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.
