for the Pardubice Region and the adjacent areas of the Hradec Králové, Liberec and Central Bohemian Region. It cooperates intensively with the University Hospital Hradec Králové, Pardubická krajská nemocnice a.s. as well as with the Institute for Clinical and Experimental Medicine. It provides diagnostic and treatment care for clients with diseases of coronary arteries and heart rhythm disorders. Together with the above-mentioned healthcare facilities it provides and organises heart surgery and vascular surgery treatment. The clients who undergo the diagnostic and treatment care are provided with subsequent treatment process in outpatient departments and the company cooperates with specialised regional workplaces in the subsequent medical monitoring of clients. In 2012, a joint company was established by spin-off of a healthcare part of Artur KOBLITZ s.r.o. and its amalgamation with Kardiologické centrum AGEL s.r.o In 2012, both companies were again included by the Ministry of Health of the Czech Republic among the centres of the so-called super-specialised care and they agreed on the joint provision of cardiology care, especially, in order to make it more effective within the 115

118 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Complex Cardiovascular Centre, whose partners are also Pardubická krajská nemocnice, a.s. and Fakultní nemocnice Hradec Králové. MARTEK MEDICAL a.s. MARTEK MEDICAL a.s. has been operating on the market since Progression, economic growth and development of logistic services quality showed that the experience from supplying the Group s healthcare facilities created good background for the company s growth and expansion to the markets outside the Group, which consolidated its leading position in the distribution of medical material distribution all over the Czech Republic. MARTEK MEDICAL a.s., besides others, also deals with the sale of medical technology inside and outside the Group, it provides its guarantee and post-guarantee service. At the present time, it operates two dispensaries of medical supplies in Ostrava and Šumperk. At the end of August 2012, the existing branch of the Company in Jesenice near Prague was relocated to the new warehouse premises in the area of Airport Logistic Park in Prague Kněževes. More than 1,000 pallet places were created at the total area of 2,300 m2. The WMS (Warehouse Management System) a system for the optimisation of stock management and logistics was also applied here. In 2012, the supervisory audits of ČSN EN ISO 9001:2009, ČSN EN ISO 14001:2005 a ČSN OHSAS 18001:2008 took place in the company. In the audits, the company successfully defended its possession of, and thus compliance with the principles of the integrated quality management system. At the end of 2012, continuous work regarding the transition to a new Mediox information system was commenced within the company s dispensaries of medical supplies in Ostrava and Šumperk. MARTEK MEDICAL a.s. received the prize from Ecolab Hygiene s.r.o. for excellent results and sales support in MARTEK MEDICAL a.s. received the 2012 the Golden Aesculap prize in the category Company of the Year. The Company received this prize, particularly, as a result of its diligence and working effort of all the employees, who, in 2012, managed to achieve the highest growth and development in the Company s whole history. MEDI RELAX M+M s.r.o. MEDI RELAX M+M s.r.o. provides occupational medical service it provides employers with specialised and consulting services in the area of health protection and support at work via medical supervision. In 2012, it managed to conclude contracts with new clients from a number of companies. Medical Systems a.s. The major business activity of Medical Systems a.s. is providing services in the area of system integration, providing consulting and IT services in the area of healthcare and health insurance companies with the added value. 116

119 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 The main business activities, which the company carried out in 2012, was implementation of the internally developed clinical system, IKIS, to SMN a.s. s hospitals the branch of Nemocnice Přerov, Nemocnice Valašské Meziříčí a.s. and SMN a.s. the branch of Nemocnice Šternberk. Further, the module Pojišťovna IKIS was successfully implemented in Vítkovická nemocnice a.s., Nemocnice Nový Jičín a.s., Šumperská nemocnice a.s., CGB laboratoř a.s., 1. Oční s.r.o. and Dialýza Šumperk, spol. s r.o. The IKIS system thus became a significant reference, providing that it handles the shared regional information support of healthcare facilities in the territory of three regions, and in terms of the size of installation, the volume of reported documents, the number of users and patients, this installation corresponds to the size of the university hospital. AGEL FOUNDATION AGEL FOUNDATION is a non-profit organisation, whose main goal is a support of humanitarian activities in relation to the healthcare sphere. The purpose of the foundation is, via its activities, to offer assistance to those who need it most and at the same time to support the interest in natural humanitarian assistance aimed at people who appeared in a difficult life situation. The basic activities of the Foundation include: General support of humanitarian activities of legal persons and private individuals aiming at generally beneficial goals, particularly concentrating on the support of projects and activities of a healthcare and social character and projects and activities in the area of education in healthcare; Support of development of healthcare, support of comprehensive development of diagnostic and treatment methodologies dealing particularly with the oncologic patients; Contribution to equipment of healthcare facilities with a view to improving conditions and the environment for the patients; Raising and purpose-bound expenditure of financial and other resources to support research and educational programs oriented to prevention, diagnostics and treatment particularly of patients with oncologic diseases; Support of financing of research and education of specialists, particularly in oncology, cardiology, cytology, neurology, orthopaedics, rehabilitation, gastroenterology, including foreign assignments and secondments abroad, organising national and seminars and congresses and with scientific and popular orientation; Support of preventive healthcare, performing and organising training and education activities oriented to health; Publication and promotion activities and cooperation with comparable foundations, Other goals as decided by the Board of Directors. During 2012, tens of our citizens as well as the representatives of companies and different civil associations, unions and clubs turned to the foundation with written or phone inquiries concerning foundation s activities and operation, whether it can financially support such and such projects and activities of a different type and orientation, and, of course, physically or mentally handicapped people and their legal representatives, including people coming from lower social classes with their requests for financial support or providing material donations. In the previous year, the AGEL FOUNDATION financially supported 21 applicants. 117

120 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Nemocnica Krompachy spol. s r. o. The major business activities include providing healthcare in a non-governmental healthcare facility in a hospital with health centre of type I, in the extent of providing outpatient care in the selected specialisations and their superstructures, joint examination and curative components and institutional care. The year 2012 was a year of economic stabilisation for the hospital. Last year, the contracts for providing healthcare were concluded with all insurance companies operating on the Slovak market. With effect from 1/10/2012, the sublessee in the non-residential premises of the transport medical service company (DZS) was replaced. A new lessee was Dopravno zdravotná služba M.K. Trans s.r.o. Michalovce, which took over the DZS s operation in the region. Four ambulance vehicles were sold to the company on the basis of a mutually agreed price and one vehicle was transferred under the continued lease. Since 2012, in cooperation with haematology-transfusion department of VNsP Levoča, a.s. a collection point of blood and plasma has been established, and regular draws of blood have been organised in cooperation with Slovenský červený kríž. Nemocnica Zvolen a.s. Business activities of Nemocnica Zvolen a.s rest in the prevention of diseases, return of health to ill people, improvement of life quality of people in the region and via quality comprehensive medical services as well as other activities stated in the scope of business, ensuring the means for its activities and continuous development in favour of patients, employees and shareholders and contributing to the development of people s education in the region by means of a training base for practical education of students at Secondary Medical School in Zvolen and other secondary schools and universities. In the second half of 2012, two major construction projects were commenced, namely the Reconstruction of joint laboratories of haematology and biochemistry and the Reconstruction and modernisation of geriatric department. Within the mentioned projects, in 2012, a part of the internal medicine department was reconstructed in order to obtain further premises for the needs of the department in the building of the joint pavilion. In 2012, the company purchased a new laboratory information system and extension of the information system for blood storage of the haematology and biochemistry department. The company purchased tangible fixed assets, that are two pieces of defibrillators for geriatric department. On the premises of the joint pavilion, a digital x-ray device with indirect digitalisation was installed, which will be put into operation at the beginning of In the part of the former administrative building, two gas boilers were supplied and assembled, a part of the building was connected to gas supply and the exchange station for heat supplies was shut down, which should lead to considerable energy savings. 118

121 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Nemocnice Český Těšín a.s. The hospital is one of the pillars of the system of care of Český Těšín s people in the provision healthcare in the key specialisations of rehabilitation, follow-up care and specialised outpatient surgeries. In 2012, the follow-up care was a dominant specialisation and thus changed the character of the establishment from the acute care hospital to a healthcare facility providing follow-up care. A major milestone was the transition from the acute to follow-up care. This change was continuously discussed with all health insurance companies, a change of the character of beds fund was discussed and contracts were concluded with all health insurance companies. The company purchased the building of the former civil defence storehouse on the premises of the hospital and commenced preparations for the reconstruction for the purposes of the healthcare. The hospital managed to expand the spectrum of the provided care with other specialised surgeries a psychologist, plastic surgeon and neurologist. Nemocnice Podlesí a.s. Nemocnice Podlesí performs elective interventions in mini-invasive surgery, vascular surgery, endovascular treatment, and cardiology and heart surgery. In 2012, the major event was the commencement of the construction of a hybrid theatre, whose completion significantly affects the Complex Cardiovascular Centre, heart surgery, cardiology, vascular surgery and intervention radiology. With respect to the hospital s orientation, it is obvious that it will affect all the key specialisations and its completion and operation will affect the hospital as a whole. A unique novelty is the implantation of biodegradable coronary stents for ill people with chronic ischaemic heart disease. Their advantage rests in the elimination of non-physiological remodelation and a possibility of follow-up surgery revascularisation. At the heart surgery department, aortal sutureless valvular prosthesis via a minimally-invasive method was implanted as the first in the Czech Republic. The programme of conservation surgeries of aortal valves in patients with valvular defect of aortal valves is a significant move towards improving the quality of care and benefit for patients. The implantation of the long-term mechanical heart support, Heart Mate II, was a result of joint effort of physicians from both parts of the cardiology centre in the programme of chronic heart failure. The implantation was performed in cooperation with IKEM Praha team and Revírní bratrská pokladna, a health insurance company. 119

122 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Nemocnice Nový Jičín a.s. Besides providing healthcare in the basic medical specialisations for the broad region of Nový Jičín, the main business activities of Nemocnice Nový Jičín a.s. is to diagnose and treat oncologic diseases within the Complex Oncology Centre, which has been an integral part of the hospital since 21/1/2012. The Complex Oncology Centre in Nový Jičín, which is a part of the network of 13 complex oncology centres in the whole Czech Republic, which meets demanding requirements stipulated by the Czech Oncology Society and the Ministry of Health of the Czech Republic. In 2012, Nemocnice Nový Jičín a.s. concentrated all of its activities on the internal, organisational and process consolidation of the former Radioterapie, a.s. and Nemocnice s poliklinikou v Novém Jičíně, p.o., so that these two companies would create a hydrogenous unit operating in the individual information systems. Regarding the care of patients, a multi-disciplinary team-based approach was further developed, including prevention, diagnostics, comprehensive treatment and dispensation. The indicated patients are treated by modern procedures using the most recent findings in the field, top-ranking technology and state-of-the-art medical preparations, which are available besides others as a result of the participation in clinical studies. During 2012, several investment projects were executed. Extension of the outpatient tract at the radiation oncology department four surgeries and a meeting room. Purchase of an x-ray device for the purposes of brachytherapy. Commencement of reconstruction of the Old Internal Medicine building PET CT operation, urology surgery, internal medicine surgery, haemodialysis department. Nemocnice Valašské Meziříčí a.s. Nemocnice Valašské Meziříčí a.s. is a regional healthcare facility providing care in the basic medical fields. At the present time, the key programmes are obstetrics, accident and general surgery. Further intention of the hospital is to extend key programmes oriented to preventive and diagnostic healthcare, specially focused on seniors with respect to the population s ageing within the internal specialisations, as well as follow-up medical and nursing care. The essential goal is also to strengthen preventive and consulting activities in the outpatient part of the hospital, in which we focus on the broad groups of the population within the prevention of lifestyle diseases. We want to offer consulting and inspection activities to our patients in a comprehensive way in the issues relating to healthy lifestyle, including healthy way of weight reduction. The Centre for the Weight Reduction and Preventive Medicine was opened within obesitology surgery aimed at the groups of overweight patients and patients with slight obesity. This Centre concentrates on exclusion of pathological metabolic reasons of obesity, capture of potentially risk-bearing persons and early prevention of lifestyle diseases. The operation of the united intensive care unit of surgical and internal medicine specialisations and intermediary care department was commenced with the goal to link, particularly, non-medical personnel at these units and departments. The hospital successfully managed to implement a new hospital information system, IKIS, (the Integrated Clinical Information System). The hospital repeatedly became the winner in the Zlín Region s survey Hospitals in the Czech Republic Patients satisfaction, which is organised nationally by the HealthCare Institute. 120

123 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 P&R LAB a.s. (at present Laboratoře AGEL a.s.) P&R LAB a.s. mission includes diagnostic activities in the broad spectrum of specialisations of laboratory medicine. Specialised examinations are performed in oncological diseases, which are required for specific oncological treatment. Podhorská nemocnice a.s. The main business activities of Podhorská nemocnice a.s. is the provision of healthcare and social services in accordance with Section 52 of the Act on Social Services. Other activities include services connected with catering, when within the frame of the company s catering; the company provides catering services to external clients and companies. The essential aim of the company is to ensure patient s safety and comfort. These goals require the efforts to create optimal conditions for employees and, of course, the renewal of infrastructure, which is impossible without close cooperation with the buildings owner, i.e. the cities of Rýmařov and Bruntál. In the previous year, 2012, construction work and transfer of the radio-diagnostic department in Rýmařov were realized, including the acquisition of a new technology for this department, the repair of a barrierfree bathroom was completed at the rehabilitation and physical medicine department and a planned replacement of flooring was carried out at the social hospitalisation department. A new dignified room for dead people was constructed in Bruntál. In the Bruntál part of the hospital, the next stage of the window replacement and replacement of flooring was executed in the whole outpatient rehabilitation department. Repharm, a.s. The scope of the business activities of Repharm, a.s include: Management of united drug policy in the healthcare facilities of the AGEL Group as well as outside the Group in the form of order and prescription positive drug lists. Supplying of inpatient healthcare facilities of the AGEL Group with drugs from the company s institutional pharmacies. Operation of the network of public pharmacies (nine pharmacies and six pharmacies are under the indirect methodical management in the healthcare facilities of the AGEL Group). In 2012, the company consolidated the pharmacies in the healthcare facilities of the AGEL Group. We unified pharmacies under the single brand, LÉKÁRNA AGEL, so that the network of our pharmacies would obtain far greater purchasing and marketing strength, but also support the overall image of pharmacies under the AGEL brand. As a result, all of the pharmacies in the AGEL Group were rebranded in Consulting and management of clinical studies are new activities. 121

124 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Středomoravská nemocniční a.s. Středomoravská nemocniční a.s. operates three leased hospitals in the Olomouc Region Nemocnice Prostějov, Nemocnice Přerov a Nemocnice Šternberk. Besides the basic and specialised healthcare provided to the patients in the regions of Prostějov, Přerov and Šternberk, these hospitals also offer the care of interregional significance. They include: In the case of Nemocnice Prostějov, above all, the specialisation of cardiology, infectious medicine of orthopaedics and traumatology, neonathology, radiation oncology and laboratory medicine. In the case of Nemocnice Přerov, the specialisation of cardiology, infectious medicine of orthopaedics and traumatology, urology, nuclear medicine and follow-up intensive care department. In the case of Nemocnice Šternberk, gynaecology and obstetrics specialisations. The major events in 2012 include, above all, the following: Defence of the re-accreditation as per the standards of the Joint Accreditation Committee in Nemocnice Prostějov and Nemocnice Přerov; Integration of workplaces of SNM pathologies under the single senior consultant office, obtaining of accreditation for these workplaces; Successful evaluation and ranking within the national patient satisfaction survey carried out by the non-profit organisation, HealthCare Institute; Successful cooperation of the laboratory medicine department with the research workplace of the Charles University in Prague and biotechnological company in testing uromodulin substance (a very precise indicator of kidney defects or a tool for monitoring the state of health of patients with already developing kidney disorder); Implementation of the new hospital information system, IKIS, in Nemocnice Přerov and Nemocnice Šternberk; Reconstruction of the internal medicine pavilions in Nemocnice Přerov; Reconstruction of the outpatient part of surgical specialisations pavilion in Nemocnice in Přerov; Reconstruction of the dialysis department, completion of the intervention theatre in the gynaecology and obstetrics department and construction work of the emergency department in Nemocnice Prostějov; Šumperská nemocnice a.s. Šumperská nemocnice a.s. is a non-governmental healthcare facility with a large potential of specialists, providing healthcare services in the region with 130 thousand inhabitants. The company s goal is to provide healthcare services at the top level with a high quality in both the medical and nursing care. Šumperská nemocnice is the centre of care of locomotive apparatus in the Jeseníky area. The treatment care is provided in all basic medical specialisations. Next, Šumperská nemocnice provides social hospitalisations, operates medical transport service, possesses a laundry,catering process and cleaning work. 122

125 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 The major event in 2012 was the defence of the accreditation quality certificate of Spojené akreditační komise, o.p.s. (the Joint Accreditation Committee) for the next three years and extension of a number of social hospitalisations. In terms of specialisation, new medical procedures at the urology and orthopaedic departments were introduced. In 2012, historically the largest number of the endoprosthetic interventions were performed. At the same time, modernisation of the inpatient pavilions, medical technology as well service operations continued. Reconstruction of the first floor of the B pavilion was completed, new ENT surgery, new sanitary facilities at the internal medicine department were built up and new above-standard rooms were established. Significant financial means were invested in the cultivation of the hospital premises. Transfúzní služba a.s. Transfúzní služba a.s. produces and distributes transfusion preparations in terms of quality corresponding to the requirements specified by government institutions and supplies them to facilities of the AGEL Group. In selection of donors, production and distribution of transfusion preparations, Transfúzní služba a.s. puts emphasis on compliance with the applicable laws to ensue deliveries of quality transfusion preparations for all patients in the Group hospitals. The company has detached workplaces in all hospitals of the AGEL Group. The goal of Transfúzní služba a.s. is to remain the producer of quality transfusion preparations, which is recognised by its suppliers and customers. In 2012, construction resetting was completed, in which the installation of a new freezing box on the premises of the dispatch was the most important. In relation to this investment, production of transfusion preparations and plasma was increased. Quality of provided services was proved by an in-depth external audit in the company receiving plasma, in which Transfúzní služba Šumperk was highly esteemed. Vítkovická nemocnice a.s. The main business activities of Vítkovická nemocnice a.s. is the provision of healthcare. The hospital aims at a constant increase of the provided care and this fact is also the base of its motto a patient s satisfaction. This should be ensured by the standard of specialised medical care, nursing standard as well as the quality of the environment in which a patient is treated. All the members of the staff constantly work on improving processes, which fulfil the basic motto, also in cooperation with a number of partners, such as health insurance companies, medical material suppliers, drug suppliers or service providers. The major element in the life of the company is a patient s safety, which is subject to the audit of the Joint Accreditation Committee, which executes this audit regularly. Vítkovická nemocnice a.s. endeavours to create optimal conditions for the fulfilment of its business activities by the care of its employees and building the necessary infrastructure. 123

126 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 In 2012, the company made a significant investment in the machine equipment and construction resetting. The major investment project was the reconstruction of the premises for the Stroke Centre, including technological equipment for neurology and rehabilitation departments, then the reconstruction of the premises of the intensive care of the internal medicine specialisations as well as the purchase of a number of other pieces equipment required for the fulfilment of the hospital s mission. As a result, the completed investments further improve the employees working environment, but, particularly, they increase a patients comfort. Therefore, the hospital offers top equipment and very good environment for both the patients and medical staff. The company is also involved in scientific activities and in this respect it organises a number of educational projects. The major projects include the Ostravian Angiology Days and the Gastroenterology Workshop. Všeobecná nemocnica s poliklinikou Levoča, a.s. The company s principle task rests in the prevention of diseases, return of health to ill people, improvement of life quality of people in the region via quality comprehensive medical services and other activities shown in the scope of business. In 2012, Všeobecná nemocnica s poliklinikou Levoča, a.s provided healthcare in the following specialisations internal medicine, neurology, psychiatry, paediatrics, surgery, urology, examination and treatment activities with the radio-diagnostic workplaces with CT, clinical biochemistry, physiatrics- rehabilitation, pathological-anatomic, haematology-transfusion, first aid medical service for adult, children and youth, DZS, RLP. Oncology, otorhinolaryngology, ophthalmology, glaucomic, ophthalmodiabetology, physiatrics-rehabilitation surgeries, daily social care institute in paediatrics and internal medicine specialisations and a public pharmacy. During 2012, the x-ray devices and mammography device were digitalised, either by the purchase of a new x-ray device or via indirect digitalisation. As a result of the compliance with the resolution of the Ministry of Health of Slovakia, the urology department was relocated and the provided services were improved and the department of psychiatry was renovated and the number of beds was increased. The operating theatres at the surgical department were renovated and the institutional pharmacy was relocated to the new premises. In 2012, the impact of the hospital in the Spiš Region was strengthened, particularly, in the urology, psychiatry and neurology specialisations. The urology department was relocated to the new premises and the renewal of the machine equipment was commenced in order the hospital could meet hard conditions of health insurance companies for the subsequent providing healthcare. In 2012, a total of 1,423 patients were hospitalised and a total of 1,362 operations interventions were performed at this department. The department of psychiatry underwent a complete renovation, it was extended by two treatment units and at the present time provides healthcare for the region with 300 thousand of inhabitants. A total of 1,916 patients were hospitalised. 124

127 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 The department of neurology increased the numbers of treated patients; the services of this department are used not only by the people from the Levoča Region, but also from nearby Spišská Nová Ves and Poprad. In 2012, a total of 2,645 patients were hospitalised, in which 371 at the ICU department. Vzdělávací institut AGEL, o.p.s. Similarly as in the previous year, Vzdělávací institut AGEL, o.p.s. paid attention to the medical staff s education, development of the educational activities oriented to the broadest public and organisation of activities aiming at the support of lifestyle. The company s activities were oriented, above all, to the organisation of specialised conferences and seminars for physicians and middle medical staff. It is suitable to emphasise that the company participates in the organisation of some of these educational events every year, which makes these activities already a tradition, and participants of the past years take an active interest in their continuance. Such a type of already traditional events oriented to medical specialists include the Cardio Day in Třinec, the conference Heart in the Palm, gastroenteorologic days in Rožnov pod Radhoštěm or Days of Curative Nutrition in Ostrava. Other events gradually come to this list, such as the international workshop Ostrava Live Endoscopy, Regional conference of children nurses, the Pediatric day in Prostějov and other events of specialised seminars type. The Symposium AGEL again became the top event of the season in the area of medical education and exchange of experience, which was held on the premises of NH Olomouc Congress Hotel. The selected topic of Mini-invasive procedures in medicine attracted over four hundred specialists ranging from medical and non-medical healthcare professions. Prominent persons of the Czech and Slovak medicine passed the best of their experience in the particular topic from different medical specialisations. Other supplementary activities, which Vzdělávací institut AGEL, o.p.s. dealt with in 2012, include support in obtaining different types of grants for healthcare facilities and support of projects oriented to children and the youth, mentioning for example the co-organisation of the summer children camp in Rapotín. The goal of the company s effort still remains in the support of healthcare development, prevention, support of healthy lifestyle, which aims at patients and people s satisfaction. ZENAGEL a.s. ZENAGEL a.s. is a commercial company ensuring distribution of medications via logistic services and distribution warehouses. ZENAGEL a.s., as a distributor of medications, is a stable and major business partner particularly of pharmacies and healthcare facilities within the AGEL Group. Via effective distribution policy, the company attempts to preserve and develop the quality of provided services and maintain the present standard of logistics of medications distribution to customers. 125

128 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 BALANCE OF THE AGEL GROUP ASSETS AS OF 31/12/2012 The following changes were made to assets in 2012: Under the Project of Demerger by Spin off through Amalgamation, the medical part of the company being demerged Artur KOBLITZ, s.r.o., based at Brno, Okružní 875/19a, Postcode: , Identification No was transferred to Kardiologické centrum AGEL s.r.o. AGEL a.s. received the share interest in Avenier, a.s. via the Contract on a Paid Transfer of Securities In 2012, the construction of a hybrid theatre in Nemocnice Podlesí a.s. was commenced. In November 2012, the first stage of the reconstruction of buildings in Nemocnice Nový Jičín a.s. and reconstruction of the old internal medicine building for the PET centre and hemodialysis were commenced. In December 2012, the reconstruction of the F and G pavilions for the needs of the Stroke Centre was completed.on the premises of Vítkovická nemocnice a.s. CONSOLIDATED BALANCE SHEET full version as of 31/12/2012 (in TCZK) AGEL a.s Line No. Gross Adjustment Net Net TOTAL ASSETS B. Fixed Assets I. Intangible fixed assets II. Tangible fixed assets III. Non-current financial assets IV. Goodwill on consolidation V. Securities and equity investments under equity accounting C. Current assets I. Inventory II. Long-term receivables III. Short-term receivables IV. Current financial assets D. Accruals and deferrals

129 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Consolidated assets structure As of 31 December 2012, the AGEL Group reported the total assets in the amount of CZK 6,341 million. When compared with the balance at the end of 2011, they are CZK 1,545 million higher. Intangible fixed assets (acquisition cost) Technical improvement of intangible fixed assets included above all the IKIS information system in Incorporation expenses Software Valuable rights Goodwill Other intangible FA Intangible FA yet-not-in-use Prepayments TOTAL Balance at 31/12/ Additions Changes due to foreign exchange gains and losses Disposals assets retirements Balance at 31/12/ Tangible fixed assets (acquisition cost) Besides the impact of new acquisitions, an increase in the tangible fixed assets was reported in: Investments in constructions in accordance with the approved investment plan, in which the major ones include: Revitalisation of pavilions in Vítkovická nemocnice a.s. for the needs of the Stroke Centre Revitalisation of Poliklinika Italská Praha, Dopravní zdravotnictví a.s. Investments in the area of separate movable items in technologies and medical technology In accordance with the approved investment plan, in which the major ones include: PET CT for AGEL DIAGNOSTIC a.s. s workplace in Košice, Angioline in Nemocnice Podlesí a.s., Medical technology for Nemocnice Nový Jičín a. s. 127

130 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Land Constructions Separable movable items Other tangible FA Tangible FA yet-not-in-use Prepayments for tangible FA Valuation difference on acquired assets TOTAL Balance at 31/12/ Additions Changes due to foreign exchange gains and losses Disposals assets retirements Balance at 31/12/ Besides the assets shown in the Balance Sheet, the balance of assets acquired via leasing is as follows: Finance leases with a subsequent purchase of a leased asset Company Total value of lease Payments made as of 31/12/2012 Payments actually made in 2012 Payable in 2013 Payable in following years AFTER 2013 AGEL a.s AGEL SERVIS a.s Avenier, a.s CGB laboratoř a.s Dialýza Šumperk, spol. s r.o Dopravní zdravotnictví a.s Kardiologické centrum AGEL s.r.o MARTEK MEDICAL a.s Medical Systems a.s Nemocnice Český Těšín a.s Nemocnice Podlesí a.s Nemocnice Valašské Meziříčí a.s Podhorská nemocnice a.s

131 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Company Total value of lease Payments made as of 31/12/2012 Payments actually made in 2012 Payable in 2013 Payable in following years AFTER Oční s.r.o P&R LAB a.s Repharm, a.s Nemocnice Nový Jičín, a.s Středomoravská nemocniční a.s Šumperská nemocnice a.s Transfúzní služba a.s Vítkovická nemocnice a.s AGEL SK a.s Nemocnica Krompachy spol.s r.o Všeobecná nemocnica s poliklinikou Levoča, a.s Nemocnica Zvolen a.s Total Non-current financial assets Non-current financial assets include the item Acquired non-current financial assets in the amount of CZK 1,645 thousand and other non-current financial assets which have not been consolidated by any consolidation method. Acquisition cost Fair Value Balance at 31/12/2011 Additions Disposals Balance at 31/12/2012 Revaluation at 31/12/2012 Balance at 31/12/2012 Other long-term investments TOTAL Other long-term investments include a contribution to Společnost pro řízenou zdravotní péči v České republice, o.p.s. (CZK 100 thousand), to Dom sociálnych služeb Krupina n.o. (CZK 129 thousand) and a contribution to the AGEL FOUNDATION (CZK 500 thousand) not included in the consolidation group. 129

132 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Inventory: The material entry particularly includes unused inventory of drugs and medical material in the individual departments of hospitals. The goods entry includes inventory of drugs in the individual public and institutional pharmacies of companies belonging to the consolidation group and goods in stock of distribution companies of the consolidation group, particularly MARTEK MEDICAL a.s. and Repharm, a.s. Long-term receivables (excluding deferred tax) An overview of long-term receivables is shown in the table below. Long-term receivables excl. deferred tax receivables and estimated long-term receivables Year Category Due Up to 2 years 2 5 years Over 5 years TOTAL Gross Provisions Net Gross Provisions Net The largest entries of the long-term receivables as of 31/12/2012 include: A receivable in the amount of CZK 24,456 thousand (as of 31/12/2011 in the amount of CZK 27,456 thousand), which arose on the basis of the difference between the assumed components of assets and payables arising from the contract on long-term lease of the company in Nemocnice Valašské Meziříčí a.s., A receivable in the amount of CZK 34,215 thousand (as of 31/12/2012 in the amount of CZK 38,016 thousand). The receivable arose on the basis of the difference between the assumed components of assets and payables arising from the contract on long-term lease of the company in Středomoravská nemocniční a.s. A receivable in the amount of CZK 16,564 thousand (CZK 20,705 thousand as of 31/12/2011 ) Dopravní zdravotnictví, which originated on the basis of the difference between the assumed components of assets and payables arising the from the contract on long-term lease. A receivable in the amount of CZK 243,000 thousand, which originated on the basis of the difference between the assumed components of assets and payables arising from the contract on the long-term lease of the business in Nemocnice Nový Jičín a.s. 130

133 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Short-term receivables An overview of short-term receivables (excluding estimated receivables) as of 31/12/2012 is shown in the following table. The estimated receivables in the current and past periods contain particularly the receivables due from health insurance companies upon account of the healthcare performed by the individual companies of the consolidation group. Year Category Before due date 0 90 days days days Past due date 1 2 years 3 and more years Total past due TOTAL Gross Provisions Net Gross Provisions Net Current financial assets The amount of the current financial assets is affected by the overdraft drawdown. Balance at 31/12/2011 Balance at 31/12/2012 Cash on hand Duty stamps TOTAL cash Current accounts Cash in transit TOTAL Cash at bank Current securities TOTAL Current financial assets

134 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 Environmental activities For the whole year 2012, AGEL a.s. had arranged regular disposal of municipal refuse and other produced refuse through a cleaning company, MW-DIAS, spol. s r.o., under the concluded contract on the lease of non-residential premises and related services with Nemocnice Prostějov. Research and development activities AGEL a.s., a commercial company, does not carry out its own research and development. Suitable conditions for the development of research and scientific activities in the area of medicine have been prepared by the management of the company AGEL a.s. for the year In 2013, Vzdělávací institut AGEL, o.p.s. will be transformed into Vzdělávací a výzkumný institut AGEL, o.p.s., which will form an organizational basis for the integration and development of research and scientific activities in the healthcare facilities of the AGEL Group. Activities regarding Employment Relations AGEL a.s. provides its employees a number of benefits over and above the statutory obligations. Our activities are oriented to the social area, preventive programmes, education, but they are also aimed at our employees children. One extra week of holiday, which is appreciated by the employees a lot) can be one of the examples. As far as preventive care is concerned, we offer a possibility of vaccination to our employees. We fully cover tick-borne encephalitis and hepatitis B virus vaccination, and then we provide vitamin vouchers. Within our employees care, we offer a possibility to use relaxation stays in the Rajecké Teplice Spa in Slovakia, in the medical house in Odra na Ostravicí and Teplice nad Bečvou. We also use the rehabilitation services of our subsidiaries. The winter children camp in Valčianská dolina. 132

135 Report on the Company s Business Activities and the Balance of its Assets as of 31/12/2012, Activities Regarding Protection of the Environment, Research and Development Activities, and Activities regarding Employment Relations 8.0 The winter children camp in Valčianská dolina. We contribute the amount of CZK 2,000 crowns per one child for the payment of the fee to parents who send their childre to our company summer or winter camp. At the end of January 2012, we organised a fourday winter camp in the recreation facility Snowland in Valčianská dolina in Slovakia for the employees children. During the first days of June, two sessions of the summer camp took place in Rapotín u Velkých Losin. The programme of these camps included sports, cultural as well as art activities. Significant financial means are also invested in education and we organise seminars and courses oriented to soft skills as well as specialised areas. All of these activities are focused on the development of our employees personalities. Organisation of educational activities is based on the existing Postgraduate Education Concept in the AGEL Group. During 2012, we alse received the subsidies for education within Project No.37 Healthy Company. Next, we also prepared the application for the project with the key topic of the gender problems, which was approved at the end of 2012 with the period of implementation between 2013 and This project is determined for women employees within the AGEL Group. Further, we also actively continued in the running Project No. 52, which lasted from 2011 to the second half of

136 Report on Related Party Transactions for the Year Ended 31 December Name of the Company AGEL a.s. Registered Office: Prostějov, Mathonova 291/1, Postcode: Legal Form: Joint stock company Identification No: Registered in File No.3941, Section B of the Commercial Register held by the Regional Court in Brno AGEL a.s., with its registered office at Prostějov, Mathonova 291/1, Postcode: , Registration No.: , registered in the Commercial Register, Section B, Inset No. 3941, held by the Regional Court in Brno, (hereinafter the Company has prepared this Report on Relations of the Company with Related Parties, which, for the purposes of this Report, mean the Controlling Party of the Company and other persons controlled by the same Controlling Party, including the persons controlled by the Company which are known as of the date of this Report (hereinafter the Related Parties ) for the last accounting period, from 1 January 2012 to 31 December 2012 (hereinafter the Accounting Period in accordance with Section 66a (9) of Act No. 513/1991, Coll., the Commercial Code, as amended (hereinafter the Commercial Code. As of 31/12/2012, the share capital of AGEL a.s. in the amount of CZK 100,000,000 consisted of contributions of the Company s below-specified shareholders included in the list of the Company s shareholders: a) Ing. Tomáš Chrenek, Ph.D., who participated in the share capital with his contribution of CZK 75,000,000, which represents a 75% shareholding, and, b) MUDr. Martin Polach, MBA, who participated in the share capital with his contribution of CZK 25,000,000, which represents a 25% shareholding, and, During the entire accounting period of the year, Ing. Tomáš Chrenek, Ph.D. was the controlling person of AGEL a.s. in accordance with Section 66a(5). 134

137 Report on Related Party Transactions for the Year Ended 31 December I. CONTRACTS CONCLUDED WITH RELATED PARTIES By and between AGEL a.s. and the Related Parties In 2012, 1. Oční s.r.o. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Oční s.r.o. received compensation in the amount of CZK 39,665. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, AGEL SERVIS a.s. concluded: Contract on bookkeeping and other services dated 28/03/2012, with the compensation set in the amount of CZK 18,000 excluding VAT, for the period from 28/3/2012 to 31/12/2012. The contract was concluded for an indefinite period of time. Contract on ensuring liquidity dated 01/08/2012 to specify relations in the provision of cashpooling. The contract was concluded for an indefinite period of time. Contract on the provision of services in the area of assets administration dated 01/10/2012. The contract was entered into for an indefinite period of time. Purchase contract dated 30/9/2012 for the purchase of the LCD BenQ monitor for CZK 3,200, Samsung i9000 mobile phone for CZK 3,100, Dell Latitude E4300 notebook for CZK 5,000, HP EliteBook 8460 notebook for CZK 20,000 Kč, Nokia C5 mobile phone for CZK 2,500, Nokia C5 mobile phone for CZK 2,100, EVIS programme for CZK 30,000, Škoda Octavia 1,9 TDi car for CZK 106,167 and an automobile, Škoda Superb, for CZK 100,750. All prices are shown excluding VAT. Contract on the provision of sublicense dated 01/04/2012 for the use of sublicence to the ESO9 Profi programme. The price for the use is set in deposits in the amount of CZK 1,342 monthly incl. VAT. The contract was entered into for an indefinite period of time. In 2012, AGEL SK a.s. concluded: Trademark licence agreement dated 1/1/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Avenier, a.s. concluded: Contract on ensuring liquidity to specify relations in the provision of cashpooling. The contract was entered into for an indefinite period of time. 135

138 Report on Related Party Transactions for the Year Ended 31 December In 2012, CGB laboratoř a.s. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Dialýza Šumperk concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Dopravní zdravotnictví a.s. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Dopravní zdravotnictví a.s. received compensation in the amount of CZK 1,547,688. In 2012, IVF Clinic a.s. concluded: Contract on bookkeeping and other services to 31/12/2012, for the compensation in the amount of CZK 10,000 excluding VAT, from 01/01/2013 then in the amount of 1,500, excluding VAT for a calendar month. The contract was entered into for an indefinite period of time. Contract on ensuring liquidity to specify relations in the provision of cashpooling. The contract was entered into for an indefinite period of time. In 2012, Kardiologické centrum AGEL s.r.o. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Contract on the provision and intermediation of services for the provision of services to the customer, or the provision of such services by third parties, under the terms and conditions thereof. Allocation of costs for services is performed in accordance with the provider s policies and on the basis of the respective expert opinion. The contract was entered into for an indefinite period of time. Agreement on the provision of compensation for the guarantee dated 16/04/2012 for the provision of the guarantee obligation by Kardiologické centrum AGEL s.r.o in relation to the Loan contract between AGEL a.s. and Citibank Europe plc, dated 16/04/2012. For the period of guarantee obligation, AGEL a.s. will pay the fixed interest rate of 0.90% p.a. of the amount of the provided guarantee obligation, whose amount corresponds to the value the principal of the Loan contract outstanding at that time. 136

139 Report on Related Party Transactions for the Year Ended 31 December In 2012, KTR-Servis s.r.o. concluded: Contract on provision of sublicense dated 01/11/2012 for the use of sublicence to the ESO9 Profi programme. The price for the use is set in deposits in the amount of CZK 1,930 monthly plus VAT. The contract was entered into for an indefinite period of time. In 2012, MARTEK MEDICAL a.s. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for MARTEK MEDICAL a.s. settled the payment in the amount of CZK 333,053. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Contract on the lease of a means of transport dated 01/01/2012 regarding an automobile, Škoda Octavia, for a monthly lease of CZK 12,900, including insurance. The contract was entered into for an indefinite period of time. Agreement on the Settlement of the Contractual Payment to MARTEK MEDICAL a.s. for the services provided under the General Agreement of 01/01/2011, which amounted to CZK 187, excl. VAT in Contract on the lease of a means of transport dated 01/01/2012 regarding an automobile, Škoda Fabia Combi, for a monthly lease of CZK 7,100, including insurance. The contract was entered into for an indefinite period of time. Purchase contract dated 15/02/2012 for an automobile, Škoda Superb, for the price of CZK 198,400 as per the respective expert opinion. In 2012, Medical Systems a.s. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Licence agreement (Licence contract) for the provision of a licence to use the IKIS application. The contract was concluded for a definite period of time, to 31/12/2013, with the option right to purchase the licence for the next five years. Contract on the provision of services (IKIS service contract), whose purpose is a detailed specification and legal identification of the contracting parties in the provision of IKIS services. The Contract was concluded on 012/01/2012 for a definite period of time, until 31/12/2012. Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Medical Systems a.s. received compensation in the amount of CZK 3,083,

140 Report on Related Party Transactions for the Year Ended 31 December In 2012, Nemocnice Český Těšín a.s. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Nemocnice Český Těšín a.s. received compensation in the amount of CZK 5,024. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Nemocnice Nový Jičín a.s. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Nemocnice Nový Jičín a.s. received compensation in the amount of CZK 613,480. Purchase contract dated 15/02/2012 for an automobile, Audi A6 Allroad, for the price of CZK 249,300 excluding VAT. Purchase contract dated 31/08/2012 for the Volkswagen Passat car, Latitude E5510 notebook and a Samsung Galaxy mobile phone for the total amount of CZK 277,499 excluding VAT. In 2012, Nemocnice Podlesí a.s. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Nemocnice Podlesí a.s. received compensation in the amount of CZK 1,618,966. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Agreement on the provision of compensation for the guarantee dated 23/07/2012 for the provision of the guarantee obligation by Nemocnice Podlesí a.s. in relation to the Loan contract No /01/2012 between AGEL a.s. and Raiffeisenbank a.s., dated 23/07/012. For the period of guarantee obligation, AGEL a.s. will settle the fixed interest rate of 0.90% p.a. of the amount of the provided guarantee obligation, whose amount corresponds with the amount at the moment of the outstanding principal of the Loan contract. In 2012, Nemocnice Valašské Meziříčí a.s. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. 138

141 Report on Related Party Transactions for the Year Ended 31 December Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Nemocnice Valašské Meziříčí a.s. settled compensation in the amount of CZK 322,174. In 2012, Laboraboře AGEL a.s. (former P&R LAB a.s.) concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for P&R LAB a.s. settled compensation in the amount of CZK 255,959. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Contract on a lease of an asset dated 01/01/2012 for a lease of an automobile, Škoda Superb Combi 2,0 TDI DPF, for a monthly lease in the amount of CZK 25,000 excluding VAT. The contract was terminated by agreement as of 09/08/2012. Podhorská nemocnice a.s. byla v roce 2012 uzavřena: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Podhorská nemocnice a.s. received compensation in the amount of CZK 16,375. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Repharm, a.s. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Repharm, a.s. received compensation in the amount of CZK 13,743,911. Contract on the lease of a means of transport regarding an automobile, Škoda Superb Combi Elegance, for a monthly lease of CZK 17,789 excluding VAT. The contract was terminated by agreement as of 30/09//2012. In 2012, Středomoravská nemocniční a.s. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for SNM a.s. received compensation in the amount of CZK 938,

142 Report on Related Party Transactions for the Year Ended 31 December Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Šumperská nemocnice a.s. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Šumperská nemocnice a.s. received compensation in the amount of CZK 176,333. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Transfúzní služba a.s. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Transfúzní služba a.s. received compensation in the amount of CZK 1,250,779. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. In 2012, Vítkovická nemocnice a.s. concluded: Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for Vítkovická nemocnice a.s. received compensation in the amount of CZK 546,376. Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Purchase contract dated 02/01/2012 for an automobile, Volkswagen Passat Benzin, for CZK 292,700 including VAT. Purchase contract dated 02/01/2012 for the Latitude E5510 PC notebook and a Samsung mobile phone for the total amount of CZK 18, including VAT. In 2012, ZENAGEL a.s. concluded: Trademark licence agreement dated 01/01/2012. Under this agreement, the Licensee may utilise all and any rights with regard to the trademark in business relations. Allocation of the royalty is calculated as per the respective expert opinion. The agreement was concluded for an indefinite period of time. Contract on financial settlement with respect to the group VAT registration, concluded on 01/07/2012. The contract regulates the mutual rights and obligations of the contracting parties in 140

143 Report on Related Party Transactions for the Year Ended 31 December the final distribution of the profit or loss arising from their group registration in accordance with the VAT Act for ZENAGEL a.s. received compensation in the amount of CZK 2,110,611. AGEL a.s. branch and AGEL SK a.s. concluded Contract on the lease of a motor vehicle, Škoda Octavia, reg. No.BA463ZT for a monthly lease of EUR 800 excluding VAT. The contract dated 01/01/2012 was terminated by agreement as of 31/08//2012. Contract on the lease of a motor vehicle, Škoda Octavia, reg. No.BA539ZC for a monthly lease of EUR 1,000 excluding VAT. The contract dated 01/01/2012 was concluded for an indefinite period of time. Contract on the lease of a motor vehicle, Škoda Octavia, reg. No.BA546ZC for a monthly lease of EUR 800 excluding VAT. The contract dated 01/01/2012 was concluded for an indefinite period of time. Contract on the lease of a motor vehicle, Škoda Octavia, reg. No.BA595ZD for a monthly lease of EUR 400 excluding VAT. The contract dated 01/01/2012 was concluded for an indefinite period of time. Contract on the lease of a motor vehicle, Škoda Superb, reg. No. BA659VT, for a monthly lease of EUR 1,200 excluding VAT. The contract dated 01/01/2012 was terminated by agreement as of 29/02//2012. Contract on the lease of mobile phones for a monthly lease of EUR 100 excluding VAT. The contract dated 01/01/2012 was concluded for an indefinite period of time. II. ACTS PERFORMED IN THE INTEREST OF RELATED PARTIES Bellow-mentioned legal acts were performed in the interest of Related Parties by the Company during the Accounting Period. Agreement for the guarantee No C/CORP/2012 dated 23/03/2012 to secure obligations of AGEL DIAGNOSTIC a.s. under the Loan contract No.: /CORP/2012, concluded between AGEL a.s. as a guarantor and UniCredit Bank Slovakia a.s. as a creditor. III. MEASURES ADOPTED IN THE INTEREST OF RELATED PARTIES No other measures were adopted or made by the Company at instigation or in the interest of the Related Parties during the Accounting Period. 141

144 Report on Related Party Transactions for the Year Ended 31 December IV. CONCLUSION No detriment was incurred to the Company pursuant to Section 66(a)(8) of the Commercial Code resulting from the above-mentioned contracts, acts and measures. This Report has been prepared by the Company s statutory body and will be presented for review to the Supervisory Board and the auditor, who will perform a review of the Financial Statements in accordance with a special law. With regard to the fact that by law the Company is obliged to prepare the Annual Report, this Report is attached to it as an integral part thereof. The Company s General Meeting shall be informed about the Supervisory Board s review of the Report. Prostějov, 05/02/2013 MUDr. Filip Horák, MBA Chairman of the Board of Directors of AGEL a.s. Ing. Karel Kantor Vice-Chairman of the Board of Directors of AGEL a.s. 142

145 Report of AGEL a.s. Supervisory Board 10.0 On the basis of the submitted documents discussed by the Board of Directors of AGEL a.s., the Company s Supervisory Board reviewed the individual Financial Statements and the consolidated Financial Statements for the year ended 31 December 2012, and discussed the proposal of Distribution of the 2012 profit/loss. The Supervisory Board reviewed the 2012 Annual Report including the Report on the Company s Business Activity and the Balance of its Assets and has no comments or objections to these presented documents. On the basis of the opinion of the Auditor, Deloitte Audit s.r.o., the AGEL a. s. s Supervisory Board recommends that the General Meeting approve the individual Financial Statements of AGEL a.s. and the consolidated Financial Statements of the AGEL Group for the year ended 31 December 2012, including the Board of Director s proposal for the distribution of the Company s profit/loss for the year ended 31 December Ing. Tomáš Chrenek, Ph.D. Chairman of the Supervisory Board of AGEL a.s. 143

146 Audit Committee Report 11.0 In accordance with the applicable laws, the Company s Articles of Association and the Audit Committee s schedule of activities, approved at the Audit Committee meeting held on 16/05/2012, the Audit Committee followed up the procedure of preparation of the Company s individual Financial Statements and consolidated Financial Statements for the year ended 31 December In this respect, the Audit Committee monitored the integrity of financial information provided by the Company, and consistency and fitness of the accounting methods applied in the Company. The Audit Committee also followed up the process of the mandatory audit of the individual Financial Statements and consolidated Financial Statements for the year ended 31 December 2012 and issue of the Audit Report on the Company s individual Financial Statements and the Audit Report on the Company s consolidated Financial Reports for the year ended 31 December 2012 by the Auditor. In this process, it particularly verified independence and objectivity of the Auditor and reviewed defectiveness of the mandatory audit. The Audit Committee has taken part in communication between the auditor and the Company management and evaluated the ways the Company management follows the recommendations which the auditor provided to the Company management. The Audit Committee communicated with internal audit with a view to setting risk management and control mechanisms within provision of reasonable assurance and effective internal audit and determination of readiness for the improvement of the Company s processes. The Audit Committee also followed up the preparation and the process of audit of the individual and consolidated Financial Statements for the period ended 31 December 2012 prepared In accordance with its duties stipulated in Section 44(4) of the Act on Auditors, No.93/2009, of Coll., the Audit Committee recommends that the Company s Board of Directors approve Deloitte Audit s.r.o. as the auditor of AGEL a.s. for Ing. Dana Trezziová Chaiman of the Audit Committee of AGEL a.s. 144

147 Estimated Development of the AGEL Group in 2013 and Following Years 12.0 In 2013, AGEL a.s. received the honourable mention of the Governor of the Moravian and Silesian Region for adoption and implementation of ideas of corporate responsibility in the social, economic and environmental areas. AGEL a.s.took part in the competition of business entities employing up to 250 employees. This year, the competition, which has been held since 2008, was divided in two main categories Business Entities and Municipalities. These were then subdivided according to the number of employees and the competence of municipalities. The evaluation committee considered a number of social, environmental and economic indicators of the participators. Besides others, it focused on their relation to the environment and its social needs, support of socially endangered groups, handicapped people as well as people with limited working capacity. Our goal in this year is to continue in improving specialised level of our healthcare facilities. We should achieve this goal with the help of deepening cooperation with universities and transformation of Vzdělávací institut AGEL, o.p.s. to Vzdělávací a výzkumný institut AGEL, o.p.s. In spite of the fact that the income from the public health insurance companies has been stagnating and the costs have been rising constantĺy, the estimated development of the Group remains optimistic also for This trend is confirmed by the investment policy, under which several large projects will be completed in The major investments include the purchase of the PET CT and the reconstruction of operating theatres and intensive care units in the Complex Oncology Centre in Nový Jičín. The construction of the hybrid operating theatre in the Complex Cardiology Centre of Nemocnice Podlesí a.s. will be completed. Similarly as in the previous years, this year, we will again hold the AGEL Specialist Scientific Symposium, which is becoming a traditional meeting of our specialists. This year s symposium will be held in Ostrava and the Oncology in the 21st Century will be its key topic. This area also includes the support of grants, which have been allocated from the AGEL funds on the basis of applications and approval by the Scientific Council. Our Company is aware of the importance of the human potential in business. Therefore, our objective rests in improving employees working conditions and strengthening uniform company culture of the Group. Meeting the commitments arising from the Collective Agreement is important for us, regardless of the complicated economic situation in our country. Collective bargaining and the conclusion of a new Holding Collective Agreement for the following period is ahead of us. The most important output of our efforts is the satisfied patient. Like in the previous years, we will continue in the patient satisfaction surveys, which enable us to obtain patient feedback from the individual healthcare facilities. Last but not least, we will continue to support the process of accreditations, which our companies need to recover every three years. 145

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150 2012 AGEL a.s. ANNUAL REPORT AGEL Group CONSOLIDATED ANNUAL REPORT