Report 3/2021

 The Company hereby informs about providing a shareholder, at his request, with written information about the company outside the General Meeting, pursuant to Art. 428 § 6 of  the Commercial Companies Code. The information concerns the circumstances justifying the adoption of a resolution on consent to the disposal of an organized part of the enterprise or termination of the operation of the St. George in Kamień Pomorski.

The shareholder was provided with the following information:

1.           Amount of losses and restructuring measures taken

Between 2017 and 2019 St. George’s Hospital generated losses as  follows:

• PLN -1,512,933 in 2019

• PLN -1,772,553 in 2018

 • -729 284 PLN in 2017

The above data indicates that St. George’s hospital  has been generating losses despite restructuring measures taken in recent years, such as:

• Liquidation of the Gynecology and Obstetrics Department (turn of 2018/2019)

 • Liquidation of the Surgery Department (turn of 2018/2019)

 • Liquidation of the operating theater

• Opening a long-term care facility, which, however, has failed to win a contract with the National Health Fund and which has been operating only as a commercial facility

• obtaining a higher value of the NHF contract for services related to the operation of specialist clinics at the St. George

• Re-education of current administration costs, including:

 - Introduction of central purchasing

- Transfer of administrative services to the Shared Services Center of the EMC Group

 - Ongoing expenditure control

 - Minimizing the increase in wages

2.           Valuation of ZCP and directed sales offers

The company has not so far commissioned the valuation of St. George’s Hospital as an organized part of the enterprise, because it is economically worthless. Most of the assets, including the most important one: the building itself, are leased from the Kamień District. The economic potential of the facility is negative; i. e .the hospital is not able to cover all the necessary costs with the NHF reimbursement, while the potential of commercial activity is negligible unable to compensate the losses.

Considering the above, of St. George’s Hospital, as an organised part of the company, has no selling value, because running it is economically unprofitable.

  In addition, it should be noted that at present in times of the COVID-19 epidemic, the prevailing restrictions and the powers of public authorities to interfere with the management of medical facilities, there is also a reduced demand for medical facilities on the market.

Therefore, the sale offer could only be addressed to the Kamień Poviat as the owner of the building and at the same time a local government unit responsible for providing healthcare to the poviat residents. Consequently, the only economically justified price is the token prize.

The company has already signed an agreement with the Kamień District regarding the conclusion, by March 1, 2021a sales agreement of an organized part of the enterprise in the form of the St. Geore’s Hospital in Kamień Pomorski together with the Specialist Outpatient Clinic to the newly established company Hospitall i Kamień Sp. z o.o. which the company informed about in the current report No. 28/2020 of 22/12/2020.

The liquidation of the Hospital has also been taken into account, but in the interests of the inhabitants of the Kamień District, it is more reasonable to sell the Hospital to the District (or the municipal company of the Kamień District).

On November 26, 2020, the Supervisory Board of EMC Instytut Medyczny at a meeting held by means of direct remote communication adopted resolutions both on consent to the sale of an organized part of the enterprise constituting   St. George’s Hospital in Kamień Pomorski and to consent to the termination of the operation of the said hospital.

Legal basis: §19 section 12 of the Regulation of the Minister of Finance on Current and Periodic Information Published by Issuers of Securities and Conditions for Recognizing as Equivalent Information Required by the Law of a Non-member State