Latvijas Juras medicinas centrs

Annual Report • May 23, 2022

JOINT STOCK COMPANY "LATVIJAS JŪRAS MEDICĪNAS CENTRS"

(Unified registration number: 40003306807)

FINANCIAL STATEMENTS FOR 2021 (18th financial year)

PREPARED IN ACCORDANCE WITH THE LAW 'ON ACCOUNTING' AND 'ANNUAL REPORTS AND CONSOLIDATED ANNUAL REPORTS LAW' OF THE REPUBLIC OF LATVIA

Riga, 2022

JSC Latvijas Jlras mediclnas centrs Address: Patversmes iela23, Riga, LV-1005 LInified registration number: 40003306807

Contents

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Information on the Company	3
Statenrent of the Board's Responsibility	4
Management Report	5-6
Remuneration Report'for 2021	7-B
Financial Statements:
Profit and Loss Statement	I
Balance Sheet	10-11
Statement of Changes to the Shareholders' Equity	12
Statement of Cash Flows	13
Notes to the Financial Statements	14 -28

lnformation on the Company

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Name of the Company	Latvijas JUras mediclnas centrs
Legalstatus	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:	Hospitalactivities (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.se) Physical well-being activities (96.04) Other personal service activities n.e.c. (96.09)
Registered office	Patversmes iela 23 Riga, LV-1005, Latvia
Largest shareholders	llze Birka (17.50%) Mirtir.r5 Birks ( 1 7.50%) srA'PoM' (B.82Yo) Guna Svarcberga (1 0.36%) Jdnis Birks (12.8A%j Adomas Navickas (6.85%)
Names of the Board members, their positions	Jinis Birks - Chairman of the Board Juris lmaks - Member of the Board Anatolijs Ahmetovs - Member of the Board
Names of the Councilmembers, their positions	Mdrtin5 Birks - Chairman of the Council Viesturs Siliqts - Deputy Chairman of the Council lneta Gadzjus * Member of the Council Jevgeryijs Kal6js - Member of the Council Uldis Osis - Member of the Council
Reporting year	1 January 2021 * 31 December 2021
Name and address of the certified auditor KPMG Baltics SIA in charge	Certified auditor in charge: Licence No. 55 Rainers Vilins Vesetas iela 7 Certificate No. 200 Riga, LV-1013, Latvia

JSC Lafuijas J0ras mediclnas centrs Address: Patversmes ielaZS, Riga, LV-1005 Unified registration number. 40003306g07

Statement of the Board's Responsibitity

The Board of AS Latvijas J0ras Mediclnas Centrs (hereinafter - the Company) is responsible for preparing the financial statements of the Company.

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The financial statement on pages g to 28 is prepared based cn acccunting records and source documents and present fairly the financial position of Companies as at 31 Decemb er ZaZl and the results of its operations, and cash flows for the 12-month period of 2021.

The above mentioned financial statement of the Company is prepared in accordance with the laws 'on accounting'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 esiimates 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 tfp Company. The management is atso responsible for compliance with laws of the Republic of Laty'iA.

.--2 Chairman of the Board Jinis Birks

MeiirUer of the goard ,,rAnatolijs Ahmetovs

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JSC Latuijas JUras mediclnas centrs Address: Patversmes iela23, Riga, LV-1005 Unified registration number: 40003306807

Type of business

AJS Latvijas J6ras mediclnas centrs (hereinafter - LJMC or the Company) is a certified and advanced privaie medical facility available to everyone, which consists of Sarkandaugava Ambulaiory i{ealthcare Centre at 23 Patversmes iela, Riga; Central Hospital at 23 Patversmes iela, Riga; Vecmilgravis Hospital and No(hern Diagnoitics Centre 26 Vecmilgravja S.linija; Riga, and Vecmllirivis Primary Health Care Centre at lO fUetiOas iela, Riga. ln 2021, the average number of employ-ees at LJMC was 352. The shares of A/S Latvi.las Jilras mediclnas centrs are traded on the Baltic Secondary list of Nasdaq Riga.

As of S September 201 3, A/S Latvijas J0ras medicTnas centrs has been included on the list of medical facilities approved by the Health inspectorate of Latvia, which provides medical tourism services, n"*"fy, ilfrlC proviOes medical tourism services as a reliable partner and this provides an insight into the overall iatuian 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'

LJlulC has accredited Clinical Diagnostics Laboratory at 23 Patversmes iela with the Laf;ian 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 2021and further development

The Company's activities in the 12 months of 2A21

ln 2021, LJMC continued to provide high-quality medical services and attract new patients' Similar to prior years, also in 2021 LJMC employed excellent doctors from Latvia and competent medical peisonnel. Activities of highly qualified and. professional personnel allowed LJMC to provide examinations of competitivJand exceptional quality and adherence to strict precautionary standards, and personnel can ensure safe and accessible services for patients when providing health care services. LJMC is on the official list of providers of medical tourism services maintained by the Health lnspection of the Republic of Latvia. ln 2021, LJMC published information in the catalogue "Health Tourism in Latvia", created and supported by LIDA.

During 2021, LJMC, when providing health care services, adapted flexibly to the normative docurients of the Ministry of Health, wnicf imposed restrictions on preventing and overcoming the spread of Covid-1g. Both secondary ambulatory health care services and daily hospital services, as well as paid health care services were provided to the extent permitted in the normative documents, ensuring continuity of activity and the monitoring of the impact of new events and conditions.

13ZA2l, LJMC promoted paid health care services, ensuring increase in the number of patients living in Latvia, promoting competitiveness and recognition of LJMC.

The Radiology Department in 2021 provided the full range of diagnostic services (magnetic resonance, X-iay 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.

ln order to ensure compliance with the requirements of GDPR in 2o21, LJMC in cooperation with an independent data protection inspector continued improvement of documents in compliance with the laws and regulations, continued improvement of renewing the contracts (on the use of medical facilities in tigitat form, use of medical information system, insurance company services, communication services), and began the training process for LJMC stafi.

ln ZOZ1, LJMC signed agreements with the National Health Service for the provision of state paid medical services in the amount provided by the budget tor 2021'

,nZAZ1 LJMC continued working on lSO, tn 2019, LJMC received ISO 9001:2015 quality certification in functional diagnostics and radiological diagnostics, in-patient medical rehabilitation and day-care rehabilitation vaiid until 14 March 2025, and-continued updating the hygiene and disinfeetion plan, and implementing ISO certificatlon in other units of LJMC.

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JSC Latvijas J0ras mediclnas centrs Address: Patversmes iela23, Riga, LV-1005 Unified registration number: 40003306807

Management Report

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Further development of the Company

To attract even more patients, in 2A21 LJMC will by made investments to introduce innovative solutions for pi'oviding medical services, improve the qualification of the staff and enhance patient service. Also, LJMC will continue the state policy in re-profiling of hospitals to ambulatory healthcare institutions, thus adding to the health care service offering. !n2022, the LJMC will continue to further ensure compliance with precautionary standards in the provision of healthcare services, so that cooperation between the patients and healthcare professionals could facilitate access to those services.

Coniinuing to improve the available services vvith a highly qualified and professional diagnostic service, the Radlology Department of LJMC, as one of the most modern and innovative mnrer diagnostic centres in Eastern Europe, will help to increase the flow of local and foreign patients when a safe flow of patients is restored.

By attracting patients not only from Latvia and other Baltic countries, but also from other EU countries and offering high-quali\$ medical services, LJMC will increase its competitiveness in the Baltics medicalmarket.

Financial results

ln the 12 months of 2021, LJMC operated in accordance with the budget approved for 2021. The profit of LJMC is EUR 880 259.

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 identifu 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. LJMC does not use loans, except operating leases.

Subsequent events and going concern

No other 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. The Russia-Ukraine war is not expected to have material effect on the s of the Company. The Company does not plan to enter into transactions with Russia, Belar Ukraine.

Chairman of the Board Jdnis Birks Mernber of the Board Anatolijs AhmeJovs ,-*4%

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27 April2O2?

JSC Latvijas Jiras medicTnas centrs Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807

lntroduction

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The remuneration report of Joint Stock e ompany "Latuijas JItras medicTnas centrs" (hereinafter - the Cornpany) is prepared according to the remuneration policy to members of the Board and the Council ,ppror"i'fV ihe decision of the-Company's Shareholders Meeting of 30 November 202A, developed on'the basis of Directive (EU) 20171828 of the European Parliament and of the Councilof 17 May ZA1T as regards the encouragement of long-term shareholder engagement, as wellas according to Article Sg3 ;f the Financial lnstrument 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 providi an opinion on whether the information referred to in Section 59.4 of the Financial lnsirument Market Law has been included in the remuneration report and whether significant nonconformiiies have been established in the remuneration statement in reiation to the financiai information indicated 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 "Remuneraiion report", as well as on the Nasdaq Riga website; http:llwww.nasdaqbaltic.com'

Remuneration to the Board and Council

The remuneration poticy of the Board and the Council ensures that in 2021 lhe Company's strategy, realization of long-ierm interests and sustainability, ensuring business continuity, is implemented'

Remuneration to the members of the Council consists only of fixed component of remuneration. ln 2021, the follcwing total remuneration was granted and paid ts the members of the Council:

Name, surname	Position		Remuneration paid in 2021, EUR
MdrtiqS Birks	Chairman of Council	the	I 195.76
lneta Gadzjus	Member of Council	the	4 780.92
Viesturs SilinS	Member of Council	the	4780.92
JevgEqrijs KalSjs	Member of Couneil	the	478A.92
Uldis Osis	Member of Council	the	4780.92

ln Z0ZO, the total remuneration granted and paid to the members of the Supervisory Board of the Company was as follows: EUR27 319.44

Remuneration to the members of the Board consists of a fixed and variable component of remuneration.ln2O2l, the following total remuneration was granted and paid to the members of the Board:

Name, surname	Position		Remuneration paid in2A21, EUR	Fixed part of remuneration, %	Variable part of remuneration, %
J6nis Birks	Chairman of the Board		67 445	30.45o/o	69.55%
Juris lmaks	Member of the Board		59 028	31.74/o	68.3%
Anatolijs Ahmetovs	Member of Board	the	48 477	47.2%	52.84/o

inZ0ZA,thetotal remuneration granted and paid to the members of the Company's Board of Directors was EUR 165424.

JSC Latvijas J0ras medicTnas centrs Address: Patversmes iela 23, Riga, LV-1005 ^Unified registralion number: 40003306807

Remuneration Repoft far 2021

Members of the Board and the Council did not receive remuneration from another company belonging to the same group in the understanding of the Annual Reports and Consolidated Annual Report Law.

Shares or share options were not granted and offered to members of the Board and the Council.

No variable part of remuneration was reclaimed from members of the Board and the Council.

There were no cases of applying temporary derogations from the remuneration policy.

Section 5S, paragraph one, point 3 of the Financial lnstrument Market Law requires to report, in ^a comparabie manner, changes that took piace in the last five financiaiyears in remuneration paid io members of the Board and the Council, performance of the company and average remuneration on ^afull-time equivalent basis of employees of the company other than members oi the Board and the Council.

This is the second Remuneration Report prepared by the Company and it covers ZAZ1. ln accordance with Paragraph 66 of the Transitional Provisions of the Financial lnstrument 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. The Company has identified that there are no current annual changeslelating to the period beginning no later than 't January 2A20.

Remuneratlon to performance of equivalent basisl he Board and the council has not changed significanfly during the last s years, e company matches its strategic goals, average remuneration on a full-time

labour market. Chairman of the Board Jinis Birks Board

ofthe Board

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JSC Latvijas Jūras medicīnas centrs period of 2021 Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807

Financial statements

Profit and Loss Statement for 2021

		Note	31.12.2021 EUR	2020 EUR
ﮯ	Net sales	2	9 363 852	7 080 939
2.	Cost of goods and services	3	(8 146 691)	(6 488 048)
3.	Gross profit		1 217 161	592 891
ব	Administrative expenses	4	(580 253)	(557 818)
ട്.	Other operating income	5	247 435	241 697
6.	Other operating expenses	6	(3 439)	(2 153)
	7. Profit before corporate income tax Corporate income tax for the reporting		880 904	274 617
8.	year	7	(645)	(1 062)
9.	Profit for the reporting year		880 259	273 555
	Number of shares		800 000	800 000
×	Earnings per share (EUR)*		1.10	0.34

* 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 Member of One Board
Juris Imaks Jānis Birks

Member of the Board Anatolijs Ahmetovs

11 Chilef Accountant Gunta Kaufmane

27 April 2022

JSC Latvijas Jūras medicīnas centrs period of 2021 Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807

Balance Sheet as at 31 December 2021

	Note	31.12.2021 EUR	31.12.2020 EUR
Assets
Long-term assets
I Fixed assets: 1. Land, buildings and engineering structures 2. Equipment and machinery		4 919 770 883 062	4 440 002 244 153
3. Other fixed assets ব Construction in progress		70 196 70 407	76 129 359 779
Total fixed assets:	8	5 943 435	5 120 063
Total long term investments:		5 943 435	5 120 063
Current assets
I Stock: 1. Raw materials, primary materials and auxiliary materials Total stock:	9	156 517 156 517	138 556 138 556
Il Receivables: 1. Trade receivables 2. Other receivables and advanced payments 3. Prepaid expenses Accrued income ব Total receivables:	10 11 12 13	102 008 600 254 7 270 429 311 1 138 843	57 794 21 767 24 621 216 782 320 964
III Cash:	14	1 017 259	1 765 040
Total current assets:		2 312 619	2 224 560
Total assets		8 256 054	7 344 623

The accompanying notes on pages 14 to 28 form an integral part of these financial statements.

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JSC Latvijas Jūras medicīnas centrs period of 2021 Address: Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807

Balance Sheet as at 31 December 2021

	Note	31.12.2021 EUR	31.12.2020 EUR
Equity and Liabilities
Shareholders' equity:
1. Share capital	15	1 120 000	1 120 000
2. Long-term investment revaluation reserve 3. Reserves:	17	2 472 973	2 472 973
b) reserves according to Statutes 4. Retained earnings:		63 819	63 819
a) retained earnings brought forward from		1 803 462	1 585 907
previous years	16
b) profit for the reporting year		880 259	273 555
Total shareholders' equity:		6 340 513	5 516 254
Liabilities: Long term liabilities:
1. Deferred income	20	628 654	669 617
Total long term liabilities:		628 654	669 617
Short-term liabilities:
1. Customer advances		34 057	1 831
2. Accounts payable to suppliers and contractors 3 Taxes and compulsory state social security contributions		303 198	387 250
	19	249 572	155 019
4. Other creditors	18	277 672	194 938
5. Deferred income	20	58 126	55 513
6. Accrued liabilities	21	364 262	364 201
Total short term liabilities:		1 286 887	1 158 752
Total liabilities:		1 915 541	1 828 369
Total equity and liabilities		8 256 054	7 344 623

The accompanying notes on pages 14 to 28 form an integral part of these financial statements.

Chairman of the Board Member of the Board Jānis Birks Juris Imaks

Member of the Board Anatolijs Ahmetovs

Chief Accountant Gunta Kaufmane

27 April 2022

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Statement of Changes to the Shareholders Equity for 2021

	Share capital EUR	Long-term investment revaluation reserve EUR	Reserves set in the Company's statutes EUR	Retained earnings brought forward from previous years EUR	Profit/ (loss) for the year EUR	Total reporting shareholder's equity EUR
Balance as at 31 December 2019 Profit of 2019 transferred to	1 120 000	2 292 360	63 819	1 861 747	164 160	5 502 086
retained earnings of previous years				164 160	(164 160)
Result of revaluation in 2020 (see Note 18) Profit for the reporting year		180 613				180 613
Dividends for 2017				(440 000)		(440 000)
Profit for the reporting year Balance as at 31					273 555	273 555
December 2020 Profit of 2020 transferred to retained earnings of	1 120 000	2 472 973	63 819	1 585 907	273 555	5 516 254
previous years Dividends for 2017				273 555 (56 000)	(273 555)	(56 000)
Profit for the reporting year Balance as at 31					880 259	880 259
December 2021	1 120 000	2 472 973	63 819	1 803 462	880 259	6 340 513
The accomparying notes on pages 14 to 28 form an iptegral part of these financial statements.
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Chairman of the Board Jānis Birks			Member of the Board Juris Tmaks
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Member of the Board Anatolijs Ahmetovs			Chief/Accountant Gunta Kaufmane

27 April 2022

JSC Latvijas Jūras medicīnas centrs period of 2021 Patversmes iela 23, Riga, LV-1005 Unified registration number: 40003306807

Statement of Cash Flows for 2021

	Note	2021 EUR	2020 EUR
I. Cash flows from operating activities
1. Profit before corporate income tax		880 904	274 617
Adjustments for:
a) impairment of fixed assets	8	286 644	234 829
2. Profit before adjustments for the effect of changes to
current assets and short-term liabilities		1 167 548	509 446
Adiustments for:
a) decrease/ (increase) in trade receivables		(817 879)	13 032
b) decrease/ (increase) in stock		(17 961)	(36 810)
c) increase/ (decrease) in accounts payable to
suppliers and other liabilities		87 591	247 037
3. Gross cash flows from operating activities		419 299	732 705
Corporate income tax
Net cash generated from operating activities		(1 064)
		418 235	732 705
II. Cash flows from investing activities
a) purchase of fixed and intangible assets	8	(1 110 016)	(515 119)
6. Net cash flows used in investing activities		(1 110 016)	(515 119)
III. Cash flows from financing activities
a) Dividend paid		(56 000)	(440 000)
7. Net cash flows used in financing activities		(56 000)	(440 000)
Net increase/(decrease) in cash and cash
equivalents in the reporting year		(747 781)	(222 414)
Cash and cash equivalents at the beginning of the year		1 765 040	1 987 454
Cash and cash equivalents at the end of the year	15	1 017 259	1 765 040
The accompanying notes on pages 14 to 28 form an integral part of these financial statements.
Chairman of the Board Member of the Board
Jānis Birks Junis Imaks

Member of the Board Anatolijs Ahmetovs 27 April 2022

Chief Accountant Gunta Kaufmane

Nofes to the financialsfafemenfs

{1} lnformation on the Company's activities and summary of significant accounting principles

lnformation on the Company

The legal address AS Latvijas JUras mediclnas centrs (LJMC or the Company) is 23 Patversmes iela, Riga, Latvia, The Company was registered with the Commercial Register under the common registration number40003306807. The largest shareholders of the Company are llze Birka (17.50%), Mirtiqs Birks ('17.50%), Jdnis Birks (12.80%), Guna Svarcberga (10.36%), SIA POM (8.82%), Adomas Navickas (6.85%).

The Board comprises Jdnis Birks (Chairperson of the Board), Juris lmaks (Board Member) and Anatolijs Ahmetovs (Board Member). The Chairperson of the Council is Mdrtiqr5 Birks, Council Members are Viesturs SiliryS, lneta Gadzjus, JevgE4ija Kal6js 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 97.74; Education n.e.c. (95.59); 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 residentialcare activities (87.90); Other socialwork activities without accommodation n.e.c. (88.99); Physicalwell-being activities (96.0a); Other personal service activities n.e.c. (96.09).

Basis af preparation

The financial statements were prepared in accordance with the law 'On Accounting' 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 dnd Consolidated Annual Reports Law, the Company applies the requirements of the law applicable tc lai"Ee 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 fixed assets disclosed under Land, buildings and engineering structures - land and buildings, which are measured using a revaluation method.

Accaunting principles

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The financial statements were prepared in accordance with the following policies:

• Going concern assumption that the Company will continue as a going concern; a)
• Consistent valuation principles with those used in the prior year; b)
• Items were valued in accordance with the princiole of prudence, i.e.. c)
  • r the financial statements reflect only the profit generated to the balance sheet date;
    • r 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 fi nancial statements;
    • r all amounts of impairment and depreciation have been taken into consideration irrespective af whether the flnancial result sJas a proflt or loss.
• lncome 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. d)
• Assets and liabilities have been valued separately; e)
• The opening balance agrees with the prior year closing balance. 0
• All material items, which would influence the decision-making process of users of the financialstatements, have been recognised and insignificant items have been combined and g)
• their details disctosed in the notes. h) Business transactions are recorded taking into account their economic contents and substance. not the legal form.

Related padies

Related parties represent both legal entities and private individuals related to the company in accordance u*ith the follcwing rules.

a) ^Aperson or a close member of that person's family is related to a reporting entity if that person:

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• 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 entifi.

• 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. lf the reporting entity is itself such ^aplan, 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 par\$ transaction - a transfer of resources, services or obligations between a reporting entity and a related pafi, regardless of whether a price is charged.

Financial instruments and financial nsks

Financial instrument is an agreement that simultaneously results in financial assets of one party and financialliabilities of the other pafi.

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.

Financialnsks connected with the Company's financiat instruments, financial isk management

Key financial risks related to the Company's financial instruments are:

• r 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;
• r 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.
• r lnterest rate risk risk that the Company may incur losses due to fluctuations in interest rates;
• r 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.

lnterest rate risk

Management believes that interest rate risk is not material.

Liquidity risk

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The Company has no external loans and it has significant financial resources to settle its liabilities.

Fair value of financialassefs 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 relatecl to the purchase.

Reporting period

The repo(ing period comprises the 12 months from 1 January 2A21 b 3't December 2A21.

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:

	31.12.2421	31.12.2420
usD	1.13260	1.?2714

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.

Esfimafes 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 expense. 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 the future periods.

Key sources of estimation uncertainty are the following:

{i) Useful lives of fixed and intangible assefs

Management estimates the useful lives of fixed and intangible assets in proportion to the expected duration of use of the asset (its expected capacily or effectiveness) based cn 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:

	o/o
iniangible assets	2A
Buildings and constructions	2.5 - 2.85
Communication equipment and instruments	33.33
Other fixed assets	2A

Current maintenance and repair costs of fixed assets are recognized in the profit and loss statement as incurred.

{ii) Fixed assefs

Fixed assets other than land, buildings and constructions are carried at cost less accumulated depreciation and impairment lcsses.

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.

Based on the Company's position as at 31 December 2020, the Company has estimated the value of the balance sheet item'Land, buildings and engineering structures', and in accordance with the estimation, has determined the carrying amount of all land, buildings and engineering structures in line with market value and based on evaluation of external certified valuers. For more details on 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.

ln 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. ln that event, the long term investment revaluation reserve is decreased by the amount of impairment.

ln 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'. lf 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 ionger reasonabie.

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.

Recefvables

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 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.

Pravisions

a

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. ln order to determine the amount of loss management is required to select an appropriate calculation method and make specific assumpticns ccnnected with the specific risk. No provisions were made as at 31 December 2021.

Revenue reeognition

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lncame 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 seruices

lncome from services provided is recognized in the profit and loss statement as generated. lncome is received and recorded according to signed cooperation agreements.

Rentalincome

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 afier lhe balance sheet date are classified as long term. Amounts to be received, paid or written off within a year are classified as short term.

Lease transactions

Aperating lease - (the Company as a LessorJ

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. lncome 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 /essee)

Payments for operating lease are recognized in the profit and loss statement on a straight-line basis over the period of lease.

Fixed asse(s

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 intangibte 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 prcbable 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 !"eserve of the respective fixed asset, and charged to the profit and loss statement as incurred.

Accounting and valuation of sfoclr

Stock is carried at the lower of cost and net realizable value. Stock has been valued aceording to the FIFO method. Stock accounting is based on the perpetual method. Stock has been counted during the annual stock take.

Remuneration

Remuneration is set according to employment contracts, taking into account the changing requirements and trends of the labour market: by mutual agreement on the application of specific principles: %, fixed numbers, individual conditions, combined conditions. Employees have access to the procedure for calculating remuneration (data selection algorithms, data processing procedures, L- ¹⁸

data flow organisation). The Company provides only short-term remuneration benefits to its employees.

Grants

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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 lncome Tax of the Republic of Latvia entered into force and set out a new regime for paying taxes. The tax rate is 2A% 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.

{2} Net sales

Net sales represents revenue generated during the reporting period from the activities - sales of services, net of value added tax and discounts. Company's basic

	2420
	EUR
	6 558 049
	522 890
	294 726
	232 164
9 363 852	7 080 939
	2421 EUR 8721 772 642 080 359 56s 282 51 5

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. 189312006 (EK) of the European Parliament and European Council of 20 December 2006, with which the statistic classification of business activity NACE rev 2 rs 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.

	2421	,)nrln LVAV
	EUR	EUR
Remuneration	4 449 742	3244 861
Medicines, medical materials	864 355	757 676
Compulsory state social security contributions	997 841	750 079
Non-deductible value added tax	372725	303 825
Lease of equipment	279 627	258 548
Depreciation	286 644	234 829
Utilities and maintenance	224 423	212 814
Office items and equipment, other materials	176 127	153 893
Repair costs	226 154	157 467
Medical examinations and other services	72284	53 975
!T expenses	13 321	do ?5n
Advertisement expenses	630	635
Security	26 631	28 614
Changes in doubtful debt allowances		63 245
Medical fund risk expenses	13 129	13 531
Transport	17 365	B 873
Office expenses	10 790	7 658
Patient catering expenses	23 593	6 951
Realestate tax	6172	6 173
lnsurance	12 494	11 929
Staff training expenses	1 818	't 085
Risk duty	1 445	1 341
Benefits and gifts to ernployees	1 849	7 973
Changes in cost of accrued vacations	25 098	B0 257
Other costs related to services	82 834	81 466
	8 146 591	6 488 048

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	2021	2020
Remuneration	EUR	EUR
	416 643	395 692
Compulsory state social security contributions	95 395	90 942
Communication expenses	19 998	19 612
Audit of the financial statements	21 434	20 650
Office expenses	5 092	7 858
Bank services	10 783	9 597
Legal services	8 802	7 570
Representation expenses	603	1 113
Other	1 503	4 784
	580 253	557 818

	2021	2020
Income from rent	EUR	EUR
	170 490	135 708
Amortisation of funds received from EBRD Other income - tax refund	10 513	10 513
Other income		7 165
	66 432	88 311
Other income consists of income from catering and laundry convice	247 435	241 697

f income from catering and laundry service, advertising and beauty care services.

(6) Other operating expenses

	2021	2020
Penalties	EUR	EUR
Other expenses	1 142	974
	2 297	1 179
	3 439	2 153
(7) Corporate income tax
	2021	2020
Current tax	EUR	EUR
	645	1 062
	645	1 062

(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
31.12.2020	4 862 253	2 639 190	573 085	80 453	359 779	8 514 740
Additions		410 992	36 350		662 674	1 110 016
Transfers	596 426	355 620			(952 046)
Disposals		(29 837)	(17 325)			(47 162)
31.12.2021	5 458 679	3 375 965	592 090	80 453	70 407	9 577 594
Accumulated depreciation and
amortisation 31.12.2020 Accumulated depreciation and amortisation for the	422 251	2 395 037	496 936	80 453		3 394 677
year Depreciation of disposed fixed	116 658	127 703	42 283			286 644
assets		(29 837).	(17 325)			(47 162)
31.12.2021	538 909	2 492 903	521 894	80 453		3 634 159
Balance as at 31.12.2019	4 370 610	176 891	107 499		4 159	4 659 159
Balance as at 31.12.2020	4 440 002	244 153	76 129		359 779	5 120 063
Balance as at 31 12 2024	4 919 770	883 062	70 196		70 407	5 943 435

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.

A new revaluation was not performed on 31 December 2021, 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.

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:

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i t_	Type	Valuation method	Significant unobservable data	Inter-relation between si gnificant unobservable inputs and fair value measurement
*_ i	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 comparison technique: The fair value was based on results of comparabie saies of simiiar buildings. Discounted cash flow technique: 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 - 9Ao/o Capitalisation rate - 9o/o	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 850 000 at Vecmilgr6vja 5.linija, Riga	trair rralua hao haan estimated based on the average of: Market comparison technique: The fair value was based on results of comparable sales of similar buiidings. Discounted cash flow technique: The model is based on discounted cash flows from rendering services	Price per m2 EUR 327 Rent rate per m2 EUR 3.5-5 Capacity - 90% Capitalisation rate - 9Yo	The fair value would increase (decrease) if the price per m2 was higher (loweQ. The estimated fair value would increase (decrease), if: cent rate would be higher (lower); capacitrT percentage would be higher (lowe0; capitalisation rate would be lower (higher).

Type	Valuation method	Significant unobservable data	lnter-relation between significant unobservable inputs and fair value measurement
Buildings and land in the amount of trt lP A?l'l AOO a+ Melidas iela, Riga	Fair value has been estimated based on the average cf:		Fair value would increase (reduce), if the price per m2 was higher (lower).
	Market comparison technique: The fair value was based on results of comparable sales of similar buildings.	Price per m2 EUR 3't5	The estimated fair value would increase (decrease), if: rent rate would be higher (lower); capacity percentage would be higher (lower);
	Discounted cash flow technique: The model is based on discounted cash flows from rendering services	Rent rate per m2 EUR 5	capitalisation rate would be lower (higher).
		Capacity - 90o/o
		Capitalisation rate - 9.AYo

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:

Had revaluation not taken place, the carrying amount 31.12.2A21wou|d be EUR 3 191 B8B. of land, buildings and constructions as at

lncluding:	31.12.29?1	31.12_292C
	EUR	EUR
-historicalcost	4 617 716	4Q21 2gA
-accumulated depreciation	(1 425 828)	(1 306 7e3)

JSC Lafuijas Jrlras mediclnas centrs period of 2021 Patversmes iela23, Riga, LV-1005 Unified registration number: 40003306807

Nofes to the financial statements

(91 Stock 31.12.2A21 31.12.2020 trl tEl Medicines in warehouse 124 285 121 308 Med icines in departments 20 639 13 888	EUR 383
Other materia[s 14 570
156 5{7 138 556
{10} Trade receivables
31.12.2021 31.12.2024
EUR	EUR
lnsurance companies
66 802 36 017 Other institutions, companies and individuals
247 457 195 44? (171 e51) Doubtful debt allowance (173 665)
57 794 102 008
(11) Other receivables
31.12.2A20 3',1.12.2A21
EUR	EUR
Overpaid taxes (see Note 20) 6	698
Value added tax on unpaid services 4 786 4 356
Prepayments for fixed assets 571 228
Other receivables 24 234 16713
s00 2g 21 787
(12) Prepaid expenses
31.12.2A21
31.12.202A EUR	EUR
Rent 17 961
lnsurance 6 866 6 416
Other 404	244
7 270 24621
(13) Accrued income
31.12.2021 31.12.2t2A
EUR	EUR
Accrued income for invoices issued after the year end 429 311 216 782
216782 429 311

'Accrued income' represents invoices from the National Health Service issued after. the reporting period.

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(14) Cash
By currency:			31.12.2021		31.12.2020
		Currenc	EUR	Currenc	EUR
		V		D
Current account	usp	5 840	5 156	5 839	4 758
Current account	EUR		1 004 291		1 756 643
Cash on hand	EUR		7 812		3 639
			1 017 259		1 765 040

(15) Share capital

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Share capital of the Company as at 31 December 2021 amounted to EUR 1 120 000 (31.12.2020: 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:

	31.12.2021		31.12.2020
	Number of	Holding (%)	Number of	Holding (%)
	shares		shares
Ilze Birka	140 000	17.50%	140 000	17.50%
Mārtinš Birks	140 000	17.50%	140 000	17.50%
SIA 'POM'	70 565	8.82%
Ilze Aizsilniece			70 565	8.82%
Guna Svarcberga	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) Retained earnings

Retained earnings, including profit for 2021 in the amount of EUR 2 683 721.

(17) Revaluation reserves

Revaluation reserve as at 31 December 2020 includes the result of revaluation of fixed assets. In 2021, the revaluation reserve was not changed.

Long-term investment revaluation reserve

	2021	2020
	EUR	EUR
Revaluation reserves as at 1 January	2 472 973	2 292 360
Appreciation as a result of revaluation		208 538
Decrease as a result of revaluation		(27 925)
Revaluation reserves as at 31 December	2 472 973	2 472 973
(18) Other liabilities
	31.12.2021	31.12.2020
	EUR	EUR
Salaries	277 050	194 505
Payments to the trade union	622	433
	277 672	194 938

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{19} Taxes and compulsory state socialsecurity contributions
	Balance as at 31.12.202A	Calculated for ,n4	Paid in 2021	Balance as at 31.12.2A21
	EUR	EUR	EUR	EUR
Corporate income tax	568	645	(1 064)	149
VAT	4 060	189 558	(175 931)	17 687
Realestate tax	(6)	6 172	{6172}	(6)
Natural resources tax	(6e2)	4713	(60)	3 961
Risk dug	111	1 445	{1 437}	119
Social contributions	93 581	1 624 712	(1 56e 364)	148 929
Personal income tax	56 699	871 BB4	(B4e 856)	78727
Total	154 321	2699129	____gig\$!E	249 566
lncluding:
Overpaid taxes
Tax liabilities	{6e8} 15s 019			{6t 249 572
{20} Deferred inesme
			31.12.2021 EUR	31.12.2A20 EUR
The part of capital grants to be charged to profit or loss within 1 to 5 years			58 126	55 513
The part of capital grants to be charged to profit or loss for more than 5 years			320 655	332 854
Lease payment of 10 years			236 250	?u 25A
The part of capital grants to be charged to profit or loss for
more than 5 years			13 623
Deferred income, long term			628 654	669 617
The part of capital grants to be charged to profit or loss within
one year			10 929	10 513
Lease payment of 10 years			45 000	45 000
The part of capital grants to be charged to profit or loss within
one year			2 197
Deferred income, short term			58 126	55 513

h 2412, the Company received EBRD funding to purchase fixed assets. h 2A21, the Company recognised revenue of EUR 10 513 (202A: EUR 10 513) (see Note 5).

h 2421, the Company received EBRD funding to purchase fixed assets. ln 2021, the Company received funding from CFCA for the purchase of fixed assets in the amount of EUR 1T 878 (agreement No. 9.3.2.0/2UalA7\$. The Company started to revenue recognition in2A22.

The Company received lease payments for the next 10 yeai's amounting to EUR 450 C00. In 2C21, the Company recognised revenue of EUR 45 000 (2020: 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 the specific classification. Revenue is reflected under 'lncome from rent', refer to Note S.

{2{} Accrued liabilities
	31.',12.2021 EUR	31.12.2420 EUR
Accrued expenses for unused vacations Accrued liabilities to suppliers	364 262_	339 164 25 037
	364262	36,4 201
(22) Average number of employees by category
	2421	2A2o
Average number of employees in the reporting year: incl. Members of the Board	352 3	330 3
Members of the Council	5	5
Other employees	344	32?
(23) Personnel expenses
Type of costs	2A21 EUR	2A2A EUR
Remuneration	4 826 385	3 640 553
Compulsory state social securig contributions	1 093 236 5 9{9 621	841 A21
		__14815?4
(24) Remuneration to management
Members of the Board	AVA I EUR	2A2g EUR
remuneration (variable and fixed)	174 95A	165 624
' compulsory state social security contributions	39 369	39 899
Members of the Council
remuneration ' compulsory state social securig contributions	27 319	27 319
	6 040	6 182
Other members of the administration remuneration
' compulsory state social security contributions	214 374 49 986	262 81? 60 -301
	______{?	j3g_ ____Iga]3z_

(25) Future liabilities

As at 31 December 2A21,lhe Company has no efiective future payment liabilities under agreements related to the purchase of fixed assets (91 .12.ZAZA: 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 it gt December ²⁰²¹ (31.12.2A20: none).

(26) Related party transactions

ln2a02l, the Company issued invoices to SIA Kodolmediclnas kllnika for rent payments in the amount 9! EUn 17 864 {2A20: EUR 32 560). ln 2021, additional provisions were not accrued (2020: EUR 58 821). The outstanding amount of the credit line as at 31 December 2021 is EUR 163 g63 (31 December 2020: EUR 163 363). Since December 2A21, SIA Kodolmediclnas kllnika ir not considered as a related company. The provisions are made as at31.12.2020 to reduce the impact of transaction risk in the profit and loss statement.

(27) Remuneration to the certified auditor

	2021 EUR	2020 EUR
Audit of the financial statements	20 386	20 650
	20 386	20 650

(28) Information on operating lease and rent agreements with a significant impact on the Company's activities

The Company has 11 effective operating lease agreements regarding equipment. Under these agreements, lease payments, including VAT, are the following:

In 2020 EUR 386 090 In 2021 EUR 299 530 From 2022 to 2025 EUR 119 281

(29) 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 or disclosures added within the financial statements. The Russia-Ukraine war is not expected to have material effect on the operations of the Company. The Company does not plan to enter into transactions with Russia, Belarus and Ukraine.

Chairman of the Board Member of the Board Jānis Birks Juris Int Member of the Board Chief Accountant Anatolijs Ahmetovs Gunta Kaufmane 27 April 2022

KPMG Baltics SIA Vesetas ela 7 R ga, LV-1 01 3 Latvia

T: + 371 67038000 kpmg.com/lv kl)ff!J !' kLr!ng 1!,

lndependent Auditors' Report

To the shareholders of AS Latvijas J0ras medicTnas centrs

Report on the Audit of the Financlal Statements

Our Opinion on the Financial Statements

We have audited the accompanying financial statements of AS Latvijas J0ras medicinas centrs ("the company") set out on pages 9 to 28 of the accompanying Annual Report, which comprise:

• . the balance sheet as at 31 December 2021 ,
• . the statement of prof it or loss for the year then ended,
• . the statement of changes to the shareholders' equity for the year then ended,
• . the statement of cash f lows for the year then ended, and
• . the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes.

ln our opinion, the accompanying f inancial statements give a true and fair view of the f inancial position of AS Latvijas Juras medicinas centrs as at 31 December2021, and of its financial performance and its cash f lows for the year then ended in accordance with the 'Law on the Annual Reports and Consolidated Annual Reports'of the Republic of Latvia.

Basis for Opinion

ln accordance with the 'Law on Audit Services' of the Republic of Latvia we conducted our audit in accordance with International Standards on Auditing adopted in the Republic of Latvia (lSAs). Our responsibilities under those standards are further described in Lhe Auditors' Responsibility for the Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the International Ethics Standards Board for Accountants'lnternational Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) and independence requrrements included in the'Law on Audit Services'of the Republic of Latvla that are relevant to our audit of the financial statements in the Republic of Latvia. We have also fulfilled our other professional ethics responsibilities and objectivity requirements in accordance with the IESBA Code and the 'Law on Audit Services' of the Republic of Latvia,

We believe that the audit evidence we have obtained is suff icient and approprrate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most signif icance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the f inancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

KPMG Ba trcs S A, a Latv an mrted rab ity company and ^a member f rm of the KPMG g obal organ zat on oi ndependent member f rms aff rated w th KPMG lnternattonal L m ted. ^a pnvate Eng sh company rm ted by guarantee

Recognition of revenue from medical services
Key audit matter	Our response
Revenues from outpatient and inpatient medical services (including servlces covered by insurance) in the financial statements as at and for the year ended 31 December 2021: EUR 9.36 million (3i December 2020. EUR 7.08 million) We refer to the financial statements: Note 1 (accounting policy) and Note 2 (f inancial disclosures). The Company offers a wide variety of healthcare services. The major part of revenues relates to the agreements with the National Health Service and the largest insurance companies in Latvia which cover the patient's costs f or medical procedures. Both the National Health Service and the insurance companies regularly monitor the compensation for services that'the Company receives.	Our procedures included, among others: testing the design and implementation of controls over revenue recognition process; assessing the completeness and existence of revenue by analysing revenue trends by month in the current period and challenging any unusual fluctuations using our knowledge of the Company and through inquiries of management; inspecting incoming cash receipts in2022 lor a sample of outstanding balances due from larger customers as at 31 December 2021', f or a sample of revenue transactions recognized shortly before and after year-end assessing whether revenue was recognised in the appropriate period by reference to the relevant documentation, supporting delivery of services, for example, invoices and cash receipts;
Additionally, the Company provides a large volume of sales to individual patients, including sales on credit terms. Sales to individual patients are not sublect to the same level of external controls and scrutiny as sales to Natronal Health Service or insurance companies.	obtaining third party conf irmations f or revenues from outpatient and inpatient medical services financed by the National Health Service and on a sample basis from insurance companies and tracrng the amounts from those confirmations to the revenues recognized by the Company for the year ended 31 December 2021',
As a consequence, there is an increased risk of misstatement in revenue balances due to fraud, including through potentral override of controls by management, for sales conducted on credrt terms. Therefore, revenue recognition was considered by us as a key audit matter.	performing substantive analytical procedure by comparrng incoming cash transactions for outpatient and inpatient medical services to the revenue recognised throughout the year; evaluating the accuracy and completeness of the financial statement disclosures relating revenues against the to relevant requirements of the f inancial reporting standards.

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Completeness of remuneration expenses
Key audit matter	Our response
Remuneration expenses in the f inancial statements as at and for the year ended 31 December 2021. EUR 4.8 million (31 December 2020: EUR 3 6 millron). We refer to the frnancial statements: Note 'l (accounting policy) and Notes 3, 4 and 24 (Iinancial disclosures). Nearly 58o/o of Remuneration expenses for the year ended 31 December 2021 is comprrsed of variable pay that is calculated based on the volume and type of services provided by prof essional medical staff and rates set by the management or agreed with Natronal Health Service for state funded services, including services provided by family doctors. The remuneration calculation process in the Company, which is inherently complex and involves multiple inputs, is not automated. This significantly increases the risk of error, which specifically relates to completeness of inputs used and manual calculatrons performed; and therefore, required our increased attention in the course of our audit. As a consequence, we consider the area to be our key audit matter.	Our procedures included, among others updating our understanding over salary calculation process with particular focus for the calculation of the variable pay; for a sample of individuals developing an independent expectation of their salary costs based on the variable pay rates approved by management or rates agreed with the National Health Service and by reference to the respective employment contracts, and comparing them to the salary costs recorded by the Company; testing the completeness of recognized amounts of variable pay by reference to lists of medical services pard by National Health Servrce and the list of provided medical services during the year reimbursed by the insurance companies or paid by cash. This procedure included the following: randomly comparing lists of medical - services reimbursed by National Health Service attached to invoices paid by National Health Service against the list of provided medical services during the year, and compare against Company's salary calculations; randomly comparing the report for - total paid medical services against the Company's salary calculations. evaluating the accuracy and completeness of the f inancial statement disclosures relating to remuneration expenses against the relevant requirements of the f inancial reporting standards.

Reporting on Other lnformation

The Company's management is responsible for the other information, The other information comprises:

• lnformation about the Company, as set out on page 3 of the Report, accompanying Annual
• the Management Report, as set out on pages from 5 to 6 of the accompanying Annual Report,
• the Statement on Management Responslbility, as set out on page 4 of the accompanying Annual Report,
• ' the Statement of corporate Governance, as pubrished on homepage http://wwwrjmc.rv and publicly available,
• ' the Remuneration Report, as set out on pages fromT to 8 of the accompanying Annual Report.

Our opinion on the financial statements does not cover the other information included in the Annual Report, and we do not express any form of assurance conclusion thereon, except as described in the Other Reporting Responsibitities in Accordance with the Legislation of the Republic of Latvia Related to other lnformation section of our report.

in connection with our audit of the f inancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit oi otherwise appears to be materially mrsstated,

lf, based on the work we have performed and in light of the knowledge and understanding of the Company and its environment obtained in the course of our audit, we conclude that there is a material misstatement of this other information, we are required to report that {act. We have nothing to report in this regard,

Other Reporting Responsibitities in Accordance with the Legislation of the Republic of Latvia Related to Other lnformatnn

ln addition, in accordance with the 'Law on Audit Services' of the Republic of Latvia with respect to the Management Report, our responsrbility is to consider whether the Management Report is prepared in accordance with the requirements of the 'Law on the Annual Reports and consolidated Annual Reports'of the Republic of Latvia.

Based solely on the work required to be undertaken in the course of our audit, in our opinion, in all material respects:

• o the information given in the Management Report for the f inancial year for which the financial statements are prepared is consistent wrth the financial statements; and
• ^rthe Management Report has been prepared in accordance with the requirements of the 'Law on the Annual Reports and Consolidated Annual Reports' of the Republic of Latvia.

In accordance with the'Law on Audit Services'of the Republic of Latvia with respect to the Statement of Corporate Governance, our responsibility is to consider whether the Statement of Corporate Governance includes the information required in section 56.'l , first paragraph, clause 3, 4, 6, 8 and g, as weil as section 56.2, second paragraph, crause s, anJ tr,ird paragraph of the 'Frnancial lnstruments Market Law' of the Republic of Latvia and if it includestheinformationstipulatedinsection56.2secondparagraph,clause 1,2,3,4,7and ⁸of the 'Financial lnstruments Market Law' of the Republic of Latvia.

In our opinion, the Statement of Corporate Governance includes the information required in section 56 1, first paragraph, clause 3, 4,6, g and 9, as well as section 56.2, second paragraph, clause 5, and third paragraph of the 'Financial Instruments Market Law'of the Republic of Latvra and it includes the information stipulated in section 56.2 second paragraph, clause 1 , 2,3, 4,7 and 8 of the 'Financial Instruments Market Law' of the Republic of iatvia

Furthermore, in accordance with the'Law on Audit Services'of the Republic of Latvia our responsibility is to consider whether the Remuneration Beport includes the information requrred in section 59.4 of the 'Financial lnstruments Market Law'of the Republic of Latvia, and whether material misstatements have been jdentified in the Remuneration Report in relation to the financial lnformation disclosed in the Annual Report.

ln our opinion, the Remuneration Report includes the information requrred in section 59.4 of the 'Frnancial Instruments Market Law' of the Republic of Latvia, and no material misstatements have been identified in the Remuneration Report in relation to the financial information disclosed in the Annual Beport,

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation of the financial statements that give a true and fair view in accordance with'Law on the Annual Reports and Consolidated Annual Reports' of the Republic of Latvia and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to f raud.or error.

In preparrng the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters r"lut"d to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistrc alternative but to do so

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditors' Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonabie assurance about whether the financial statements as a whole are f ree f rom material misstatement, whether due to f raud or error, and to issue an auditors'report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with lSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financral statements

As part of an audit in accordance with lSAs, we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

o ldentify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• ' Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the pur[ose of expressing an opinion on the effectiveness of the Company's internal control.
• o Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management,
• o Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern, lf we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• o Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the f inancial statements represent the underlying transactrons and events in a manner that achieves a fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant def iciencies tn internal control that we identify during our audit.

We also provide those charged wrth governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most signif icance in the audit of the f inancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless Iaw or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benef its of such communication,

Report on Other Legal and Regulatory Requirements

Other Reporting Responsibilities and Confirmations Required by the Legistation of the Republic of Latvia and the European lJnion when Providing Audit Seruices to pubtic lnterest Entities

We were appointed by those charged with governance on 1O June 2021 ro audit the financial statements of AS Latvijas J0ras medicinas centrs for the year ended 3l December 2021, Our total uninterrupted period of engagement rs 6 years, covering the periods ending ³¹ December 2016 to 31 December 2021 .

We confirm that:

' our audit opinion is consistent with the additronal report presented to the Audit Committee of the Company;

. as referred to in the paragraph 37.6 of the 'Law on Audit Services' of the Republic of Latvia we have not provided to the Company the prohibited non-audit services (NASs) referred to of EU Regulatron (EU) No 53712014. We also remained independent of the audited entity in conducting the audit.

Report on the Auditors' Examination of the European Single Electronic Format (ESEF) Report

ln addition to our audit of the accompanying financial statements, as included in the Annual Report, we have also been engaged by the management of the company to express an opinion on compliance of the frnancial statements prepared in a format that enables uniform electronic reporting ("the ESEF Report") with the requirements of the commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 20041109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (the "RTS on ESEF ").

Responsibilitres of Management and Those Charged with Governance for the ESEF Report

Management is responsible for the preparation of the financial statements in a format that enables uniform electronic reporting that complies with the RTS on ESEF This responsibility includes:

• the preparation of the financial statements in the applicable xHTML format;
• the design, implementation and maintenance of internal control relevant to the application of the RTS on ESEF '

Those charged with governance are responsible for overseeing the financial reporting process.

Auditors' Responsibility for the Examination of the ESEF Report

Our responsibrlrty is to express an oprnion on whether the ESEF report complies, in all material respects, with the RTS on ESEF, based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance wrlh lnternational Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial lnformation (ISAE 3000) issued by the International Auditing and Assurance Standards Board.

A reasonable assurance engagement in accordance with ISAE 3000 involves performing procedures to obtain evidence about compliance with the RTS on ESEF. The nature, timing and extent of procedures selected depend on the auditor's judgment, including the assessment of the risks of material departures from the requirements of set out in the RTS on ESEF, whether due to fraud or error. Our procedures included, among other things, evaluating the appropriateness of the format of the f inancial statements.

We believe that the evidence we have obtained is sufficient and appropriate to provide ^a basis f or our optnion.

Opinion

ln our opinion, the ESEF Report of the Company as at and for the year ended 31 December 2021 DE03OU33RkBHFMM= has been prepared, in all material respects, in accordance with the requirements of the RTS on ESEF.

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KPMG Baltics SIA Licence No. 55

Rainers Vilans

Rainers Vilans Partner pp. KPMG Bsaltics SIA Latvian Sworn Auditor certificate No. 200 Riga, Latvia Apnl 27 2022

This report is an English translation of the original Latvian. between the two reports, the Latvian version prevails ln the event of discrepancies