Latvijas Juras medicinas centrs

Annual Report • Apr 30, 2023

AS LTVIJAS jŪRAS MEDICĪNAS CENTRS - 48510000PKWFM6UZDS84 - 2022 JOINT STOCK COMPANY LATVIJAS JŪRAS MEDICĪNAS CENTRS (Unified registration number: 40003306807) ANNUAL REPORT FOR THE 12 MONTHS OF 2022 (19th financial year) PREPARED IN ACCORDANCE WITH THE ‘ACCOUNTING LAW’ AND ‘ANNUAL REPORTS AND CONSOLIDATED ANNUAL REPORTS LAW’ OF THE REPUBLIC OF LATVIA Riga, 2023 AS Latvijas Jūras medicīnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Content 2 Information on the Company 3 Statement of the Board’s Responsibility 4 Management Report 5 – 6 Remuneration Report 7 - 8 Financial Statements: Profit and Loss Statement 9 Balance Sheet 10 – 11 Statement of Changes in the Shareholders’ Equity 12 Statement of Cash Flows 13 Note 14 – 28 AS Latvijas Jūras medicīnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Information on the Company 3 Name of the company Latvijas Jūras medicīnas centrs Legal status Joint Stock Company Number, place and date of registration 40003306807 Riga, 27 August 1996 Re-registered with the Commercial Register On 27 February 2004 under the unified registration number 4000 330 6807 Core business: Hospital activities (86.10) Retail sale of medical and orthopaedic goods in specialised stores (47.74) Other education n.e.c. (85.59) General medical practice activities (86.21) Special medical practice activities (86.22) Dental practice activities (86.23) Other human health activities (86.90) Residential nursing care activities (87.10) Other residential care activities (87.90) Other social work activities without accommodation n.e.c. (88.99) Physical well-being activities (96.04) Other personal service activities n.e.c. (96.09) Legal address Patversmes iela 23 Riga, LV-1005, Latvia Largest shareholders Ilze Birka (17.50%) Mārtiņš Birks (17.50%) SIA POM (8.82%) Guna Švarcberga (10.36%) Jānis Birks (12.80%) Adomas Navickas (6.85%) Names of the Board members, their positions Jānis Birks – Chairman of the Board Juris Imaks – Member of the Board Anatolijs Ahmetovs – Member of the Board Names of the Council members, their positions Mārtiņš Birks – Chairman of the Council Viesturs Šiliņš – Deputy Chairman of the Council Ineta Gadzjus – Member of the Council Jevgeņijs Kalējs – Member of the Council Uldis Osis – Member of the Council Reporting year 1 January 2022 – 31 December 2017 Name and address of the certified auditor in charge KPMG Baltics SIACertified Auditor in charge: License No. 55Rainers Vilāns Roberta Hirša iela 1Certificate No. 200 Riga, LV-1045, Latvia AS Latvijas Jūras medicīnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Statement of the Board’s Responsibility 4 The Board of AS Latvijas Jūras Medicīnas Centrs (hereinafter – the Company) is responsible for preparing the financial statements of the Company. The financial statements on pages 9 to 28 are prepared based on accounting records and source documents and present fairly the financial position of the Company as at 31 December 2022 and the results of its operations, and cash flows for the 12-month period then ended. The above mentioned financial statement of the Company is prepared in accordance with the ‘Accounting Law’ and ‘Annual Reports and Consolidated Annual Reports Law’ effective in the Republic of Latvia, on a going concern basis. Appropriate accounting policies have been applied on a consistent basis. Prudent and reasonable judgements and estimates have been made by the Management in the preparation of the financial statement. The management of the Company is responsible for the maintenance of a proper accounting system, safeguarding the Company’s assets, and the prevention and detection of fraud and other irregularities in the Company. The management is also responsible for compliance with laws of the Republic of Latvia. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs 28 April 2023 THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP AS Latvijas Jūras medicīnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Management Report 5 Type of activity A/S Latvijas Jūras medicīnas centrs (hereinafter - LJMC or the Company) is a certified and advanced private medical facility available to everyone, which consists of Sarkandaugava Ambulatory Healthcare Centre at 23 Patversmes iela, Riga; Central Hospital at 23 Patversmes iela, Riga; Vecmilgravis Hospital and Northern Diagnostics Centre 26 Vecmilgravja 5.linija; Riga, and Vecmīlgrāvis Primary Health Care Centre at 10 Melidas iela, Riga. In 2022, the average number of employees of LJMC was 361. The shares of A/S Latvijas Jūras medicīnas centrs are traded on the Baltic Secondary list of Nasdaq Riga. As of 5 September 2013, A/S Latvijas Jūras medicīnas centrs has been included on the list of medical facilities approved by the Health Inspectorate of Latvia, which provides medical tourism services, namely, LJMC provides medical tourism services as a reliable partner and this provides an insight into the overall Latvian health care system because the list only includes those healthcare institutions which have been registered with the register of health care institutions for at least 3 years and control has been carried out in the health care institution during the past three years. LJMC has accredited Clinical Diagnostics Laboratory at 23 Patversmes iela with the Latvian National Accreditation Bureau. LJMC has signed cooperation agreements with all health insurance companies operating in Latvia. LJMC has received certificate No. MSC-50-034 issued by Exova BM TRADA confirming compliance of the energy management system with ISO 50001:2018. Activities in the 12 months of 2022 and further development The Company’s activities in the 12 months of 2022 In 2022, LJMC continued to provide high-quality medical services and attract new patients. Similar to prior years, also in 2022 LJMC employed excellent doctors from Latvia and competent medical personnel. The highly qualified and professional staff of LJMC is the driving force behind its competitive, high quality examinations and adherence to precautionary standards in the provision of healthcare services, so that interactions between patients and healthcare persons promote accessibility. LJMC is on the official list of providers of medical tourism services maintained by the Health Inspection of the Republic of Latvia. In 2022, LJMC placed information in the medical tourism catalogue created and supported by LIDA. In 2022, the war between Russia and Ukraine has not had a potentially material impact on the Company’s operations. In 2022, LJMC had no business transactions with Russia, Belarus and Ukraine. In 2022, when providing healthcare services, LJMC demonstrated flexibility in adapting to the regulatory documents issued by the Ministry of Health and their ever changing conditions. Both secondary outpatient and day hospital services, as well as paid healthcare services, were provided to the extent allowed by the regulatory documents, ensuring continuity of operations and stable monitoring of the impact of new events and circumstances. In 2022, LJMC focussed on the promotion of paid medical services, which helped increase the number of patients living in Latvia and enhanced competitiveness and raised the profile of LJMC. The Radiology Department in 2021 provided the full range of diagnostic services (magnetic resonance, X-ray examinations and ultrasonography) increasing the amount and quality of services (both state paid services and services paid by patients). PET/CT radiological examinations are available and payable both by private means and state funds. In order to ensure compliance with the requirements of GDPR, in 2022 LJMC, in cooperation with an independent data protection officer, continued the improvement of documents in compliance with the laws and regulations, continued the improvement of the contract renewal procedure (digital access to medical examinations, use of health information systems, services of insurance companies, communication services), and began the training process for LJMC staff. In 2022, LJMC signed agreements with the National Health Service for the provision of state paid medical services in the amount provided by the budget for 2022. In 2022, LJMC continued working on ISO: 9001-2015. In 2022, LJMC received ISO 9001:2015 quality certification in functional diagnostics and radiological diagnostics, in-patient medical rehabilitation and day-care rehabilitation valid until 14 March 2025, and continued updating the hygiene and disinfection plan, and implementing ISO certification in other units of LJMC. AS Latvijas Jūras medicīnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Management Report 6 Further development of the Company In order to attract an increasing number of new patients, in 2023 LJMC plans to make investments to introduce innovative solutions for providing medical services, improve staff qualifications and enhance patient service. In 2023, LJMC will also continue to participate in the national policy on the conversion of hospitals into outpatient facilities, by complementing the offer of healthcare services. In 2023, LJMC will continue to make sure that precautionary standards are adhered to in the provision of healthcare services, so that interactions between patients and healthcare persons facilitate accessibility. Continuing to improve the available services with highly-qualified and professional diagnostics service, LJMC’s Radiology Department, as one of the most modern and innovative cancer diagnostics centre in Eastern Europe, will contribute to the increase in domestic and international patient flow when the safe patient flow is restored. By attracting patients not only from Latvia and other Baltic countries, but also from other EU countries and offering high-quality medical services, LJMC will increase its competitiveness in the Baltics medical market. Financial results In the 12 months of 2022, LJMC performed better than according to the approved budget for 2022. The profit of LJMC is EUR 625 729. Risk Management LJMC continues carrying out activities seeking to limit the negative impact of potential financial risks on the financial position of LJMC by implementing a set of control and analysis measures. Financial assets exposed to credit risk are mostly cash, trade receivables and other receivables. Credit risk is managed by LJMC by performing regular debtor control procedures and debt collection measures aiming to identify and solve any problems on a timely basis. Liquidity risk is managed by LJMC in line with the principle of prudence ensuring that appropriate credit resources are available to cover liabilities as they fall due. Other than operating leases, LJMC does not use borrowed funds. Subsequent events No significant subsequent events have occurred in the period from the year-end to the date of these financial statements that would require adjustments to be made to these financial statements and disclosures added to the notes thereto. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs 28 April 2023 THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP AS Latvijas Jūras medicīnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Remuneration Report for 2022 7 Introduction The Remuneration Report of Joint Stock Company “Latvijas Jūras medicīnas centrs” (hereinafter – the Company) for 2022 is prepared according to the remuneration policy to members of the Board and Council approved by the decision of the Company’s Shareholders Meeting of 30 November 2020, which is developed on the basis of Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 as regards the encouragement of long-term shareholder engagement, as well as according to Article 593 of the Financial Instrument Market Law, which introduces the directive. The Remuneration Report is prepared by the Board and reviewed by the Council of the Company. The Remuneration Report is reviewed and approved by the Shareholders’ Meeting alongside other parts of the Annual Report. According to the Audit Services Law of the Republic of Latvia, a sworn auditor is under the obligation to provide an opinion on whether the information referred to in Section 59.4 of the Financial Instrument Market Law has been included in the Remuneration Report and whether significant non-conformities have been established in the Remuneration Report in relation to the financial information presented in the Annual Report. The Remuneration Report is published concurrently with the audited annual report of the Company as a separate part of the annual report in Latvian and English on the Company’s website: in section “Remuneration Report”, as well as on the Nasdaq Riga website: http://www.nasdaqbaltic.com. Remuneration to the Board and Council The remuneration policy of the Board and Council ensures that in 2022 the Company’s strategy, realization of long-term interests and sustainability, ensuring business continuity, is implemented. Remuneration to the members of the Council consists only of fixed component of remuneration. In 2022, the following total remuneration was granted and paid to the members of the Council: Name, surname Position Remuneration paid in 2022, EUR Remuneration paid in 2021, EUR Remuneration paid in 2020, EUR Mārtiņš Birks Chairman of the Council 9 649.79 8 195.76 8 195.76 Ineta Gadzjus Member of the Council 5 629.07 4 780.92 4 780.92 Viesturs Šiliņš Member of the Council 5 629.07 4 780.92 4 780.92 Jevgēņijs Kalējs Member of the Council 5 629.07 4 780.92 4 780.92 Uldis Osis Member of the Council 5 629.07 4 780.92 4 780.92 Remuneration to the members of the Board consists of a fixed and variable component of remuneration. In 2022, the following total remuneration was granted and paid to the members of the Board: Name, surname Position Remuneration paid in 2022, EUR Fixed part of remuneration, % Variable part of remuneration, % Jānis Birks Chairman of the Board 90 547 39.97 % 60.03 % Juris Imaks Member of the Board 69 218 37.28 % 62.72 % Anatolijs Ahmetovs Member of the Board 54 719 47.97 % 52.03 % Name, surname Position Remuneration paid in 2021, EUR Fixed part of remuneration, % Variable part of remuneration, % Jānis Birks Chairman of the Board 67 445 30.45 % 69.55 % Juris Imaks Member of the Board 59 028 31.70 % 68.30 % Anatolijs Ahmetovs Member of the Board 48 477 47.20 % 52.80 % AS Latvijas Jūras medicīnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Remuneration Report for 2022 8 Name, surname Position Remuneration paid in 2020, EUR Fixed part of remuneration, % Variable part of remuneration, % Jānis Birks Chairman of the Board 74 315 29.74 % 70.26 % Juris Imaks Member of the Board 49 309 35.40 % 64.60 % Anatolijs Ahmetovs Member of the Board 42 000 48.82 % 51.18 % As the variable part of remuneration is linked to net sales, it works as an incentive for the Board to drive the Company’s growth. Shares or share options were not granted and offered to members of the Board and Council. No variable part of remuneration was reclaimed from members of the Board and Council. There were no cases of applying temporary derogations from the remuneration policy. Section 594, paragraph one, point 3 of the Financial Instrument Market Law requires to report, in a comparable manner, changes that took place in the last five financial years in remuneration paid to members of the Board and Council, performance of the company and average remuneration on a full-time equivalent basis of employees of the company other than members of the Board and Council. In accordance with Paragraph 66 of the Transitional Provisions of the Financial Instrument Market Law, a comparison of the changes referred to in Section 594, paragraph one, Clause 3 of the Law is provided for at least the period of the last five financial years beginning not later than 1 January 2020. Remuneration to the Board and Council has not changed significantly during the last 5 years, performance of the company matches its strategic goals, average remuneration on a full-time equivalent basis of employees of the company has increased in line with the overall trends of the labour market. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs 28 April 2023 THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Financial statements Profit and Loss Statement for 2022 9 Note 2022 2021 EUR EUR 1. Net sales 2 9 700 898 9 363 852 2. Cost of goods and services 3 (8 926 149) (8 146 691) 3. Gross profit 774 749 1 217 161 4. Administrative expenses 4 (704 751) (580 253) 5. Other operating income 5 582 442 247 435 6. Other operating expenses 6 (26 107) (3 439) 7. Profit before income tax 626 333 880 904 8. Corporate income tax for the reporting year 7 (604) (645) 9. Profit of the reporting year 625 729 880 259 Number of shares 800 000 800 000 x Earnings per share (EUR) 0.78 1.10 * Profit or loss after corporate income tax / average number of shares during the reporting year. The accompanying notes on pages 14 to 28 form an integral part of these financial statements. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs Chief Accountant Gunta Kaufmane 28 April 2023 THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Balance Sheet as at 31 December 2022 10 Note 31.12.2022 31.12.2021 EUR EUR Assets Non-current assets I Fixed assets 1.Land, buildings and engineering structures 4 784 474 4 919 770 2. Equipment and machinery 1 401 099 883 062 3. Other fixed assets 92 020 70 196 4. Construction in progress 76 209 70 407 Total fixed assets: 8 6 353 802 5 943 435 Total long term investments: 6 353 802 5 943 435 Current assets I Stock: 1. Raw materials 9 143 201 156 517 Total stock: 143 201 156 517 II Receivables: 1.Trade receivables 10 82 057 102 008 2. Other receivables 11 585 094 600 254 3. Prepaid expenses 12 9 927 7 270 4. Deferred income Prepaid expenses Prepaid expenses 4. Prepaid expenses 13 350 787 429 311 Total receivables: 1 027 865 1 138 843 III Cash: 14 1 321 420 1 017 259 Total current assets: 2 492 486 2 312 619 Total assets 8 846 288 8 256 054 The accompanying notes on pages 14 to 28 form an integral part of these financial statements. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Balance Sheet as at 31 December 2022 11 Note 31.12.2022 31.12.2021 EUR EUR Equity and liabilities Shareholders’ equity: 1. Share capital 15 1 120 000 1 120 000 2. Long-term investment revaluation reserve 16 2 472 973 2 472 973 3. Reserves: b) reserves provided by the Co-operative’s Statutes 63 819 63 819 4. Retained earnings a) retained earnings carried forward from previous years 2 523 721 1 803 462 b) profit of the reporting year 625 729 880 259 Total shareholders’ equity: 6 806 242 6 340 513 Liabilities: Long term liabilities: 1. Deferred income 19 567 544 628 654 Total long term liabilities: 567 544 628 654 Short-term liabilities: 1. Customer advances 51 606 34 057 2. Accounts payable to suppliers and contractors 447 021 303 198 3 Taxes and compulsory state social security contributions 18 217 045 249 572 4. Other liabilities 17 288 058 277 672 5. Deferred income 19 59 092 58 126 6. Accrued liabilities 20 409 680 364 262 Total short term liabilities: 1 472 502 1 286 887 Total liabilities: 2 040 046 1 915 541 Total equity and liabilities 8 846 288 8 256 054 The accompanying notes on pages 14 to 28 form an integral part of these financial statements. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs Chief Accountant Gunta Kaufmane 28 April 2023 THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Statement of Changes to the Shareholders Equity for 2022 12 Share capital Long-term investment revaluation reserve Reserves set in the Company’s statutes Retained earnings brought forward from previous years Profit of the reporting year Total share-holders’ equity EUR EUR EUR EUR EUR EUR Balance as at 31 December 2020 1 120 000 2 472 973 63 819 1 585 907 273 555 5 516 254 Profit of 2020 transferred to retained earnings of previous years - - - 273 555 (273 555) - Dividends for 2017 - - - (56 000) - (56 000) Profit for the reporting year - - - - 880 259 880 259 Balance as at 31 December 2021 1 120 000 2 472 973 63 819 1 803 462 880 259 6 340 513 Profit of 2021 transferred to retained earnings of previous years - - - 880 259 (880 259) - Dividends for 2017 - - - (160 000) - (160 000) Profit for the reporting year - - - - 625 729 625 729 Balance as at 31 December 2022 1 120 000 2 472 973 63 819 2 523 721 625 729 6 806 242 The accompanying notes on pages 14 to 28 form an integral part of these financial statements. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs Chief Accountant Gunta Kaufmane 28 April 2023 THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Statement of Cash Flows for 2022 13 Note 2022 2021 EUR EUR I. Cash flows from operating activities 1. Profit before corporate income tax 626 333 880 904 Adjustments for: a)impairment of fixed assets 8 427 880 286 644 b)(gain)/loss on disposal of fixed assets 8 5 524 - 2. Profit before adjustments for the effect of changes to current assets and short term liabilities 1 059 737 1 167 548 Adjustments for: a)decrease/ (increase) in trade receivables 110 978 (817 879) b)decrease/ (increase) in stock 13 316 (17 961) c)increase/ (decrease) in accounts payable to suppliers and other liabilities 124 588 87 591 3. Gross cash flows from operating activities 1 308 619 419 299 Corporate income tax 18 (687) (1 064) Net cash flows from operating activities 1 307 932 418 235 II. Cash flows used in investing activities a)purchase of fixed and intangible assets 8 (843 771) (1 110 016) 6. Net cash flows used in investing activities (843 771) (1 110 016) III. Cash flows from financing activities a)Dividends paid (160 000) (56 000) 7. Net cash flows used in financing activities (160 000) (56 000) Net increase/(decrease) in cash and cash equivalents in the reporting year 304 161 (747 781) Cash and cash equivalents at the beginning of the year 1 017 259 1 765 040 Cash and cash equivalents at the end of the year 14 1 321 420 1 017 259 The accompanying notes on pages 14 to 28 form an integral part of these financial statements. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs 28 April 2023 Chief Accountant Gunta Kaufmane THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 14 (1)Information on the Company’s activities and summary of significant accounting principles Information on the Company The legal address AS Latvijas Jūras medicīnas centrs (LJMC or the Company) is 23 Patversmes iela, Riga, Latvia. The Company was registered with the Commercial Register under the common registration number 40003306807. The largest shareholders of the Company are Ilze Birka (17.50%), Mārtiņš Birks (17.50%), Jānis Birks (12.80%), Guna Švarcberga (10.36%), SIA POM (8.82%), Adomas Navickas (6.85%). The Board comprises Jānis Birks (Chairperson of the Board), Juris Imaks (Board Member) and Anatolijs Ahmetovs (Board Member). The Chairperson of the Council is Mārtiņš Birks, Council Members are Viesturs Šiliņš, Ineta Gadzjus, Jevgēņija Kalējs and Uldis Osis. The core business of the Company according to NACE rev 2. is Hospital activities (NACE 86.10); Retail sale of medical and orthopaedic goods in specialised stores (47.74); Education n.e.c. (85.59); General medical practice activities (86.21); Special medical practice activities (86.22); Dental practice activities (86.23); Other human health activities (86.90); Residential nursing care activities (87.10); Other residential care activities (87.90); Other social work activities without accommodation n.e.c. (88.99); Physical well-being activities (96.04); Other personal service activities n.e.c. (96.09). Basis of preparation The financial statements were prepared in accordance with the ‘Accounting Law’ and the ‘Annual Reports and Consolidated Annual Report Law’ (hereinafter – the Law). The management believes that the accounting policies used in the preparation of these financial statements are largely consistent with those used last year. According to Article 3(6) of the Annual Reports and Consolidated Annual Reports Law, the Company applies the requirements of the law applicable to large companies as its transferable securities are included in the regulated market of the Republic of Latvia. The profit and loss statement was prepared according to the turnover costing method. The cash flow statement was prepared according to the indirect method. The financial statements are prepared on the historical cost basis except for the fixed assets disclosed under Land, buildings and engineering structures – land and buildings, which are measured using a revaluation method. Accounting principles The financial statements were prepared in accordance with the following policies: a)Going concern assumption that the Company will continue as a going concern; b)Consistent valuation principles with those used in the prior year; c)Items were valued in accordance with the principle of prudence, i.e.: ▪The financial statements reflect only the profit generated to the balance sheet date; ▪all incurred liabilities and current or prior year losses have been taken into consideration even if discovered within the period after the date of the balance sheet and preparation of the financial statements; ▪all amounts of impairment and depreciation have been taken into consideration and calculated irrespective of whether the financial result was a loss or profit; d) Income and expenses incurred during the reporting year have been taken into consideration irrespective of the payment date or date when the invoice was issued or received; Expenses were matched with revenue for the reporting period. e)Assets and liabilities have been valued separately; f)The opening balance agrees with the prior year closing balance. g)All material items, which would influence the decision-making process of users of the financial statements, have been recognised and insignificant items have been combined and their details disclosed in the notes. h) Business transactions are recorded taking into account their economic contents and substance, not the legal form. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 15 Related parties Related parties represent both legal entities and private individuals related to the company in accordance with the following rules. a)A person or a close member of that person’s family is related to a reporting entity if that person: i.has control or joint control over the reporting entity; ii.has significant influence over the reporting entity; or iii.is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. b) An entity is related to a reporting entity if any of the following conditions applies: i.The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others); ii.One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member); iii.Both entities are joint ventures of the same third party; iv.One entity is a joint venture of a third entity and the other entity is an associate of the third entity; v.The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. vi.The entity is controlled, or jointly controlled by a person identified in (a); vii.a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). viii. The entity or any member of the group to which the entity belongs provides management personnel services to the entity or the parent of company of the entity. Related party transaction – a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. Financial instruments and financial risks Financial instrument is an agreement that simultaneously results in financial assets of one party and financial liabilities of the other party. The key financial instruments held by the Company are financial assets such as trade receivables, amounts due from related parties and other receivables, and financial liabilities such as prepayments from clients, accounts payable to suppliers and contractors and other creditors arising directly from its business activities. Financial risks connected with the Company’s financial instruments, financial risk management Key financial risks related to the Company’s financial instruments are: ▪Credit risk is the risk that the Company may incur financial losses if parties to the transactions fail to fulfil their liabilities under the contracts, and credit risk is primarily connected with trade receivables; ▪Currency risk– risk that the Company may suffer unexpected losses arising from fluctuations in the foreign exchange rates; the Company is not exposed to currency risk as it does not significant amounts of currencies other than EUR. ▪Interest rate risk – risk that the Company may incur losses due to fluctuations in interest rates; ▪Liquidity risk – risk that the Company will not be able to meet its financial liabilities in due time. Management has implemented procedures to control the key risks. Credit risk The inability of insurance companies and patients to pay for the services provided by the Company in due time and in full amount. Most of the services are paid for within a short period of time after the provision of services or are funded by state or insurance providers, so the credit risk is low. Interest rate risk Management believes that interest rate risk is not material. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 16 Liquidity risk The Company has no external loans and it has significant financial resources to settle its liabilities. Fair value of financial assets and liabilities Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Financial assets and financial liabilities are carried at cost which according to management approximates their fair value at acquisition plus any related additional expenses. Purchase costs are acquisition costs of goods or services (net of discounts received) with added additional costs related to the purchase. Reporting period The reporting period comprises the 12 months from 1 January 2022 to 31 December 2022. Currency unit and revaluation of foreign currency All amounts in these financial statements are expressed in the official currency of Latvia – euro (EUR), the functional currency of the Company. Foreign currency transactions are translated into EUR according to currency exchange rates effective at the date of transaction and determined by reconciliation of the system of the European Central Bank and other central banks and which is published on the website of the European Central Bank. As at the reporting date, all monetary assets and liabilities are translated into EUR according to exchange rates published on the website of the European Central bank. Non-monetary items of assets and liabilities are revalued to euros in accordance with the reference exchange rate published by the European Central Bank on the transaction date. Exchange rate per EUR 1: 31.12.202231.12.2021 USD1.06660 1.13260 Gain or loss resulting from payments under transactions executed in foreign currencies and the translation of monetary assets and liabilities denominated in foreign currencies is reflected in the profit and loss statement of the respective period. Estimates and judgements The preparation of financial statements requires the management to make judgements, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses. The actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates are recognized in the period when those estimates are reviewed and in future periods. Key sources of estimation uncertainty are the following: (i) Useful lives of fixed and intangible assets Management estimates the useful lives of fixed and intangible assets in proportion to the expected duration of use of the asset (its expected capacity or effectiveness) based on historical experience with similar fixed assets and future plans. Land is not subject to depreciation. For other assets, depreciation and amortization is calculated on a straight-line basis over the entire useful life of the respective intangible asset and fixed asset in order to write their value or revalued value down to the estimated book value at the end of the useful life based on the following rates: % Intangible assets 20 Buildings and constructions 2.5 - 2.85 Communication equipment and instruments 33.33 Other fixed assets 20 AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 17 Current maintenance and repair costs of fixed assets are recognized in the profit and loss statement as incurred. (ii) Fixed asset valuation Fixed assets other than land, buildings and constructions are carried at cost less accumulated depreciation and impairment losses. Land, buildings and constructions are measured by the Company using the revaluation model. The balance sheet item Land, buildings and engineering structures of the financial statements of the Company is presented at revalued value, which equals fair value at the revaluation date net of subsequent accumulated deprecation and impairment loss. Management has, as at 31 December 2020, carried out a valuation of the entire balance sheet item ‘Land, buildings and engineering structures’ and determined the carrying amounts of all land plots, buildings and engineering structures to be consistent with market value based on valuations by external certified appraisers. For details on the revaluation please refer to Note 8. According to the policy, revaluation of a single building or construction requires the whole category to be revalued. To determine the impact of revaluation at the date of revaluation accrued depreciation is netted of cost or other value, which replaces cost in the financial statements, and the carrying amount is increased or decreased according to the revalued value of the building or structure in the following manner: depreciation accrued to the date of revaluation is initially written-off of the current carrying amount of fixed asset, and afterwards the residual value is increased or decreased according to the fair value of fixed asset as a result of revaluation. In case the fair value of fixed assets at the balance sheet date is lower than their carrying amount, and such impairment is expected to be permanent, fixed assets are recognized at the lower value. The revaluation result is recognized in the profit and loss statement except where a previously recognized increase in the value of fixed assets offsets an impairment loss. In that event, the long term investment revaluation reserve is decreased by the amount of impairment. In case the value of fixed assets at the balance sheet date is higher than the valuation on the balance sheet, fixed assets are revalued to the higher value if the increase in value may be assumed to be other than temporary. The increase in value resulting from revaluation is recognized under ‘Long term investment revaluation reserve’. If an increase in the value resulting from revaluation compensates for the impairment of the same fixed asset which was previously recognized as an expense in the profit and loss statement, then the increase resulting from revaluation is recognized as income in the profit and loss statement as incurred. The long term investment revaluation reserve is decreased when the revalued asset is disposed, is no longer utilized, or the increase of value is no longer reasonable. The increase in value recognized in the long term investment revaluation reserve under equity is reversed by recognizing a decrease in the profit and loss statement upon liquidation or disposal of the revalued fixed asset. (iii) Valuation of receivables Receivables are disclosed at amortised cost net of impairment allowances. Doubtful debt allowances are recognized based on an individual management assessment of the recoverability of each receivable. Impairment allowances are recognized when objective evidence exists that the Company will not be able to recover the full amount of receivables according to the previously agreed repayment terms. The amount of allowance represents the difference between the carrying and recoverable amount of receivables. The allowance is charged to the profit and loss statement. (iv) Provisions Provisions are recognized when a past event has given rise to a present obligation or losses and the amount can be estimated reasonably. The likelihood of loss is assessed based on management assumptions. In order to determine the amount of loss management is required to select an appropriate calculation method and make specific assumptions connected with the specific risk. No provisions were made as at 31 December 2022. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 18 Revenue recognition Income from sales of goods Revenue from the sales of goods is recognized in the profit and loss statement after the risks and rewards of ownership are transferred to the client. No revenue is recognized if according to the provisions of the transaction the Company retains significant risks pertaining to the ownership of goods and the goods can be returned. Income from services Income from services provided is recognized in the profit and loss statement as generated. Income is received and recorded according to signed cooperation agreements. Rental income Rental income is recognised on a straight-line basis over the rental term. Long and short term classification Amounts with terms of receipt, payment or write off due in more than one year after the reporting date are classified as long term. Amounts to be received, paid or written off within a year are classified as short term. Lease transactions Operating lease (the Company as a Lessor) The Company leases premises, which are part of revalued fixed assets. Depreciation is calculated on a straight-line basis over the entire useful life of the respective fixed asset in order to write its value down to the estimated carrying amount at the end of the useful life based on the rates set for similar fixed assets. Income from operating lease and client prepayments is charged to the profit and loss statement on a straight-line basis over the period of lease. Operating lease – (the Company as a lessee) Payments for operating lease are recognized in the profit and loss statement on a straight-line basis over the period of lease. Fixed assets All fixed assets other than land, buildings and constructions are recognised on the balance sheet at historical cost less depreciation. For other assets, depreciation and amortization is calculated in accordance with the straight-line method over the entire useful life of the respective intangible assets and fixed assets in order to write their value or revalued value down to the estimated book value at the end of the useful life. The depreciation method is reviewed at least on an annual basis, at the year-end. Subsequent expenses are added to the book value of the asset or recognized as a separate asset only where it is highly probable that future benefits related to this item would flow into the company and expenses of this item can be estimated reliably. Such expenses are written off over the entire useful life of the respective asset. When capitalizing the costs of installed spare parts, the book value of the spare parts is written off in the profit and loss statement. Profit or loss from disposal of fixed assets is calculated as the difference between the carrying amount of the asset and income generated from sale, and income from the reversal of the revaluation reserve of the respective fixed asset, and charged to the profit and loss statement as incurred. Accounting and valuation of stock Stock is carried at the lower of cost and net realizable value. Stock has been valued according to the FIFO method. Stock accounting is based on the perpetual method. Stock has been counted during the annual stock take. Remuneration costs Remuneration costs are determined in accordance with effective employment contracts, taking account of changing labour market requirements and trends. The application of certain principles is mutually agreed: per cent, fixed figures, individual conditions, combined conditions. Employees have access to the payroll procedures (data selection algorithms, data processing procedures, data flow organisation). The Company provides only short-term remuneration benefits to its employees. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 19 Donations Grants received for special types of capital investments are treated as deferred income which is gradually recognised as revenue over the useful life of the fixed assets received or acquired using grants. Grants received to cover expenses are recognised in the same period when the related expenses have arisen, if all the conditions of receiving the grant are met. Corporate income tax (a) Current tax On 1 January 2018 the Law on Enterprise Income Tax of the Republic of Latvia entered into force and set out a new regime for paying taxes. The tax rate is 20% from the taxable base determined by dividing the value of the amount taxable with corporate income tax by coefficient 0.8, includes: • distributed profit (dividends calculated, payments equivalent to dividends, conditional dividends), and • conditionally distributed profit (such as non-operating expenses and other specific cases provided for by the law). The new tax regime is not applicable to the distribution of dividends from profit accumulated to 31 December 2017 and taxed under the previous taxation regime. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 20 (2)Net sales Net sales represents revenue generated during the reporting period from the Company’s main activities – sales of services, net of value added tax and discounts. 2022 2021 EUR EUR Medical and hospital outpatient services 8 967 187 8 721 772 Services covered by insurance 733 711 642 080 Paid outpatient services 410 950 359 565 Paid inpatient services 322 761 282 515 9 700 898 9 363 852 The Company provides services only in the territory of the Republic of Latvia. The Company does not disclose information on distribution of net sales by lines of business in accordance with Regulation No. 1893/2006 (EK) of the European Parliament and European Council of 20 December 2006, with which the statistic classification of business activity NACE rev 2 is established, as its disclosure could have a severe negative impact on the interests of the Company. (3)Cost of goods and services The item represents costs incurred for generating net sales – such as costs of goods and services at acquisition cost, and costs related to purchase of goods and services. 2022 2021 EUR EUR Remuneration 4 846 025 4 409 742 Medicines, medical materials 922 309 864 355 Compulsory state social security contributions 1 114 143 997 841 Non-deductible value added tax 379 561 372 725 Lease of equipment 119 859 279 627 Depreciation 427 880 286 644 Utilities and maintenance 373 117 224 023 Office items and equipment, other materials 168 467 176 127 Repair costs 159 517 226 154 Medical examinations and other services 87 965 72 284 IT expenses 13 932 13 321 Advertisement expenses 6 805 630 Security 30 923 26 631 Medical fund risk expenses 10 898 13 129 Transport expenses 17 404 17 365 Office expenses 10 598 10 790 Patient catering expenses 27 365 23 593 Real estate tax 6 173 6 172 Insurance 14 897 12 494 Staff training expenses 4 002 1 818 Risk duty 1 482 1 445 Benefits and gifts to employees 1 525 1 849 Changes in cost of accrued vacations 45 418 25 098 Other costs related to services 135 884 82 834 8 926 149 8 146 691 AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 21 (4)Administrative expenses 2022 2021 EUR EUR Remuneration 507 283 416 643 Compulsory state social security contributions 116 821 95 395 Communication expenses 17 600 19 998 Audit of the financial statements 22 880 21 434 Office expenses 11 194 5 092 Bank services 11 852 10 783 Legal services 11 792 8 802 Representation expenses 1 173 603 Other 4 156 1 503 704 751 580 253 (5)Other operating income 2022 2021 EUR EUR Income from rent 130 435 125 074 Amortisation of funds received from EBRD 10 928 10 513 Other income - business related 303 527 111 848 Other income – cession Tax adjustment 117 226 20 326 - - 582 442 247 435 * During the course of several years, outstanding rent payments from tenant SIA Kodolmedicīnas klīnika accumulated. In September 2022, a cession agreement was signed and all liabilities of SIA Kodolmedicīnas klīnika were eliminated. As a result of the cession, allowances for doubtful receivables were partly released. (6)Other operating expenses 2022 2021 EUR EUR Donations 19 000 - Fines 426 1 142 Other expenses 6 681 2 297 26 107 3 439 (7)Corporate income tax for the reporting year 2022 EUR 2021 EUR Current tax 604 645 604 645 AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 22 (8)Fixed assets Land, buildings and engineering structures Equipment and machinery Other fixed assets Intangible assets Construction in progress Total EUR EUR EUR EUR EUR EUR Historical cost 31.12.2021 5 458 679 3 375 965 592 090 80 453 70 407 9 577 594 Additions - 769 859 68 110 - 5 802 843 771 Disposals - (101 377) (12 961) - - (114 338) 31.12.2022 5 458 679 4 044 447 647 239 80 453 76 209 10 307 027 Accumulated depreciation and amortisation 31.12.2021 538 909 2 492 903 521 894 80 453 - 3 634 159 Depreciation and amortisation charge for the year 135 296 246 298 46 286 - 427 880 Depreciation of disposed fixed assets - (95 853) (12 961) - - (108 814) 31.12.2022 674 205 2 643 348 555 219 80 453 - 3 953 225 Balance as at 31.12.2020 4 440 002 244 153 76 129 - 359 779 5 120 063 Balance as at 31.12.2021 4 919 770 883 062 70 196 - 70 407 5 943 435 Balance as at 31.12.2022 4 784 474 1 401 099 92 020 - 76 209 6 353 802 In December 2020, land, buildings and constructions were valued by independent experts. The valuation was carried out by the independent experts using a combination of the comparable transactions method and income method. As at 31 December 2022, a new revaluation was not performed as the management assessed that no significant changes had taken place in the market and the recognised carrying amount did not differ materially from the fair value of the property. The fair value of land and building was determined by an external, independent property valuer, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 23 The following table shows the valuation technique used in measuring the fair value of core real estate items included in position ‘Buildings and land’, as well as the significant unobservable inputs used: Type Valuation approach Significant unobservable data Inter-relation between significant unobservable inputs and fair value measurement Buildings and land in the amount of EUR 3 000 000 at Patversmes iela, Riga Fair value has been estimated based on the average of: Market approach: The fair value was based on results of comparable sales of similar buildings. Discounted cash flow approach: The model is based on discounted cash flows from rendering services Price per m2 EUR 452 Rent rate per m2 – EUR 2.3-9 Capacity – 90% Capitalisation rate – 9% The fair value would increase (decrease) if the price per m2 was higher (lower). The estimated fair value would increase (decrease), if: Rent rate would be higher (lower); Capacity percentage would be higher (lower); Capitalisation rate would be lower (higher); Buildings and land in the amount of EUR 810 000 at Vecmīlgrāvja 5.līnija, Riga Fair value has been estimated based on the average of: Market approach: The fair value was based on results of comparable sales of similar buildings. Discounted cash flow approach: The model is based on discounted cash flows from rendering services Price per m2 EUR 327 Rent rate per m2 EUR 3.5 - EUR 5 Capacity – 90% Capitalisation rate – 9% The fair value would increase (decrease) if the price per m2 was higher (lower). The estimated fair value would increase (decrease), if: Rent rate would be higher (lower); Capacity percentage would be higher (lower); Capitalisation rate would be lower (higher). Buildings and land in the amount of EUR 630 000 at Melīdas iela, Riga Fair value has been estimated based on the average of: Market approach: The fair value was based on results of comparable sales of similar buildings. Discounted cash flow approach: The model is based on discounted cash flows from rendering services Price per m2 EUR 315 Rent rate per m2 EUR 5 Capacity – 90% Capitalisation rate – 9.0% Fair value would increase (reduce) if the price per m2 was higher (lower) The estimated fair value would increase (decrease), if: Rent rate would be higher (lower); Capacity percentage would be higher (lower); Capitalisation rate would be lower (higher). According to Section 52(2)(2) of the Annual Reports and Consolidated Annual Reports Law, disclosures are provided concerning revalued fixed assets indicating their value had revaluation not taken place: The carrying amount of ‘Land, buildings and constructions’ as at 31 December 2022 had revaluation not taken place would be EUR 3 054 217 (31.12.2021 – EUR 3 191 888). Including: 31.12.2022 31.12.2021 EUR EUR -historical cost 4 617 716 4 617 716 -accumulated depreciation (1 563 499) (1 425 828) AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 24 (9)Raw materials 31.12.2022 31.12.2021 EUR EUR Medicines in warehouse 124 784 121 308 Medicines in departments 18 291 20 639 Other materials 126 14 570 143 201 156 517 (10)Trade receivables 31.12.2022 31.12.2021 EUR EUR Insurance companies 56 194 66 802 Other institutions, companies and individuals 33 851 207 057 Doubtful debt allowance (7 988) (171 851) 82 057 102 008 (11)Other receivables 31.12.2022 31.12.2021 EUR EUR Overpaid taxes (see Note 18) 2 360 6 Value added tax on unpaid services 7 841 4 786 Prepayment for fixed assets 561 561 571 228 Other receivables 13 332 24 234 585 094 600 254 The prepayment was made to SIA Tradintek for the purchase of a magnetic resonance equipment. (12)Prepaid expenses 31.12.2022 31.12.2021 EUR EUR Insurance expenses 8 775 6 866 Other prepaid expenses 1 152 404 9 927 7 270 (13)Accrued income 31.12.2022 31.12.2021 EUR EUR Accrued income for invoices issued after the year end 350 787 429 311 350 787 429 311 Accrued income consists of invoices issued to the National Health Service after the reporting date. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 25 (14)Cash By currency: 31.12.2022 31.12.2021 Currency EUR Currency EUR Current account USD 5 840 5 475 5 840 5 156 Current account EUR - 1 307 936 - 1 004 291 Cash on hand EUR - 8 009 - 7 812 1 321 420 1 017 259 (15)Share capital Share capital of the Company as at 31 December 2022 amounted to EUR 1 120 000 (31.12.2021: EUR 1 120 000) and consisted of 800,000 shares with nominal value of EUR 1.40. The share capital of the Company is owned by the following shareholders: 31.12.2022 31.12.2021 Number of shares Holding (%) Number of shares Holding (%) Ilze Birka 140 000 17.50% 140 000 17.50% Mārtiņš Birks 140 000 17.50% 140 000 17.50% SIA POM 70 565 8.82% 70 565 8,82% Guna Švarcberga 82 917 10.36% 82 917 10.36% Jānis Birks 102 388 12.80% 102 388 12.80% Adomas Navickas 54 811 6.85% 54 811 6.85% Other shareholders (up to 5% shares per each) 209 319 26.17% 209 319 26.17% Total 800 000 100.00% 800 000 100.00% Share capital (EUR) 1 120 000 1 120 000 All shares of the Company are name (publicly issued shares) shares. (16)Revaluation reserves In 2021 and 2022, the revaluation reserve was not changed. (17)Other liabilities 31.12.2022 31.12.2021 EUR EUR Salaries 287 426 277 050 Payments to the trade union/court orders 632 622 288 058 277 672 AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 26 (18)Taxes and compulsory state social security contributions Balance as at 31.12.2021 Calculated for 2022 Paid in 2022 Balance as at 31.12.2022 EUR EUR EUR EUR Corporate income tax 149 604 (687) 66 VAT 17 687 49 980 (57 570) 10 097 Real estate tax (6) 6 173 (6 188) (21) Natural resources tax 3 961 3 654 (10 020) (2 405) Risk duty 119 1 482 (1 477) 124 VSAOI 148 929 1 779 305 (1 800 163) 128 071 Personal income tax 78 727 968 259 (968 233) 78 753 Total 249 566 2 809 457 (2 844 338) 214 685 Including: Overpaid taxes (6) (2 360) Tax liabilities 249 572 217 045 Overpaid taxes are disclosed under “other receivables”. (19)Deferred income 31.12.2022 31.12.2021 EUR EUR The part of capital grants to be charged to profit or loss within 1 to 5 years 54 640 58 126 The part of capital grants to be charged to profit or loss within for more than 5 years 311 455 320 655 Lease payments to be charged to profit or loss within 1 to 5 years 191 250 236 250 The part of capital grants to be charged to profit or loss within 1 to 5 years 10 199 13 623 Deferred income, long term 567 544 628 654 The part of capital grants to be charged to profit or loss within one year 10 928 10 929 Lease payments to be charged to profit or loss within one year 45 000 45 000 The part of capital grants to be charged to profit or loss within one year* 3 164 2 197 Deferred income, short term 59 092 58 126 * In 2012, the Company received EBRD funding to purchase fixed assets. In 2022, the Company recognised revenue of EUR 10 928 (2021: EUR 10 929) (see Note 5). ** 2018, the Company received lease payments for the next 10 years amounting to EUR 450 000. In 2022, the Company recognised revenue of EUR 45 000 (2021: EUR 45 000) according to the terms of lease agreements that secured lease rights for a specified period and promoted operating activities in line with specific classification. Revenue is reflected under ‘Income from rent’, refer to Note 5. In 2021, the Company received funding of EUR 17 578 from the CFLA for the purchase of fixed assets (contract No. 9.3.2.0/20/a/074). Revenue recognition started in 2022. AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 27 (20)Accrued liabilities 31.12.2022 31.12.2021 EUR EUR Accrued expenses for unused vacations 409 680 364 262 409 680 364 262 (21)Average number of employees by category 2022 2021 Average number of employees in the reporting year: 361 352 incl. Members of the Board 3 3 Members of the Council 5 5 Other employees 353 344 (22)Personnel expenses Type of costs 2022 EUR 2021 EUR Remuneration 5 353 308 4 826 385 Compulsory state social security contributions 1 230 964 1 093 236 6 584 272 5,919 621 (23)Remuneration to management 2022 2021 EUR EUR Members of the Board · remuneration (fixed and variable) 214 483 174 950 · compulsory state social security contributions 48 043 39 369 Members of the Council remuneration 32 166 27 319 · compulsory state social security contributions 7 112 6 040 Other members of the administration remuneration 260 634 214 374 · compulsory state social security contributions 61 666 49 986 624 104 512 038 (24)Future liabilities As at 31 December 2022, the Company has a design and build contract with a future payment commitment for the acquisition and deployment of a fixed asset – an MRI scanner (see Note 11). Total construction costs amount to EUR 621 913 (31.12.2021: none). The management has no information on issued guarantees, legal proceedings and other contingent liabilities, which could impact the financial position of the Company as at 31 December 2022 (31.12.2021: none). AS Latvijas Jūras medicīnas centrs Financial statements for the 12-month period of 2022 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807 Notes to the financial statements 28 (25)Remuneration to the certified auditor 2022 2021 EUR EUR Audit and translation of the financial statements 22 880 20 386 Other assurance services 2 050 - 24 930 20 386 (26)Information on operating lease and rent agreements with a significant impact on the Company’s activities The Company has signed 11 operating lease agreements for lease of equipment, of which 3 are in force at the year end. Under these agreements lease payments, including VAT, are the following: In 2022 EUR 421 925 In 2023 EUR 10 199 In 2024 EUR 3 744 (27)Subsequent events No significant subsequent events have occurred in the period from the year-end to the date of these financial statements that would require adjustments to be made to these financial statements and disclosures added to the notes thereto. Chairman of the Board Jānis Birks Member of the Board Juris Imaks Member of the Board Anatolijs Ahmetovs 28 April 2023 Chief Accountant Gunta Kaufmane THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT CONTAINS A TIME-STAMP