Latvijas Juras medicinas centrs

Annual / Quarterly Financial Statement • Apr 30, 2015

JOINT STOCK COMPANY "LATVIJAS JURAS MEDICINAS CENTRS" (UNIFIED REGISTRATION NUMBER 40003171237)

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (11th financial year)

PREPARED IN ACCORDANCE WITH THE LAW OF THE REPUBLIC OF LATVIA ON ANNUAL REPORTS TOGETHER WITH INDEPENDENT AUDITORS' REPORT

Information on the Company	2
Statement of Management's responsibility	3
Report of the Management	4 - 5
Financial statements:
Profit and loss account	ട
Balance sheet	7 - 8
Statement of changes in equity	9
Cash flow statement	10
Notes	11 - 24
Auditors' report	25 - 26

000330680 Riga, 27 August 1996

Reregistered in Commercial Register with common registration No 4000 330 6807

Patversmes iela 23 Riga, LV-1005 Latvia

IIze Birka (17.5%) Marti!)!; Birks (17.5%) IIze Aizsilniece (11.4%) Guna Svarcberga (10.36%) Janis Birks (10.17%) Adomas Navickas (6.35%)

Name and address of the certified audit company and certified auditor in charge Janis Birks - Chairman of the Board Vita Svarcberga - Member of the Board Juris Imaks - Member of the Board

PricewaterhouseCoopers SIA Certified audit company Licence NO.5 Kr. Valdemara Street 21-21 Riga, LV-1010 Latvia

Certified auditor in charge: Lolita Capkevica Certificate No 120

The Board of Directors of JSC "Latvijas Juras MedicTnas Centrs" is responsible for the preparation of the financial statements of the Company.

The financial statements on pages 6 to 24 are prepared in accordance with the accounting records and source documents and present fairly the financial position of the Company as of 31 December 2014 and the results of its operations and cash flows for the year ended 31 December 2014.

The financial statements are prepared in accordance with the Law on Accounting and Law on Annual Reports of the Republic of Latvia on a going concern basis. Appropriate accounting policies have been applied on a consistent basis. Prudent and reasonable judgments and estimates have been made by the Board of Directors in the preparation of the financial statements.

The Board of Directors of LJMC is responsible for the maintenance of proper accounting records, the safeguarding of the Company's assets and the prevention and detection of fraud and other irregularities in the Company. The Board of Directors is also responsible for operating the Company in compliance h the legislation of the Republic of Latvia.

Type of operations

AlS Latvijas Juras medicTnas centrs (LJMC or the Company) is a certified, high-level and and all available private medical institution, consisting of Sarkandaugava ambulatory health care center in Patversmes Street 23, Riga, Central Hospital in Patversmes Street 23, Riga, VecmTIgravja Hospital and Northern Diagnostic Centre in VecmTIgravja line 5 - 26, Riga and VecmTIgravja primary health care center in MelTdas Street 10, Riga. The average number of employees in 2014 is 360. AlS Latvijas Juras medicTnas centrs shares are quoted on "NASDAQ Riga" second list. Full information about the Company is provided on www.ljmc.lv

Starting from 5 September 2013 AlS Latvijas Juras medicTnas centrs is included in the Ministry of Health Inspection approved list of medical institutions that provide medical tourism services: LJMC providing medical tourism services as a reliable partner, and it gives an idea of the Latvian health care system as a whole, because it includes only those medical institutions which are registered in the register of medical institutions for at least 3 years and the last three years, the Company has been under control.

In year 2013 the Company's Northern diagnostic center received DVN Certification OY/AB, Finland quality certificate ISO 9001 :2008 in the functional diagnosis and radiological diagnosis which is valid until 14 March 2016. In year 2014 LJMC continues work on the implementation of ISO quality standards in all other central departments.

LMJC have concluded cooperation agreements with all health insurance companies, which operates in Latvia.

Performance of the Company during the year

In year 2013 LJMC completed an ambitious three-year investment project of EUR 2.3 million with the ERAF support. As part of investment project - old AlS Latvijas Juras medicTnas centrs building complex was renovated along with improvement of the related territory in accordance with the standards of modern medical facilities. Also investments in new medical equipment, and facilities to enhance the competitiveness of the Baltic medical market, attracting patients from both the Baltic and the EU, offering high the quality of medical examinations. Benefiting from the investment project it was made possible to locate LJMC family doctors practice in single place, creating a modern family doctor practice center LJMC, located in Northern District VecmTlgravis, Riga. Since creation of LJMC family doctors practice center, the number of new customers increased by 25%. In Sarkandaugava Patversmes Street 23, where in the past were provided hospital care services, was established a new outpatient health care center. Restructuring of inpatient services to outpatient services have already improved the reporting year and in the future will continue to improve the LJMC operational efficiency, maximizing the use of existing resources held by the center and providing quality medical care to patients.

In 2014, the LJMC has contracted the National Health Service for state-paid medical services in 2014, within the budgeted amount. In April 2014, the LJMC won the tender for the right to provide VAS "Paula Stradil)a KlTniskas universitates slimnTca" medical care for patients with maturity for 1 year.

One of the 2014's strategic directions of LJMC have been attraction of patients living abroad. LMJC combines outstanding Latvian doctors and knowledgeable medical personnel, so the medical examination has high quality and competitiveness also outside Latvia. Increasing number of foreign patients, as well as LJMC inclusion in the official Medical tourism service providers register, kept by the Ministry of Health Inspection evidences above mentioned facts. In 2014 LMJC continued to attract medical tourists from the EU, developing cost of the medical services packages. In order to attract more new foreign and local patients, LJMC in 2014 made investments to gain the objective of introducing innovative solutions to the medical service support, to increase staff qualifications in pacient servicing, continuing the state policy on the conversion of hospital profile to outpatient medical institutions, allocating investments to VecmTlgravja hospital. In August 2014, a construction contract with SIA "Selva buve" was concluded on the first floor premises renovation in VecmTIgravja hospital.

Performance of the Company during the year (continued)

In October, AS "Latvijas Juras medicTnas centrs" used its pre-emption rights to buy the 9 632 shares or 5.08% of the SIA "Neirozu klTnika" share capital for an amount of EUR 13 677 from the State Social Insurance Agency. After the transaction, A\S "Latvijas Juras medicTnas centrs" owes 50.4% of SIA "Neirozu klTnika"shares.

Financial results

In 2014 LJMC have worked according to the year's 2014 approved budget: revenue plan has been fulfilled by 101.99% and costs has been fulfilled by 97.65% in comparison to planned results. Net safes in 2014 are 6% higher than in comparative period of 2013. In 2014 LJMC profit before tax is EUR 238 848.

LJMC continues to implement intense investment policy, that focuses on the Company's competitiveness and profitability raise in the future. The planned investment amout in 2014 is realized for EUR 430000.

Financial risk management

The Company's management continues activities, to minimize potential adverse effects of financial risk on the financial performance of the Company, realizing a set of control and analysis measures.

The financial assets that could potentially lead to a certain concentration of the credit risk in the Company are mainly cash, customers' debts and other debts. LJMC makes regular control of debtors and debt recovery, to ensure credit risk management and early problem identification and resolution.

The Company pursues a prudent liquidity risk management maintaining sufficient credit resources that allow settling liabilities when they fall due. The Company has no borrowings.

Post balance sheet events

On 21 January 2015 the 100% wholly owned subsidiary was liquidated and the Company received a liquidation quote EUR 9,623 and merged assets of land and construction in progress in the amount of EUR 266 thousand.

profit proposed by the Board

nt Board recommends to retain undistributed profit of EUR 266 004 for the reporting

r:Yit:Jtk~5 Vita Svarcberga Member of the Board

Profit and loss account for the year ended 31 December 2014

		Note	2014 EUR	2013 EUR (restated)
1.	Net sales		5388611	5081 474
2.	Cost of sales	2	(4898829)	(4962175)
3.	Gross profit		489782	119299
5.	Administrative expenses	3	(450631)	(458992)
6.	Other operating income	4	191 559	177 738
7.	Other operating expenses	5	(6082)	(1 313)
8.	Income from investments in subsidiary undertakings and associated companies	6	10 591
10.	Other interest income and similar income	7	3629
16.	Profit I (loss) before taxes		238848	(163268)
18.	Deferred income tax	8	27156	15374
20.	Current year's profit I (loss)		266004	(147894)
	Number of shares		800000	800000
	Profit I (loss) per share (EUR)		0.33	(0.18)
	Return on equity (ROE)		4.7%	(2.7%)

~ ~ J'n;s Birks ~ V"a \$varcberga

Chairman of the Boar~ Member of the Board

Balance sheet as at 31 December 2014 (1)

	Note	31.12.2014. EUR	31.12.2013. EUR (restated)
Assets Long-term investments I Intangible assets:
1. Concessions, patents, licences, trademarks and similar rights		7667	19707
Total intangible assets:	9	7667	19707
II Fixed assets: 1. Land and buildings, perennial plants		4036486 603401	4151 973 829713
2. Equipment and machinery 3. Other fixed assets 4. Assets under construction		42356 370035	65650
Total fixed assets:	9	5052278	5047336
V Long-term financial investments: 1. Investments in subsidiary undertakings 2. Investments in associated companies		474123	288472 141 624
Total long-term financial investments:	10	474123	430096
Total long-term investments:		5534068	5497139
Current assets I Inventories:
1. Raw materials and consumables 5. Advances for goods receivable	11	104295 32	84688 185
Total inventories:		104327	84873
III Debtors: 1. Trade debtors	12	217793	164235
2. Receivables from affiliated companies			14752
4. Other debtors	13	40508	15882
7. Deferred expenses	14	3861	3681
Total debtors:		262162	198550
V Cash and bank:	15	1 346 187	1 131 288
Total current assets:		1 712676	1414711
Total assets		7246744	6911850

	31.12.2014. EUR	31.12.2013. EUR (restated)
Liabilities and shareholders' funds
Shareholders' funds:	1 120000	1 138297
1. Share capital 3. Long-term investments revaluation reserve	2379400	2379400
5. Reserves:
c) reserve provided by statutes
6. Retained earnings
a) previous years' retained earnings	1 872 113	2020007
b) current year's profit I (loss)	266004	(147894)
Total shareholders' funds:	5701336	5435332
Creditors: Long-term creditors: 10. Deferred income 12. Deferred income tax liabilities Total long-term creditors:	464929 447566 912495	501 577 474722 976299
Short-term creditors:
5. Advances from customers 6. Trade creditors	2214 213386	5783 87764
10. Taxes and the state compulsory social
insurance contributions	114648	113956
11. Other creditors	133237	137454
12. Deferred income	50976	47551
15. Accrued liabilities	118452	107711
Total short-term creditors:	632913	500219
Total creditors:	1545408	1476518
Total liabilities and shareholders' funds	7246744	6911850

Notes on pageL 11 to 24 form an integral part of these financial stateme

(./

Statement of changes in equity for the year ended 31 December 2014

	Share capital	Long-term invest- ments revaluation reserve	Reserves provided by statutes	Retained earnings	Total
	EUR	EUR	EUR	EUR	EUR
Balance as at 31 December
2012 before restatement	1138297	929364	45522	2020007	4133190
Restatement		1450036			1450036
Balance as at 31 December
2012 after restatement	1138297	2379400	45522	2020007	5583226
Loss for the year (restated)
				(147894)	(147894)
Balance as at 31 December
2013 (restated)	1 138297	2379400	45522	1872113	5435332
Conversion of the share capital EUR	(18 297)		18297
Profit for the year				266004	266004
Balance as at 31 December
2014	1120000	2379400	63819	2138117	5701 336

Notes on pages 11 to 24 form an integral part of these financial statements.

Cash flow statement for the year ended 31 December 2014

	Note	2014 EUR	2013 EUR (restated)
I. Cash flows from operating activities
1. Profit I (loss) before taxation		238848	(163268)
Adjustments for:
fixed asset depreciation and value of a)
intangible assets write-downs	9	466845	529889
interest income b)	7	(3629)
losses I (gains)from fixed c)
assets sales	7		(3695)
income from subsidiaries and associated d)
companies		(10591)
		691473	362926
Adjustments for: a) trade debtors' increase		(78364)	(74684)
b) inventories (increase) I decrease		(19454)	12803
c) trade and other creditors'
decrease		(32723)	(36538)
2. Gross operating cash flow		560932	264507
3. Corporate income tax paid
4. Net cash flow		560932	264507
II. Cash flows from investing activities
1. Purchase of shares of subsidiaries or
associates net of liquidation quote		(19054)	(2500)
2. Dividends		967
3. Acquisition of fixed assets and
intangible assets		(330978)	(167533)
4. Proceeds from sale of fixed assets and
intangible assets			6355
5. Interest received 6. Net cash used in investing activities		3032 (346033)	(163678)
Net increase in cash and
cash equivalents		214899	100829
Cash and cash equivalents at the beginning of the
reporting year	15	1 131 288	1 030459
Cash and cash equivalents at the end of
reporting year	15	1346187	1 131 288

Notes AGcountingpolicies

(a) Information on the Company

The legal address of the JSC "Latvijas Juras medicTnas centrs" is Patversmes street 22, Riga. The Company was registered in Commercial Register with common registration number 40003306807. The Company's main shareholders are IIze Birka (17.5%), Martil)s Birks (17.5%), IIze Aizsilniece (11.4%), Guna Svarcberga (10.36%), Janis Birks (10.17%), Adomas Navickas (6.35%).

The Board of the Company consists of Janis Birks (Chairman of the board), Vita Svarcberga (Member of the board from 1 May 2014) and Juris Imaks (Member of the board from 1 May 2014). Until 30 April 2014 board members were also Marta Aizsilniece and Andris Vigants. The Council of the Company consists of Martil)s Birks (Chairman of the council), Viesturs Silil)s, Ineta Gadzjus, Jevgel)ija Kalejs and Uldis Osis are members of the Council. The Company's auditor is the certified audit company PricewaterhouseCoopers SIA and certified auditor in charge Lolita Capkevica.

(b) Financialstatements preparation basis

Financial statements are prepared in accordance with the Law on Accounting and Law on Annual Reports of the Republic of Latvia.

The Company carried out a revaluation of its land and buildings at the end of 2014 and concluded that their market value significantly exceeded their carrying value at the date of revaluation and at the beginning and end of previous reporting period.

Given that there had not been significant changes during the last two years and given that the previous revaluation took place in 2007, the Company's management concluded that the results of revaluation carried out at the end of 2014 were also indicative of the fair value of those assets at the end of 2013 and 2012, subject to depreciation adjustment. As a result, retrospective restatement was carried out in respect of the comparative figures in these financial statements in order to report such comparative balances of land and buildings, as if the revaluation took place by 31 December 2012. Impact of the retrospective restatement on the comparative financial information is described in Note 28 to these financial statements.

Besides the retrospective adjustment described above, accounting policies used by the Company are consistent with those used in the previous reporting period. Minor reclassification between Profit and Loss positions and comparatives has been made in the current year without adjusting current year's profit.

(d) Netsales and income recognition

Net sales represent the total of services sold during the year net of discounts and value added tax. Sales of services are recognised in the accounting period in which the services are rendered. Dividend income is recognised when the right to receive payment is established.

(e) Currency unit and revaluation of foreign currency

In accordance with the requirements of the "Law on the Procedure for Introduction of Euro" all amounts in these financial statements are expressed in the Latvian national currency - euro (EUR). The comparative figures as at 31 December 2013 have been translated from lats to euro in accordance with the rate set by the European Union Council 1 EUR = 0.702804 LVL and the clause 6 of the "Law on the Procedure for Introduction of Euro" on conversion principles.

Foreign currency transactions until 31 December 2013 were translated into lats applying the official exchange rate established by the Bank of Latvia at the transaction date. Starting from 1 January 2014 the foreign currency transactions have been translated into euro applying the rate determined by the conversation procedure between central banks of the European System of Central Banks and other central banks and which is published on the European Central Bank's website.

Notes (continued)

Accounting policies (continued)

(e) Currency unit and revaluation offoreign currency (continued)

All monetary assets and liabilities denominated in foreign currencies have been translated into lats at the official exchange rate established by the Bank of Latvia at the last day of the calendar year -

31 December 2013. On the Euro implementation day 1 January 2014 all monetary assets and liabilities were translated into euro in accordance with the exchange rate set by the European Union Council, considering the rounding principles determined by clause 6 of the "Law on the Procedure for Introduction of Euro". On the last day of the reporting year all monetary assets and liabilities

were translated into euro in accordance with the rates published on the European Central Bank's website.

31.12.2014. EUR	31.12.2013. EUR

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

(f) Intangible assets and fixed assets

Intangible assets and fixed assets are recorded at historical cost or revalued amount net of accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the intangible assets and fixed assets. The cost of software licences includes the purchase cost and costs related to their implementation in use. The following fixed asset groups are revalued regularly but not less frequently than every five years:

buildings;

plant and equipment.

Increase in the carrying amount arising on revaluation is credited to "Long-term investments revaluation reserve" in shareholders' equity. Decreases that offset previous increases of the same asset are charged against the revaluation reserve directly in equity; all other decreases are charged to the current year's profit and loss account. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives using the following rates set by management:

	% per annum
Intangible assets	20
Buildings*	2.5 - 2.85
Equipment and machinery	33.33
Other fixtures and fittings	20

* - along with revaluation of land and buildings made in 2014, the Company's management reestimated useful lives of revalued buildings in the range of 35 - 40 years. Within retrospective restatement in relation to revaluation of fixed assets, also comparative period's depreciation was recalculated based on re-estimated useful lives in order to ensure comparability of depreciation expense within accounting periods.

Where the carrying amount of an intangible or a fixed asset exceeds its estimated recoverable amount, it is written down immediately to its recoverable amount. Recoverable amount is the higher of the fair value less costs to sell and the value in use of the related intangible or fixed asset.

Subsequent costs are included in the asset's carrying amount or recognised as separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Such costs are depreciated over the remaining useful life of the related asset. Capitalising the cost of mounted spare parts, the carrying value of the part replaced is written off to the profit and loss account.

Notes (continued) Accounting policies (continued)

(f) Intangible assets and fixed assets (continued)

Repairs and maintenance are charged to the profit and loss account during the period in which they are incurred.

Leasehold improvements are amortised on a straight-line basis over the shorter of the estimated useful life of the leasehold improvement and the term of the lease.

Gains or losses on disposals are determined by comparing carrying amount with proceeds and gains from related asset's revaluation reserve write-off and are charged to the profit and loss account during the period in which they are incurred.

(g) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in first-out (FIFO) method. When the net realisable value of inventories is lower than its cost, provisions are created to reduce the value of inventories to its net realisable value.

(h) Accounts receivable

Accounts receivable are recorded in the balance sheet at their amortised cost less provisions for impairment. Provisions for impairment are established when there is an objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. The amount of provisions for impairment is the difference between the amortised cost and the recoverable amount. The amount of the provision is recognised in the profit and loss account.

(i) Finance leases - the Company as a lessee

Leases of assets under which the Company has substantially all the risks and rewards or ownership are classified as finance leases. Finance leases are capitalised at the inception of lease at the lower of the fair value of the leased asset or the present value of the minimum lease payments. The interest element of lease payments is charged to the profit and loss account so that as to produce a constant periodic rate of interest on the remaining balance of the liability.

The Company as a lessor

The Company is leasing buildings which are part of the revalued fixed assets. Depreciation is calculated on a straight-line basis to write down each asset to its estimated residual value over its estimated useful life using rates set for similar Company's assets. Rental income from operating lease including advances received is recognised on a straight-line basis over the period of the lease.

(k) Investments in subsidiary undertakings and associated companies

Investments in subsidiary undertakings and associated companies are accounted for at cost net of accumulated impairment loss. The Company recognises the income only to the extent the distribution of the profit accumulated after the acquisition date is received from the respective subsidiary or associated company. Received distributions in excess of such profit are regarded as recovery of the investment and are booked as a decrease of the cost of investment.

When there is objective evidence that the carrying amount of the investment in subsidiary undertaking or associated company has impaired, the impairment loss is calculated as a difference between the carrying amount of the investment and its recoverable amount. The recoverable amount is determined as the higher of its fair value less costs to sell and its value in use. An impairment loss recognised in prior periods can be reversed only if there has been a change in the estimates used to determine the investment's recoverable amount since the last impairment loss was recognised.

Notes (continued) Accounting policies (continued)

(o) Grants

Grants relating to the purchase of specific assets are recorded as deferred income and are credited to the profit and loss account on a straight-line basis over the expected lives of the related assets. Grants granted to cover the expenses are recognised as an income in the same period when respective expenses have arisen if all conditions associated with the receipt of grant have been fulfilled.

(p) Taxation

Corporate income tax for the reporting period is included in the financial statements based on the management's calculations prepared in accordance with Latvian Republic tax legislation.

Deferred tax is provided for, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The deferred tax is calculated based on currently enacted tax rates that are expected to apply when the temporary differences reverse. The principal temporary differences arise from different fixed asset depreciation rates, as well as tax losses carried forward, fixed asset revaluation, tax losses carried forward and accrued expenses. The deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

(r) Provisions

Provisions are recognised when there is a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated.

(s) Accrued unused annual leave expenses

Amount of accrual for unused annual leave is determined by multiplying the average daily wage of employees for the last six months of the reporting year by the amount of accrued but unused annual leave at the end of the reporting year.

(t) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, balances of current account with banks and other highly liquid investments with original maturities up to 90 days.

(u) Related parties

Related parties are defined as Company's shareholders, members of the Board of Directors and Supervisory Board, their close relatives and companies in which they have a significant influence or control.

	2014 EUR	2013 EUR
Medical ambulant services	3660173	3294993
Medical hospital services	936787	909783
Insurance payments	384894	321 414
VS ZOC ambulant services	251 750	278847
Inpatient care	122762	153772
Stomatology services	8472	52833
Family doctors		31 868
Residents training	16682	20859
Services - minimum fixed part	6564	13144
Other income	527	3961
	5388611	5081474

Salaries and wages	2233448	(restated) 2232465
Fixed assets depreciation	466845	529884
Medical goods	646635	636675
State compulsory social insurance contributions	513039	524391
Public utilities	247528	249382
Non-deductible VAT	271 857	245431
Repair expenses	170848	153499
Household goods and equipment, other materials	95844	87084
Security costs	22018	40014
Provisions for vacations	10741	38536
Patient feeding	31 929	31 639
IT costs	33835	34137
Medical examinations and other services	42728	38583
Office expenses	13492	11 315
Transport costs	12385	9182
Stock listing expenses		7114
Advertising expenses	28835	6511
Insurance costs	5819	5949
Real estate tax	5263	5263
Provision for doubtful debts	1 117	4010
Employee training expenses	3598	2942
Risk fee	1406	1473
Employees benefits and grants	1472	1 991
Equipment rent	15853	569
Received discounts		(8580)
Other services related costs	22294	72 716
	4898829	4962175

	2014 EUR	2013 EUR
Salary expenses	327129	341760
State compulsory social insurance contributions	75517	79268
Communication costs	11 738	11 807
Financial statement audit costs	12188	7114
Office expenses	8539	6759
Banking services	8313	5849
Representation costs	3154	1 615
Legal services	1 395	2001
Other administrative costs	2658	2819
	450631	458992

Rental income	105895	95823
ERAF income: fixed assets depreciation	38400	47551
Other income	47264	34364
	191 559	177 738

Fines and penalties	10	30
Other expenses	6072	1283
	6082	1313

Dividends from associated companies	967
Liquidation quota for the subsidiary's liquidation	9624
	10591

3629
3629

	2014 EUR	2013 EUR (restated)
Deferred income tax credit (see Note 17) Corporate income tax charge for the current year

Corporate income tax differs from the theoretically calculated tax amount that would arise applying the 15% rate stipulated by the law to profit / (loss) before taxation:

Theoretically calculated tax at a tax rate of 15%	35827	(24490)
Expenses not deductible for tax purposes	183	4180
Change in unrecognised deferred tax asset	(63 166)	4935
Tax credit	(27 156)	(15375)

As at 31 December 2013 the Company had accumulated tax losses of EUR 371 722, and they were fully utilised in 2014 reporting year.

Notes (continued)

(9) Intangible assets and fixed assets

	Intangible assets	Land	Buildings	Equipment and machinery	Other fixed assets	Assets under construction	Total
	EUR	EUR	EUR	EUR	EUR	EUR	EUR
		(restated)	(restated)
Original or
revaluated
amount
31.12.2012.
(restated)	64610	584000	3849164	3792708	500247	4727	8795457
Additions	11 347		27279	87 115	46519	(4727)	167533
Disposals	(3917)		(1 851)	(196925)	(42812)		(245505)
31.12.2013.	72040	584000	3874593	3682898	503954		8717 485
Additions	2050			82350	5312	370035	459747
Disposals	(3724)			(163886)	(46847)		(214457)
31.12.2014.	70366	584000	3874593	3601362	462419	370035	8962775
Depreciation
31.12.2012.	42935		194904	2679758	445962		3363559
Charge for 2013	13315		113567	370311	32535		529728
For disposed	(3917)		(1 851)	(196884)	(40193)		(242845)
31.12.2013.	52333		306620	2853185	438304		3650442
Charge for 2014	14090		115487	308662	28606		466845
For disposed	(3724)			(163886)	(46847)		(214457)
31.12.2014.	62699		422106	2997961	420063		3902830
Net book value
31.12.2014.	7667	584000	3452486	603401	42356	370035	5059945
Net book value
31.12.2013.	19707	584000	3567973	829713	65650		5067043
Net book value
31.12.2012.	21675	584000	3654261	1112950	54285	4727	5431 898

Cadastral value of freehold land as at 31 December 2014 is EUR 519 364 (31 December 2013: EUR 519 383). Cadastral value for the buildings as at 31 December 2014 is EUR 1 271 297 (31 December 2013:EUR1 271 407).

As at 31.12.2014. Company's land and buildings were revalued by independent certified appraiser SIA Latio (certificate No. 19). The market value was determined by a 50% I 50% combination of Income and Market approach results.

The Company's management considered, that the market value as calculated as at 31.12.2014. is also retrospectively applicable to comparative period as it would be accounted as at 31.12.2012. Revalued land and buildings were historically accounted restating the comparatives, as this was the only basis to ensure comparability of carrying values of land and buildings at the year-end 2014 and comparative period. A correction of retrospective application has been disclosed in note 28 in these financial statements

If land and buildings would be recorded at cost less accumulated depreciation, their net book value would be as follows:

	31.12.2014.	31.12.2013.
	EUR	EUR
Cost	2229565	2229565
Accumulated depreciation	(949134)	(851 640)
Net book value	1 280431	1377 925

	Investments in subsidiary undertakings	Investments in associated companies	Total
	EUR	EUR	EUR
Book value
31.12.2013.	288472	141 624	430096
Additions	30350	13677	44027
Reclassification	155301	(155301)
31.12.2014.	474123		474123

				I (loss) Profit for the reporting year
		31.12.2014. EUR	31.12.2013. EUR	2014 EUR	2013 EUR
"Juras medicina" SIA "Neirozu klinika"	VecmTIgravja 5.linija 28, Riga, LV-1015 Dzintaru prospekts 48, Jurmala,
SIN	LV-2015

	Carrying value of investments in subsidiary and associated companies undertakings		Participating interest in share capital of subsidiary and associated companies undertakings
	31.12.2014. EUR	31.12.2013. EUR	31.12.2014. %	31.12.2013. %
"Juras medicina" SIA "Neirozu klinika" SIA	318822 155301	288472 141 624	100% 50.4%	100% 45.32%

	31.12.2014. EUR	31.12.2013. EUR
Medication in warehouse, pharmacy	86370	71684
Medication in divisions	17813	12895
Other materials	112	109
	104295	84688
The National Health Service (NHS)	115806	70691
P.StradiQa Clinical University Hospital	42862	24996
Insurance companies	33346	42688
Other institutions, businesses and individuals	34856	33820
Provision for doubtful debts	(9077)	(7960)
	217 793	164235
VAT overpaid (see Note 18)	13	5 111
VAT on unpaid invoices	4424	4032
Other debtors	36071 40508	6739 15882
	3861	3681
	3861	3681
Cash at bank		1 126887
Cash at State treasury		16
Cash on hand	5479	4385
	1346187	1 131 288

In 2014, the Company re-registered its share capital to EUR compliant to EUR implementation law requirements. Nominal value of 1 share was rounded to 1,40 EUR as a result of share capital conversion. The value in excess of denomination of share capital to EUR was accounted in Company's reserves. As at 31 December 2014 registered and fully paid share capital consists of 800 000 shares at EUR 1,40 nominal each.

	31.12.2014.		31.12.2013
	Number of	Capital share	Number of	Capital share
	shares	%	shares	%
IIze Birka	140000	17,50%	140000	17,50%
Martil)s Birks	140000	17,50%	140000	17,50%
IIze Aizsilniece	91 600	11,45%	91 600	11,45%
Guna Svarcberga	82 880	10,36%	82880	10,36%
Janis Birks	81 338	10,17%	69280	8,66%
Adomas Navickas	50825	6,35%	50825	6,35%
Other shareholders (the number
of shares up to 5% each)	213357	26,67%	225415	28,18%
Total	800000	100,00%	800000	100,00%
Share capital (EUR)	800000		800000

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

Deferred income tax has been calculated from the following temporary differences between assets and liabilities values for financial reporting and tax purposes:

	31.12.2014. EUR	31.12.2013. EUR
Deferred income tax liability: Temporary difference on fixed assets depreciation
Deferred income tax assets: Temporary difference on accruals for unused annual leave Deferred tax liability	(17768) 447566	(16157) 474722

	2014 EUR	2013 EUR
Deferred income tax liability at the beginning of the reporting year Deferred income tax credited to profit and loss account
(see Note 8) Deferred tax liability at the end of the reporting year	(27 156) 447566	(15374) 474722

	Liabilities 31.12.2013. EUR	(Overpaid) 31.12.2013. EUR	Charge for 2014 EUR	Transferred to other taxes EUR	Paid in 2014 EUR	Liabilities 31.12.2014. EUR	(Overpaid) 31.12.2014. EUR
Corporate
income tax		(5105)		5105
VAT	1635		71482		(63875)	9242
Real estate tax		(6)	5263		(5263)		(6)
Natural
resource tax	861		2601		(3469)		(7)
Entre
preneurial risk
duty	117				(1)	116
State						68013
compulsory
social
insurance
contributions	72356		850326	(5 105)	(849564)
Personal	38987		473301		(475011)	37277
income tax
Total	113956	(5 111)	1402973		(1 397 183)	114648	(13)

(19) Other creditors

	31.12.2014. EUR	31.12.2013. EUR
Salaries	131 902	136035
Payments to labour union	688	761
Deposited salary	647	658
	133237	137454

(20) Deferred income

Grants received to be recognised as income after more than 1
year and not later than 5 years
Long term deferred income
Grants received to be recognised as income within 1 year	50976	47551
Short term deferred income	50976	47551

118452	107711
118452	107711

	2014 EUR	2013 EUR
Board members' remuneration - salary expenses	72 407	67236
- state compulsory social insurance contributions Council members' remuneration	16593	14962
- salary expenses - state compulsory social insurance contributions	27319 5993	27319 6093
Other management remuneration - salary expenses	227403	247205
- state compulsory social insurance contributions	52931	58213

The Company's management has no information on guarantees, existing or pending litigations or other commitments that could significantly influence company's net results

In August 2014, the Company has concluded construction agreement on VecmTlgravja hospital first storey renovation in total for around EUR 430 thousand. Advance payment of EUR 370,035 has been granted. The construction works has been started on June 2014, and it is anticipated to conclude the construction on April 2015.

In 2014, the Company has not entered into transactions with related parties - subsidiaries and associated companies, other than received dividends EUR 967 from SIA "Neirozu Klinika" and capitalised within SIA "JOras medicina" share capital was loan EUR 30 350 and upon liquidation in 2015 the Company received a liquidation quote.

	2014 EUR	2013 EUR
Audit of financial statements	9900
Tax consulting services	500
	10400

As described in accounting policy section (c) "Restatement of comparative financial information" and the explanation in Note 9, the Company carried out real estate revaluation and found that the fair value of real estate subject to revaluation significantly exceeded its book value at the time of the revaluation, as well as at the end and beginning of the last reporting year. Taking into account that there have been no significant changes in Latvian Republic real estate market during the last two years in respect to such property types, the Company's management concluded, that the results of valuation in 2014 can be attributable to the last reporting year as well. Valuation results of revalued fixed assets were booked retrospectively changing comparative figures, as being the only basis to provide financial statement figure comparability in the reporting and comparative period. The effects of retrospective adjustments are set out in the table shown below.

Impact on shareholders' equity as at 31 December 2012:
Increase in long-term investments revaluation reserve	1 450036
Total increase in shareholders' equity:	1450036
Impact on year 2013:
Decrease of net book value of land as at 31.12.2013.	(18 383)
Increase of net book value of buildings as at 31.12.2013.	1 954313
Total increase of assets as at 31.12.2013.	1 935930
Increase of deferred tax liabilities as at 31.12.2013.	(363409)
Total increase in shareholders' equity:	1572521
Including:
Increase in shareholders' equity as at 31.12.2012.
Decrease of fixed asset depreciation expense in profit and loss account
and decrease in net loss for 2013:
Decrease of long-term investments revaluation reserve for deferred tax
liabilities correction that were made in 2013:	(24474)
Total	1572521

On 21 January 2015 the 100% wholly owned subsidiary SIA "JOras MedicTna" was liquidated and the Company received a liquidation quote EUR 9,623 and merged assets of land and construction in progress in the amount of EUR 266 thousand.

Except for the above, there are no subsequent events since the last date of the reporting year, which would have a significant effect on the financial position of the Company as at 31 December 2014.

We have audited the accompanying financial statements of JSC "Latvijas Juras Mediclnas Centrs" set out on pages 6 to 24 of the accompanying annual report, which comprise the balance sheet as of 31 December 2014 and the profit and loss account and the statements of changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Law of the Republic of Latvia on Annual Reports, 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 fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

" .

^: PricewaterhouseCoopers SIA, Kr. Va/demara ie/a 21-21, Riga, LV-lOW, Latvia, LV40003142793 T: +371 67094400, F: +371 67830055, www.pwc./v

In our opinion, the financial statements give a true and fair view of the financial position of JSC "Latvijas Juras Mediclnas Centrs" as of 31 December 2014, and of its financial performance and its cash flows for the year then ended in accordance with the Law of the Republic of Latvia on Annual Reports.

We have read the Management Report for 2014 set out on pages 4 to 5 of the accompanying annual report for 2014 and did not identify material inconsistencies between the financial information contained in the Management Report and that contained in the financial statements for 2014.

PricewaterhouseCoopers SIA Certified audit company Licence NO.5

4-i

Ilandra I:ejiI}.a Member of the Board

Lolita Capkeviea Certified auditor in charge Certificate No. 120

Riga, Latvia 8 April 2015

* This version of our report is a translation from the original, which was prepared in Latvian. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.