Management Board's Report on activities of Centrum Medyczne ENEL … · Diagnostyka Obrazowa sp. z...

Management Board's Report

on activities of Centrum Medyczne

ENEL-MED S.A. in 2014

Warsaw, 17 March 2015.

Table of contents

Management Board's Report on activities of Centrum Medyczne ENEL-MED S.A. in 2014 2

Table of contents

1. BASIC INFORMATION ON CENTRUM MEDYCZNE ENEL-MED S.A. CAPITAL GROUP …………………………………………………..4

1.1. Description of the structure of the Capital Group ............................................................................................................... 4

1.2. Management Board and Supervisory Board ....................................................................................................................... 5

1.3. Shareholding structure ........................................................................................................................................................ 6

2. CHARACTERISTICS OF ACTIVITIES OF CENTRUM MEDYCZNE ENEL-MED S.A. ................................................................ 8

2.1. Description of the activity of Centrum Medyczne ENEL-MED…………………………………………………………………………………………8

2.2. Multi-profile clinics .............................................................................................................................................................. 9

2.3. ESTELL Aesthetic Medicine Clinic....................................................................................................................................... 12

2.4. In-company clinics ............................................................................................................................................................. 12

2.5. Hospitals and diagnostic imaging ...................................................................................................................................... 12

2.6. Partner facilities ................................................................................................................................................................. 13

2.7. Basic patient types depending on the settlement method ............................................................................................... 13

2.8. Information on basic services, their values and quantities and their shares in sales ........................................................ 14

2.9. Information on sales markets ............................................................................................................................................ 14

2.10. Significant agreements ...................................................................................................................................................... 14

3. RISK FACTORS AND THREATS ..................................................................................................................................... 17

3.1. Risk arising from deterioration of the financial situation of the Company’s clients ......................................................... 17

3.2. Risk arising from becoming dependent on clients and distribution channels ................................................................... 17

3.3. Risk of change in the contracting policy of the National Health Fund ............................................................................. 17

3.4. Risk of medical malpractice in relation to the Company’s patients .................................................................................. 17

3.5. Risk of a pandemic or epidemic ......................................................................................................................................... 17

3.6. Risk associated with sensitive data processing ................................................................................................................. 18

3.7. Risk of significant change in the macroeconomic situation in Poland .............................................................................. 18

3.8. Risk of significant foreign exchange fluctuations ............................................................................................................. 19

3.9. Risk of significant changes in interest rates ....................................................................................................................... 19

3.10. Credit risk ........................................................................................................................................................................... 19

3.11. Liquidity risk ....................................................................................................................................................................... 20

3.12. Risk of changes in legal regulations and their interpretations 20

3.13. Risk of more intense domestic and foreign competition in the market ............................................................................ 20

4. BASIC ECONOMIC AND FINANCIAL RATIOS. THE COMPANY’S DEVELOPMENT PROSPECTS ........................................ 21

4.1. Selected financial data ....................................................................................................................................................... 21

4.2. Financial factors and events influencing achieved financial results .................................................................................. 21

4.3. Prospects of business activity development. The Company’s development strategy for the years 2014-2016…………….22

5. ADDITIONAL INFORMATION ........................................................................................................................... 23

5.1. Information on organisational or capital relationships of Centrum Medyczne ENEL-MED S.A.

with other entities and presentation of domestic and foreign investments thereof ........................................................ 23

5.2. Information on significant transactions concluded by the Company or its subsidiaries with related parties pursuant to

non-arm’s length conditions .............................................................................................................................................. 23

5.3. Information on concluded and terminated credit and loans agreements ........................................................................ 24

Table of contents


5.4. Information on granted loans with particular focus on the loans granted to

related parties ................................................................................................................................................................... 24

5.5. Information on warranties and guarantees granted and received ................................................................................... 25

5.6. Explanation of differences between financial results published in the annual report and previously announced annual

forecasts for a given year .................................................................................................................................................. 25

5.7. Evaluation of financial resources management ................................................................................................................ 25

5.8. Evaluation of potential implementation of investment projects ...................................................................................... 25

5.9. Evaluation of factors and non-standard events influencing the result of business activity .............................................. 25

5.10. Description of external and internal factors material for the development of the enterprise

and description of the development prospects of the Company’s business activity ........................................................ 26

5.11. Changes in the basic management principles of the Company and its capital group ....................................................... 26

5.12. Agreements concluded between the Company and the managing persons that stipulate compensation for the

resignation or loss of office without important reasons, or if their deposition

follows the Company's merger by acquisition ................................................................................................................... 26

5.13. Value of remuneration, rewards or benefits for persons managing and supervising the Company ................................. 27

5.14. Information on total number and nominal value of all shares and shares in

the related parties held by members of the management and supervisory boards of the Company .............................. 28

5.15. Information on agreements known to the Company that might in the future result in changes

of proportions of shares held by existing shareholders and bondholders ........................................................................ 28

5.16. Information on the system of control over employee shares ........................................................................................... 28

5.17. Information on proceedings pending before a court, competent arbitration authority

or public administration body concerning liabilities and receivables ............................................................................... 28

5.18. Objectives and methods of financial risk management .................................................................................................... 28

6. ENTITY AUTHORISED TO AUDIT FINANCIAL STATEMENTS .......................................................................................... 30

7. CORPORATE GOVERNANCE ........................................................................................................................................ 31

7.1. Corporate governance principles ...................................................................................................................................... 31

7.2. Information on exceptions in application of corporate governance principles ................................................................ 31

7.3. Description of key features of internal control system and risk management system applied by the Company

with respect to the process of drawing up financial statements ...................................................................................... 32

7.4. Significant share packages ................................................................................................................................................. 33

7.5. Special control rights ......................................................................................................................................................... 33

7.6. Limitation of voting rights from existing shares ................................................................................................................ 34

7.7. Limitations with respect to transferring the title to securities .......................................................................................... 34

7.8. Principles for appointing and recalling members of the Management Board and their rights, in particular

the right to make decision on issue or buy-out of shares ................................................................................................. 34

7.9. Principles for amending the Company’s Articles of Association ....................................................................................... 34

7.10. Manner of operation of the Company’s General Meeting and fundamental powers thereof, shareholders’ rights

and the manner of their exercising ................................................................................................................................... 34

7.11. Composition and operation of the Company’s management and supervisory authorities and its committees ............... 35

8. EVENTS AFTER THE BALANCE SHEET DATE ................................................................................................................. 38


1. Basic information on Centrum Medyczne ENEL-MED S.A. capital group

1. BASIC INFORMATION ON CENTRUM MEDYCZNE ENEL-MED S.A. CAPITAL GROUP

1.1. Description of the structure of the Capital Group

Centrum Medyczne ENEL-MED S.A. (hereinafter referred to also as ENEL-MED or the Company) is a part of the

Capital Group which as at 31 December 2014 comprised Centrum Medyczne ENEL-MED S.A. being the parent

company and the following subsidiaries: Enelbud sp. z o.o. and Centrum Medyczne Diagnostyka Obrazowa sp. z o.o.

Centrum Medyczne ENEL-MED S.A.

Centrum Medyczne

Diagnostyka Obrazowa

sp. z o.o.

Enelbud sp. z o.o.

Enelbud sp. z o.o. - the company established in 2006, it has been engaged in real property investments in the healthcare

sector. The parent company - Centrum Medyczne ENEL-MED S.A. - holds 80 shares in this subsidiary, which accounts for 80%

of the share capital. Furthermore, Enelbud sp. o.o. holds 40% of shares in the company trading as Bonus Vitae Sp. z o. o. with

planned objective of business activity being long-term medical care for the Elderly. In addition, in 2014 Enelbud sp. z o.o.

purchased 40% of hares in the company trading New Media Development & Hotel services sp. z o.o. with planned objective

of business activity being investments in buildings and real estate held for long-term health care services that will be rented

by Bonus Vitae sp. z o.o. As at 30 September 2013 Enelbud sp. z o.o. held 40% of shares in New Media Development & Hotel

Services sp. z o.o. In the fourth quarter of 2014 shares in this company were sold to New Media Communication sp. z o.o.

hence as at the publication date of this Report Enelbud sp. z o.o. did not hold shares in New Media Development & Hotel

Services sp. z o.o.

Centrum Medyczne Diagnostyka Obrazowa sp. z o.o. – the company was established in the fourth quarter of 2013 and the

issuer has taken up 50 shares of total nominal value of PLN 5,000.00, which represented 100% of the share capital of this

company. On 29 May 2014, the Extraordinary Meeting of Shareholders of Centrum Medyczne Diagnostyka sp. z o. o. adopted

a resolution on increasing the share capital of the company from the amount of PLN 5,000.00 to the amount of PLN

50,995,000.00, by issuing 509,950 new shares of the nominal value of PLN 100.00 each. All the newly established shares were

taken up by the Company on 29 May 2014 and paid for in full by in-kind contribution in a form of 5,000 shares in Centrum

Medyczne Diagnostyka Sp. z o.o. of the nominal value of PLN 100.00 each, of total nominal value PLN 500,000.00. The

contributed shares constituted 100% of shares in the share capital of Centrum Medyczne Diagnostyka Sp. z o.o. On 30 June

2014 Centrum Medyczne Diagnostyka Obrazowa sp. z o.o. sold 100% of shares in the share capital of Centrum Medyczne

Diagnostyka sp. z o.o. and thus ceased to be a partner in Centrum Medyczne Diagnostyka sp. z o.o. Presently, the main asset

of Centrum Medyczne Diagnostyka Obrazowa sp. z o.o. are the funds from which the Issuer shall finance development of the

Capital Group.

In 2014, there was a change in the Issuer's capital group. In connection with the conclusion of a purchase-sale agreement for

100% of shares in the share capital of Centrum Medyczne Diagnostyka sp. z o.o. on 30 June 2014 by Centrum Medyczne

Diagnostyka Obrazowa sp. z o.o. for the benefit of LUX MED Diagnostyka sp. z o.o., the Issuer lost control over Centrum

Medyczne Diagnostyka sp. z o.o.

As at 31 December 2014, the Issuer consolidates the following companies: Enelbud sp. z o.o. and Centrum Medyczne

Diagnostyka Obrazowa sp. z o.o. using the full method and Bonus Vitae sp. z o.o. using the equity method.



1.2. Management Board and Supervisory Board

The Management Board of Centrum Medyczne ENEL-MED S.A.

Adam Rozwadowski - President of the Management Board

Mr Rozwadowski has held the position of the President of the Management Board

since 2006. A graduate of Gdańsk University of Technology. In the years 1972-1985,

Mr Rozwadowski worked at STOEN as the manager of the general technical

department and in the years 1985-1995 as the Director of the Office of Design and

Implementation of Investments. Since 1993, Mr Rozwadowski has been managing

Centrum Medyczne ENEL-MED, first as the General Director and later as the

President of the Management Board. In addition, Mr Rozwadowski is the Deputy

President of the National Association of Private Hospitals [Ogólnopolskie

Stowarzyszenie Szpitali Prywatnych] and a Member of the Management Board of

Polish Union of Private Healthcare Employers [Ogólnopolski Związek Pracodawców

Prywatnej Służby Zdrowia].

Jacek Rozwadowski - Deputy President of the Management Board, CEO

Mr Rozwadowski has been performing the duties of the Deputy President of the

Management Board since 2009. Mr Rozwadowski has been working for the

Company since 2002 and since 2008 has held the position of CEO. A graduate of the

School of Business and Administration in Warsaw. Before joining the medical sector,

Mr Rozwadowski had been working in the automotive industry. In years 1999

– 2002, Mr Rozwadowski dealt with marketing and sales at DAF Trucks Polska Sp. z

o.o. Before that, Mr Rozwadowski had worked for a year for DAF Trucks NV Holland

where he was responsible for sales in Poland. In the years 1996–1998, he was a

project manager at Elektrim S.A.

Composition of the Management Board as of the publication date of the annual report did not changed.

Supervisory Board of Centrum Medyczne ENEL-MED S.A.

Anna Rozwadowska

Chairperson of the Supervisory Board

Mrs Rozwadowska has been associated with the Company since its inception. A graduate of Gdańsk University of Technology,

the Faculty of Electrical Engineering. Mrs Rozwadowska has held the position of Deputy President and Member of the

Management Board. Mrs Rozwadowska has developed Centrum Stomatologii ENEL-MED (Stomatology centre). In 1994 Mrs

Rozwadowska founded Postgraduate Training Centre for Dentists, which trained professionals from all over the country.

While managing the Operational Department Mrs Rozwadowska is responsible for ensuring quality and financial efficiency of

the Company's branches, patient's service quality and coordination of newly opened branches. In the Supervisory Board Mrs

Rozwadowska bears the responsibility for internal audits.

Anna Piszcz

Member of the Supervisory Board

The Member of the Supervisory Board since 2006. A Ph.D. at law, Mrs Piszcz has been an employee of the Faculty of Law, at

the University of Białystok since 2006, initially as an Assistant in the Department of Administrative Law and since 2006 as an

Assistant Professor in the Department of Public Economic Law. Legal advisor in years 2010-2012, a partner in RES Law Firm of

legal advisor Jerzy Bieluk and partners. In 2014 Mrs Piszcz has been appointed a member of the Advisory Board at the

President of the Office of Competition and Consumer Protection.



Janusz Jakubowski


A graduate of the Warsaw University of Technology, construction engineer. Initially, related to ENEL-MED in the years 1991–

1993, when as the Investment Director Mr Jakubowski was responsible for building the first ENEL-MED clinic and hospital in

Warsaw. Employed again in 2005, as Investment Department Director Mr Jakubowski is responsible for planning,

implementation and ongoing supervision of the Company's construction investments. Mr Jakubowki's earlier professional

experience includes work for Beton-Stal as a construction engineer and later as the Coordinator of the General Contractor of

CHP “Kawęczyn“. In 1989–1991, Mr Jakubowski was a building contractor. For a year, Mr Jakubowski performed the duties of

a Supervision Inspector on behalf of the EBRD bank at the implementation of the Business Centre Wola project. For another 8

years, Mr Jakubowski cooperated with Skanska Poland, among others, as Development Director and Executive Director. Mr

Jakubowski is responsible for performance of: Złote Tarasy, Terminal II at the Okęcie Airport, Atrium office complex in

Warsaw and the Westin Hotel. In 2002–2004 Mr Jakubowski was the Development Director for ROBYG development

company. In the years 2004–2005, Mr Jakubowski was the Director General at RD bud, a branch of Rabot Dutilleul.

Adam Ciuhak


A graduate of the Faculty of Economics and Production Organisation (specialisation: Economics and Industry Organisation),

Warsaw School of Economics. A tax consultant and the President of the Management Board of Strategia Sp. z o. o. and

Strategia Consulting Sp. z o. o. Mr Ciuhak began his career in 1993, at BDO Polska Sp. z o. o. as a Statutory Auditor’s Senior

Assistant, holding this position until 1998. In 1998–2000, Mr Ciuhak was the Chief Financial Officer in Animex S.A. Since 2000,

Mr Ciuhak has been an Advisor to the President of the Management Board in Animex S.A.

Zbigniew Okoński


A graduate of the Foreign Trade Department of the University of Gdańsk and the Faculty of Marine Fisheries at the

Agricultural Academy in Szczecin. Mr Okoński completed the Global Leadership Programme at the Faculty of Business

Administration at the University of Michigan (USA). The President of the Management Board of ROBYG S.A. In the years

1991–1992 Under-secretary of State in the Ministry of Economic Cooperation with Foreign Countries. In subsequent years,

Mr Okoński held the positions of: the President of the Supervisory Board in the State Agency for Foreign Investment, the

President of the Supervisory Board in Bank Rozwoju Eksportu S.A., Advisor to the President of the Management Board and

Director for Coordination of Commerce in Elektrim S.A., Member of the Management Board and Deputy Director General in

Elektrim-Volt S.A., the President of the Supervisory Board in Nafta Polska S.A., Deputy President of the Management Board in

Prokom Investments S.A., Member of the Supervisory Board and later the President of the Management Board in Polnord

S.A. and the President of the Management Board in EnergoPlasma Sp. z o.o. In addition, in 1995, Mr Okoński performed the

duties of the Minister of National Defence.

Composition of the Supervisory Board as of the publication date of the annual report did not changed.

1.3. Shareholding structure

As at 31 December 2014 the share capital amounted to PLN 23,566,900.00 and was divided into 23,566,900 shares with a

nominal value of PLN 1.00 each. As at the publication date of this Report on activities of the Company this situation did not

change.

According to the information available to the Company in 2014 Jacek Jakub Rozwadowski, the Deputy President of the

Management Board increased the number of the Issuer's shares held. According to the notification received from Jacek Jakub

Rozwadowski as a result of sales transaction of 1,576 shares, made during a session at the Stock Exchange in Warsaw, the

number of shares held and the number of votes controlled by Jacek Jakub Rozwadowski was increased from 992,800 to

994,376 shares which corresponds to 994,376 votes at the Company's General Meeting of the Shareholders and accounts for

4.22% of share in the capital and 4.22% of votes at the Company's GMS.



Shareholding structure as at 31 December 2014 was as follows:

Shareholder Number of

shares % of capital Number of votes % of votes

Adam Stanisław Rozwadowski* 7.124.000 30.23 7.124.000 30.23

Anna Maria Rozwadowska* 7.123.950 30.23 7.123.950 30.23

Generali OFE (Open Pension Fund) 2.377.000 10.09 2.377.000 10.09

OFE PZU ,,Złota Jesień” (Open Pension Fund)

1.680.000 7.13 1.680.000 7.13

Jacek Jakub Rozwadowski* 994.376 4.22 994.376 4.22

Bartosz Adam Rozwadowski* 972.650 4.13 972.650 4.13

Other Shareholders 3.294.924 13.97 3.294.924 13.97

* presumption of an agreement exists between Anna Maria Rozwadowska, Jacek Jakub Rozwadowski and Bartosz Adam Rozwadowski.

Bartosz Rozwadowski

4.13%

Bartosz Rozwadowski

4.22%

Other

13.97%

Adam Rozwadowski

30.23%

OFE PZU ,,Złota Jesień”

7.13%

Generali OFE

10.09%

Bartosz Rozwadowski

30.23%


2. Characteristics of activities of Centrum Medyczne ENEL-MED S.A.

2. CHARACTERISTICS OF ACTIVITIES OF CENTRUM MEDYCZNE ENEL-MED S.A.

2.1. Description of activities of Centrum Medyczne ENEL-MED

Centrum Medyczne ENEL-MED S.A. is a private provider of medical services in Poland that has been present on the Polish

healthcare market since 1993.

The Company operates 20 medical facilities including 19 multi-profile clinics (together with six in-company clinics) and two

hospitals located in Warsaw as well as ESTELL Aesthetic Medicine Clinic.

The multi-profile clinics and the aesthetic medicine clinic are situated in attractive localisations (for example in prestigious

shopping malls and office buildings) in six big cities: in Warsaw (the Centres of Zacisze, Atrium, Blue City, Arkadia, Puławska,

Domaniewska, Centrum, the ESTELL Aesthetic Medicine Clinic), Cracow (Galeria Krakowska Centre), Poznań (Kupiec

Poznański Centre), Łódź (Manufaktura Centre), Gdańsk (Grunwaldzka Centre) and Wrocław (Arkady Wrocławskie Centre). In-

company clinics, that is small branches situated on corporate client’s premises, offering a basic range of services only to the

employees of a given client, are located in Warsaw, Piła and Łódź. The only exception is the facility located in the Special

Economic Zone, the Sub-Zone of Wrocław-Kobierzyce, which is used by the employees of companies belonging to the LG

Cluster together with their families, as well as individual patients who are not employed in the companies with whom ENEL-

MED signed agreements on medical services. In addition, ENEL-MED cooperates with over 1,300 partners whose clinics are

located in localities where the Company does not have its own medical facilities.

Moreover, the Company operates two hospitals in Warsaw: the multi-specialisation 20-bed Zacisze Hospital and the 30-bed

Centrum Hospital located at Aleja Solidarności 128. In hospitals and in the multi-profile clinic in Gdańsk, ENEL-MED runs

diagnostic centres equipped with magnetic resonance imaging and computed tomography devices (Centrum Hospital and

Zacisze Hospital), as well as magnetic resonance imaging scanner in Gdańsk.

The medical services provided by the Company include but are not limited to:

• primary and specialised outpatient care, including rehabilitation and surgical procedures at outpatient clinics

• dental health care,

• diagnostic imaging tests (including tests performed using magnetic resonance, computed tomography scanner, ultrasound

cameras and X-ray)

• hospitalisation, including surgical procedures and surgeries in selected specialisation areas, scheduled at Zacisze Hospital

and Centrum Hospital

• off-site medicine and emergency home visits as well as medical care in case of sudden illness.

• aesthetic medicine, cosmetology, aesthetic gynaecology.

ENEL-MED offers a wide range of medical services used by both patients who pay for each service provided and clients with

prepaid medical care packages. One can also use selected services under National Health Fund. Furthermore, ENEL-MED has

signed contracts for medical care of patients with multiple insurance companies such as Allianz, PZU Pomoc, Generali, Inter

Polska, Signal Iduna and Uniqa. The Company’s settlements with the insurance companies are effected on a fee-for-service

basis.



2.2. Multi-profile clinics

Centrum Medyczne ENEL-MED S.A. operates 13 multi-profile clinics situated in attractive and prestigious locations (including

shopping malls and office buildings), in six major urban centres: Warsaw, Cracow, Poznań, Łódź, Gdańsk and Wrocław.

ENEL-MED clinics offer comprehensive medical care services both primary and specialist ambulatory care, including dental

health care and rehabilitation. The multi-profile clinic in Gdańsk additionally provides services in the field of diagnostic

imagining - performing magnetic resonance imaging tests.

Gdańsk

Łódź - Manufaktura Centre

Kraków – Galeria Krakowska Centre

Gdańsk – Grunwaldzka Centre

Wrocław – Arkady Wrocławskie Centre

Poznań – Kupiec Poznański Centre

Poznań

Wrocław

Łódź

Kraków

Warsaw

Warsaw:

Zacisze Centre

Atrium Centre

Blue City Centre

Arkadia Centre

Puławska Centre

Domaniewska Centre,

Centrum Centre

Promenada Centre

ESTELL - aesthetic medicine

In Warsaw, there are 8 centres in total: clinics in office buildings of Atrium Plaza and Trinity Park III

(Atrium Centre and Domaniewska Centre), clinics at prestigious shopping malls such as Arkadia, Promenada or Blue City.

Clinic at Puławska Street (Puławska Centre) and the clinic operating on the premises of the Company’s hospital at Gi larska

Street (Zacisze Centre). Additionally, the Centrum Hospital fulfils the function of a clinic, where specialist consultations are

held.

ATRIUM CENTRE ARKADIA CENTRE



BLUE CITY CENTRE PUŁAWSKA CENTRE

DOMANIEWSKA CENTRE ZACISZE CENTRE

CENTRUM CENTRE PROMENADA CENTRE

ESTELL – AESTHETIC MEDICINE CLINIC



General medical clinics of the Company located in Cracow, Poznań, Łódź and Wrocław are situated in shopping malls. In

Poznań, the clinic is located in the Kupiec Poznański Shopping Mall in Łódz - in the Manufaktura Shopping Mall, in Wrocław -

the Arkady Wrocławskie Shopping Mall, in Cracow - in the Galeria Krakowska Shopping Mall, while in Gdańsk - in the office

building of Office Island (Grunwaldzka Centre).

GALERIA KRAKOWSKA CENTRE MANUFAKTURA CENTRE

ARKADY WROCŁAWSKIE CENTRE GRUNWALDZKA CENTRE

KUPIEC POZNAŃSKI CENTRE



2.3. ESTELL Aesthetic Medicine Clinic

The new brand of ENEL-MED founded in December 2014. This is

the first profiled facility of the Company devoted to commercial

services. The clinic offers a wide range of services in the field of

cosmetology, medicine and aesthetic gynaecology, including:

• Rejuvenating and anti-ageing skin treatments

• Lines and wrinkles removal

• Reduction of shadows and puffiness under eyes

• Phototherapy, laser treatments

• Reduction of skin discolouration and pigment lesions

• Reduction of body fat

• Removal of vascular damages and spider veins

ESTELL clinic is located in the Senator building at ulica

Bielańska 12 in Warsaw.

2.4. In-company clinics

ENEL-MED operates six in-company clinics that is small branches situated on several big corporate client’s premises, offering

a basic range of services only to employees of a given client. Two in-company clinics are located in Warsaw – on the premises

of the National Bank of Poland and Bank Millennium S.A. The remaining clinics are located: in Łódź, on the premises of

Sonoco Poland - Packaging Services sp. z o.o. and in Rosmann Supermarkety Drogeryjne Polska sp. z o.o. in Piła on the

premises of Philips Lighting Poland S.A. and in the Special Economic Zone, the Sub-Zone of Wrocław-Kobierzyce on the

premises of LG Display Poland sp. z o.o. Services offered by the clinic located on the premises of LG can be used not only by

the employees of companies from the LG Cluster with their families, but also by commercial clients.

2.5. Hospitals and diagnostic imaging

In 1998 Centrum Medyczne ENEL-MED S.A. started offering

hospital services by opening a multi-specialisation hospital in

Warsaw at Gilarska Street. Currently, the hospital offers 20 beds,

two operating rooms and among others anaesthesia consultation

room and diagnostic and treatment room. The hospital also

performs highly specialised diagnostic tests using magnetic

resonance imaging or computed tomography scanners. There is

also a multi-profile clinic at the same location but within a separate

space.

The Zacisze Hospital offers services in the fields of: general surgery,

paediatric surgery, vascular surgery, plastic surgery, laryngology,

gynaecology, ophthalmology and urology.

In 2012 ENEL-MED opened a second hospital in Warsaw

- Centrum Hospital, located at Aleja Solidarności 128. The newly

opened hospital offers 30 beds, two operating rooms and one

postoperative recovery room. The hospital also houses a modern

diagnostic imaging facility that offers a wide range of diagnostic

tests



among others using magnetic resonance and computed tomography scanners. Additionally, the hospital fulfils the function of

a clinic providing specialist consultations. Moreover, emergency orthopaedic care is available 24 hours a day, 7 days a week.

The Centrum Hospital offers services in the area of spine surgery, orthopaedics and hand surgery.

Patients may use hospital services against a payment or under the contract with the National Health Fund concluded by the

Company on a selected group of treatments and surgeries. The contract for hospital services concluded with the National

Health Fund, pertaining to scheduled operations, includes the following groups of services:

• orthopaedics

• neurosurgery

• vascular surgery

• general surgery

• ophthalmology

• otolaryngology

Given the considerable potential of the hospitals that exceeds the limits ensured by the contract with the National Health

Fund, the Issuer offers a wider range of services within the commercial operations which are not covered by the contract

with the NHF. The most commonly used paid treatments are performed in the fields of:

• orthopaedics

• neurosurgery

• ophthalmology

• vascular surgery

• laryngology

2.6. Partner facilities

In order to ensure the Company's clients, who have prepaid medical care packages, a nationwide access to medical services

in cities where ENEL-MED does not have its own medical facilities, the Issuer is supported by the partner facilities, acting as

subcontractors. If it is necessary to start cooperation with a new medical facility, an employee from the Corporate Client

Service Department carries out an initial interview and verifies the scope of services of a given facility and the quality of

medical services based on the Medical Care Organisation Standards developed by the Company. After the negotiation

process is completed and the contract is signed, the partner facility receives the updated lists of patients who have prepaid

medical care packages together with the scope of medical services to which each patient is entitled. The Company

cooperates with over 1,300 medical facilities all over the country.

2.7. Basic patient types depending on the settlement method

Medical services provided by Centrum Medyczne ENEL-MED can be used on the following bases:

Enel-Care - a package of medical services (the so-called prepaid medical care package); its monthly cost depends on the

scope of services, spatial distribution of persons covered by it, the size of a group; its cost is covered by a company that have

signed an agreement with us and its employees have the possibility of making additional payments to get partner or family

packages.

medi-care - the so-called health insurance for the predetermined scope of services dedicated to individual patients, offered

as a part of cooperation between the Company and InterRisk insurance company. However, the settlements between

InterRisk and the Company are carried out based on the fixed per capita rate and consequently, from the point of view of the

Company, the medi-care product is similar to the Enel-Care prepaid medical care packages.

Fee For Service (FFS) - this form of sale of services means that a payer (corporate client, insurance company) pays every time

a medical service is provided. The FFS system applies to three key groups of clients: individuals, customers of insurance

companies and a group of companies making the settlements with the Company on the FFS basis.



National Health Fund - in order to satisfy customers' needs, it is also possible to refer a patient to receive particular hospital

or diagnostic services under the contract between the Company and the National Health Fund. In this case, the cost of

services is covered from public funds without any additional payments made by a patient.

2.8. Information on basic services, their values and quantities and their shares in sales

Centrum Medyczne ENEL-MED S.A. operates on the national market of medical services. The activities of the Company are

focused on four key market sectors (outpatient clinics, hospitalisation, diagnostics and dental care).

Value and structure of revenues by Medical Services

Medical Service SALES

2013 share 2014 share increase

DIAGNOSTICS * 35,902,984 18.00% 18,963,543 9.00% -47.20%

HOSPITAL * 10,742,862 5.40% 12,292,703 5.90% 14.40%

DENTISTRY 23,776,599 11.90% 25,693,722 12.20% 8.10%

CLINICS + ENEL-CARE 129,337,100 64.70% 152,823,380 72.90% 18.20%

Adjustment for sales - NHF 0.00% 0.00%

TOTAL 199,759,544 100.0% 209,773,348 100.0% 5.00%

* together with internal settlements ** drop in revenues from Diagnostics was caused by contribution of a part of diagnostic centres constituting an organised part of the enterprise held to

operate in the field of diagnostics to Centrum Medyczne Diagnostyka sp. z o.o by the Company in 2014. Following, 100% of shares in Centrum Medyczne Diagnostyka sp. z o.o. were contributed by the Company to Centrum Medyczne Diagnostyka Obrazowa sp. z o.o. In 2014 all the shares in Centrum Medyczne Diagnostyka sp. z o.o. were sold and as a result the Company lost control over Centrum Medyczne Diagnostyka sp. z o.o.

2.9. Information on sales markets

The Company operates throughout Poland and does not depend on any client or supplier. None of the suppliers or clients

account for more than 10% of total sales revenues. The National Health Fund is still the biggest individual business partner of

the Company but its share in revenues decreased. In 2014, it was equal to 5.6%.

2.10. Significant agreements

Agreements presented below are the agreements significant for the Company’s activities in the opinion of the Management Board.

Agreement for sale of shares in subsidiary - Centrum Medyczne Diagnostyka sp. z o.o.

On 30 June 2014 the Company, a subsidiary under the business name Centrum Medyczne Diagnostyka Obrazowa Sp. z o.o.

and LUX MED Diagnostyka Sp. z o.o. with registered office in Warsaw concluded an agreement for sale of shares by Centrum

Medyczne Diagnostyka Obrazowa Sp. z o.o. (the Issuer's subsidiary) for the benefit of LUX MED Diagnostyka sp. z o.o., for the

sale of 100% of shares in the share capital of Centrum Medyczne Diagnostyka sp. z o.o. (subsidiary) comprising the following

diagnostic centres: Bielany Diagnostic Centre in Warsaw, Magnetic Resonance Laboratory in Konin, Magnetic Resonance

Laboratory in Mielec, Computed Tomography Laboratory in Poznań, Magnetic Resonance Laboratory in Łomża, Computed

Tomography Laboratory in Wołomin and the Diagnostic Laboratory in Lublin. The selling price for 100% of shares in Centrum

Medyczne Diagnostyka sp. z o.o was set at PLN 52,519,949.00.

Purchase of medical equipment from GE Medical Systems Polska Sp. z o.o.

Conclusion of an agreement with GE Medical Systems Polska sp. z o.o. for the purchase of 4 magnetic resonance imaging

scanners (Optima MR 360 Advance 1.5 and three magnetic resonance imaging scanners Signa HDxt 3.0 GoldSeal) and 11

ultrasound cameras Voluson S6 and ultrasound camera Voluson E6. The selling price for the medical equipment was

stipulated to be the gross amount of PLN 17,618,900.00.



General loan agreement concluded with ING Finance sp. z o.o.

Conclusion of the general loan agreement under which ING Finance sp. z o.o. undertakes to grant the Company a loan in

order to purchase objects of financial in particular medical equipment (magnetic resonances scanners and ultrasound

cameras). The total value including VAT will not exceed the amount of PLN 17,400,000.

An agreement for the provision of medical services with ITI Neovision S.A.

Conclusion of an agreement for an indefinite period of time with ITI Neovision S.A. for the provision of medical services to

employees, persons cooperating with the company and their families. The value of the agreement may amount to

approximately PLN 5,880,000 within the period of 5 years.

Agreement with Canal+ Cyfrowy S.A.

Conclusion of an agreement with Canal+ Cyfrowy S.A. for the provision of medical services to employees, persons

cooperating with the company and their families. The above mentioned agreement was concluded for an indefinite period

and its value in the period of five years may amount to approximately PLN 2,400,000.

Continuation of medical service provision for Philips Lighting Poland S.A.

Conclusion of an agreement for the term of 3 years with Philips Lightening Poland S.A. for the provision of medical services,

including occupational medicine services and preventive care to the employees of Philips Lightening Poland S.A. and lease of

office space and equipment for the performance of the aforementioned services. The agreement begins the fourth year of

cooperation and its value shall amount to approximately PLN 2,340,000.00 net (receivables) during the period of its validity

and PLN 167,904.00 net in terms of liabilities.

Cooperation with Legia Warszawa S.A.

Conclusion of an agreement with Legia Warszawa S.A. for the lease of office space on the premises of the Club for the needs

of the specialised sports medicine centre. The agreement has been concluded for the term of 10 years and its value may

amount to approximately PLN 6,351,036.00 net. In addition, ENEL-MED covered players of the Club with medical care and

became an official medical partner of the Legia Warszawa Football Club. The value of the agreement in terms of both

liabilities and receivables amounted to approximately PLN 8,943,036.00.

Agreement for lease of space for the purpose of health care activity and aesthetic medicine.

Conclusion of an agreement with Union Investment Real Estate GmbH with registered office in Hamburg for the lease of

space in a building located at ul. Bielańska 12 in Warsaw. The office space leased houses ESTELL aesthetic medicine centre -

the new brand of ENEL-MED. The agreement has been concluded for the term of 10 years and its value may amount to

approximately PLN 5,646,662.09 gross.

Annex to the lease agreement for office space for the purpose of the multi-profile clinic in Poznań.

Conclusion of an agreement with Tenali Investments sp. z o.o. “Silesia Business Park” spółka komandytowo-akcyjna for the

lease of office space for the purpose of medical clinic located in Silesia Business Park in Katowice. The lease term is 10 years

since the date of the lease commencement that shall take place on 1 June 2015 and during the term of the agreement the

value shall amount to approximately PLN 9,955,630.40 net.

Lease agreement for office space for the purpose of the clinic located in Arkadia Shopping Mall in Warsaw.

Conclusion of an agreement with Arkadia Centrum Handlowe sp. z o.o. for the lease of office space for the purpose of the

multi-profile clinic operation located in Arkadia Shopping Mall in Warsaw, where ENEL-Med has been running its medical

facility since 2005. The agreement is in force until 29 September 2019 and the total value shall amount to approximately PLN

8,475,523.30 gross.

Lease agreement for office space for the purpose of the medical facility located in a building of Atrium Plaza in Warsaw

Conclusion of an agreement with Kite Duo sp. z o.o. for the lease of office space in a building of Atrium Plaza in Warsaw,

where ENEL-MED has been running its medical facility since 1999. According to the Management Board, the agreement

concluded changes, for the benefit of the Company, financial terms and conditions of the previously concluded agreement

the term of which would expire in the fourth quarter or 2017.

The agreement has been concluded for the lease of a part of office space for the term of 10 years and the second part

making up 1/5 of the leased space for the term of 9 years and 6 months. The total value of the agreement may amount to

approximately PLN 15,761,863.08 gross.



Significant agreements with the National Health Fund

Conclusion of a number of agreements with NHF for diagnostic tests and hospital treatment, carried out in own facilities of

ENEL-MED (the Company's hospitals and diagnostic laboratories). In the period presented the following agreements/annexes

have been concluded, the total value of which exceeded 10% of the Issuer's equity:

- annex to the agreement (report 1/2014) that was received by the Company on 14 January 2014 caused that the value of the

agreements concluded with NHF since the publication of the current report No. 8/2013 amounted to PLN 4,702,354.00 net.

- annex to the agreement (report 6/2014) that was received by the Company on 6 February 2014 caused that the value of the

agreements concluded with NHF since the publication of the current report No. 1/2014 amounted to PLN 7,995,320.00 net.

- annex to the agreement (report 7/2014) that was received by the Company on 10 February 2014 caused that the value of

the agreements concluded with NHF since the publication of the current report No. 6/2014 amounted to PLN 5,089,344.00

net.

Annexes to the agreements with Bank Millennium

On 21 March 2014 the Company concluded annexes to the agreements with Bank Millennium:

- annex increasing the value of long-term credit by the amount of PLN 1,973,151.00 to the total amount of PLN 10, 4000,000.00.

- annex reviewing the multi-product line, global limit granted to the Company in the amount of PLN 17,000,000.00 (decrease

by PLN 3,000,000.00 compared to the previous agreement).

Additionally, an annex to the multi-product line agreement was concluded on 11 August 2014. The bank granted the

Company the limit of PLN 15,000,000.00 (reduction of the limit by PLN 2,000,000.00 compared to the previous agreement)

for the period from 11 August 2014 to 24 April 2015.

Agreement with Property Experts company for provision of maintenance and daily services

Conclusion of an agreement with Property Experts sp. z o.o. on 11 August 2014 for provision of maintenance and daily

services in facilities of Centrum Medyczne ENEL-MED S.A. The agreement concluded caused that the value of the agreements

entered into by the Issuer with Property Experts sp. z o.o. in the last 12 months preceding the conclusion of the aforesaid

agreement amounted to PLN 9,627,346.20 net.

The Company Property Experts sp. z o.o. belongs to the same Capital Group as Proscan sp. z o. o. company, with which the

Issuer had previously signed an agreement on 31 October 2013 for the provision of maintenance and daily services in

facilities of Centrum Medyczne ENEL-MED S.A. (the value of the agreement for the term of 5 years since the day of its

conclusion amounted to PLN 7,365,424.20 net.) The agreement with Proscan sp. z o. o. was terminated as of 11 August 2014.


3. Risk factors and threats

3. RISK FACTORS AND THREATS

3.1. Risk arising from deterioration of the financial situation of the Company’s clients

The sale of prepaid medical care packages to corporate clients constitutes a significant source of the Company's revenue.

There is a risk that if the financial situation of a given client deteriorates significantly, the client could resign from offering

medical care to its employees, which is directly connected with termination of the agreement or reduction of the range of

provided services which would affect the Company's revenue. Another form of potential risk is the reduction of employment

at the client’s company, which could lead directly to a decrease in the related revenue. Nonetheless, the Company provides

services to more than 3,000 companies and the Issuer's clients cover also individual clients and insurance companies, thus

the resignation of one client or reduction of employment in a given company would not have a significant influence on the

Company’s revenue.

3.2. Risk arising from becoming dependent on clients and distribution channels

The main groups of the Company’s clients include corporate clients using prepaid medical care packages, patients of

insurance companies (ENEL-MED provides medical services to the clients of such insurers as: PZU Pomoc, Allianz, Generali,

Compensa, Inter Polska, Signal Iduna or Uniqa) as well as individuals. There is a risk that the share of a given client or a given

distribution channel in the Company’s revenue becomes so significant that the Company's financial results may deteriorate in

case of a loss of such a client or a decrease in the sales in a given channel. Given the above and in order to minimise the risk

of becoming dependent on one particular client or one distribution channel, the Company consistently pursues the policy of

diversifying its sources of revenue.

3.3. Risk of change in the contracting policy of the National Health Fund

The Company has many years’ experience in cooperation with the National Health Fund as it has concluded numerous

contracts with NHF for hospital treatment and diagnostic tests. Each year the contract value is determined for a given year

which means that there is always a risk of changes in the National Health Fund’s contracting policy, which may contribute to

a reduction in the related revenue. However, it should be noted that the sales to NHF in 2014 made up 5.6% of the

Company's revenue. The Issuer has undertaken a number of actions aiming at intensification of the commercial sale of

hospital services and diagnostic tests therefore, the Issuer is not dependent on a single payer in this field of activity.

3.4. Risk of medical malpractice in relation to the Company’s patient

The Company provides a considerable number of medical services, including medical consultations, diagnostic and laboratory

tests, as well as surgeries. As in the case with every medical facility, there is a risk that the Company’s medical personnel will

commit an act of medical malpractice in relation to a patient. As a result of such an act of malpractice, the Company may be

charged the costs of compensation and it may experience significant damage to its image and reputation. In order to

minimise this risk, the Issuer has implemented management and patient service procedures in such situations. A separate

unit has been established in the Issuer’s organisational structure which is responsible for the quality of medical services and

for the compliance of medical processes with the developed standards and procedures. Additionally, both the Company and

the physicians have taken out medical malpractice insurance policies in case of any malpractice.

3.5. Pandemic/epidemic risk

The Company provides medical services to a wide range of patients all over Poland. There is a risk that, in the event of a

pandemic or epidemic, the Issuer will be forced to provide services to a significantly larger number of patients, which may

negatively influence the Company’s financial performance and the effectiveness of its operations. In order to minimise this

risk, the Company has developed relevant procedures and standards of conduct to be followed in case of the above-

mentioned risk (the pandemic plan), which were to some extent used in



2009 when facing the threat caused by the A/H1N1 virus. The main rules of the developed pandemic plan provide for

preparing the method of dealing with the patients suspected to have an infection, changing the department’s work

organisation, conducting the campaigns that promote pro-health behaviour and minimise the risk of infection, introducing

quick diagnostic tests thanks to which viral infections may be differentiated and shortening the time spent on one visit during

the period of an increased number of visits.

3.6. Risk associated with sensitive data processing

The Issuer provides complex medical services nationwide. Keeping patients’ medical records means that the Company has

access to particularly protected sensitive data. There is a risk that an unintentional disclosure of sensitive data may occur in

the course of operating activities. In order to minimise the risk, the Issuer has developed and implemented the principles of

the personal data protection policy. In their daily work, all employees and partners of the Company are obliged to strictly

follow the aforementioned policy. The data protection policy functions as the procedure being a part of the quality

management system certified for compliance with ISO 9001:2008 standard. The correct process of safe personal data

processing is constantly monitored by the Chief Information Security Administrator at the registered office of the Issuer, as

well as by local Information Security Administrators who functions as the branch managers. Each and every employee and

partner must report to the Administrator any information about suspected cases of non-compliance with the personal data

protection policy. The role of the Information Security Administrator is to immediately analyse reasons of breaches and take

measures aimed at avoiding similar incidents in the future.

3.7. Risk of significant change in the macroeconomic situation in Poland

The Company carries out its business activities on the national market of medical services. For that reason, the financial

results achieved by the Issuer are also indirectly connected with such macroeconomic indicators as the GDP growth, the level

of unemployment, the growth dynamics of salaries and the level of inflation and interest rates. These factors indirectly

influence the demand for medical services both among corporate and individual clients, as well as among insurance

companies. They also influence the level of the budget of the National Health Fund, which is the largest individual client of

the Company.

In 2014, the Monetary Policy Council reduced the interest rates by 50 base points (bps). This decision was made in October

2014.Since that moment the reference rate has been 2%. It reached the lowest level in history. Throughout the entire 2014,

inflation was below the lower limit of the inflation target range, while in July the level dropped below zero. In December

2014, the Consumer Price Index (CPI) reached -1% year/year.

The beginning of 2014 was the continuation of the dynamics of GDP growth. In the first quarter it increased by 3.4%

year/year. By the end of the year the dynamics of GDP slowed down slightly. The Central Statistical Office estimates speak of

an increase by 3.0% in the fourth quarter, but throughout the year, the Polish economy has reached the level of approx. 3.2%

growth that is the value that was the average of the forecasts for 2014, published by the end of 2013. This situation occurred

despite the Ukrainian-Russian crisis. Despite the difficulties in trade with our two largest eastern neighbours, in 2014 Polish

exporters sold abroad goods of the value of EUR 163 billion which is 5.3% more than in 2013.

The influence of the expected changes in the dynamics of GDP growth, unemployment and real salaries should not have any

significant influence on the Company’s financial situation. It should be emphasized that the Company’s revenue is mainly

dependent on long-term contracts. Moreover, the Company’s services are used by individuals who higher income and who

will be able to afford to maintain the current expenditure structure even if the dynamics of the salary growth slows down - as

it was in 2012 and 2013. However, one should notice the increase in real salaries and decrease in structural unemployment.

A better economic situation in Poland is mainly consequence of the upturn of economy in the Euro zone, the increase in

export to other markets and the increase in consumption as a result of more optimistic expectations of consumers in the

scope of their situation in the future, as well as low interest rates. An improved situation is also noticeable in the area of

investments by enterprises. Still, the full use of aid funds of the next budget perspective did not start. It should be expected

that the ability to use these funds shall increase the intensity of the investments.



It should be emphasised that political risk related to unfavourable development of the international situation remains higher.

Events in Ukraine and intensification of Russian and Ukrainian relations and consequently relations between Russia and the

Western world may have significant impact not only on the Polish economy but also on financial markets. Political changes in

Greece and the risk of this country leaving the Euro zone should also be considered. The escalation of problems referred to

above, may lead to the weakening of the Polish currency, drops in the stock exchange, or the increase in profitability of

treasury bonds. Nevertheless, upon writing this report, it is difficult to assess the probability of different scenarios which may

have an impact on the development of political situation.

3.8. Risk of significant foreign exchange fluctuations

Foreign exchange fluctuations have an influence on the Company’s operating activities and in particular the rent payments

(which in most cases are denominated in EUR) and payments made for medical equipment (which are usually also

denominated in EUR). Rent payments are made in PLN at the exchange rate of the National Bank of Poland. If there are

significant deviations of the actual exchange rate from the assumed level, the Issuer may record a gain or loss on foreign

exchange differences. The Company constantly monitors the changes in foreign exchange rates. The Company does not

hedge foreign exchange risk by using derivative financial instruments. In order to minimise the influence of foreign exchange

rates fluctuations on the financial results of the Company, the Management Board monitors the market rental rates, taking

into account the current foreign exchange rates on an on-going basis.

It should be emphasised that in accordance with a majority of forecasts, quite a considerable variability of PLN exchange rate

is expected in connection with the situation beyond the eastern border of Poland and in Greece. In the long terms bases, it is

still expected that the value of the Polish currency shall increase. It should be also noted that in recent weeks, the risk of a

speculative attack on the Polish currency has increased. It is related to the fact that in the current situation in Poland we deal

with very high real interest rates.

3.9. Risk of significant changes in interest rates

The Company finances its activities using external funds, including credits and loans, as well as purchases medical equipment

under finance lease. The finance charges related to servicing external financing are directly dependent on the level of the

WIBOR rate. If the level of interest rates changes, the Company’s financial results may be different than those assumed. At

the end of 2012, the Monetary Policy Council started a cycle of interest rates’ reductions. At this point, it is expected that

interest rates may move up at the end of 2015 at the earliest. However, reductions in the upcoming months cannot be

excluded. Analysts draw such conclusions based on the latest inflation projections prepared by NBP and statements of the

members of the Monetary Policy Council. The Company manages financial liabilities in a way allowing minimisation of

financial costs related to debt service. Owing to years of cooperation with financial institutions, it negotiates advantageous

interest rates. The Management Board constantly analyses the situation in the banking market and if there are new

favourable opportunities for the Company to obtain external funding it renegotiates the loan agreements in order to improve

their conditions. The risk of changes in interest rate is also reduced by investing spare cash held in bank accounts in the form

of term deposits. The Company does not hedge the interest rate risk by using derivative financial instruments.

3.10. Credit risk

The Company is not exposed to too much risk due to concentration of credit sales. The Company enters into transactions

only with reputable companies with sound credit standing. All the customers who wish to trade on credit terms undergo

verification procedures. Furthermore, owing to ongoing monitoring of receivables, the Company's exposure to the risk of bad

debts is not significant. Sales transactions with individuals are settled in cash or after prepayment. With respect to the

Company's other financial assets such as cash and cash equivalents, available-for-sale financial assets, the Company's credit

risk arises as a result of the inability to make payment by the other party to the agreement.



In relation to financial liabilities credit risk may arise from the Company's inability to comply with the terms and conditions

stipulated by credit agreements. Basically it means non-fulfilment in particular areas of the contractual debt ratios, which

may lead to an increase in margin, request for additional security, request for presenting corrective program or even in

extreme case termination of the credit agreement by the Bank. In order to minimise the risk, the Company constantly

monitors the indicators and in case of any deterioration of the situation it enters into negotiations with creditors.

There are no significant concentration of credit risk in the Company's operations.

3.11. Liquidity risk

The Company's liquidity risk management assumes current control and planning of cash flows in the Company in order to

ensure appropriate level of cash flow necessary to finance the Company's current operations.

The Issuer monitors the risk of funds shortage using periodic liquidity planning tool. This tool takes into account the due

dates/maturity of both investments and financial assets (e.g. accounts receivable, other financial assets) and expected cash

flows from operating activities. Cash flow surpluses are invested in bank deposits, taking into account the corresponding

maturity, so that they have no negative impact on the Company's current liquidity. The Issuer aims at maintaining a balance

between continuity and flexibility of financing by using various sources of financing such as overdrafts, bank loans, finance

leases and lease agreements with option to purchase.

3.12. Risk of changes in legal regulations and their interpretations

The changes introduced or planned to be introduced to provisions of law and in particular to economic, tax and labour law,

may constitute a risk factor causing negative consequences for the Company. Similar consequences result from the changes

in interpretation of binding laws, in particular in relation to tax law regulations. The Company’s activity is also indirectly

influenced by regulations concerning the public health care sector, including regulations that stipulate the methods and rules

of its financing, as well as define the scope in which commercial patients may be admitted to public sector facilities.

Depending on the nature of changes, they may have either positive or negative influence on the activity of the Issuer and

other entities in the sector.

3.13. Risk of more intense domestic and foreign competition in the market

Investors recognize the attractiveness of the Polish market of private medical services, as well as good perspectives of further

development in this sector. The aforementioned may result in an increase in competition of Polish and foreign enterprises

which may be observed based on the latest transactions on the Polish market of medical services. There is a risk that as a

result of a more intense competition, the Company’s revenues and profits may decrease. However, ENEL-MED has been

operating in the competitive environment for many years and has been maintaining its sales dynamics all the time.


4. Basic economic and financial ratios. The Company's development prospects

4. BASIC ECONOMIC AND FINANCIAL RATIOS.

THE COMPANY’S DEVELOPMENT PROSPECTS

4.1. Selected financial data

The year 2014 was a very good year for the Company both in terms of revenue growth and improved efficiency. Considerable

increases in sales occurred in the field of Clinics (sales of prepaid medical care packages, services provided to individual

clients and insurance companies).

Activity area Sales 2013 Sales 2014 Growth

Clinics * 158,836 182,984 15%

Diagnostics 31,325 15,673 -50%

* Medical and dental clinics

Drop in revenues from Diagnostics resulted from the fact that an organised part of the enterprise composed of 7 diagnostic

facilities was contributed to Centrum Medyczne Diagnostyka sp. z o.o. by the Company in 2014. Subsequently, 100% of

shares in Centrum Medyczne Diagnostyka sp. z o.o. was contributed to Centrum Medyczne Diagnostyka Obrazowa sp. z o.o.

by the Company. With regard to the sale by the Issuer's subsidiary under the business name Centrum Medyczne Diagnostyka

Obrazowa sp. z o.o. of 100% of shares in Centrum Medyczne Diagnostyka sp. z o.o. financial means were obtained that will

allow for implementation of the Company's long-term strategy including new investments (both the modernisation of the

existing facilities and establishment of new ones). In the second half of 2014 Zacisze Hospital in Warsaw was equipped with

brand new magnetic resonance imaging. For 2015, further investments are planned within the Diagnostics and Clinic

divisions.

It should be noted that despite the decrease in sales under diagnostics representing approx. 7.5% in the total Company's sale,

the total sales from all divisions increased by 5% per year compared to 2013.

The increase in revenues from clinics is mainly the result of intensive sales of prepaid medical care packages, the

development of cooperation with insurance companies and high quality of services provided in our facilities which have also

been recognised by individual patients.

4.2. Financial factors and events influencing achieved financial results

In order to achieve long-term development strategy, in 2014, the Issuer's subsidiary under the business name of Centrum

Medyczne Diagnostyka Obrazowa sp. z o. o. sold 100% of shares in Centrum Medyczne Diagnostyka sp. z o. o. (the company

to which the Issuer contributed the organised part of the enterprise intended for carrying out business activity in the scope of

diagnostics). Financial means obtained as a result of this transaction will make it possible to finance new investments.

In May 2014 a new multi-profile facility located in Promenada Shopping Mall in Warsaw was opened. In the second half of

the year new magnetic resonance scanners were purchased for the Zacisze Hospital in Warsaw and in November/December

2014 ESTELL a new clinic - ESTELL aesthetic medicine centre commenced operation.

In 2014 the Company focused all its efforts on increasing sales (both in terms of subscribers and individual clients) and

further improvement of cost-efficiency. Better use of existing infrastructure combined with significant cost savings resulted in

a significant improvement the Company's financial result.


4. Basic economic and financial ratios. The Company's development prospects

4.3. Prospects of business activity development.

The Company’s development strategy for the years 2014-2016

In the fourth quarter of 2013 the Management Board of Centrum Medyczne ENEL-MED S.A. adopted a strategy for the

Company's development for the years 2014-2016. The strategy announced put a strong emphasis on expanding the scale of

operations into new areas, as well as increasing the efficiency of the offered services.

The Company's strategy assumes an increase in effectiveness of sales of prepaid medical care packages, including the

development of business activities in new markets and - as the potential is filled in - the development of clinics in selected

locations. In 2014 the Company chose location for a multi-profile clinic in Katowice that is planned to be opened in 2015. In

the second and third quarter of 2015 ENEL-MED shall launch the second medical facility in Wrocław. Pursuant to the adopted

strategy, the Management Board of ENEL-MED announced also establishment of two new highly specialist profiled facilities

in Warsaw, as well as an increase of share of dental services in the portfolio through gradual increase in the number of dental

surgeries. Launching specialist profiled facilities is aimed at the development of commercial services for individual clients in

selected specialities such as orthopaedics with rehabilitation, aesthetic medicine, etc. The first facility - aesthetic medicine

centre under the business name of ESTELL was launched in 2014. Another - sports medicine centre, located at Legia

Warszawa Football Club is planned to be opened in 2015. The expected return on investments of commercial facilities

located in Warsaw is two years.

An equally important element in the Strategy includes activities in the area of long-term medical care for the Elderly. This

project will be implemented by Bonus Vitae sp. z o.o., in which 40 % of shares are held by Enelbud sp. z o.o. (the Issuer's

subsidiary). The first elderly home care is going to be launch in Głuchołazy (the Opolskie Voivodeship), the opening is planned

for the second quarter of 2016.

Dental services play a significant role in the activities of ENEL-MED. It should be emphasised that the Company started its

business activities in 1993 from the provision of dental services at the highest level. In the subsequent years, this area is

planned to be intensively developed by increasing the number of dental surgeries and different than before positioning of

dental services. The Company intends to obtain a significant increase in sales of commercial services in this area and win the

leading position in the Warsaw market.

The Company continues efforts to increase sales of commercial services which have already been noticed in the second half

of 2014. Wishing to achieve better financial performance in hospitals, the Company has put a lot of effort into using the

potential of ENEL-MED in obtaining patients from the inside and outside by the website corresponding to the patient's needs.

Additionally, variable cost optimisation was made.

Completion of investments planned by ENEL-MED requires the investment outlays in the amount of PLN 50 million. The

Company intends to use own resources of the Capital Group, including proceeds from the sale of 100% of shares in Centrum

Medyczne Diagnostyka sp. z o. o. (the company to which the Issuer contributed the organised part of the enterprise intended

for carrying out business activity in the scope of diagnostics) and external sources of funding. All new investments will be

carried out with the maintenance of the financial security of the Company.

Implementation of the approved Strategy shall lead to dynamic development and market position strengthening of Centrum

Medyczne ENEL-MED in subsequent years.


5. Additional information

5. ADDITIONAL INFORMATION

5.1. Information on organisational or capital relationships of Centrum Medyczne ENEL-MED S.A. with other entities and presentation of domestic and foreign investments thereof

Centrum Medyczne ENEL-MED S.A. holds 80 shares making up 80% of the share capital of Enelbud Sp. z o.o. and Enelbud sp. z

o.o. holds 40 shares making up 40% of the share capital of Bonus Vitae sp. z o. o.

Additionally, the Issuer holds 510,000 shares making up 100% of the share capital of Centrum Medyczne Diagnostyka

Obrazowa Sp. z o.o.

On 28 February 2014, the Extraordinary Meeting of Shareholders of Centrum Medyczne Diagnostyka sp. z o. o. (the company

in which Centrum Medyczne ENEL-MED S.A.) holds 100% of share in the share capital) adopted a resolution on increasing the

share capital from the amount of PLN 5,000.00 to the amount of PLN 500,000.00 that is by the amount of PLN 495,000.00, by

creating 4,950 new shares with the nominal value of PLN 100.00 each. All newly established shares were taken up by

Centrum Medyczne ENEL-MED S.A. on 28 February 2014. These shares were paid for in full by in-kind contribution in the

form of a set of tangible and intangible assets separated organisationally and financially which are used to carry out business

activity in the field of diagnostic imaging at the following facilities: Bielany Diagnostic Centre in Warsaw, Magnetic Resonance

Laboratory in Konin, Magnetic Resonance Laboratory in Mielec, Computed Tomography Laboratory in Poznań, Magnetic

Resonance Laboratory in Łomża, Computed Tomography Laboratory in Wołomin and Diagnostic Laboratory in Lublin,

constituting an organised part of the enterprise with capacity of operating as an independent enterprise. The

aforementioned part of the enterprise was contributed to Centrum Medyczne Diagnostyka sp. z o.o. as of 30 April 2014.

Subsequently, on 29 May 2014 the Extraordinary Meeting of Shareholders of Centrum Medyczne Diagnostyka sp. z o. o.

adopted a resolution on increasing the share capital of this company from the amount of PLN 5,000.00 to the amount of PLN

50,995,000.00 by issuing 509,950 new shares with the nominal value of PLN 100.00 each. All the newly established shares

were taken up by the Company on 29 May 2014 and paid for in full by in-kind contribution in a form of 5,000.00 shares in

Centrum Medyczne Diagnostyka Sp. z o. o. with the nominal value of PLN 100.00 each, of total nominal value of PLN

500,000.00. The contributed shares constituted 100% of shares in the share capital of Centrum Medyczne Diagnostyka Sp. z

o.o. As a result of the described changes Centrum Medyczne Diagnostyka Obrazowa Sp. z o.o. acquired 100% of shares in the

share capital of Centrum Medyczne Diagnostyka Sp. z o.o. In connection with the conclusion of a purchase-sale agreement on

30 June 2014 by Centrum Medyczne Diagnostyka Obrazowa sp. z o.o. for the benefit of LUX MED Diagnostyka sp. z o. o., for

the sale of 100% of shares in the share capital of Centrum Medyczne Diagnostyka sp. z o.o., the Issuer lost control over

Centrum Medyczne Diagnostyka sp. z o. o.

The Company concluded also an agreement with GE Medical Systems Polska sp. z o. o. for the purchase of 4 magnetic

resonance imaging scanners and twelve ultrasound cameras, referred to in point 2.10.

With the exception of the transaction specified above, there were no other significant domestic and foreign transaction in the financial year 2014.

5.2. Information on significant transactions concluded by the Company or its subsidiaries with

related parties pursuant to non-arm’s length conditions

Neither the Company nor its subsidiaries concluded transactions with related parties pursuant to non-arm’s length

conditions.



5.3. Information on concluded and terminated credit and loans agreements

(Business) name

Type of

credit/loan

Amount of credit

loan acc. to the

agreement

Currency

Interest rate

conditions

Repayment

Date

Millennium

Bank SA

annex to the agreement

as of 2013

- corporate

mortgage credit

10,400,000.00

PLN

WIBOR1M+ 0.9%

margin

24 May 2017

Millennium

Bank SA

annex to the agreement

as of 2013

- global

overdraft

15,000,000.00

PLN

WIBOR1M+ 0.9%

margin

overdraft

limit granted

- to 24 April 2015

Credit Agricole

Bank Polska S.A.

annex to the

multi-purpose

credit line

agreement

3,000,000.00

PLN

WIBOR1M+ 0.55%

margin

overdraft

limit granted

- to 9 June 2014

* under the same annex the Bank granted the Company a limit in the amount of 20,000,000.00 for the period from 25 March 2013 to 24 March 2014 and

17,000,000.00 for the period from 25 March 2014 to 10 August 2014. Starting from 11 August 2014 the credit referred to above is binding. Other terms

such as the amount of credit and interest rate have remained unchanged.

5.4. Information on granted loans with particular focus on the loans granted to related parties

In 2014, Centrum Medyczne ENEL-MED S.A. granted the following loans:

(Business) name Amount of

Loan Type Currency Interest rate

conditions

Repayment

Date

Centrum Medyczne

Diagnostyka Obrazowa

sp. z o.o. (the Issuer's

subsidiary)

350,000.00

loan agreement

PLN

4% per year

31

December 2014

Centrum Medyczne

Diagnostyka sp. z o.o. (the

Issuer's subsidiary)*

20,000.00

loan agreement

PLN

4% per year

30 June 2014

* the company is no longer the Issuer's subsidiary. On 30 June 2014 Centrum Medyczne Diagnostyka Obrazowa sp. z o o. (the Issuer's subsidiary) sold 100% of shares in Centrum Medyczne Diagnostyka sp. z o.o.



5.5. Information on warranties and guarantees granted and received

Specification

surety/guarantee for Title Currency 31

December 2014

bank guarantee

issued by

Bank Millennium S.A.

Union Investment Real Estate

GmbH

performance bond

EUR *

145,837

bank guarantee issued by


Kite Duo Sp. z o.o.

performance bond

EUR *

422,601

bank guarantee issued by


GSSM Warsaw Sp z o.o.

performance bond

EUR *

429,036

* calculated according to the average exchange rate of NBP as at 31 December 2014

5.6. Explanation of differences between financial results published in the annual report and previously announced annual forecasts for a given year

The Company did not publish any financial forecasts for the year 2014.

5.7. Evaluation of financial resources management

Debt ratios are monitored by the Company on an on-going basis. As a result of debt reduction, they significantly improved in

the last year. Total debt ratio dropped at the end of 2014 reaching a safe level of 0.36. Liabilities are paid on time. Collection

of receivables was also significantly improved. Receivables turnover in days equals 19 days.

5.8. Evaluation of potential implementation of investment projects

The Issuer intends to use the funds obtained by the Issuer's Capital Group from the sale transaction of 100% of shares in the

share capital of the Issuer's subsidiary - Centrum Medyczne Diagnostyka sp. z o.o., composed of 7 diagnostic facilities, for

launching new medical facilities.

In 2015 the Company plans to open sports medicine centre at the sports club Legia Warszawa. Furthermore, the plans cover

opening of multi-profile and diagnostic facilities in Katowice and Cracow. Additionally, a second medical facility in Wrocław is

planned to be opened. The Issuer intends to finance all these investment from the Capital Group's own funds.

5.9. Evaluation of factors and non-standard events influencing the result of business activity

In 2014, the contract with the National Health Fund concerning hospital treatment was decreased by 8% as compared to

2013.

Drop in revenues caused by the sale of 100% of shares in the share capital of Centrum Medyczne Diagnostyka sp. z o.o

composed of 7 diagnostic facilities resulted in decrease in sales from the diagnostic imaging. Simultaneously, in 2014 the

revenue from sale of prepaid medical care packages increased by 20% compared to the previous year which meant that in

2014 the Company reached higher total sales by 5% compared to 2013. It was accomplished owing to the development of

other operating sectors.



5.10. Description of external and internal factors material for the development of the enterprise and description of the development prospects of the Company’s business activity

Description of factors material for the development of the enterprise is presented in point 3 of this report which specifies risk

factors and threats to the Company. Additionally, the Issuer’s development prospects are presented in point 4.3.

5.11. Changes in the basic management principles of the Company and its capital group

Change of the structure in the division of the Prepaid Medical Care Packages and Health Insurance, introduced in 2013, gave

results already in 2014, which resulted in a 20% increase in sales. Moreover, the model of management of the costs from

prepaid packages strictly connected with the number of patients and the monthly amount of lump sum paid by them was

improved. It contributes to optimisation of the quality for the patient and costs for the Company. A distinction of FFS patients

(who pays for the service provided) and subscribers was made and thus related sources of revenue were distinguished. A

body responsible for management of the aesthetic medicine centre was established within the structure of the Company.

In the presented period, optimisation of the structure of the purchase department was made by synergy of the purchase and

investment departments. A Purchase and Investment Director was appointed for the newly established Department.

Despite the fact that an organised part of the enterprise held to provide diagnostic services was contributed to Centrum

Medyczne Diagnostyka sp. z o.o., ENEL-MED did not stop its activity in this field, on the contrary, it continues to develop

diagnostic imagining in the scope of magnetic resonance tests which is still considered by the Company as profitable

business. In the third quarter of 2014, four magnetic resonance scanners and twelve ultrasound cameras were bought from

GE Medical Systems Polska sp. z o.o and the purchase price amounted to PLN 17,618,900.00, thus the diagnostic imaging will

continue to grow. In the middle of the year Diagnostic and Hospital Division was split up into two divisions. Former Sales

Manager - Tomasz Kupczyk was appointed a Diagnostic Imaging Director and Aleksandra Rzepecka became a Director General

for Hospitals. These divisions influenced an increase in sales of commercial services in hospitals in the second half of 2014 by

32% compared to the first half of 2014.

In 2014, the area of e-commerce was developed in the Marketing and Communication Departments and an on-line store was

opened which the Company plans to developed in 2015.

Subcontractors' management model was optimised (the Issuer cooperates with over 1.300 partner facilities) which reduced

the average cost per patient incurred by the Company in co-operating facilities.

5.12. Agreements concluded between the Company and the managing persons that stipulate

compensation for the resignation or loss of office without important reasons, or if their deposition follows the Company's merger by acquisition

The Company did not enter into any agreements with managing persons providing for compensation in the case of their

resignation or termination of employment on a particular position.



5.13. Value of remuneration, rewards or benefits for persons managing and supervising the Company

Remuneration of Members of the Issuer's Management Board in Centrum Medyczne ENEL-MED S.A. (in PLN)

First name and surname Gross remuneration payable for 2014 Gross remuneration paid for 2014

Adam Rozwadowski 540,000.00 525,000.00

Jacek Rozwadowski 36,000.00 36,000.00

384,000.00* 377,000.00*

TOTAL 960,000.00 938,000.00

* for the position of CEO held by Jacek Rozwadowski Remuneration premiums amount to PLN 33,350.00. The total amount of remuneration payable with remuneration premiums amounts to PLN 993,350.00.

Remuneration of Members of the Management Board in the Issuer's subsidiaries (in PLN)

Centrum Medyczne Diagnostyka Obrazowa sp. z o.o.

First name and surname Gross remuneration payable

for 2014

Gross remuneration paid for

2014

Adam Rozwadowski 120,000.00 100,000.00

Jacek Rozwadowski 60,000.00 50,000.00

TOTAL 180,000.00 150,000.00

Remuneration of Members of the Supervisory Board in Centrum Medyczne ENEL-MED S.A. (in PLN)

First name and surname Gross remuneration payable

for 2014

Gross remuneration paid

for 2014

Anna Rozwadowska 240,000.00 260,000.00

Adam Ciuhak 30,000.00 32,500.00

Janusz Jakubowski 30,000.00 32,500.00

Anna Piszcz 30,000.00 32,500.00

Zbigniew Okoński 30,000.00 32,500.00

TOTAL 360,000.00 390,000.00

Remuneration of Members of the Supervisory Board in the Issuer's subsidiaries (in PLN)

Enelbud sp. z o.o.

First name and surname

Gross remuneration 2014

Janusz Jakubowski 108,000.00



5.14. Information on total number and nominal value of all shares and shares in the related parties held by members of the management and supervisory boards of the Company

Shares held in Centrum Medyczne ENEL-MED S.A. by the managing and supervising persons as at 31 December 2014 based

on information provided by the persons obliged is presented in the table below.

Number of shares in Centrum

Medyczne ENEL-MED. S.A.

Nominal value of all

shares (PLN)

Adam Stanisław Rozwadowski 7.124.000 7.124.000

Jacek Jakub Rozwadowski 994.376 994.376

Anna Maria Rozwadowska 7.123.950 7.123.950

According to the information available to the Company in 2014 Jacek Jakub Rozwadowski, the Deputy President of the

Management Board increased the number of the Issuer's shares held, referred to in point 1.3 of this report.

Shares held in Enelbud sp. z o. o. - in the subsidiary of Centrum Medyczne ENEL-MED S.A.

- by the managing and supervising persons as at 31 December 2014 is presented in the table below.

Number of shares in Enelbud Sp. z o. o.

Nominal value of all shares (PLN)

Janusz Jakubowski 20 10.000

5.15. Information on agreements known to the Company that might in the future result in changes of proportions of shares held by existing shareholders and bondholders

The Company is not aware of any agreements concluded in 2014 that might in the future result in changes of

proportions of the shares held.

5.16. Information on the system of control over employee shares

There is no employee share plan functioning in the Company

5.17. Information on proceedings pending before a court, competent arbitration authority or

public administration body concerning liabilities and receivables

The Company did not take part in any proceedings held before any court, arbitration body or public administration body with

regard to the Company’s liabilities or receivables in the amount equal to at least 10% of equity.

The total amount of claims in all proceedings pending with reference to the liabilities did not exceed 10% of the

Issuer’s equity.

The total amount of claims in all proceedings pending with reference to the Company’s receivables did not exceed 10% of the Issuer’s equity as well.

5.18. Objectives and methods of financial risk management

The Company is exposed to the following types of financial risk:

1. Interest rate risk.

2. Foreign exchange risk.

3. Credit risk.



The objective of risk management is to minimise its influence on financial results of the Company and to ensure the financial

liquidity of the Issuer.

The Company manages the financial liabilities in a way allowing minimisation of financial costs related to debt service. Owing

to years of cooperation with financial institutions, it negotiates advantageous interest rates. Last year, the Company started

cooperation with Bank Millennium that being one of the main clients in the scope of prepaid packages became also the main

partner financing the Company’s activities.

The Management Board pays significant attention to ensuring cash flows for the Issuer which allow payment of financial

liabilities in accordance with the signed agreements.

The Company is exposed to the risk of foreign exchange rates fluctuation on account of costs of space leased. The foreign

exchange risk arises directly from the rates for lease determined in foreign currency converted into PLN. In order to minimise

the influence of foreign exchange rates fluctuations on the financial results of the Company, the Management Board

monitors the market rental rates, taking into account the current foreign exchange rates on an on-going basis. The Company

expects that it is more probable that the Polish currency will strengthen in 2015 than depreciate and therefore the influence

of the foreign exchange risk should be advantageous to the Company in the current year.

The Issuer is also theoretically exposed to the risk connected with possible withdrawal of financial institutions from financing

the Company's activities. To mitigate the risk, the Company makes every effort to improve its effectiveness and thus its

financial results, which results in maintaining appropriate bank ratings.

The Company pays also considerable attention to establishing partner and long-term relations with financial partners by

fulfilling its obligations and ensuring the transparency of provided financial information.

In addition, the Company applies also diversification of both financing forms (credits, leases, financing by suppliers) and

financing institutions, therefore is not dependent on one financing partner.

Taking the above into consideration, the Management Board considers this risk as not very probable.


6. Entity authorised to audit financial statements

6. ENTITY AUTHORISED TO AUDIT FINANCIAL STATEMENTS

On 27 November 2014 the Company concluded an agreement with PKF Consult sp. z o. o. for audit of the Company's

separate financial statements as at 31 December 2014 in accordance with IAS/IFRS and the consolidated financial statements

of the Capital Group prepared as at 31 December 2014 pursuant to IAS/IFRS. The parties agreed that the time-limit for audit

performance was from the date of signing the agreement to 6 March 2015.

Moreover, on 30 July 2014 the Company concluded an agreement with PKF Consult sp. z o. o. for audit of the Company's

separate financial statements and the consolidated financial statements of the Capital Group prepared as at 30 June 2014

pursuant to IAS/IFRS. PKF Consult Sp. z o. o. is a company entered into the list of entities authorised to audit financial

statements under No. 477.

The table below shows the remuneration of the entity entitled to audit the financial statements:

PLN (net) 2014

Remuneration of PKF Consult Sp. z o.o., including:

Audit of the annual separate financial statements 29,000

audit of the annual consolidated financial statements 12,000

Other assurance services, including the review of the financial statements (separate

and consolidated)

26,000

Advisory services PLN (net)

2013

Remuneration of PKF Consult Sp. z o.o., including:

Audit of the annual financial statements 29,000

Other assurance services, including the review of the financial statements 17,000

Advisory services


7. Corporate governance

7. CORPORATE GOVERNANCE

7.1. Corporate governance principles

Corporate governance principles that the Company follows are included in the “Code of Best Practice for WSE Listed

Companies” (hereinafter referred to as the Code of Best Practice). The Code of Best Practice is available on the website of the

Warsaw Stock Exchange in Warsawwww.corp-gov.gpw.pl devoted to issues of corporate governance.

7.2. Information on exceptions in application of corporate governance principles

In 2014, the Company applied and complied with all of the rules set forth in the “Code of Best Practices for WSE Listed

Companies", excluding the following rules:

- The Company did not broadcast the General Meetings of Shareholders with the use of the Internet. The Company pursues

a transparent and effective information policy, runs website based on the model investor relations service, uses modern

methods of Internet communication, yet in 2014, it did not broadcast the General Meeting with the use of the Internet.

Bearing in mind the shareholding structure of the Company, the General Meeting was attended by a significant number of

shareholders representing more than 70% of the total number of votes and therefore the Company did not broadcast the

General Meeting and did not publish it on its website. Moreover, the General Meeting was held in a place that enabled the

participation of the biggest possible number of shareholders that is in Warsaw, at the Company’s registered office.

- Shareholders’ questions on issues on the agenda submitted before and during the General Meeting were not published on

the Company's website. The Company takes the view that since a notary public took the minutes of the General Meeting, it

was not necessary to publish such records. All the resolutions adopted by the General Meeting both Ordinary and

Extraordinary were published in the ESPI system and on the Company’s website.

- The company did not enable its shareholders to exercise the voting right during the General Meeting either in person or

through a plenipotentiary, outside the venue of the General Meeting, using electronic communication means. Application of

the aforementioned rule was not possible in 2014 because the Company’s Articles of Association do not include relevant

regulations in this scope (Art. 406(5) § 2 of the Code of Commercial Partnerships and Companies). Thus, the change of this

condition would require the adoption of a resolution on the amendment of the Articles by the shareholders of the Company

and the entry of such an amendment into the register of entrepreneurs of the National Court Register. Regardless of the

above, the Company enables its shareholders to exercise the voting rights either in person or through a plenipotentiary. It is

important that the General Meeting of Shareholders was held at the Company's registered office in Warsaw, which made it

easy for the shareholders or their plenipotentiaries to be present at the venue of the General Meeting. Shareholders who

were not present at the General Meeting of Shareholders were informed about essential points of the course of the General

Meeting of Shareholders immediately after its closing. It takes place because the Company fulfils the reporting obligations

imposed by the provisions of law and not later than within 24 hours of closing the General Meeting of Shareholders, it

provides - in the form of current reports - the information about the content of adopted resolutions, results of voting and the

information about possible objections - analogous information is also published on the Company's website, as it was in 2014.

It should be also emphasised that the application of this rule poses a threat of technical and legal nature due to little

experience in the market in the scope of organisation of General Meetings of Shareholders with the use of electronic

communication means. Yet, the Company does not exclude the possibility of applying this rule in the future.

- In 2014, the Company operated a corporate website but it did not publish the records of the General Meeting in audio or

video format. The aforementioned rule was not applied by the Company as - according to the experience - there is no need of

recording the General Meeting of Shareholders in audio or video format. Pursuant to the assessment of the Company,

fulfilment of the reporting obligations imposed by the applicable laws by providing current reports including information on

the content of adopted resolutions, results of voting and information about possible objections and publishing

http://www.corp-gov.gpw.pl/



such information on the Company's website, enables the investors to get informed about the essential points of the course of

the General Meeting of Shareholders. Furthermore, the decision of the Company about the non-fulfilment of this rule

secures the Company against possible claims filed by the shareholders who may not give their consent to the publication of

their image or publishing of their statements. However, the Company does not exclude the application of this rule in the

future.

- The Company did not provide the shareholders with the possibility of participating in the General Meeting with the use of

electronic communication means in a form of the real-life broadcast of General Meeting and real-time bilateral

communication where shareholders may take the floor during a General Meeting from a location other than the General

Meeting. The application of the aforementioned rule was not possible in 2014 because the Company’s Articles of Association

do not include relevant regulations in this scope. Pursuant to the provisions of Article 406 (5) §1 of the Code of Commercial

Partnerships and Companies, the real-life broadcast of General Meetings and real-time bilateral communication where

shareholders may take the floor during a General Meeting from a location other than the General Meeting are possible if the

Company’s Articles of Association include the regulation which permit it. Thus, the change of such a condition would require

the adoption of a resolution on the amendment of the Articles by the shareholders of the Company and the entry of such an

amendment into the register of entrepreneurs of the National Court Register. Regardless of the above, it should be noted

that the Company enables its shareholders to participate in the General Meeting of Shareholders either in person or through

a plenipotentiary. The General Meeting of Shareholders is held at the Company's registered office in Warsaw, which makes it

easy for the shareholders or their plenipotentiaries to be present at the venue of the General Meeting and the shareholders

who were not present at the General Meeting of Shareholders were immediately informed about the essential points of the

course of the General Meeting of Shareholders. It takes place because the Company fulfils the reporting obligations imposed

by the provisions of law and not later than within 24 hours of closing the General Meeting of Shareholders, it provides - in the

form of current reports - the information about the content of adopted resolutions, results of voting and the information

about possible objections - analogous information is published on the Company website. Thus, pursuant to the assessment of

the Management Board, the rules arising from the provisions of law, the Company’s Articles of Association and the

Regulations of the General Meeting of Centrum Medyczne ENEL-MED S.A. are sufficient to enable the shareholders to

participate in the General Meeting either in person or through a plenipotentiary and to exercise their voting rights in this

scope. Therefore, additional and significant costs to be incurred by the Company in order to ensure the real-time broadcast

of General Meetings and real-time bilateral communication seems to be unjustified. Additionally, it should be noted that the

application of this rule poses a threat of technical and legal nature due to little experience in the market in this scope. Yet,

the Company does not exclude the possibility of applying this rule in the future.

7.3. Description of key features of internal control system and risk management system

applied by the Company with respect to the process of drawing up financial statements

The Issuer's Management Board is responsible for the internal control system in the Company and its effectiveness in the

process of drawing up financial statements and periodic reports prepared and published pursuant to the Regulation of the

Minister of Finance dated 19 February 2009, on the current and periodic information published by the issuers of securities.

During the year, the Company’s Management Board analyses financial results on an on-going basis by comparing them with

the adopted budget, using the management reporting applied in the Company developed on the basis of the Company’s

accounting policy adopted by the Company and taking into account the format and level of details of financial data presented

in periodic financial statements of the Issuer. Preparation of financial statements, periodic financial statements and reports

and current management reporting of the Company is the responsibility of the Financial Department of the Company which

is currently managed by the Chief Financial Officer. Financial statements and periodic reports of the Company are drawn up

by the Chief Accountant based on the financial data included in periodic management reports after their approval by the

Chief Financial Officer, taking into account other supplementary data provided by certain employees from other

departments. After closing the books for each month, the medium and top management of the Company’s Financial

Department led by the Chief Financial Officer jointly analyses the Company’s financial results in comparison with

assumptions,



taking into account business sectors. Identified errors are adjusted on an on-going basis in account books of the Company

and in the reporting system in accordance with the adopted accounting policy. The process of drawing up financial

statements and periodic reports begins after the Chief Financial Officer approves the results for the closed period.

In 2014, the Company introduced financial management system PROPHIX software of CPM class (Company Performance

Management). As a result, the annual budgeting process, forecasting, detailed analysis of results during the financial year

were significantly improved.

Interim and annual financial statements are verified by an independent auditor. The results of the annual audit are presented

by the auditor during the meetings summarising the audit and to the Supervisory Board fulfilling the tasks of the Audit

Committee. After the auditor completes the audit, financial statements and periodic reports are submitted to members of

the Company’s Supervisory Board. Before the Management Board and Supervisory Board approve periodic financial

statements and reports for publishing, the meeting of the Supervisory Board fulfilling the tasks of the Audit Committee is

held. During the meeting, the Chief Financial Officer presents material aspects of the annual financial statements - in

particular the possible changes in accounting principles, major estimates and accounting judgements, material disclosures

and business transactions. As a body fulfilling the tasks of the Audit Committee, the Supervisory Board carries out the reviews

of periodic financial statements and reports taking into account the information presented by the Company’s Management

Board and the independent auditor - approval of the financial statements and reports by the Supervisory Board depends on

the results of this review.

The statutory auditor is selected by the Company’s Supervisory Board in accordance with the Articles of Association. Material

issues related to periodic statements and reports that are not verified by the auditor are consulted with the auditor in order

to avoid potential material adjustments in subsequent reports. The Company maintains its account books in the Exact

system. The system is password-protected against unauthorised access. A carefully selected group of employees participate

in the process of drawing up the financial statements; other persons do not have the access to the data providing the basis

for their preparation. Account books, accounting documents and the documentation of the bookkeeping methods, as well as

approved financial statements of the Company are stored in accordance with the provisions of the Accounting Act.

7.4. Significant share packages

The table below presents Shareholders who held significant share packages as at 31 December 2014.

Shareholder Number of shares % of capital Numbe

r of

votes

% of votes

Adam Stanisław Rozwadowski* 7.124.000 30.23 7.124.000 30.23

Anna Maria Rozwadowska* 7.123.950 30.23 7.123.950 30.23

Generali Open Pension Fund 2.377.000 10.09 2.377.000 10.09

PZU ,,Złota Jesień” Open

Pension Fund 1.680.000 7.13 1.680.000 7.13

* presumption of an agreement exists between Anna Maria Rozwadowska, Jacek Jakub Rozwadowski and Bartosz Adam Rozwadowski (they hold 16,214,976 shares collectively, authorising to cast 16,214,976 votes at the General Meeting of Shareholders).

7.5. Special control rights

The shares of the Company are bearer ordinary shares listed on the Warsaw Stock Exchange. No shares of the Company are

preferred, each share gives the right to one vote at the General Meeting of Shareholders.



7.6. Limitation of voting rights from existing shares

The Articles of Association of Centrum Medyczne ENEL-MED S.A. do not impose any limitations on the exercise of the voting

right. Pursuant to Article 413 § 1 with reference to Article 413 § 2 of the Code of Commercial Partnerships and Companies, a

shareholder may not vote in person or through a plenipotentiary on resolutions related to his/her liability with respect to the

Company, on any accounts, including granting the vote of acceptance, release from an obligation towards the Company, or a

dispute between him/her and the Company.

7.7. Limitations with respect to transferring the title to securities

The Articles of Association of Centrum Medyczne ENEL-MED S.A. do not impose any limitations on transferring the title to

securities.

7.8. Principles for appointing and recalling members of the Management Board and their

rights, in particular the right to make decision about issue or buy-out of shares

Pursuant to the Articles of Association of Centrum Medyczne ENEL-MED S.A., the Management Board is composed of 1 (one)

to 5 (five) members appointed by the Supervisory Board. The Supervisory Board may appoint the President or the Deputy

President from among the Management Board members. The Management Board members are appointed by the

Supervisory Board for a three-year common term of office. The Supervisory Board has the right to appoint and recall the

Management Board members.

The powers of the Management Board are described in point 7.11.

Decisions on issue or redemption of the Company's shares are taken by the General Meeting of Shareholders.

7.9. Principles for amending the Company’s Articles of Association

The principles for amending the Company’s Articles of Association arise from the provisions of Articles 430-443 and Articles

455-458 of the Code of Commercial Partnerships and Companies. The Company’s Articles of Association do not introduce

different provisions in this respect provided that, subject to relevant provisions of the law, any change of the objectives of

the Company may be introduced without the obligation to redeem shares from those shareholders who do not consent to

such a change.

7.10. Manner of operation of the Company’s General Meeting and fundamental powers

thereof, shareholders’ rights and the manner of their exercising

The General Meeting of Shareholders is convened and prepared in accordance with the provisions of the Code of Commercial

Partnerships and Companies, the Company’s Articles of Association and the Regulations of the General Meeting of

Shareholders. Both the Articles of Association and the Regulations of the General Meeting of Shareholders are available on

the investor relations website of the Company, at: www.inwestor.enel.pl.

General Meetings can be held as ordinary or extraordinary. An ordinary General Meeting (GM) is convened by the

Management Board not later that within six months of the end of each financial year. The Supervisory Board may convene

the ordinary general meeting if the Management Board does not convene it within the aforementioned deadline. The

Supervisory Board may also convene the extraordinary general meeting if the Management Board considers it as advisable.

Additionally, shareholders representing at least half of the share capital or at least half of total votes have the right to

convene the General Meeting. At the same time, a shareholder or shareholders representing at least one-twentieth of the

share capital may request the Management Board to convene the extraordinary General Meeting and put certain matters on

the agenda.

A shareholder that is a natural person may participate in the General Meeting and exercise their voting right in person or by a

plenipotentiary. A shareholder that is not a natural person may participate in the General Meeting and exercise their voting

right by a person authorised to represent this shareholder or by a plenipotentiary. The proxy to participate in the General

Meeting should be drawn up in writing under pain of nullity, or should be granted in an electronic form and appended to the

minutes of the General Meeting.

The General Meeting is opened by the Chairperson of the Supervisory Board or another person appointed thereby. If such

persons are absent, the General Meeting is opened by the President of the Management Board or a person appointed by the

Management Board, whereupon the Chairperson of the General Meeting is immediately elected from among those entitled

to participate in the General Meeting.

http://www.enel.pl/inwestor




The General Meeting may elect the Vote-Counting Commission from among the candidates put up by the participants in the

General Meeting. The duties of the Vote-Counting Commission include the supervision of proper course of each voting as

well as determination and announcement of voting results.

A shareholders or shareholders representing at least one-twentieth of the share capital may request that the specific items

be put on the agenda provided that such a request cannot be made later than twenty-one days before the set date of the

General Meeting.

A shareholder may cast different votes from each share held by a given shareholder.

In general, the voting on resolutions is open. The Chairperson of the General Meeting shall order secret voting on elections

and on motions to recall members of corporate bodies or liquidators or bring them to responsibility, as well as on personal

matters. Furthermore, the Chairperson of the General Meeting shall order secret voting, should at least one shareholder

present or represented at the General Meeting so require. The General Meeting may adopt a resolution on waiving the

secrecy of voting on matters concerning the election of Vote-Counting Commission.

The General Meeting adopts the resolutions provided for in the provisions of the Code of Commercial Partnerships and

Companies and in particular:

- appoints and recalls members of the Supervisory Boards

- sets the manner of remunerating and the amount of remuneration of members of the Supervisory Board, but the manner of

remunerating and the amount of remuneration of the members of the Supervisory Board for independent performance of

certain supervisory activities is set by the Supervisory Board

- decides on issuing convertible or preference bonds

- decides on acquiring own shares in the case determined in Article 362 § 1 point 2 of the Code of Commercial Partnerships and Companies

- resolves other matters reserved for powers of the General Meeting in accordance with the provisions of the Company’s

Articles of Association and peremptory laws.

7.11. Composition and operation of the Company's management and supervisory authorities

and their committees

The principles governing the operation of the Management Board of Centrum Medyczne ENEL-MED S.A. are set in the

Company’s Articles of Association and the Regulations of the Management Board. Both documents are available on the

Company’s investor relations website, at: www.inwestor.enel.pl.

In accordance with the Company’s Articles of Association, the Management Board consists of one to five members appointed

by the Supervisory Board for a 3-year common term of office.

The composition of the Management Board of Centrum Medyczne ENEL-MED S.A. in 2014 was as follows:

First name and surname Function held

Adam Stanisław Rozwadowski President of the Management Board

Jacek Jakub Rozwadowski Deputy President of

the Management Board,

CEO In 2014, there were no personal changes in the composition of the Company’s Management Board.

The Management Board manages the Company’s affairs. The President of the Management Board manages the

work of the Management Board, chairs the meetings of the Management Board and coordinates fulfilment of the

tasks assigned to other Management Board members.

The President of the Management Board is in particular responsible for:

- coordination and management of works of the Management Board

- informing the Management Board members about significant and current affairs and issues related to the Company’s operation

- issuing the orders in the scope stipulated in the Regulations of the Management Board.





The meetings of the Management Board are held depending on the needs, however at least once a quarter. The meetings of

the Management Board are convened by the President of the Management Board or at a written request of any

Management Board member. The meeting should be convened within 7 days of filing the request. The notice of the meeting

of the Management Board is given to the Management Board members on the day preceding the meeting at the latest. At

the meeting of the Management Board, before approving the agenda, the Management Board members may file with the

President the request for making additions or amendments to the agenda, including the proposal of a resolution to be

adopted. The meeting of the Management Board may be held without being formally convened if all its members agree to it

no later than on the date of the meeting and confirm it in writing or sign the attendance list. The meetings of the

Management Board shall be opened by the President of the Management Board who manages its work. At the request of any

Management Board member, the meetings of the Management Board may be also attended by non-members of the

Management Board. The resolutions of the Management Board are passed with a majority of votes of the entire

composition. In the event of equality of votes, the President of the Management Board shall have the casting vote. The

resolutions of the Management Board are passed in open voting. The resolutions of the Management Board shall be kept in

the form of a register of resolutions at the registered office of the Company. The meetings of the Management Board shall be

recorded in the minutes.

The composition of the Supervisory Board of Centrum Medyczne ENEL-MED S.A. in 2014 was as follows:

First name and surname Function held

Anna Maria Rozwadowska Chairperson of the Supervisory Board

Anna Piszcz Member of the Supervisory Board

Janusz Jakubowski Member of the Supervisory Board

Adam Augustyn Ciuhak Member of the Supervisory Board

Zbigniew Wojciech Okoński Member of the Supervisory Board

The new members of the Supervisory Board were appointed on 25 May 2012, pursuant to §15 section 4 of the Company’s

Articles of Association, for a common 3-year term of office and their terms of office shall expire on the day of holding the

Ordinary General Meeting approving the financial statements for the year 2014.

In 2014, there were no personal changes in the composition of the Supervisory Board of the Company.

The Board operates based on the Code of Commercial Partnerships and Companies, the Company’s Articles of Association,

resolutions of the General Meeting of Shareholders, the Regulations of the Supervisory Board and the regulations of other

corporate bodies within the scope related to the role, function, acts or omissions of the Supervisory Board and its individual

members, as well as based on other regulations binding at the Company. The Supervisory Board supervises the activities of

the Company in all areas of its operations. The General Meeting of Shareholders is authorised to appoint members of the

Supervisory Board.

The Supervisory Board is composed of 5 (five) to 9 (nine) members, including its Chairman elected by the members of the

Board from among themselves. The General Meeting of Shareholders in each case sets the number of members of the

Supervisory Board. The common term of office of the Supervisory Board equals three years.

The Supervisory Board is in particular responsible for:

- evaluation of financial statements, reports, Management reports and recommendations of the Management Board related

to profit distribution or loss coverage and submission of the reports on the results of such audits to the General Meeting

- expressing the opinions on the Company’s work programmes developed by the Management Board

- approving regulations of the Management Board

- approving financial plan for each year and regulations for managing special purpose funds of the Company

- appointing and recalling members of the Management Board

- setting the principles for remunerating the members of the Management Board, including the President of the Management Board

- selecting a statutory auditor to audit the financial statements of the Company

- expressing consent to the Company's Management Board to establish companies or subsidiaries or to establish or invest the

Company's funds in other companies or business entities

- approving framework principles of cooperation binding the Company with its business partners

- appointing members of the Management Board

- passing regulations of the Supervisory Board.



The Supervisory Board fulfils its duties collectively but it may authorise its members to independently carry out individual

supervisory duties, including participating, when necessary, in meetings and works of the Management Board. The members

delegated to independent performance of individual supervisory duties receive separate remuneration. These members are

bound by the non-competition clause which is imposed on members of the Management Board.

The Supervisory Board adopts resolutions by absolute majority of votes of members present provided that all the members

were invited to the meeting. The resolutions may be passed when each member of the Supervisory Board has been correctly

notified in writing of the meeting of the Supervisory Board at least 14 days before the meeting. In the event of equality of

votes, the Chairperson shall have the casting vote. If the number of members of the Supervisory Board is reduced during the

term of office due to resignation, death or any other important reasons below the number of members of the Supervisory

Board set for a given term of office by the General Meeting of Shareholders, then the Supervisory Board is authorised to

appoint a new member by a resolution on co-opting.

Members of the Supervisory Board may participate in adopting the resolutions of the Supervisory Board by voting in writing

through another member of the Supervisory Board subject to Article 388 of the Code of Commercial Partnerships and

Companies. Resolutions may be passed by the Supervisory Board by voting in writing, by fax or electronic mail, subject to

Article 388 of the Code of Commercial Partnerships and Companies. The Supervisory Board may establish committees

(including the Audit Committee). In the case of appointment of a committee, the Supervisory Board appoints and recalls its

members as well as sets the method of its organisation.

In 2014, the Supervisory Board did not appoint any committees. In view of the fact that the Supervisory Board is composed of

5 members, the tasks of the Audit Committee were entrusted to the Supervisory Board (pursuant to Article 86 section 1 in

connection with Article 86 section 3 of the Act dated 7 May 2009, on Statutory Auditors, their Self-Government Organisation,

Entities Authorised to Audit Financial Statements and on Public Oversight).

A member of the Supervisory Board should have proper knowledge and experience and be able to allocate sufficient time for

the performance of their duties. Members of the Supervisory Board should participate in General Meetings in a composition

competent to provide substantial answers to questions that can be put forward at the General Meeting.

The meetings of the Supervisory Board may be ordinary or extraordinary. Ordinary meetings should be convened at least

three times a year. Extraordinary meetings of the Board can be convened when necessary, at any time.


8. Events after the balance sheet date

8. EVENTS AFTER THE BALANCE SHEET DATE

After the balance sheet date, there were no events, which would materially influence the Company’s situation.

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