21
Annual Report
A RECORD-
BREAKING
YEAR
A Leading Consumer Healthcare Company
in the Middle East and Africa
20 2021 ANNUAL REPORT
A RECORD-BREAKING
YEAR
A Leading Consumer Healthcare Company
in the Middle East and Africa
S
T
N
E
T
N
O
C
21
Annual Report
IDH delivered an outstanding 2021,
bringing its services to a record number
of patients and setting the foundations
for more growth in the future
04 Strategic Report
06 Who We Are
12 Highlights of 2021
16
Chairman’s Message
18 Chief Executive’s Report
26 Our Markets
40 Our Brands
44 Our Services
48 Competitive Strengths & Growth Strategy
52 Principal Risks, Uncertainties & their Mitigation
60 Performance
62 Financial & Operational Review
78 Corporate Social Responsibility
82 Corporate Governance
84 Board of Directors
88 Corporate Governance Report
98 Audit Committee Report
102 Remuneration Committee Report
104 Directors’ Report
110 Financial Statements
112 Independent Auditors’ Report
121 Consolidated Financial Statements
126 Notes to the Consolidated Financial Statements
20 Strategic
Report
97% Revenue growth
versus 2020
90% Net sales* growth
versus 2020
145% Net profit growth
versus 2020
* Revenue and net sales reconciliation is outlined on page 11
4 IDH 2021 Annual Report
2021 Annual Report IDH 5
Strategic Report Who We Are
Who We Are
Integrated Diagnostics Holdings (“IDH,” the “Group,”
established in 2019 to generate growth opportunities in
or the “Company”) is a leading consumer healthcare
the healthcare management space by leveraging the
company in the Middle East and Africa with opera-
Company’s database of over 13 million patients.
tions in Egypt, Jordan, Sudan and Nigeria. With a track
record of over four decades, IDH is a trusted and fully
The Group continues to invest in organic growth, while
integrated provider of pathology and radiology services
simultaneously pursuing strategic acquisition opportu-
with internationally recognised accreditations. Today,
nities in new markets where IDH can leverage its busi-
the Group offers patients a vast suite of over 2,000
ness model to capitalise on healthcare and consumer
high-quality diagnostic tests. As at 31 December 2021,
trends similar to those witnessed across its current
IDH operated a network of 502 branches across its geo-
geographies. IDH has been a Jersey-registered entity
graphic footprint, deploying a CAPEX-light Hub, Spoke
with a Standard Listing on the Main Market of the Lon-
and Spike business model to fuel its continued expan-
don Stock Exchange since May 2015. In May 2021, the
sion. IDH also delivers data-driven healthcare services
Company’s EGP-denominated and dual-listed ordinary
through its Egypt-based subsidiary “Wayak”, which was
shares made their debut on the Egyptian Exchange.
5.2 EGP
BN
in revenue in
2021, +97%
vs 2020
+40
years track
record at the
subsidiary levels
BN
5.0EGP
4
countries across
the Middle East
and Africa
in net sales1 in
2021, +90%
vs 2020
LSE
listed since
May 2015
7
EGX
listed since
May 2021
key brands with
strong awareness in
underserved markets
502
operational
branches as at 31
December 2021
1 Revenue and net sales reconciliation is outlined on page 11.
6 IDH 2021 Annual Report
Our Services
Through IDH’s brands, the Group offers over 2,000
a full suite of radiology services through Al Borg Scan
internationally accredited pathology tests ranging
in Egypt and Echo-Lab in Nigeria. Finally, IDH also
from basic blood glucose tests for diabetes to advanced
offers highly tailored healthcare management services
molecular testing for genetic disorders. IDH also offers
through its Egypt-based subsidiary, Wayak
1
4
7
Immunology
Microbiology
Haematology
2
5
8
Endocrinology
Clinical Chemistry
Molecular Biology
3
6
9
Cytogenetics
Histopathology
Radiology
Our Brands
Our Markets
IDH’s core brands include Al Borg, Al Borg Scan, Al
IDH’s geographic footprint across the Middle East and Africa
Mokhtabar and Wayak in Egypt, Biolab in Jordan,
includes Egypt, Sudan, Jordan and Nigeria. The generally
Ultralab and Al Mokhtabar Sudan in Sudan, and
underpenetrated and underserved nature of these markets’
Echo-Lab in Nigeria.
diagnostic services industries provide the Group with attrac-
tive fundamentals from which to drive future growth.
Egypt
Jordan
Nigeria
Sudan
2021 Annual Report IDH 7
Strategic Report Who We Are
Our Patients
IDH serves two principal types of clients: contract (cor-
has two strategic components; first, IDH’s easily scalable
porate) and walk-in (individuals). Within each of these
“Hub, Spoke and Spike” network of branch laboratories.
categories, the Group also offers house call services, and
Second, key supplier relationships that facilitate rapid
within the contract segment, a lab-to-lab service.
expansion without the need for the Company to pur-
chase expensive medical diagnostic equipment.
IDH’s walk-in clients, also known as “self-payers”,
represented 43% of the Group’s 2021 net sales2.
IDH’s contract clients, who in 2021 accounted
for the remaining 57% of the Group’s net sales2,
are comprised of institutions such as unions, syn-
Hub, Spoke and Spike
The Group’s CAP-accredited* Mega Lab functions
as the ‘Hub’ and is fitted with state-of-the-art equip-
ment. This provides the required tools and capacity
to process all tests and services for samples col-
dicates, private and public insurance companies,
lected by the B-Labs (Spokes) and C-Labs (Spikes).
banks and corporations who enter into one-year
IHD utilises its B-Labs to process routine tests and
renewable contracts at agreed rates per-test and on
leverages their capacity to manage traffic to the
a per-client basis.
An Asset-Light Business Model
IDH adopts an asset-light business model that allows the
Group’s Mega Lab when needed. Meanwhile, C-Labs
or Spikes serve primarily as collection centres and
most notably increase the Group’s geographic reach
to clients nationwide. This “plug and play” busi-
Group to grow in a capital-efficient manner. The model
ness model forms the operational backbone of the
2 Revenue and net sales reconciliation is outlined on page 11.
*Accreditation is granted by the College of American Pathologist
8 IDH 2021 Annual Report
Group and provides it with considerable leverage in
testing as well as ongoing maintenance and support
extracting superior revenue and cost synergies.
services. Moreover, IDH stipulates contracts with
tenors typically ranging from five to seven years, with
Supplier Relationships
IDH’s unique business model strengthens the Com-
the equipment substituted following the contract’s
renewal. The extended tenors effectively shield IDH
pany’s position in its relationship with its suppliers.
from temporary price fluctuations, a strategic advan-
As one of the largest providers of diagnostics in the
tage which proved particularly beneficial in light of
MENA region, the Group enjoys substantial bargain-
rising inflation rates during 2021.
ing power that enables it to negotiate favourable
contract terms with medical equipment and test kit
Owing to the Group’s sheer business size and
suppliers. The Group’s contracts with its key suppli-
increasing test volumes, IDH comfortably covers
ers of medical testing kits also include the provision
the minimum annual payments. Moreover, the high
of the equipment to analyse the laboratory test
volume of kit consumption supports its pricing
results. These agreements have minimum annual
power, reducing the cost per test while simultane-
commitment payments to cover the medical diag-
ously incurring no initial capital outlay for the
nostic equipment, kits and chemicals to be used for
purchase of medical diagnostic equipment.
Integrated Diagnostics Holdings
Suppliers
2021 Annual Report IDH 9
Strategic Report 2021 Highlights
Important Notice
Treatment of Revenue-Sharing Agreements and Use
of Alternative Performance Measures
As part of IDH’s efforts to support local authorities in Egypt
Throughout the report, management utilizes net sales
and Jordan in the fight against the pandemic, Biolab (IDH’s
of EGP 5,048 million for FY 2021 (IFRS revenues stand
Jordanian subsidiary) secured several revenue-sharing
at EGP 5,225 million for the year), and cost of net sales
agreements to operate testing stations, primarily dedicated
of EGP 2,244 million (IFRS cost of sales recorded EGP
to PCR testing for Covid-19, in multiple locations across the
2,421 million). Net sales for the period are calculated
country including Queen Alia International Airport (QAIA)
as total gross revenues (IFRS compliant measure)
and Aqaba Port. Under these agreements, Biolab receives
excluding concession fees and sales taxes paid as part
the full revenue (gross sales) for each test performed and
of Biolab’s revenue sharing agreements with Queen Alia
pays a proportion to QAIA (38% of gross sales) and Aqaba
International Airport (QAIA) and Aqaba Port.
Port (36% of gross sales) as concession fees to operate
in the facilities, thus effectively earning the net of these
It is important to note that aside from revenue and cost
amounts (net sales) for each test supplied.
of sales, all other figures related to gross profit, operat-
ing profit, EBITDA, and net profit are identical in the APM
For IFRS purposes Biolab is considered the principal in
and IFRS calculations. However, the margins related to
this relationship and record the full amount received
the aforementioned items differ between the two sets
as revenue. For internal purposes management consid-
of performance indicators due to the use of Net Sales
ers the net amount earned to be net sales, and have
in the APM calculations and the use of Revenues for
therefore included this measure as an “alternative
the IFRS calculations. More specifically, under the APM,
performance measure” (APM) alongside the IFRS mea-
in FY 2021 IDH reported a gross profit margin on net
sure when describing the business’ performance. The
sales of 56%, an EBITDA margin on net sales of 50%,
decision to present APMs reflects the Directors’ view
and a net profit margin on net sales of 30%. Under the
that they provide the user of the accounts with addi-
IFRS regime, gross profit margin recorded 54%, EBITDA
tional information to the IFRS information reported to
margin stood at 48%, and net profit margin recorded
help understand the performance of the business, and
29%. Furthermore, this amendment has no impact on
is consistent with how the Company’s performance is
the prior year reported revenues.
reviewed internally. Moreover, it allows further com-
parability when describing the performance of the
Group’s regions and year-on-year analysis.
10 IDH 2021 Annual Report
Adjustment breakdown on each country’s results
Revenues FY 2021 (IFRS 15)
Net Sales FY 2021 (APM)
(EGP mn)
Egypt
Jordan
Nigeria
Sudan
Group total
Adjustments Breakdown
(EGP mn)
Net Sales
QAIA and Aqaba Port Concession Fees
Revenues
Cost of Net Sales
Adjustment for QAIA, and Aqaba Port Agreements
Cost of Sales
4,108
1,046
54
17
5,225
4,108
869
54
17
5,048
FY 2021
5,048
177
5,225
(2,244)
(177)
(2,421)
2021 Annual Report IDH 11
Strategic Report 2021 Highlights
2021 Highlights
2021 was an exceptional year for IDH, as the Company delivered record-breaking growth, supported by
strong demand across its entire service offering, and delivered on all its longer-term strategic priorities,
setting the foundations for more sustainable growth in the coming years
Financial Highlights
— Revenue
expanded 97% year-on-year
to reach EGP 5.2 bn in 2021
supported by strong demand
for IDH’s full test portfolio.
— Net Sales
surpassed the EGP 5 billion
mark to record EGP 5,048 mil-
lion in 2021, representing a
90% year-on-year expansion.
Net sales growth for the year
was dual-driven, with total
increasing
tests performed
24% year-on-year and aver-
age price per test expanding
53% versus 2020. Net sales
were supported by both IDH’s
Covid-19-related3 and con-
ventional test portfolios, both
of which recorded growing
demand throughout the year.
— Gross Profit
grew 109% year-on-year in
2021 to record EGP 2,804
million. Gross profit margin
on net sales stood at 56%, a
solid five percentage point
expansion compared to the
previous twelve months.
— Adjusted Operating
Profit5
recorded EGP 2,292 million in
2021, up 132% year-on-year.
Adjusted operating profit
margin on net sales stood
at 45% for the year, up eight
percentage points from 2020.
— Adjusted EBITDA4
increased 116% year-on-year
in 2021 to reach EGP 2,530
adjusted
million, while
EBITDA margin on net sales
expanded
six percentage
points to record 50% for the
year. EBITDA recorded EGP
2,501 million in 2021, up
114% versus 2020 and with
an associated margin on net
sales of 50%.
— Net Profit
reached EGP 1,493 million in
2021, up 145% versus 2020.
Net profit margin on net sales
expanded seven percentage
points from 2020 to record
30% for the year.
— Recommended Final
Dividend
of EGP 2.17 per share, or EGP
1.3 billion in aggregate (exact US
dollar amount is subject to the
exchange rate at the time of the
upstreaming from the subsidiar-
ies to the holding company).
— Earnings Per Share
stood at EGP 2.35 in 2021 compared to EGP 0.99 in 2020.
3 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting
markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company
opted to include in the classification as “other Covid-19-related tests” due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.
4 Adjusted EBITDA is calculated as operating profit adding back depreciation and amortization and excluding one-off fees incurred in FY 2021 (EGP 29 million)
related to the Company’s EGX listing completed in May 2021.
5 Adjusted operating profit excludes one-off fees incurred in FY 2021 (EGP 29.0 million) related to the Company’s dual listing on the EGX completed in May 2021.
Note(1): Adjusted operating profit, EBITDA and adjusted EBITDA are measures utilized by management in assessing performance of the group. These adjusted
measures eliminate the one off impacts of items in the year to provide a measure of underlying performance. EBITDA is an important measure as it shows
the performance of the Group and the Group’s ability to reinvest funds generated and this is a widely used term for acquisitive businesses such as ourselves.
Note (2): It is important to note that throughout the Group’s 2021 Annual Report, percentage changes between reporting periods are calculated using the exact
value (as reported in the Company’s Consolidated Financials starting page 110 of this report) and not the corresponding rounded figure.
12 IDH 2021 Annual Report
2021 Annual Report IDH 13
Strategic Report 2021 Highlights
Our Frontline Role in the Fight Against
Covid-19”
Throughout 2021, the Company continued to play a
Supporting International Travel
frontline role in helping governments across its foot-
IDH secured multiple partnerships with international
print combat the ongoing Covid-19 pandemic.
air carriers and regional healthcare providers like
Egypt
In its home market of Egypt, IDH continue to offer a
wide range of Covid-19-related6 tests, helping patients
all around the country promptly detect Covid-19 and
National Aviation Services (NAS) Kuwait and Pure
Health UAE to conduct PCR testing for passengers
traveling from Egypt to other regional destinations.
The Company also offered PCR testing for passengers
on a walk-in basis, with IDH being the first lab in
supporting the government’s containment efforts.
Egypt to provide QR codes on travel certificates. In
Throughout the year, IDH made Covid-19-related tests
Jordan, Biolab signed revenue-sharing agreements
more widely available and increasingly more affordable,
with Queen Alia International Airport (QAIA), King
and organized several promotional and discounts cam-
Hussain International Airport (KHIA), and Aqaba Port
paigns to help needy patients and healthcare workers
to offer PCR and rapid Covid-19 testing for passengers
across the country. In the twelve months to 31 Decem-
arriving and departing.
ber 2021, IDH performed 1.3 million PCR, Antigen and
Antibody tests and an additional 379 thousand other
Covid-19-related tests in Egypt. As a share of revenue
Delivering on Our Strategy
During the year, the Company also pushed forward
generated in Egypt, Covid-19-related revenue reached
on its longer-term growth strategy, delivering on all
49% in 2021, versus 21% in 2020.
its sustainable growth pillars and putting down solid
foundations on which to build its next phase of growth
Jordan
and development.
Biolab has been at the forefront of Covid-19 testing in
Jordan since the very start of the pandemic, offering
Branch Network
Covid-19-related tests (PCR, Antigen, and Antibody) to
During the last twelve months, IDH rolled out 24 new
patients through its 21 branches, expanded house call
branches, bringing its total number of branches to
services, and testing stations located in several airports
502 as at year-end 2021. This sees the Group currently
and ports across the country. In 2021, Biolab performed
operating the largest network of branches amongst
1.3 million PCR and Antibody tests in Jordan, with
Covid-19 tests contributing to 66% of total net sales7 in
the country, up from the 46% contribution made in 2020.
private players in Egypt, enabling it to maintain its
leadership position in its home market.
6 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and
clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP),
which the Company opted to include in the classification as “other Covid-19-related tests” due to the strong rise in demand for these tests witnessed following
the outbreak of Covid-19.
7 Net Sales is calculated as revenues excluding commission fees paid by Biolab as part of the company’s revenue sharing agreements with QAIA and Aqaba
Port. In FY 2021, in Jordan, IDH recorded revenue of EGP 1,046 million (up 156% year-on-year) and net sales of EGP 869 million (up 112% year-on-year).
14 IDH 2021 Annual Report
House Call Services
70% rise in tests performed for the year. To capitalise
IDH’s house call services in both Egypt and Jordan
on the rising patient demand for IDH’s radiology
continued to record steady growth in 2021, with the
service, the Group opened two new Al-Borg Scan
Company serving 51% more house call patients than
branches in October and December 2021.
in the previous year. Through its house call service,
IDH is able to carry out more tests per patient than
Wayak
at its traditional branches, enabling the Company to
Operations at Wayak, IDH’s AI-focused subsidiary,
deliver on an important pillar of our long-term growth
continued to be ramped up effectively, with the ven-
strategy and further emphasising the significant
ture’s losses declining further throughout 2021 sup-
potential offered by the service well beyond the end of
ported by strong revenue growth and management’s
the Covid-19 pandemic.
cost optimisation strategy.
Conventional Patients
Nigeria
Despite the challenges posed by the pandemic,
Echo-Lab posted strong 49% year-on-year revenue
IDH never lost sight of the needs of its conventional
growth in 2021, supported by a steady rise in both
patients, continuing to care for them even at the
patient and test volumes. The venture’s consistent
height of the Covid-19 crisis. The Company’s efforts
revenue growth and successful cost optimisation
have focused on expanding its service offering and
strategy implemented by the company’s new manage-
delivery capabilities, as well as organising special
ment team, see Echo-Lab on track to turn EBITDA
campaigns to raise healthcare awareness specifically
positive in early 2022.
targeting patients suffering from chronic diseases,
a particularly vulnerable category in light of the
Dual Listing on EGX
ongoing pandemic. Throughout 2021, the Company
In May 2021, IDH made its debut on the Egyptian
performed 28.6 million conventional tests and, as at
Exchange, becoming the first dual-listed health-
year-end 2021, conventional test net sales for the year
care company on the EGX and LSE. The dual list-
stood 11% above its pre-pandemic level.
ing gives the Company access to a larger pool of
Al-Borg Scan
investors and offers local retail and institutional
investors, who regularly invest through the EGX, an
Al-Borg Scan reported outstanding growth in 2021,
attractive opportunity to capitalise on IDH’s solid
with revenue up 81% year-on-year supported by a
growth prospects.
2021 Annual Report IDH 15
Strategic Report Chairman’s Message
Chairman’s Message
During the year, we performed more than 2.6 mil-
lion PCR, antigen, and antibody tests, and contin-
ued to improve our delivery capabilities to bring
our services to as many people as possible.
We also achieved a robust recovery in our conven-
tional business offerings, which now exceeds our
pre-Covid-19 levels enhancing our long established
track record in our core business.
In Nigeria, following our restructuring of the busi-
ness and with our strong management team we
achieved solid and sustainable results. We are
expecting Echo-Lab to turn EBITDA positive in the
coming months.
I am pleased to report that despite the continued
operational challenges posed by Covid-19, your Com-
pany delivered an outstanding performance in 2021,
A Forward-looking Business
As firm believers in proactive healthcare, at IDH we
providing its services to a record number of patients,
take pride in our ability to deliver service excellence
while laying new foundations from which to generate
today, while always keeping an eye to the future.
sustainable growth in the coming years.
Throughout the year, we continued to invest in
Record-Breaking Results
In our seventh year as a publicly listed company on
new services to our portfolio and world-class doc-
tors to our team, to expanding our delivery chan-
the London Stock Exchange, we were proud to see our
nels and enhancing our digital infrastructure.
developing all aspects of our business, from adding
revenue surpass EGP 5 billion for the first time, grow-
ing year-on-year by over 90%.
We have successfully expanded our house call services.
Leveraging on our expanded service offerings, we
We have also accomplished steady growth of our
attracted a record number of patients to our laborato-
radiology venture, Al-Borg Scan.
ries, serving over 10 million patients in 2021.
In both Egypt and Jordan, we continued to honour
environment, we are exploring ways to utilize our
our responsibility as a leading healthcare provider,
vast database to develop new services increasingly
assisting local authorities tackle the pandemic and
tailored to patients’ individual needs.
In the ever burgeoning data analytics business
supporting the recovery of international travel.
16 IDH 2021 Annual Report
We continue to ensure strict data privacy and
professionally in line with their ambitions while
remain vigilant in strengthening our IT infrastruc-
providing a long-term incentive programme (LTIP)
ture to proactively address all cybersecurity risks.
starting 2022.
Expanding our Footprint
Your Company continues to enjoy strong organic growth
We have also recently expanded and strengthened your
Company’s Board of Directors, welcoming Yvonne Still-
momentum while constantly evaluating potential M&A
hart as a Non-Executive Director. Yvonne brings a wealth
opportunities across new African, Middle Eastern, and
of experience across multiple sectors, and replaces James
Asian markets.
Nolan who stepped down in September of last year.
On this front, we look forward to potentially adding Paki-
We are enormously grateful to James for his excellent
stan to our footprint and commencing our partnership
service and wise counsel to IDH.
with Islamabad Diagnostics Centre and Dr. Uppal once
all pending conditions precedent are satisfied. The com-
bination of our two businesses will see us well-placed to
Broadening our Shareholder Base
IDH’s shares are now listed on both the London Stock
meet the country’s growing healthcare needs.
Exchange and Egyptian Stock Exchange. We are confi-
Environmental, Social, and Governance (ESG)
We are proud to have published our first Sustainability
Report and are cognizant of our social responsibilities
dent that this will expand our shareholder base to include
local institutional and retail investors in Egypt, while
increasing liquidity and visibility in our largest market.
while seeking to constantly monitor and address all
In 2022 we also welcomed IFC as a strategic shareholder,
areas of ESG within the business in Egypt and elsewhere
and look forward to carrying on working closely together
in our offices around the world.
to continue meeting the strong demand for healthcare
Management regularly monitors and revises our risk
matrix and heat map to ensure we have the right
As our countries of operation prepare to transition
checks and balances in place and ensuring business
into a post-Covid-19 world, your Company is well
services across our footprint.
continuity processes.
A United Team
We have benefitted hugely over the past three years hav-
ing most of our team working out of our headquarters in
Cairo’s Smart Village.
positioned to maintain growth and profitability and
continue delivering exceptional and consistent value
to patients and shareholders.
We value our loyal and hard-working workforce and
constantly review their KPIs to help them progress
Lord St John of Bletso
Chairman
2021 Annual Report IDH 17
Strategic Report Chief Executive’s Report
Chief Executive’s Report
2021 was an exceptional year
for IDH which saw our 5,000
employees serve more than 10
million patients and perform more
tests than ever before, helping
us deliver outstanding financial
results.
2021 was an exceptional year for IDH which saw our
to coexist with the virus, driving widespread economic
5,000 employees serve more than 10 million patients
recovery from the previous year’s lows.
and perform more tests than ever before, helping us
deliver outstanding financial results. In parallel, we
In the midst of a challenging operating environ-
added new services to our roster, expanded our reach
ment, we displayed a remarkable ability to adapt to
across both digital and physical channels, enhanced
changing market and demand dynamics and con-
the overall experience of our patients, grew our foot-
sistently cater to the evolving needs of our growing
print, and completed our dual-listing on the Egyptian
patient base, ensuring we continue to provide our
Exchange, complementing our LSE listing. This saw us
communities with access to high quality, affordable
end the year having built new foundations on which to
healthcare and diagnostic services. Over the past
drive the next phase of growth across all our markets.
twelve months, we continued to effectively care for
both our conventional and Covid-19 patients lever-
Similar to the previous year, 2021 was heavily impacted
aging an expanded branch network, a ramped-up
both economically and socially by Covid-19, as countries
house call service, and a growing digital presence
around the world combatted various waves of new infec-
to make our services increasingly accessible and
tions and confronted multiple new variants. Despite this,
our payment methods increasingly convenient.
2021 was also a turnaround year for the fight against the
Our efforts translated
in significant
improve-
pandemic as vaccines were gradually rolled out and gov-
ments in our patients’ overall experience, with the
ernments and individuals became increasingly willing
Group’s net promoter score for the year recording
18 IDH 2021 Annual Report
consistently above the 80 mark, ahead of last year’s
Throughout the year, we also devoted increasing atten-
value and well above industry averages.
tion and resources towards developing our digital infra-
structure to expand our reach, provide new services
During 2021, we continued to serve our Covid-19
to our patients, and improve their overall experience.
patients by ensuring we were well-equipped to
Highlights for the year included the roll out of multiple
handle peaks in demand when infection rates
new patient touch points including a revamped IDH
increased, while promptly adapting our offering to
app, a new chatbot function, as well as an additional
the requirements of patients. In the twelve months
call centre. At the same time, we also made it increas-
to 31 December 2021, we performed over 2.6 mil-
ingly convenient for our patients to pay for our services.
lion PCR, antigen and antibody tests, continuing
to provide patients and healthcare workers with a
trustworthy first line of defence against the virus.
At the same time we secured multiple partner-
Record-breaking Growth and Operational
Results
Our ability to transform the business in step with
ships with international air carriers and regional
changing demand dynamics enabled us to build on
healthcare providers like National Aviation Services
an already strong 2020, to deliver a formidable set
(NAS) Kuwait and Pure Health UAE to conduct PCR
of operational and financial results in 2021. More
testing for passengers traveling from Egypt to other
specifically, in the twelve months to 31 December
regional destinations. We also offered PCR testing
2021, we recorded consolidated revenue of EGP
for passengers on a walk-in basis, and were the first
5.2 billion, up 97% year-on-year and represent-
lab in Egypt to provide QR codes on travel certifi-
ing the highest full-year revenue figure on record.
cates. This enabled us to not only to play an impor-
Meanwhile, net sales expanded an impressive 90%
tant role in supporting the recovery of international
from the previous year, coming in at EGP 5.0 billion
travel, but also ensured that we successfully cap-
in FY 2021. Net sales growth for the year was dual
tured a leading market share for the service.
driven, as we performed 24% more tests than in the
previous year and recorded a 53% year-on-year rise
In parallel, despite the challenges posed by the
in average price per test versus 2020.
pandemic, we never lost sight of the needs of our
conventional patients, continuing to care for them
Throughout the year, consolidated net sales was sup-
even at the height of the Covid-19 crisis. Our efforts
ported by strong demand for both our Covid-19-re-
focused on expanding our service offering and
lated and conventional tests portfolios, with each
delivery capabilities, as well as organising special
segment contributing to around half of consolidated
campaigns to raise healthcare awareness specifi-
net sales for the year. On the conventional tests front,
cally targeting patients suffering from chronic dis-
demand recorded a sustained recovery following the
eases, a particularly vulnerable category in light of
Covid-19-related slowdown experienced in the previ-
the ongoing pandemic.
ous year, with conventional test net sales expanding
2021 Annual Report IDH 19
Strategic Report Chief Executive’s Report
22% versus 2020, and coming in a noteworthy 13%
our success in keeping turnaround times strictly
above pre-Covid-19 levels recorded in 2019.
below 24 hours even throughout the multiple peaks
Volume and net sales growth for the year also
effectively ramp up the service to match its growing
reflected our ongoing investments to expand our
popularity is enabling us to perform over five thou-
delivery capabilities, which over the course of
sand house visits per day, the most out of any other
2021 saw us grow our patient reach across both
player in the market, and process over ten thousand
in infection rates witnessed in 2021. Our ability to
traditional branches and our house call service. On
calls each day.
the one hand, we inaugurated 23 new branches in
Egypt and an additional branch in Jordan, taking
Regionally, in Egypt, as with the consolidated per-
the total number of operational branches as at year-
formance, our revenues were supported by both our
end 2021 to 502. Our ability to consistently rollout
Covid-19-related test offering, which in 2021 made
new branches within and outside the Greater Cairo
up 49% of the country’s revenues, as well as the
area currently sees us operate the largest network
country’s conventional test offering, which made up
of branches amongst private players in the coun-
the remaining 51%. During the year, we continued to
try, enabling us to strengthen our brand name and
lead the market in terms of core Covid-19 tests per-
maintain our leadership position in the market.
formed, further testament to the high quality of our
Moreover, it is also important to note that our Mega
offering and the extensive reach of our services. At
Lab, which continues to be the sole CAP-accredited
the same time, we observed a sustained recovery in
facility in Egypt, typically operates at around 55% of
our conventional business, with revenues generated
its maximum capacity leaving abundant room for
by conventional tests increasing a solid 23% versus
further growth. In 2021, we also continued to work
the previous year supported by a 15% rise in conven-
closely with local authorities in Egypt to obtain the
tional tests performed and a 7% expansion in average
necessary certifications to take part in the govern-
revenue per conventional test.
ment’s Universal Healthcare Insurance (UHI) system
which is being rolled out across the entire country.
Egypt’s revenues were further buoyed by revenues
As at year-end 2021, IDH had 13 out of the 19 UHI-
generated by our house call service, which expanded
accredited labs in the country, with several more of
an impressive 94% versus 2020, contributing an
our labs looking to obtain accreditation in the com-
additional EGP 935 million to the country’s total
ing year. On the other hand, in response to the grow-
revenues for the year. Meanwhile, at our fast-growing
ing demand for our house call services in both Egypt
radiology venture, Al-Borg Scan, we witnessed a solid
and Jordan, we continued to ramp up our house call
81% year-on-year increase in revenue to EGP 45 mil-
capabilities. In our home market of Egypt, where
lion supported by a 70% year-on-year rise in both
sample collected directly in patient homes made up
tests performed and patients served, which recorded
23% of the country’s revenue for the year, we added
78 thousand and 62 thousand, respectively. I am
a second call centre, expanded our house call team
particularly happy to note the growing success of
to an average of 400 chemists, and streamlined
Al-Borg Scan, which is helping us to capitalise on the
logistics to further decrease turnaround times. On
important growth opportunities offered by Egypt’s
this last point, we were particularly happy to note
fragmented radiology market while delivering on
20 IDH 2021 Annual Report
our vision of providing patients with a one-stop-
In Nigeria, we continued to record steady revenue
shop service offering featuring both pathology and
growth throughout the entire year on the back of
radiology. To capitalise on the rising patient demand
growing test and patient volumes. In 2021, Echo-
for our radiology services, we inaugurated two new
Lab’s revenues expanded 49% year-on-year on the
Al-Borg Scan branches in 2021 and a third in March
back of a 31% increase in tests performed coupled
2022. In the coming months, we plan to continue
with a 14% rise in average revenue per test. Grow-
launching additional branches, further expanding
ing volumes continue to highlight the effectiveness
our reach across Great Cairo. Finally, it is also worth
of our investments to revamp Echo-Lab’s operations
highlighting Wayak’s growing market traction, with
and the success of our targeted marketing efforts. The
the venture continuing to expand its patient base
consistent growth delivered by our Nigerian opera-
and product offering. The company’s EBITDA losses
tions also reflect the incredible work done by Dr.
have narrowed significantly and management has
Alok Bhatia, who joined Echo-Lab as CEO in March
ambitious plans to build on this momentum by roll-
2021. Dr. Bhatia and his team have brought the skills
ing out multiple new services in 2022.
and expertise needed to deliver on our long-term
vision for Echo-Lab and we look forward to reaping
Jordan was the standout performer for the year, with
the rewards of their hard work in the coming years.
Biolab reporting year-on-year net sales growth of
112% and contributing a record share of consolidated
Finally, in Sudan our results for the year were heavily
net sales at 17.2%. During the year, Covid-19-related
impacted by the devaluation of the Sudanese Pound
tests contributed to 68% of Biolab’s net sales as the
in February 2021 as well as the rise in social and politi-
venture continued to record strong demand at both
cal unrest witnessed in the final months of the year.
its regular branches and across its testing booths
However, management’s continued success in raising
located in the country’s main airports and ports. In
prices in step with inflation, saw revenue in local cur-
fact, Covid-19-related net sales in Jordan was boosted
rency terms grow an impressive 159% in 2021. It is also
by strong contributions from Biolab’s new partner-
worth highlighting that despite the operational diffi-
ship with Queen Alia International Airport, King
culties and heightened uncertainty faced throughout
Hussain International Airport, and Aqaba Port. As
the past year, operations are continuing without
part of these agreements, Biolab has been operating
major interruptions.
testing stations across all three locations primarily
focused on offering PCR testing for Covid-19 to pas-
Further down the income statement, we reported
sengers arriving in Jordan. Through these initiatives,
impressive margin expansions at all levels of profit-
Biolab was able to continue playing a frontline role in
ability supported by strong revenue growth and the
the country’s fight against the pandemic and simul-
subsequent dilution of IDH’s fixed costs. More specifi-
taneously expand its patient base and reach across
cally gross profit for the year more than doubled with
new segments of the population. Meanwhile, we
a five-point margin expansion. Meanwhile, EBITDA
were also very pleased to note the robust recovery in
adjusted for one-off listing fees expanded 116% with
Biolab’s conventional test net sales, which increased
a margin on net sales of 50%, up six percentage points
26% year-on-year on the back of a solid rise in con-
from 2020 (adjusted EBITDA margin on revenues
ventional tests performed.
stood at 48% in FY 2021). Strong adjusted EBITDA
2021 Annual Report IDH 21
Strategic Report Chief Executive’s Report
level profitability supported a 145% year-on-year
like many of the markets we currently operate in,
expansion in net profit which reached EGP 1,493 mil-
its healthcare industry is characterised by a widen-
lion in 2021. Net profit margin on net sales expanded
ing demand-supply gap for high quality healthcare
seven percentage points versus 2020 to record 30% for
services, a high degree of out-of-pocket payments
the year (net profit margin on revenues stood at 29%
(medical expenses not reimbursed by insurance),
in FY 2021). It is worth highlighting that the remark-
and increasingly favourable regulations aimed at
able net profit growth comes despite the Company
encouraging private sector participation. Similar to
booking EGP 29 million in one-off fees related to our
our existing businesses, IDC boasts an established
dual-listing as well as EGP 20 million in fees related to
position in the Pakistani market with network of over
the IFC loan secured in May of last year.
85 branches across 30 cities, and offers a full roster of
Expanding Our Footprint
While effectively serving our patients and delivering
pathology and radiology diagnostic services. These
characteristics make IDC the perfect partner for IDH,
and Pakistan an ideal location where our proven busi-
exceptional results across our existing geographies,
ness model is well placed to drive new value and help
we also worked to expand our footprint into new ter-
meet the rising demand for high quality healthcare.
ritories. On this front, in December 2021, we signed a
sale and purchase agreement to acquire 50% of Islam-
abad Diagnostic Centre (IDC), one of Pakistan’s larg-
Dual-listing on the EGX
Adding to this past year’s list of achievements, in May
est, most respected, and fastest growing integrated
2021 we successfully completed our dual-listing on
diagnostics companies, for a total consideration of
the Egyptian Exchange (EGX), successfully meeting
USD 72.35 million. The deal, which is currently pend-
our goal of offering IDH’s unique value proposition
ing regulatory approval, would see us partner with
to the widest investor base possible. With our shares
IDC’s founder and CEO, Dr Rizwan Uppal, and acquire
now listed on the both the LSE and the EGX and
a stake in an established provider with a strong track-
tradeable in a fully fungible manner, we have provided
record, solid financial performance, and an ambitious
local retail and institutional investors as well as global
growth plan. The transaction will see us add a fifth
emerging markets specialists who regularly invest
country to our footprint and help us further diversify
through the EGX with the possibility to capitalize on
our revenue base in line with our long-term strategy.
our attractive growth profile. We remain optimistic
IDC will be fully consolidated on IDH’s accounts
that going forward investors will find having two ven-
following the completion of the transaction and
ues on which to trade IDH shares increasingly useful,
the transfer of funds to the Evercare Group. Under
realizing our target of having a larger number of the
the agreement, IDH will hold four of the seven seats
Company’s shares being traded on the EGX.
on IDC’s board. The transaction, which is subject to
the satisfaction of a number of conditions precedent
should be completed later in 2022.
Our Sustainability Journey
Across our operations, we continue to place a strong
focus on strengthening our environmental, social
With a population of over 200 million, 63% of which
and governance (ESG) monitoring and compliance
is under the age of 30, Pakistan boasts an attractive
frameworks to ensure we continue working to the
demographic profile providing long-term sustainable
betterment of our communities and safeguarding
demand for quality healthcare services. Meanwhile,
the interests of all our stakeholders. Throughout
22 IDH 2021 Annual Report
2021, we devoted our attention to developing a more
overseeing all aspects of the business since our list-
assertive road map that draws clear guidelines and
ing on the LSE in 2015. Our Board is composed in the
methods to monitor, evaluate, and improve our sus-
majority by independent, non-executive directors and
tainability practices. Under the guidance of a top-
is backed by a robust and constantly enhanced policy
tier ESG consultant, we undertook a rigorous ESG
framework. In early 2022, our Board of Directors was
assessment across all functions to highlight key
further strengthened with the appointment of Ms.
sustainability initiatives while identifying areas of
Yvonne Stillhart, as a Non-Executive Director. Yvonne
improvement. This allowed us to set the foundation
is a seasoned Senior Executive working with innovation
for future ESG implementation by internally map-
and growth driven companies across a wide range of
ping key performance indicators to the newly devel-
industries and geographical regions, including Europe,
oped sustainability framework. As a critical sector,
USA, North Africa and Sub-Saharan Africa.
the healthcare industry stands at the threshold of
each of the UN’s Sustainable Development Goals
(SDGs). Throughout our operations, we have direct
Dividend Policy and Proposed Dividend
In view of the strong cash-generative nature of our
impacts on a number of key SDGs, and indirectly
business and its asset-light strategy, our dividend pol-
impact multiple others. Through our Sustainability
icy is to return to shareholders the maximum amount
Report, we were able to successfully share with
of excess cash after taking careful account of the cash
our peers and wider community our contributions
needed to support operations and expansions. As
across all 17 SDGs, providing stakeholders with a
such, IDH is delighted to recommend a final dividend
clear framework to benchmark our contributions
in respect of the financial year ended 31 December
and hold us accountable in the years to come.
2021 of EGP 2.17 per share, or EGP 1.3 billion in aggre-
gate. The equivalent value, which will depend on the
In a world where investment decisions are being taken
exchange rate at the time of the upstreaming from the
with an increasing focus on the ESG profile of a com-
subsidiaries to the holding company, represents a sig-
pany, we have provided investors with an in-depth
nificant increase from the dividend of US$ 29.1 million
analysis of our ESG performance, facilitating their due
distributed for the previous financial year.
diligence processes. On this front, we have dedicated
a chapter of the report to address our investors’ inqui-
ries related to our ESG performance and strategy,
2022 Outlook
We kicked off 2022 recording another surge in Covid-
aligning ourselves with the global action plan set by
19 infections across our markets as the highly-infec-
the Principles of Responsible Investment. As we leave
tive Omicron variant became increasingly prevalent.
2021 behind us, we are proud of the progress made on
Throughout this new wave, in both Egypt and Jordan
this front, but remain cognizant that of the long road
we continued to provide our patients with widespread
ahead of us. As we enter this exciting new chapter for
access to Covid-19-related testing, helping to keep our
IDH, we welcome all our stakeholders to share their
communities safe and providing local authorities with
insights and help us generate additional social and
vital support in the fight against the virus. In the final
environmental value for our communities.
weeks of the first quarter, as vaccines continued to be
rolled out, we witnessed a sustained decline in new
Throughout this process, we have been closely guided
infections with governments around the world signal-
by our world-class Board of Directors, which has been
ling a strong will to transition into a post-Covid-19
2021 Annual Report IDH 23
Strategic Report Chief Executive’s Report
normality. While the Group remains vigilant and ready
their overall experience. At the same time, we are tar-
to respond to possible new waves in infections, we are
geting the roll out of an additional 25 to 30 branches
prepared and excited to kickstart our post-pandemic
in and outside the Greater Cairo area, and continue
strategy and venture into a new chapter of sustainable
to take advantage of the abundant spare capacity at
growth. During the course of 2021, while our priority
our house call division to further scale up the service.
remained helping governments combat the Covid-19
In Nigeria, thanks to the consistent revenue growth
pandemic, we also worked tirelessly to improve all
and the stellar work being done by Dr. Bhatia and his
aspects of the business and lay solid foundations on
team to streamline operations, Echo-Lab is on track
which to build out next phase of development and
to turn EBITDA positive in 2022. We are confident
value creation.
that the investments undertaken since the acquisi-
tion of Echo-Lab back in 2018 have built a stronger,
Heading into 2022, there are several exciting devel-
leaner, and growth-oriented business which is well-
opments I am looking forward to across both new
placed to take full advantage of the significant growth
and existing markets. In Egypt and Jordan, we are
opportunities offered Nigeria’s diagnostics market.
aiming to capitalise on our market leading posi-
Finally, in Sudan, we are continuing to monitor the
tion, expanded product offering and patient base,
ongoing political and social instability and have put
increased service delivery capabilities, and growing
in place strong mitigation strategies to protect our
visibility to continue delivering robust growth in the
people and operations.
year ahead. In particular, we are eager to capitalise on
the post-Covid-19 rebound in conventional testing as
Beyond our current markets, we are also looking for-
patients’ focus shifts back to conventional healthcare
ward to obtaining the remaining regulatory approvals
as the threat of Covid-19 subsides. Moreover, across
and add Pakistan to our footprint. IDC is expected to
both markets, our attention will now pivot towards
generate substantial value from the very start and we
patient retention as well look to maintain the new
are thrilled to kick off our partnership with Dr. Uppal
relationships we were able to establish during the
in the coming months. In parallel, we will continue
pandemic thanks to our Covid-19-dedicated offer-
to assess other potential value-accretive acquisition
ing. On this front, we have recently launched a new
opportunities both across new and existing markets
dedicated loyalty programme in partnership with a
in Africa, the Middle East, and Asia which present
leading loyalty solutions provider, and are working
similar characteristics to our current markets and
to roll out multiple new marketing campaigns mak-
where our operational model would be best-suited to
ing full use of our growing social media presence. In
drive long-term value creation.
parallel, we are also leveraging our enhanced digital
and data analytics capabilities to monitor patient
records and disease cycles, and provide tailored
A Turbulent Start to the Year
In the first few months of the new year, globally we
services and increase cross-selling. Our efforts con-
have been confronted with a new set of challenges
tinue to ensure that our patients enjoy a hassle-free
related to the long-term economic spill overs of the
experience from start to finish, further enhancing
pandemic coupled with the impacts of the ongoing
24 IDH 2021 Annual Report
Russia-Ukraine war. Supply chain issues, fast-rising
I would like to conclude by thanking all my colleagues
consumer demand, and the increased volatility in
for their exceptional work over the course of the last
commodity prices which has been exacerbated by
year. 2021 was the outstanding year that it was in great
the ongoing war in Eastern Europe, are continuing
part due to your relentless efforts to deliver on our
to push up prices, with countries around the world
vision and goals. I am honoured to have the oppor-
recording inflation figures not seen for many years.
tunity to work with you, and I am confident that by
In light of rising inflation, central banks around the
working together we will be able to continue deliver-
world have commenced a cycle of monetary tight-
ing exceptional value in 2022.
Dr. Hend El-Sherbini
Chief Executive Officer
ening, with many raising interest rates for the first
time in years.
Here in Egypt, on 21 March 2022, the Central Bank
raised policy rates by 100bps and allowed the Egyp-
tian Pound to devalue by more than 17% against the
US Dollar. Despite the heightened uncertainty fol-
lowing the announcement, we are confident that our
proven track record in navigating similar turbulent
times and the strong mitigation frameworks we have
in place provide ample protection from the short and
longer-term impacts of the decision. Going forward,
we will continue to keep a close eye on the evolving
situation, and have taken proactive steps to build up
our inventory to safeguard ourselves from any poten-
tial future disruptions.
2021 Annual Report IDH 25
Strategic Report Our Markets
Our Markets
| 4countries of operation
| 502operational branches, +21 versus 2020
IDH operates in emerging markets whose healthcare
of pocket in advance of the tests being completed
framework is considerably different from those in
with no insurance, corporate or syndicate covering
many Western markets. In emerging markets, we
the expenses.
often find publicly funded and private healthcare
systems operating in parallel thus giving the patient
Generally, patients receive their test results in-
the liberty to choose the healthcare service that best
person accompanied by a report from a specialist
meets their needs. Additionally, general practitioners
such as a pathologist, geneticist or radiologist and
(also referred to as family medicine practitioners or
return to the physician who requested the tests be
primary care specialists) are not commonly available,
done. IDH also has the option to deliver same-day
consequently, they are not the gatekeepers through
results to patients electronically and via the mobile
which patients access primary or specialist care.
app. IDH engages in sales and marketing activities
that separately target:
In emerging markets, a patient seeking medical care
• Physicians: through direct sales visits to
may do so through several routes including visiting
individual practitioners, periodic gatherings
a hospital outpatient clinic or emergency room,
for physicians within a specialty, promotional
attending a polyclinic or directly seeking the ser-
giveaways as well as discount cards for physi-
vices of a specialist physician. Although physicians
cians and their families, incentive-based physi-
ordering diagnostic testing may recommend that
cian loyalty programs and the organisation or
the patient complete these tests at a specific ser-
sponsorship of conferences;
vice provider, more often than not, patients enjoy
• Walk-in Patients:
through social media
a high degree of freedom in choosing their service
channels, mass-market and targeted health
provider. The decision is usually contingent on the
awareness campaigns, outdoor advertising,
perceived quality and safety, proximity, affordability
television, radio and online advertising; and
and/or insurance or corporate arrangements. Walk-
• Contract Patients: through direct outreach to
in patients (also referred to as “self-payers”) pay out
insurers and employers.
26 IDH 2021 Annual Report
Barriers to Market Entry
Covid-19 Across IDH’s Markets
Accreditation of Facilities
Attracting contract clients requires
accredited, high-quality testing
capabilities and facilities (IDH is the
sole CAP-accredited lab in Egypt)
Brand Equity and Reputation
Patients are loyal to leading brands
with a strong track record
Market Reach
Fragmented market necessitates a wide
geographic presence to allow for broad
customer reach
Relationship with Key Stakeholders
Building a scalable platform requires
strong relationships with stakeholders
such as physicians, patients and hospitals
Economies of Scale
IT-enabled platform, critical mass,
decades of know-how and cutting-
edge equipment mitigate against new
entrants
Following the outbreak of Covid-19, governments
across all of IDH’s countries of operation instituted
strict restrictive measures to curb the spread of the
virus. These included, curfews, the shuttering of non-
essential business, travel bans and restrictions on
public gatherings. While these measures were neces-
sary to guarantee the health and safety of citizens,
they posed severe operational disruptions across
IDH’s geographies including branch closures and
reduced operating hours.
Starting in the latter half of 2020, restrictive measures
were gradually lifted across all countries and vaccine
campaigns were successfully kicked off in the first
weeks of 2021. As the year progressed, we saw patient
volumes return back to normal levels across IDH’s
geographic footprint, and by mid-2021 non-Covid-19
test volumes had returned to their pre-pandemic
levels. Throughout the year, IDH continued to actively
assist local authorities’ efforts in containing emerging
variants by offering PCR testing in both Egypt and Jor-
dan. The Company also played a key role in supporting
the recovery of international travel, providing PCR
testing to departing and arriving passengers both on a
walk-in basis and as part of agreements with airports,
airlines, and insurance providers.
2021 Annual Report IDH 27
Strategic Report Our Markets
Egypt
81%
Contribution to
consolidated net sales9
in 2021
Egypt
Key Highlights
| 452Branches as at year-end 2021,
+23 versus 2020
| 4.1 EGP
BN
Revenues in 2021,
up 89% y-o-y
| 8.5MN
Patients served in 2021,
up 34% y-o-y
The Egyptian diagnostic market can be broadly divided into public
and private sector infrastructure, with the latter including both labs
attached to private hospitals and independent standalone labs (chains
and single labs). The majority of labs in Egypt are located in big cities,
leaving considerable room to ramp up accessibility across the country’s
27 governorates for greater coverage of the population. Additionally, the
corporate market is emerging as a driver for diagnostic services as more
companies elect to offer healthcare coverage to their employees.
IDH is the largest fully-integrated private sector diagnostics service pro-
vider, with more than 50% share by revenue of the private chain market
in Egypt.10 IDH enjoys a strong competitive position in the Egyptian diag-
nostic industry, having created significant barriers to entry with its 40-year
track record and network of 452 branch labs at year-end 2021. This was
accomplished through:
Long-established brands with
trusted reputations that have
engendered strong patient loyalty
Strong relationships with key
stakeholders including physicians,
patients and hospitals
A scalable, asset-light business
model that enables expansion in
fragmented markets
International accreditations
notably the coveted CAP
certification of the Mega Lab
9A full reconciliation of revenues and net sales by geography is available on page 11 of this report.
10According to the Boston Consulting Group (BCG)
28 IDH 2021 Annual Report
Growth in the Egyptian diagnostics industry is sup-
numbers go down. Successful efforts in mitigating
ported by robust market fundamentals including:
the spread of the virus despite the resurgence of vari-
• A large and growing population of over 100 mil-
ants have supported economic recovery and growth.
lion, making Egypt the most populous country in
the Middle East North Africa (“MENA”) region; in
On 21 March 2022, the Central Bank raised policy
terms of demographics, it hosts a significant pro-
rates by 100bps and allowed the Egyptian Pound to
portion of elderly people.
devalue by more than 17% against the US Dollar which
• An increasing prevalence of diseases including com-
is expected to impose Inflationary pressures in the
municable and non-communicable diseases, tropi-
short to medium term. Inflation rates are expected to
cal diseases, and lifestyle diseases such as diabetes.
average around 13% to 15% during 2022, up from 5.9%
• A growing government role to increase aware-
in December 2021. Moreover, GDP growth in FY22/23
ness on the importance of diagnostic testing in
was revised downward to 5.5% from 5.7% by the Egyp-
preventative healthcare, supporting the growth in
tian government in March 2022.
laboratory diagnostics as a tool in clinical practice.
Macroeconomic Developments
The Covid-19 outbreak in early 2020 led the govern-
Operational and Financial Highlights
In Egypt, IDH recorded revenues of EGP 4,108 million
and contributed to 79% of IDH revenues (81% of net
ment to implement a series of restrictive measures
sales) for the year. Revenue year-on-year growth of
to curb the spread of the virus, which had material
89% in 2021 came on the back of solid growth in both
impacts on IDH’s operations including reduced
working hours causing a decline in volumes for sev-
eral months. Towards the end of 2020 and through-
patient and test volumes. Revenues in IDH’s home
market were supported by both Covid-19-related11
and conventional tests, and were further boosted by
out 2021, restrictions were relaxed and the road to
the Group’s house call service which in the twelve
economic recovery began as businesses returned to
months ended on 31 December 2021 saw its revenues
normal operations.
nearly double, contributing 23% of Egypt’s revenues
versus 22% in 2020. Throughout 2021, demand for
Egypt officially kicked off its vaccination campaign
conventional tests continued to recover following
in the final week of January 2021. As at the end of
the Covid-19-related slowdown recorded in 2020,
March 2022, approximately 45% of the population
with conventional test revenues increasing 23% year-
had received at least one dose of the Covid-19 vaccine
on-year on the back of a 15% year-on-year increase in
and the country saw both hospitalisation and death
conventional test volumes.
11 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and
clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP),
which the Company opted to include in the classification as “other Covid-19-related tests” due to the strong rise in demand for these tests witnessed following
the outbreak of Covid-19.
2021 Annual Report IDH 29
Strategic Report Our Markets
Meanwhile, IDH’s fast-growing radiology business,
Al-Borg Scan, recorded year-on-year revenue growth
of 81%, with the venture’s revenues reaching EGP 45
million in 2021. Revenue growth was supported by
solid growth in volumes, with both tests performed
and patients served standing 70% above the preced-
ing year’s figures. To capitalise on Al-Borg Scan’s
growing popularity, the Group inaugurated two
Al-Borg Scan branches in the second half of 2021
and one in early March 2022. Looking ahead, the
Company is working to roll out additional branches
to further expand its reach across Greater Cairo.
In its home market of Egypt, IDH
continues to leverage its expanded
service offering and delivery
capabilities to serve its Covid-19
and conventional patients whilst
delivering outstanding growth and
profitability for the year.
IDH’s house call service in Egypt, which has been
EBITDA for IDH’s Egyptian operations recorded EGP
successfully ramped up to capitalise on the service’s
2,206 million in 2021, up 112% year-on-year on the
growing popularity, recorded revenues of EGP 935
back of strong revenue growth. EBITDA margin on net
million in 2021, up 94% year-on-year. The service’s
sales increased six percentage points to 54% the year.
contribution to the country’s revenues stood at 23%
in 2021, versus the 22% contribution made in 2020.
Core12 Covid-19 tests performed through its house
call service made up 30% of total core Covid-19
Operationally, IDH rolled out 23 new branches in
Egypt during 2021, including two new Al-Borg Scan
branches rolled out in October and December.
tests performed by IDH in the country throughout
Through its expanded branch and house call ser-
the year. Tests performed through IDH’s house call
vices, IDH served 8.5 million patients in 2021, up
service are offered at the same price as at traditional
34% year-on-year, and performed 29.7 million tests,
branches, with only an additional house call delivery
representing a 21% increase from 2020.
fee charged to patients to cover the transportation
costs of the chemist.
12 Core Covid-19 tests refer to Polymerase Chain Reaction (PCR), Antigen, and Antibody.
30 IDH 2021 Annual Report
2021 Annual Report IDH 31
Strategic Report Our Markets
Jordan
17%
Contribution to
consolidated net sales13
in 2021
Jordan
Key Highlights
| 21Branches as at year-end 2021,
+1 versus 2020
| 869 EGP
BN
Net Sales14 in 2021,
up 112% y-o-y
| 1.6MN
Patients served in 2021,
up 196% y-o-y
Jordan has one of the most modern healthcare infrastructures in the
Middle East, with services highly concentrated in Amman and c.70%
of Jordanians having medical insurance. The Jordanian market’s strong
fundamentals allow IDH to deliver consistent growth despite strict
price regulation on medical laboratories with a set price list that has
not changed since its issuance by the Jordanian Ministry of Health in
2008. Biolab has thus focused on driving volume growth in the market,
deploying strategies to expand its services portfolio and packages that
encourage increased testing per patient.
Unlike Al Borg and Al Mokhtabar in Egypt, Biolab does not operate a
Hub, Spoke and Spike business model. Whilst Biolab’s 21 central labs
perform many of the 1,000+ pathology tests offered, four that are consid-
ered specialty labs perform particular types of tests including, but not
limited to, hematology, endocrinology, immunochemistry, parasitol-
ogy, oncology, transfusion medicine, molecular genetics and antenatal
diagnostics and gene sequencing. Furthermore, Biolab does not share
purchasing, supply and logistics, IT, marketing or sales functions with
its Egyptian parent company.
During 2020, Biolab followed through with its agreement with Georgia
Healthcare Group PLC (GHG) to establish a Mega Laboratory (Mega
Lab) in the Georgian capital of Tbilisi. The 7,500 square meter, multi-
disciplinary Mega Lab is the largest of its kind in Georgia. In exchange
for providing information technology and management services, Biolab
holds an 8.025% equity stake in the Mega Lab project and receives annual
IT support services fees for a period of 10 years and annual management
service fees for a period of two years. Due to the Covid-19 pandemic
and related restrictions on international flights affecting planned audit
visits, logistics and external quality control – an agreement has been
reached with GHG to postpone the implementation of the management
agreement and its scheduled payments to 2022.
13 A full reconciliation of revenues and net sales by geography is available on page 11 of this report.
14 Net Sales is calculated as revenues excluding commission fees paid by Biolab as part of the company’s revenue sharing agreements with QAIA and Aqaba
Port. In FY 2021, in Jordan, IDH recorded revenue of EGP 1,046 million (up 156% year-on-year) and net sales of EGP 869 million (up 112% year-on-year).
32 IDH 2021 Annual Report
Despite the difficult operating environment due
a significant improvement to the 1.6% contraction
to Covid-19, the planned integration of the Mega
experienced in 2020.
Lab with GHG’s network proceeded as scheduled,
and by mid-2021 all 76 locations had successfully
completed the technology transfer, including the
installation of the lab’s Laboratory Information
Management Systems (LIMS). Initially serving
GHG’s network, that is expected to utilize one-
Operational Highlights
IDH’s Jordanian operations saw net sales more than
double year-on-year to reach EGP 869 million for
the year, up 112% versus 2020 ( Jordan’s revenues15
(IFRS) recorded EGP 1,046 million in FY 2021, up
third of the facility’s capacity, the Mega Lab plans
156% year-on-year). Net sales growth was driven by
to develop a B2B network of healthcare providers
an 75% increase in test performed coupled with a
outside the Group to reach full utilization.
21% rise in Biolab’s average revenue per test. Dur-
Macroeconomic Developments
To curtail the spread of the Covid-19 virus in 2020,
ing the year, Covid-19-related tests contributed
to 68% of Biolab’s net sales and to 37% of its tests
performed. Covid-19-related net sales in Jordan
the Jordanian government ordered the closure of all
was boosted by contributions of EGP 185 million
educational institutions, governmental and private
from Biolab’s new partnership with QAIA coupled
entities and introduced a curfew. The restrictions had
with the EGP 107 million in net sales coming from
an impact on Biolab’s branches which were ordered
its partnerships with KHIA and Aqaba Port. As part
to close or operate reduced working hours. In early
of these agreements, Biolab has been operating
2021, the government began the gradual easing of
testing stations across all three locations primarily
these measures following a decline in new infections
focused on PCR testing for Covid-19 to passengers
across the country, which saw operations resume to
arriving in Jordan. The stations also offer additional
their normal volumes.
diagnostic tests to patients including rapid PCR
testing for Covid-19 for departing passengers and
Jordan launched its Covid-19 vaccination campaign
other, more generic diagnostic tests. Meanwhile,
in early January 2021. As at the end of March 2022,
conventional test net sales increased 26% year-on-
45% of the population had received at least one dose
year on the back of a 28% increase in conventional
of the Covid-19 vaccine, which is supporting the
tests performed. Meanwhile, the country’s net sales
country’s efforts towards economic recovery. Jor-
continued to be supported by Biolab’s house call
dan’s forecasted GDP growth for 2022 is 2.7%, which
service which generated EGP 55 million in net sales
is up from the realized 2.0% growth rate in 2021 and
in 2021, up 12% year-on-year.
15 Biolab’s revenues for the year are calculated as net sales plus concession fees paid to QAIA and Aqaba Port as part of their revenue sharing agreement.
2021 Annual Report IDH 33
Strategic Report Our Markets
IDH’s Jordanian operations recorded EBITDA of EGP
331 million in 2021, up 155% versus the previous
year on the back of strong net sales growth. In local
currency terms, EBITDA grew 157% compared to the
previous year. EBITDA margin on net sales recorded
38% in 2021 compared to 32% in 2020.
Throughout the year, Biolab rolled out an additional
branch in the country, taking the total number of
branches to 21 as at year-end 2021.
Jordan was a strong performer
in 2021, with Biolab delivering
exceptional financial and
operational results while continuing
to play a frontline role in the fight
against Covid-19
Meanwhile, in Georgia, where Biolab has partnered
LIMS roll out, Biolab has received an 8.025% equity
with Georgia Healthcare Group (GHG) to establish a
interest in Mega Lab. Moreover, in exchange for man-
7,500 sqm Mega Lab, the ramp up phase is progress-
agement services, which Bio Lab will be supplying
ing as scheduled, with Biolab concluding the roll
for a two-year period with the option to extend, the
out of the new Laboratory Information Manage-
company will receive an annual fees as well as a fixed
ment System (LIMS) across all of GHG’s 76 medical
percentage of Mega Lab’s annualized EBITDA.
facilities (7 hospitals and 69 clinics) in the first half of
2021. The Mega Lab is the region’s largest diagnostic
medical laboratory which will leverage the advanced
technological systems provided by Biolab to connect
more than 40 hospitals and diagnostic centers that
are part of GHG’s network. As compensation for the
34 IDH 2021 Annual Report
2021 Annual Report IDH 35
Strategic Report Our Markets
Nigeria
1.1%
Contribution to
consolidated net sales16
in 2021
Nigeria
Key Highlights
| 10Branches as at year-end 2021,
-2 versus 2020
| 54 EGP
BN
Revenues in 2021,
up 49% y-o-y
| 153K
Patients served in 2021,
up 16% y-o-y
IDH’s operations in Nigeria commenced in February 2018 following its
acquisition of Eagle Eye Echo-Scan Limited (“Echo-Scan”) through a stra-
tegic alliance with Man Capital LLC (“Man Capital”), the London-based
investment arm of the Mansour Group, called Dynasty Holding Group
(“Dynasty”), which is 51% owned and controlled by IDH. In turn, Dynasty
partnered with the International Finance Corporation (“IFC”) and invested
in Echo-Scan (since rebranded as Echo-Lab) to capture the opportunity
present in the country’s large medical diagnostics industry, valued at c. US$
140 million in 2017 and projected to reach US$ 1 billion by 202517.
The strategic rationale for investing in Nigeria’s healthcare system is
very compelling and supports the Group’s goal of expanding its regional
footprint. Nigeria’s diagnostic services market is very large, highly
fragmented and underpenetrated, offering significant opportunities
for growth and economies of scale. Nigeria’s diagnostics industry can
be broadly divided into three groups; the largest being independent
standalone labs (chains and single labs), followed by public and private
hospitals. Moreover, Nigeria has a population of over 213 million and
shares many similarities with Egypt’s market in the 1980s and 1990s
in terms of structure, pace of development, and the emerging disease
profile of patients.
Since acquisition, IDH rolled out an integration and value-building plan
for the expansion of Echo-Lab’s branch network, renovating existing
branches, procuring state-of-the-art equipment and growing the lab’s
service offerings and enhancing its quality standards. The process of
integrating Echo-Lab entails realigning its existing labs into IDH’s “Hub,
Spoke and Spike” business model to form B-labs (“Spokes” capable of
processing routine tests) in Nigeria’s three major cities of Abuja, Lagos
and Benin; and C-labs (“Spikes” functioning as collection and basic test
centres) in less populated areas. IDH continues to ramp up its opera-
tions in Nigeria with its efforts already proving successful in strengthen-
ing Eco-Lab’s brand equity and driving strong growth volumes.
16 A full reconciliation of revenues and net sales by geography is available on page 11 of this report.
17 Source: Boston Consulting Group.
36 IDH 2021 Annual Report
Macroeconomic Developments
IDH’s Nigerian operations were impacted in 2020 due
During 2021, Echo-Lab closed down two underper-
forming branches taking the number of operational
to complete lockdowns in several cities as well as a
branches to 10 as at year-end 2021. The strategic deci-
wave protests and civil unrest which led to branch
sion is part of a wider plan to optimize the venture’s
closures at times. In 2021, all branches returned to
operations as the new management team works to
normal working hours and operated without disrup-
turn the business EBITDA positive. On this front, it
tions which improved overall volumes.
is important to note that Echo-Lab has undergone a
management restructuring with a new CEO joining
Despite recording the country’s worst recession in
the team in early 2021 to guide the venture in its new
four decades during 2020, Nigeria economic growth
phase of growth and value creation.
in 2021 was back on track as pandemic restrictions
were eased, oil prices recovered and authorities
Operations in Nigeria posted an EBITDA loss of EGP 7
implemented policies to counter the economic
million, in line with the previous year’s figure. Losses
shock. Nigeria’s GDP is expected to grow 2.7% in 2022
for the year partially reflect a one-off EGP 4.4 million
on par with the realized growth rate in 2021.
adjustment related to the previous year. Controlling
for the one-off adjustment, EBITDA would come in
Operational Highlights
At the Group’s Nigerian subsidiary, revenues expanded
at a loss of EGP 2.6 million, significantly narrowing
from the previous year’s figure. In light of the steady
49% year-on-year to reach EGP 54 million in 2021.
improvements witnessed throughout 2021, Nigeria
Growth was even more pronounced in local currency
is expected to turn EBITDA positive during the first
terms with revenues up 53% year-on-year supported
half of 2022.
by a 31% year-on-year expansion in tests performed
(patients served were up 16%) coupled with a 14% rise
in average revenue per test. Over the last two years,
Echo-Lab’s has consistently delivered solid volume
growth thanks to an effective revamp strategy which
has involved the complete renovation of the venture’s
branches combined with the rollout of targeted
marketing campaigns aimed at stimulating demand
for the venture’s services. Volumes for the year also
benefitting from a gradual normalisation of traffic fol-
lowing the easing of restrictive measures enforced to
curb the spread of Covid-19 throughout 2020.
2021 Annual Report IDH 37
Strategic Report Our Markets
Sudan
0.3%
Contribution to
consolidated net sales18
in 2021
Sudan
Key Highlights
| 19Branches as at year-end 2021,
-1 versus 2020
| 17EGP
BN
Net Sales in 2021,
down 56% y-o-y
| 17K
patients served in 2021,
down 46% y-o-y
IDH operates under two brand names in Sudan, Ultralab and Al Mokh-
tabar Sudan. Al Borg acquired a majority interest in Ultralab in 2011,
whilst Al Mokhtabar Sudan had been established in 2010 prior to the
Group’s acquisition of Al Mokhtabar in Egypt.
Sudan’s economic backdrop continued to be affected by the social
conflict and civil unrest which has endured since the 2011 secession
of South Sudan, and subsequent loss of c.75% of oil production. These
events have hindered the country’s economic growth, depriving it of its
major foreign currency sources which culminated in a severe currency
devaluation in 2018 with the Sudanese Pound lose c.85% of its value.
During 2019, economic hardships and political unrest led to month-
long protests early in the year and the removal of long-time president
Omar Al-Bashir in April 2019. Subsequently, a power-sharing agree-
ment was signed between the military and an opposition coalition in
July 2019 which brought about fragile stability during the transitional
period. In 2021, the situation remained volatile as civil unrest coupled
with a weak Sudanese Pound (SDG) continued to plague the country.
The current environment may adversely affect IDH’s businesses, as
such, management is closely monitoring the situation and any develop-
ments on the ground.
Macroeconomic Developments
In December 2020 the US government officially removed Sudan from its
States Sponsors of Terrorism list. The change in the country’s designa-
tion is expected to allow Sudan to have access to international funds
and investment, including the International Monetary Fund, paving
the way for the country’s economic growth. The lifting of sanctions also
opens up important growth opportunities for IDH’s operations in the
coming years. With the country now open to international suppliers;
the Group will be able to directly import test kits and in turn improve its
operational efficiency and profitability.
18A full reconciliation of revenues and net sales by geography is available on page 11 of this report.
38 IDH 2021 Annual Report
In February 2021, Sudan’s government announced it
management’s continued success in raising prices
would allow for the free float of the Sudanese Pound
in step with inflation throughout the year, saw net
(SDG) leading to a sharp devaluation of the currency
sales in local currency terms grow an impressive
and a rapid rise in inflation. The central bank set
159% in 2021.
the indicative rate at 375 pounds to the dollar up
from 55 pounds, which had a significant impact on
During the twelve months to 31 December 2021, IDH
IDH’s operations. Later in the year, protests broke
closed one branch in Sudan, with the number of opera-
out following the Sudanese Military’s decision to
tional branches in the country now standing at 20.
depose the civilian prime minister. Despite being
reinstated in the final week of November, Abdalla
The Company recorded an EBITDA loss of EGP 0.5
Hamdok later resigned in early January 2022 as civil
million in 2021, compared to a positive EBITDA of
unrest continued. The protests led to the temporary
EGP 6.1 million in 2020. EBITDA for the year was
closure of all of IDH’s Sudanese branches. However,
impacted by the sharp SDG devaluation in Febru-
all locations were reopened within a few days and
ary 2021. In SDG terms EBITDA declined 148%
quickly gained back momentum. Management on
year-on-year.
the ground continues to monitor the situation and
has put in place an all-encompassing mitigation
strategy to safeguard staff and patient wellbeing and
protect IDH’s operations.
Meanwhile, the country’s Covid-19 vaccination cam-
paign launched in March 2021. As at the end of March
2022, around 13% of the population had received at
least one dose.
Operational Highlights
In Sudan, IDH reported a 56% year-on-year con-
traction in revenue to EGP 17 million for the year.
The country’s results continue to be significantly
impacted by the devaluation of the Sudanese pound
in early 2021 with the average SDG/EGP rate in 2021
standing at 0.05 versus 0.29 in 2020. Nonetheless,
2021 Annual Report IDH 39
Strategic Report Our Brands
Our Brands
IDH’s core brands include Al Mokhtabar, Al Borg and Al Borg Scan in Egypt, Biolab in Jordan, Ultralab and Al
Mokhtabar Sudan in Sudan and Echo-Lab in Nigeria. Meanwhile, the Group’s newest venture, Egypt-based
Wayak, utilises data analytics to offer patients data-driven healthcare management services and compile
electronic medical records.
Al Mokhtabar – Egypt
Al Mokhtabar was first launched over 40 years ago when
microbiology/infectious diseases, toxicology, cytology,
Dr. Moamena Kamel, Professor of Immunology at Cairo
surgical pathology, flowcytometry, molecular biology
University, founded MK Lab in 1979. In 2004, MK Lab was
and cytogenetics. As of 31 December 2021, Al Mokhtabar
rebranded Al Mokhtabar and has since built a reputation
operated a network of 244 branches across Egypt, mak-
as a quality care provider with a portfolio of over 2,000
ing it the largest privately owned laboratory group in
clinical analyses in the areas of immunology, haema-
the region, and served 5.0 million patients who received
tology/coagulation, clinical chemistry, parasitology,
more than 17.3 million tests.
Al Mokhtabar
Key Highlights
| 244operational
branches as at 31
December 2021
| 50MN
patients served in
2021
| 17.3MN
tests performed in
2021
Al Borg Laboratories – Egypt
Founded in 1991, Al Borg Laboratories is the first
tests covering the whole spectrum of conventional
medical laboratory in the Middle East to successfully
and non-conventional medical testing. The company
implement a Hub, Spoke and Spike business model. Al
caters to outpatient walk-in customers in addition to
Borg is now amongst the largest privately owned labo-
corporate, insurance and lab-to-lab clients.
ratory group in the region, offering more than 2,000
Al Borg Laboratories
Key Highlights
| 203operational
branches as at 31
December 2021
| 3.4MN
patients served
in 2021
| 12.2MN
tests performed
in 2021
40 IDH 2021 Annual Report
Al Borg Scan – Egypt
IDH established Al Borg Scan in 2018 to capture
2022. Al Borg Scan draws on the latest technology to
growth opportunities presented by Egypt’s high-value
offer the highest quality in MRI, CT, ultrasound, x-ray,
and high-fragmented radiology sector. Al Borg Scan
mammogram and cath lab services. Run by some of
offers a full range of radiology services and leverages
Egypt’s most competent and distinguished radiolo-
the Al Borg brand equity along with its large customer
gists, Al Borg Scan is a key component of IDH’s strat-
base to consolidate its position as Egypt’s premium
egy to build a national brand in Egypt, and enables
provider of medical imaging. The company currently
the Group to deliver on its vision of providing patients
operates five state-of-the-art facilities in Egypt and
with a one-stop-shop service offering featuring both
is actively working on launching multiple more in
pathology and radiology.
Al Borg Scan
Key Highlights
| 4operational
branches as at 31
December 2021
| 62K
patients served
in 2021
| 78K
exams performed
in 2021
2021 Annual Report IDH 41
Strategic Report Our Brands
Wayak – Egypt
Wayak was established in 2019 to invest in data mining
to develop electronic medical records for patients
and artificial intelligence platforms and capitalise on
and better serve their needs with innovative patient
IDH’s patient database to capture new growth oppor-
healthcare profiles, medication home-delivery, diag-
tunities in the healthcare management space. With
nostics testing reminders, referrals to service provid-
a database of over 13 million patients, of which 10%
ers under the IDH network with discounted prices as
live with chronic illnesses, Wayak has allowed IDH
well as follow-up services.
Biolab – Jordan
IDH launched Biolab in 2001 with the goal of becoming
referring clinical laboratories. Biolab is accredited by
a leader in Jordan’s private medical laboratory sector.
the Jordanian Ministry of Health (“MOH”), with two
Through a nationwide network of 21 branches fitted
branches accredited with ISO 15189 and Joint Com-
with state-of-the-art medical technology, Biolab offers
mission International (JCI) and one branch receiving
a vast suite of over 1,000 diagnostic tests to a customer
CAP accreditation in 2018.
base comprised of patients, physicians, hospitals and
Biolab
Key Highlights
| 21operational
branches as at 31
December 2021
| 3.5K
patients served
in 2021
| 1.6MN
tests performed
in 2021
Echo-Lab – Nigeria
Founded in 1991, Al Borg Laboratories is the first
tests covering the whole spectrum of conventional
medical laboratory in the Middle East to successfully
and non-conventional medical testing. The company
implement a Hub, Spoke and Spike business model.
caters to outpatient walk-in customers in addition to
Al Borg is now the largest privately owned labora-
corporate, insurance and lab-to-lab clients.
tory group in the region, offering more than 2,000
Echo-Lab
Key Highlights
| 10operational
branches as at 31
December 2021
| 153K
patients served in
2021
| 281 K
tests performed in
2021
42 IDH 2021 Annual Report
UltraLab – Sudan
Established in 2008, UltraLab quickly developed into
clinical centre-based labs. The company has broad
Sudan’s largest and most respected laboratory chain.
exposure across Sudan with branches in Khartoum,
As at year-end 2021, UltraLab operated 12 laborato-
Om Dorman and Port Sudan.
ries, including 9 independent labs and 3 hospital/
UltraLab
Key Highlights
| 12operational
branches as at 31
December 2021
| 57K
patients served
in 2021
| 143K
tests performed
in 2021
Al Mokhtabar – Sudan
Al Mokhtabar Sudan was established in 2010 prior to
subsidiaries adhere to the Group’s proven Hub, Spoke
IDH’s acquisition of Al Mokhtabar in Egypt. The com-
and Spike model, mirroring the approach employed
pany offers a comparable suite of diagnostic services
by Al Borg and Al Mokhtabar in Egypt.
as that provided by UltraLab. Both of IDH’s Sudanese
Al Mokhtabar – Sudan
Key Highlights
| 7operational
branches as at 31
December 2021
| 13K
patients served
in 2021
| 40K
tests performed
in 2021
The Group boasts a multi-decade-long
track record of successful service
delivery, with its brands enjoying a strong
reputation and an established position in
their respective markets of operation
2021 Annual Report IDH 43
Strategic Report Our Services
Our Services
Through IDH’s brands, the Group spans the full
Additionally, IDH’s Egypt-based subsidiary Wayak,
spectrum of diagnostic testing services with over
leverages the Group’s vast patient database and wide
2,000 internationally accredited pathology tests rang-
geographic reach to build electronic medical records
ing from basic blood glucose tests for diabetes to
and provide patients with customized services includ-
advanced molecular testing for genetic disorders. IDH
ing home-delivery of medications, diagnostic testing
also offers the full suite of radiology services through
reminders and referrals to service providers.
Al Borg Scan in Egypt and Echo-Lab in Nigeria.
Pathology
IDH’s comprehensive pathology product portfolio covers immunology, haematology, endocrinology, clinical
chemistry, molecular biology, cytogenetics, histopathology and microbiology
Immunology
Microbiology
Haematology
Endocrinology
Clinical Chemistry
Molecular Biology
Cytogenetics
Histopathology
Radiology
Radiology
IDH offers the full suite of radiology services through
targeted services to its customers. With a database of
Al Borg Scan in Egypt and Echo-Lab in Nigeria, includ-
over 13 million patients, of which 10% live with chronic
ing but not limited to magnetic resonance imaging
illnesses, Wayak invests in data mining and artificial
(MRI), computed tomography (CT), ultrasound, x-ray,
intelligence platforms to develop electronic medical
mammograms and cath lab facilities.
records for patients and better serve their needs with
Healthcare Management Services
In 2019, IDH ventured into the healthcare management
new value propositions. These include building patient
healthcare profiles, medication home-delivery, diag-
nostics testing reminders, referrals to service providers
space with the launch of Wayak. The subsidiary aims to
under IDH’s network with discounted prices as well as
capitalise on the Group’s vast patient database and offer
follow-up services, amongst others.
44 IDH 2021 Annual Report
Internationally-Accredited Test Portfolio
Across its brand portfolio, IDH boasts international-quality accreditations with a stringent internal audit pro-
cess to ensure it continues to deliver the world-class services patients have come to expect from IDH’s facilities.
ISO
College of American Pathologists (CAP)
ISO accreditation requires an initial inspection of
IDH operates the only laboratory in Egypt to receive
laboratory practices, calibration and medical analysis
this distinguished certification, which was renewed
by an accreditation body. For Al Mokhtabar and for Al
in October 2021. Unlike ISO accreditation, CAP certi-
Borg, it was URS Certification (accredited internation-
fication is awarded to individual labs, rather than the
ally by the United Kingdom Accreditation Service);
Group’s operations as a whole and is widely considered
and for Biolab, it was the Jordanian Accreditation
the global leader in laboratory quality assurance. The
System (JAS). The inspection involves the clinical
Group’s central Mega Lab in Cairo, which was inau-
chemistry area, the virology unit, the haematology
gurated in 2015, first received its CAP certification in
unit and the general laboratory management practice.
February 2018 and is renewable every two years. The
The accreditation’s standards include both manage-
Mega Lab replaces two smaller, independent “A-labs”
ment and technical requirements. The Company’s ISO
one of which was also CAP certified.
9001:2008 accreditations for both Al Mokhtabar and
Al Borg passed accreditation reviews in December
2020 and are valid for three years.
2021 Annual Report IDH 45
Strategic Report Our Services
| 300Employees trained per month
Quality Assurance
Employee Training
IDH’s quality assurance programme ensures that all
The Group views education as an essential means
internal diagnostic processes, lab testing procedures
of ensuring quality across its laboratories. To help
and results analyses are accurate. The quality assur-
develop the skills of employees, IDH has a dedicated
ance program ensures that all the standards of the
training facility in Cairo with four training laborato-
CAP and ISO accreditations are met by inspecting
ries. In 2021, the training team was composed of one
hardware and equipment, ensuring compliance with
manager, one medical consultant, two supervisors,
procedure manuals, inspecting the accuracy of results
one administrator and six full-time training special-
and administering competency assessments
for
ists. The centre provides training to more than 600
employees. The internal audit team also maintains a
employees per month, including doctors, chemists,
specific audit checklist for the basic and routine tests
receptionists, branch and area managers, sales per-
conducted in the Group’s C-labs, including conformity
sonnel and administrators. The training curriculum
of process; testing the competency of employees
is determined based on performance KPIs, internal
through oral, observational, practical and written
audit reports, management reviews, competency
tests; and conducting managerial audits to assess the
assessment reports and analysis of customer feedback
labs’ management and administrative efficiency.
and complaints. IDH’s employee training is structured
along four modules: new employee training, compe-
tency based, need-based and practical re-training.
46 IDH 2021 Annual Report
2021 Annual Report IDH 47
Strategic Report Competitive Strengths & Growth Strategy
Competitive Strengths
& Growth Strategy
IDH’s prominent market position and agile business model coupled with its scalable
platform and experienced management provide the required tools to deliver on the
Group’s ambitious long-term growth strategy
Competitive Strengths
Exposure to resilient markets with favourable dynamics
IDH operates in markets underpinned by strong structural growth driv-
ers, with generally under-penetrated and underserved diagnostic ser-
vices markets. Given the counter-cyclical nature of the diagnostic and
healthcare industries, the Group is able to remain resilient in the face of
economic and political obstacles across its geographic footprint. This
is best illustrated by IDH’s consistent double-digit revenue growth in
recent years and, more recently, by its ability to achieve record-breaking
top- and bottom-line growth despite the unprecedented challenges
posed by the Covid-19 pandemic.
Strong market position with over four decades of
industry experience
The Group benefits from strong barriers to entry in the markets where
it operates (as detailed in Our Markets on page 26). This provides a
competitive advantage for players who, like IDH, maintain an estab-
lished market position. With a success track recording spanning four
decades, IDH’s subsidiaries have successfully nurtured a strong brand
equity and reputation, earning patients’ trust and loyalty and position-
ing themselves as the go-to service providers in the markets where they
operate. IDH also leverages its internationally accredited facilities to
attract contract clients, while its scalable business model and relation-
ships with key stakeholders enable the Group to extend its reach in a
fragmented market.
48 IDH 2021 Annual Report
| 33.7MN
tests performed in 2021
Scalable asset-light business model
IDH’s efficient Hub, Spoke and Spike business model allows the Group
to organically expand its geographic footprint through a low-capital
intensive platform. The Group’s centralised Mega Lab, which is fitted
with modern, high-capacity equipment and enjoys ample throughput,
facilitates the rapid deployment of asset-light, plug and play C labs for
sample collection and simple testing across its markets. Safety and test-
ing procedures are continuously enhanced as more tests are performed
using the advanced diagnostic tools and state-of-the-art technology
installed at IDH’s Mega Lab.
Strong balance sheet and cash generation capacity
IDH’s asset-light model renders minimal borrowing and significant stra-
tegic flexibility, which allows the Company to maintain a strong financial
position with an unlevered balance sheet. Additionally, core profitability
is consistently strong, with the Group delivering EBITDA margins exceed-
ing 40% and sustaining healthy cash balances irrespective of the challeng-
ing operating conditions endured throughout the years.
Experienced and entrepreneurial management
The Group boasts a highly qualified management team with several decades
of healthcare experience, while its Board of Directors brings a wealth of
healthcare, MENA region and investment experience to the table.
2021 Annual Report IDH 49
Strategic Report Competitive Strengths & Growth Strategy
Long Term Growth Strategy
IDH leverages its competitive strengths to capture
the penetration of new geographic markets through
substantial opportunities and deliver on a four-
selective, value-accretive acquisitions; and (4) the
pillar growth strategy focused on 1) the continued
introduction of new medical services by leveraging
expansion of its customer base; (2) the expansion of
the Group’s network and reputable brand position
its service portfolio to increase tests per patient; (3)
Expand Customer Reach
IDH is constantly seeking opportunities to increase
Increase Tests per Patient
IDH’s state-of-the-art Mega Lab boosts its ability to
patient accessibility and expand its customer base,
perform higher volume and more advanced tests
capitalising on the favourable market dynamics and
that are not available at competing labs. The Group
strong demand for private healthcare services that
also bundles testing services into discounted health
prevail across its geographic footprint. IDH’s scal-
packages offered to existing customers, further
able, asset-light business model allows the Group to
driving volume growth and revenue per patient.
rapidly and efficiently rollout new labs and further
Additionally, IDH actively engages in awareness cam-
expand its presence in the Middle East and Africa.
paigns focusing on particular diseases and educating
In addition to its core offerings, the Group provides
people on lifestyle diseases such as diabetes and high
an array of complementary services including house
cholesterol, and highlighting the importance of fre-
calls, e-services and results delivery, which enable
quent testing. Such efforts have successfully driven
a smoother, well-rounded experience
for both
volume growth in IDH, bolstering average test and
existing and prospective patients. IDH’s house call
revenue per patient.
services have become increasingly popular in the
last two years given the ongoing Covid-19 pandemic,
accounting for 20% of consolidated revenues in 2021
compared to around 9% in 2019. In response to higher
demand, the Company has effectively ramped up the
service and can now perform up to 5,000 house call
visits per day and process as many as 10,000 daily
calls. This has enabled the Company to effectively
cater to the growing demand while still enjoying
ample spare capacity to ramp up the service further.
50 IDH 2021 Annual Report
| 24new branches in 2021
| 10.3MN
patients served in 2021
Geographic Expansion
The Group is constantly pursuing strategic acquisi-
Diversify into New Medical Services
As Egypt’s medical testing space evolves from a
tion opportunities within the Middle East and Africa
single-doctor model to a branded chain model, IDH
where markets tend to be highly fragmented and
realizes the opportunity to offer services that are not
underpenetrated. IDH’s business model is well-
currently available at private healthcare providers
positioned to capitalise on prevailing healthcare
on a large scale. The Group believes that its brand
and consumer trends in the region. Leveraging the
equity, experience, and patient following ideally posi-
strength of its balance sheet, IDH delivers on its stra-
tion it too pursue opportunities in adjacent markets.
tegic objective through value-accretive acquisitions
To this end, the Group marked its expansion into
such as that of Echo-Lab in Nigeria in 2018.
the high-value radiology segment in October 2018
through Al Borg Scan and its expansion into data-
driven, tailored healthcare management services in
September 2019 through Wayak.
2021 Annual Report IDH 51
Strategic Report Principal Risks, Uncertainties & their Mitigation
Principal Risks, Uncertainties
& their Mitigation
As in any corporation, IDH has exposure to risks
every risk — and some risks, as at the country level,
and uncertainties that may adversely affect its
are largely without potential mitigants — the Group
performance. IDH Chairman Lord St John of Bletso
has in place processes, procedures and baseline
has emphasised that ownership of the risk matrix is
assumptions that provide mitigation. The Board and
sufficiently important to the Group’s long-term suc-
senior management agree that the principal risks
cess that it must be equally shared by the Board and
and uncertainties facing the Group include:
senior management. While no system can mitigate
Specific Risk
Mitigation
Country/regional risk — Economic & Forex
The Group is subject to the economic conditions of
Egypt specifically and, to a lesser extent, those of
the other geographies. Egypt accounted for c. 81%
of our revenues in 2021 (2020: 82%).
Overall, management notes that IDH has a resilient
business model and that the business continued to
grow year-on-year through two revolutions, as well
as under extremely difficult operating conditions in
2016 and in 2020.
Economic risk: On the 21st of March 2022, the
Central Bank of Egypt (CBE) raised policy rates by
100bps and allowed the Egyptian Pound (EGP) to
depreciate against the United States Dollar (USD)
by around 17%, which will impose Inflationary pres-
sures in the short to medium term. Inflation rates
are expected to average around 13% to 15% during
2022, up from 5.9% in December 2021. Moreover,
GDP growth in FY22/23 was revised downward
to 5.5% from 5.7% by the Egyptian government in
March 2022.
Foreign investors welcomed March 2022 CBE move
as it demonstrated the Egyptian government’s will-
ingness to improve investment climate.
IDH management is closely monitoring the impact
of the rise of inflation on its cost base, especially
raw material. The risk is partially mitigated given
its long-term contractual agreement with its raw
material suppliers.
52 IDH 2021 Annual Report
Specific Risk
Mitigation
Country/regional risk — Economic & Forex
Foreign currency risk: The Group is exposed to
foreign currency risk on the cost side of the business.
The majority of supplies it acquires are paid in Egyp-
tian pounds (EGP), but given they are imported, their
price will vary with the rate of exchange between the
EGP and foreign currencies. In addition, a portion of
supplies are priced and paid in foreign currencies.
High Inflation in Sudan: Following substantial cur-
rency devaluation in Sudan during 2018 the currency
lost 85% of its value. In 2019, the Sudanese Pound’s
official rate versus the US Dollar remained relatively
stable at 45.11 as 31 December according to the Cen-
tral Bank of Sudan. However, in July 2020 the Sudanese
government announced it would devalue its currency
and cut fuel subsidies due to a huge budget deficit
and an economic crisis aggravated by the coronavirus
pandemic. In February 2021, the Sudanese govern-
ment announced it would float the Sudanese Pound
in an effort to bridge the gap with the forex prices at
the parallel market. This led to a significant increase in
the currency rates. The US Dollar rate for instance rose
from SDG 55 to more than SDG 375. This was followed
by the removal of fuel subsidies in June 2021, which
again led to the increase of consumer prices. Accord-
ing to data from Sudan’s Central Bureau of Statistics,
the country’s headline inflation rate averaged 359% in
2021, up from 163% in 2020.
Nigeria: Capital controls could make profit repatria-
tion difficult in the short term.
Nigeria: Depreciation of the Naira would make imported
products and raw materials more expensive and would
reduce Nigeria’s contribution to consolidated Company
revenues. Whilst capital controls have helped the offi-
cial exchange converge with the black market rate, the
central bank has yet to allow the naira to float freely.
During FY2021, only 10% of IDH’s cost of supplies
(c.2% of revenues) are payable in US dollars, mini-
mising the Group’s exposure to foreign exchange
(FX) scarcity and in part, the volatility of the Egyp-
tian pound.
The Group is closely monitoring the economic situ-
ation in Sudan and has implemented several price
increases to keep instep with inflationary pressures.
IDH is also working to limit expatriate salaries and
foreign currency needs by increasing dependence
on local hires.
In Nigeria, until currency exchange policy is clari-
fied and there is greater visibility regarding profit
repatriation, IDH expects to reinvest early profits
into its Nigerian business. Dividend payments are
expected to be repatriated after the completion of
the branch roll-out plan.
2021 Annual Report IDH 53
Strategic Report Principal Risks, Uncertainties & their Mitigation
Specific Risk
Mitigation
Country risk — Political & Security
Sudan is currently undergoing a significant political
transition which began in 2019 when severe politi-
cal unrest and protests led the military to remove
long-time president Omar Al-Bashir. Following his
removal, the military signed a power-sharing agree-
ment with an opposition coalition in July 2019, with
the aim of eventually transferring power to a civilian
government. On 25 October 2021, Sudan’s Prime
Minister was detained by armed forces, and Army
chief General Abdel Fattah al-Burhan announced
that the civilian government and other transitional
bodies have been dissolved. Throughout November,
the country witnessed several mass rallies and
increased civil unrest with protesters asking for the
reinstatement of the civilian Prime Minister, Abdalla
Hamdok. The protests led to the temporary closure
of all of IDH’s Sudanese branches. All locations were
reopened within a few days and quickly gained back
momentum. On 21 November 2021, Mr. Hamdok
took office once again but later stepped down on 2
January 2022. Civil unrest and protests are continu-
ing as the country’s future remains unclear. The
situation in Sudan is volatile and continued civil
unrest could adversely affect IDH’s business.
It is important to note that in FY 2021 Sudan made
up just 0.3% of IDH’s net sales. Moreover, while
nationwide protests do affect patient and test vol-
umes in Sudan, the diagnostic industry is relatively
immune given the inelastic demand for healthcare
services. Additionally, management in Sudan has
been successful in offsetting the effect of lower
volumes due to protest with higher pricing, and in
2019, 2020, and 2021 the geography recorded solid
year-on-year revenue growth in SDG terms.
In December 2020, US removed Sudan from its
States Sponsors of Terrorism list. The change in the
country’s designation is expected to allow Sudan to
have access to international funds and investment,
including the International Monetary Fund, paving
the way for the country’s economic growth.
IDH’s management on the ground continues to
monitor the evolving situation and has put in
place an all-encompassing mitigation strategy to
safeguard staff and patient wellbeing and protect
IDH’s operations.
Nigeria faced security challenges on several fronts,
including re-emerging ethnic tensions and resur-
gent attacks by Islamist militants in the northeast.
Against the backdrop of a sluggish economy and the
slow implementation of reforms, mounting discon-
tent could translate into further social unrest.
While this is relatively hard to mitigate, IDH is
continuously evaluating its processes to safeguard
its employees and operations. Overall, IDH applies
rigorous standards to evaluating all aspects of its
business processes in Nigeria to ensure it is well-
equipped to respond to the evolving situation.
The government dissolved the special division
known as SARS (Special Anti-Robbery Squad) in
October 2021. In late 2020 and throughout 2021,
protests have decreased significantly across the
country but a potential escalation of civil unrest
remains possible.
54 IDH 2021 Annual Report
Specific Risk
Mitigation
Covid-19
The ongoing Covid-19 pandemic presents business
continuity risks to IDH including, but not limited
to, supply-chain disruptions, government enforced
quarantines and their effect on IDH’s business oper-
ations and risk of infection among IDH employees.
In 2021, the rollout of vaccines across its countries
of operation coupled with governments’ willingness
and ability to coexist with the virus, saw restrictions
imposed to curb the spread being lifted and opera-
tions running normally throughout the year. No new
restrictions have been imposed following the rise of
new Covid-19 variants throughout the year, with
countries across IDH’s footprint continuing to push
forward their vaccination campaigns. As at the end
of March 2022, the share of the population having
received at least one Covid-19 vaccine dose stood at
approximately: 45% in Egypt, 45% in Jordan, 10% in
Nigeria, and at 13% in Sudan.
Covid-19 global economic impact: Rising inflation
rates, supply chain disruptions, and the rise of new,
more fast-spreading Covid-19 variants continue to
pose a threat for the global economic recovery.
Covid-19 impact on IDH Financials
Throughout FY 2021, IDH generated around 50%
of its revenues from Covid-19-related testing. In
light of the increasing roll out of vaccines and the
widespread decline in infection rates, Covid-19-re-
lated revenues are expected to gradually decline
throughout 2022.
All of IDH staff use appropriate protective equip-
ment when interacting with patients, including
those suspected of having Covid-19 or any other
infectious disease. IDH is currently administering
PCR, Antibody, and Antigen testing for Covid-19 in
Egypt and Jordan.
All of the Group’s employees have been fully vac-
cinated during 2021 and they are subject to regular
communications reminding them that they may
not report to work if they have symptoms of a
Covid-19 infection.
The effective rollout of vaccines and the increasing
ability and willingness of governments to coexist with
the virus and its variants have supported a steady
recovery of the global economy throughout 2021.
Throughout the Covid-19 crisis, IDH has maintained a
strong focus on growing its conventional (non-Covid-
19-related) business, which in FY 2021 expanded 22%
versus FY 2020, and came in 13% above pre-covid
levels recorded in FY 2019. Moreover, in both Egypt
and Jordan, IDH enjoys a market leading position
and plans to capitalise on its expanded product
offering and patient base, increased service delivery
capabilities, and growing visibility to continue deliv-
ering growth in the year ahead. Across both markets,
the Group’s strategy will now pivot towards patient
retention as it looks to maintain the new relation-
ships established during the pandemic thanks to its
Covid-19-dedicated offering.
2021 Annual Report IDH 55
Strategic Report Principal Risks, Uncertainties & their Mitigation
Specific Risk
Mitigation
Global Supply Chain Disruptions
Throughout 2021, restrictions imposed to curb the
spread of Covid-19, labour shortages, and fast-rising
demand for goods saw global supply chains come
under strong pressure causing delays and shortages
worldwide. The ongoing global supply chain dis-
ruptions have had no impacts on IDH’s operations
throughout the year.
Supplier risk
IDH faces the risk of suppliers re-opening negotia-
tions in the face of cost pressure owing to the pre-
vailing inflationary environment and/or a possible
albeit limited devaluation risk.
IDH’s supplier risk is concentrated amongst three
key suppliers — Siemens, Roche and BM (Sysmex)—
who provide it with kits representing 24% of the total
value of total raw materials in 2021 (2020: 52%).
Remittance of dividend regulations and
repatriation of profit risk
The Group’s ability to remit dividends abroad may
be adversely affected by the imposition of remit-
tance restrictions. More specifically, under Egyptian
law, companies must obtain government clearance
to transfer dividends overseas and are subject to
higher taxation on payment of dividends.
IDH’s management team continually monitors the evolv-
ing situation and have taken proactive steps to build up
its inventory to shield the Group from any potential
future disruptions. IDH is in continual dialogue with key
suppliers to gauge the risk associated with a shortage of
materials and is yet to identify a weakness.
IDH’s test kits are purchased on fixed-price con-
tracts with tenors ranging from five to seven years,
providing effective protection from short-term
price fluctuations.
IDH has strong, longstanding relationships with its
suppliers, to whom it is a significant regional client.
Due to the volumes of kits the Group purchases, IDH
is able to negotiate favourable pricing and maintain
raw material costs increases at a rate slower than
inflation. It is worth highlighting that IDH’s supplier
relations were not impacted by COVID-19.
Total raw materials costs as a percentage of net sales
were 19.6% in 2021 compared with 18.4% in 2020.
As a foreign investor in Egypt, IDH does not have
issues with the repatriation of dividends, yet given
the recent depreciation in the EGP value, the
Company foresees probable delays in FX sourcing
and repatriation.
As a provider of medical diagnostic services, IDH’s oper-
ations in Sudan are not subject to sanctions. Notably, in
October 2017 the US lifted a host of sanctions imposed 20
years ago that included a comprehensive trade embargo,
a freeze on government assets and tight restrictions on
financial institutions dealing with the country. More
recently, in December 2020 the US removed Sudan from
its States Sponsors of Terrorism list.
56 IDH 2021 Annual Report
Specific Risk
Mitigation
Legal and regulatory risk to the business
The Group’s business is subject to, and affected by,
extensive, stringent and frequently changing laws
and regulations, as well as frequently changing
enforcement regimes, in each of the countries in
which it operates. Moreover, as a significant player
in the Egyptian private clinical laboratory market,
the Group is subject to antitrust and competition-
related restrictions, as well as the possibility of inves-
tigation by the Egyptian Competition Authority.
The Group’s general counsel and the quality assur-
ance team work together to keep IDH abreast of,
and in compliance with, both legislative and regula-
tory changes.
On the antitrust front, the private laboratory seg-
ment (of which IDH is a part) accounts for a small
proportion of the total market, which consists of
small private labs, private chain labs and large gov-
ernmental and quasigovernmental institutions.
Risk from contract clients
Contract clients including private insurers, unions
and corporations, account for c. 57% of the Group’s
net sales in 2021. Should IDH’s relationship with
these clients deteriorate, for example if the Group
were unable to negotiate and retain similar fee
arrangements or should these clients be unable to
make payments to the Group, IDH’s business could
be materially and adversely affected.
IDH diligently works to maintain sound relation-
ships with contract clients. All changes to pricing
and contracts are arrived at through discussion
rather than blanket imposition by IDH. Relations
are further enhanced by regular visits to contract
clients by the Group’s sales staff.
IDH’s attractiveness to contract clients is enhanced
by the extent of its national network.
It should be highlighted that, excluding the contri-
butions from IDH’s multiple partnerships to con-
duct PCR testing for passengers (Pure Health, NAS,
QAIA), which in 2021 generated EGP 365 million in
contract segment net sales, no single client contract
accounts for more than 1% of total net sales or 1.4%
of contract net sales.
2021 Annual Report IDH 57
Strategic Report Principal Risks, Uncertainties & their Mitigation
Specific Risk
Mitigation
Pricing pressure in a competitive, regulated
environment
The Group faces pricing pressure from various
third-party payers, including national health insur-
ance, syndicates, other governmental bodies, which
could materially and adversely affect its revenue.
Pricing may be restrained in cases by recommended
or mandatory fees set by government ministries and
other authorities.
This risk may be more pronounced in the context of
the imminent inflationary pressures following the
recent depreciation of the Egyptian Pound.
The Group might face pricing pressure from existing
competitors and new entrants to the market.
Cybersecurity risks
The Company controls a vast amount of confiden-
tial data for its patients’ records; to this end, there
is a cybersecurity risk for both data confidentiality
and data security.
This is an external risk for which there exist few
mitigants.
In the event there is escalation of price competition
between market players, the Group sees its wide
national footprint as a mitigant; c. 57% of IDH net sales
in 2021 is generated by servicing contract clients (pri-
vate insurer, unions and corporations) who prefer IDH’s
national network to patchworks of local players.
IDH has a limited ability to influence changes to
mandatory pricing policies imposed by government
agencies, as is the case in Jordan, where basic tests that
account for the majority of IDH’s business in that nation
are subject to price controls.
IDH enjoys a strong brand equity in its markets of
operation which enables all its brands to enjoy a solid
positioning in the markets in which it operates. As
such, IDH is a price maker, especially in Egypt, where
the Group currently controls the largest network of
branches amongst all private sector players. Moreover,
in its home market of Egypt, which in FY 2021 accounted
for 81.4% of total revenues, the Group faces no potential
risk of price regulation by the government.
The Company has stringent control over its data secu-
rity and regularly stress tests its IT infrastructure to
assess the robustness of its internal controls. Moreover,
its cybersecurity controls and protocols are regularly
updated to proactively address potential shortcomings,
keep them in full adherence with data security regula-
tions in the Group’s markets of operation, and maintain
them in line with global best practices.
58 IDH 2021 Annual Report
Specific Risk
Mitigation
Business continuity risks
Management concentration risk: IDH is dependent
on the unique skills and experience of a talented
management team. The loss of the services of key
members of that team could materially and adversely
affect the Company’s operations and business.
Business interruption: IT systems are used exten-
sively in virtually all aspects of the Group’s business
and across each of its lines of business, including
test and exam results reporting, billing, customer
service,
logistics and management of medical
data. Similarly, business interruption at one of the
Group’s larger laboratory facilities could result in
significant losses and reputational damage to the
Group’s business as a result of external factors such
as natural disasters, fire, riots or extended power
failures. The Group’s operations therefore depend
on the continued and uninterrupted performance
of its systems.
Interruption: across
Business
its geographies,
the reimposition of restrictive measures related
to Covid-19 (including curfews and lockdowns)
could impact the working hours of branches and in
extreme cases could lead to their temporary closure.
IDH understands the need to support its future
growth plans by strengthening its human capital
and engaging in appropriate succession planning.
The Company is committed to expanding the senior
management team, led by its CEO Dr. Hend El
Sherbini, to include the talent needed for a larger
footprint. The Group has constituted an Executive
Committee led by Dr. El Sherbini and composed of
heads of departments. The Executive Committee
meets every second week.
The Group has in place a full disaster recovery plan,
with procedures and provisions for spares, redun-
dant power systems and the use of mobile data sys-
tems as alternatives to landlines, among multiple
other factors. IDH tests its disaster recovery plans
on a regular basis.
In Egypt and Jordan, to mitigate the impact of poten-
tial branch closures on operations, the Group has
been ramping up its house call services. Moreover,
the Group’s important role in conducting PCR test-
ing for Covid-19 in both Egypt and Jordan makes it
unlikely that branches would be closed even if new
restrictive measures were introduced.
2021 Annual Report IDH 59
Performance
IDH delivered outstanding financial
and operational results in 2021
48%
50%
29%
Adjusted EBITDA margin on
consolidated revenue in 2021
Adjusted EBITDA margin on net
sales in 2021
Net profit margin on
consolidated revenue in 2021
30% Net profit margin on net sales
in 2021
60 IDH 2021 Annual Report
2021 Annual Report IDH 61
Performance Financial & Operational Review
Important Notice
Treatment of Revenue-Sharing Agreements and Use
of Alternative Performance Measures
As part of IDH’s efforts to support local authorities in Egypt
Throughout the report, management utilizes net sales
and Jordan in the fight against the pandemic, Biolab (IDH’s
of EGP 5,048 million for FY 2021 (IFRS revenues stand
Jordanian subsidiary) secured several revenue-sharing
at EGP 5,225 million for the year), and cost of net sales
agreements to operate testing stations, primarily dedicated
of EGP 2,244 million (IFRS cost of sales recorded EGP
to PCR testing for Covid-19, in multiple locations across the
2,421 million). Net sales for the period are calculated
country including Queen Alia International Airport (QAIA)
as total gross revenues (IFRS compliant measure)
and Aqaba Port. Under these agreements, Biolab receives
excluding concession fees and sales taxes paid as part
the full revenue (gross sales) for each test performed and
of Biolab’s revenue sharing agreements with Queen Alia
pays a proportion to QAIA (38% of gross sales) and Aqaba
International Airport (QAIA) and Aqaba Port.
Port (36% of gross sales) as concession fees to operate
in the facilities, thus effectively earning the net of these
It is important to note that aside from revenue and cost
amounts (net sales) for each test supplied.
of sales, all other figures related to gross profit, operat-
ing profit, EBITDA, and net profit are identical in the APM
For IFRS purposes Biolab is considered the principal in
and IFRS calculations. However, the margins related to
this relationship and record the full amount received
the aforementioned items differ between the two sets
as revenue. For internal purposes management consid-
of performance indicators due to the use of Net Sales
ers the net amount earned to be net sales, and have
in the APM calculations and the use of Revenues for
therefore included this measure as an “alternative
the IFRS calculations. More specifically, under the APM,
performance measure” (APM) alongside the IFRS mea-
in FY 2021 IDH reported a gross profit margin on net
sure when describing the business’ performance. The
sales of 56%, an EBITDA margin on net sales of 50%,
decision to present APMs reflects the Directors’ view
and a net profit margin on net sales of 30%. Under the
that they provide the user of the accounts with addi-
IFRS regime, gross profit margin recorded 54%, EBITDA
tional information to the IFRS information reported to
margin stood at 48%, and net profit margin recorded
help understand the performance of the business, and
29%. Furthermore, this amendment has no impact on
is consistent with how the Company’s performance is
the prior year reported revenues.
reviewed internally. Moreover, it allows further com-
parability when describing the performance of the
Group’s regions and year-on-year analysis.
62 IDH 2021 Annual Report
Adjustment breakdown on each country’s results
Revenues FY 2021 (IFRS 15)
Net Sales FY 2021 (APM)
(EGP mn)
Egypt
Jordan
Nigeria
Sudan
Group total
Adjustments Breakdown
(EGP mn)
Net Sales
QAIA and Aqaba Port Concession Fees
Revenues
Cost of Net Sales
Adjustment for QAIA, and Aqaba Port Agreements
Cost of Sales
4,108
1,046
54
17
5,225
4,108
869
54
17
5,048
FY 2021
5,048
177
5,225
(2,244)
(177)
(2,421)
2021 Annual Report IDH 63
Performance Financial & Operational Review
Financial & Operational Review
Key Performance Indicators
EGP mn
Net Sales
Cost of Net Sales
Gross Profit
Gross Profit Margin on Net Sales
Adjusted Operating Profit*
Adjusted EBITDA**
Adjusted EBITDA Margin on Net Sales
Net Profit
Net Profit Margin on Net Sales
Cash Balance
FY 2020
2,656
(1,314)
1,343
51%
986
1,171
44%
609
23%
877
FY 2021
5,048
(2,244)
2,804
56%
2,292
2,530
50%
1,493
30%
2,350
Change
90%
71%
109%
5.0 pts
132%
116%
6.1 pts
145%
6.6 pts
168%
* Adjusted operating Profit excludes one-off fees incurred in FY 2021 (EGP 29.0 million) related to the Company’s dual listing on the EGX completed in May 2021.
** Adjusted EBITDA is calculated as operating profit plus depreciation and amortization and excluding one-off fees incurred in FY 2021 (EGP 29.0 million) related
to the Company’s dual listing on the EGX completed in May 2021.
Note: Adjusted operating profit, EBITDA and adjusted EBITDA are measures utilized by management in assessing performance of the group. These adjusted
measures eliminate the one off impacts of items in the year to provide a measure of underlying performance. EBITDA is an important measure as it shows
the performance of the Group and the Group’s ability to reinvest funds generated and this is a widely used term for acquisitive businesses such as ourselves.
Revenue/Net Sales and Cost Analysis
Revenue/Net Sales
Consolidated Analysis
IDH reported total revenues of EGP 5,225 million
test portfolios, both of which recorded growing
in FY 2021, up 97% year-on-year. Consolidated net
sales19 surpassed the EGP 5 billion mark, recording
EGP 5,048 million in FY 2021, up 90% versus FY
demand during the period. IDH’s Covid-19-related
offering contributed to just over half of consoli-
dated net sales in FY 2021 compared to the 24%
2020. The remarkable growth was dual driven with
contribution made in FY 2020. The segment wit-
tests performed during the year growing 24% and
nessed high demand throughout the entire year,
average price per test rising 53% year-on-year.
supported by rising infection rates in the first half
of the year and the widespread lifting of travel bans
On a service basis, net sales growth was supported
by both IDH’s Covid-19-related20 and conventional
in the second half of 2021.
19 A reconciliation between revenue and net sales is available on page 11 of this report.
20 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and
clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP),
which the Company opted to include in the classification as “other Covid-19-related tests” due to the strong rise in demand for these tests witnessed following
the outbreak of Covid-19.
64 IDH 2021 Annual Report
2021 Annual Report IDH 65
Performance Financial & Operational Review
In parallel, a steady recovery in demand for conventional
generated EGP 990 million in revenue in FY 2021,
tests, saw conventional net sales expand 22% year-on-year
up 87% versus the previous year. By test type, in FY
supported by a 15% year-on-year rise in tests performed
2021 house call revenue generated by core Covid-19
and a 7% increase in average price per conventional test.
tests stood at EGP 544 million, making up 55% of
Conventional test net sales for the year stood 13% above
total house call revenue for the year. Geographically,
its pre-pandemic level, a testament to the Company’s
in Egypt house call services generated EGP 935 mil-
impressive ability to expand its service accessibility and
lion in revenue, contributing 23% to the country’s
delivery capabilities, to drive a rapid recovery across its
revenues. Meanwhile, In Jordan house call revenue
conventional test portfolio despite the difficult operating
stood at EGP 55 million, making up 6% of the coun-
conditions faced over the last two years.
try’s net sales for the year. It is worth highlighting
House Call Service
The Group’s consolidated net sales was buoyed by
its house call services in Egypt and Jordan, which
that in FY 2021, average revenue per house call test
stood at EGP 202, significantly above the Group’s
average of EGP 150.
Detailed Consolidated Performance Breakdown
Total net sales (EGP mn)
Total tests (mn)
Conventional test net sales (EGP mn)
Conventional tests performed (mn)
Total Covid-19-related test net sales (EGP mn)
Core Covid-19 tests (PCR, Antigen, Antibody) (EGP mn)
Core Covid-19 tests performed (k)
Other Covid-19-related tests (EGP mn)
Other Covid-19-related tests performed (k)
FY 2020
2,656
27.1
2,007
24.9
649
437
438
213
1,722
Contribution to consolidated results
Conventional test net sales
Conventional tests performed
Total Covid-19-related tests
Core Covid-19 tests (PCR, Antigen, Antibody)
Core Covid-19 tests performed
Other Covid-19-related tests
Other Covid-19-related tests performed
76%
92%
24%
16%
2%
8%
6%
66 IDH 2021 Annual Report
FY 2021
5,048
33.7
2,452
28.5
2,596
2,217
2,610
379
2,507
49%
85%
51%
44%
8%
8%
7%
Net Sales Analysis: Contribution by
Patient Segment
Contract Segment
Revenue generated by IDH’s contract segment reached
for passengers. More specifically, IDH’s agreement with
EGP 3,062 million in FY 2021, representing a 113% year-
Pure Health UAE and with National Aviation Services
on-year increase versus the previous twelve months.
Kuwait (NAS) generated EGP 89 million and EGP 91 mil-
Meanwhile, net sales generated by the Group’s contract
lion, respectively, in FY 2021. The number of PCR tests
segment more than doubled year-on-year to record EGP
performed during the year as part of IDH’s partnerships
2,885 million in FY 2021 supported by a 25% increase in
with Pure Health stood at 83 thousand, making up 7% of
contract tests performed and a 61% rise in the average net
total PCR tests performed in Egypt for the year. Mean-
sales per contract test. The segment’s contribution to total
while, tests performed as part of the Company’s agree-
net sales subsequently increased to reach 57% from 54%
in FY 2020. Covid-19-related21 testing contributed 53% of
contract net sales in FY 2021 as the Company continued to
ment with NAS stood at 51 thousand, representing 4% of
total PCR tests performed in Egypt during FY 2021.
record strong patient demand in both Egypt and Jordan.
In Jordan, the Group’s partnership with Queen Alia
Controlling for contributions made by Covid-19-related
International Airport (QAIA) generated net sales of EGP
tests during the year, the contract segment would record
185 million. As part of the agreement, Biolab carried out
a 23% year-on-year increase in conventional test net sales
503 thousand PCR tests, representing 41% of total PCR
on the back of a 17% increase in tests performed and a 6%
tests performed in Jordan for the year. At the same time,
expansion in average net sales per test.
Biolab’s agreements with Aqaba’s King Hussein Interna-
The contract segment’s results include contributions
additional EGP 107 million to the segment. It is worth
from IDH’s multiple partnerships to conduct PCR testing
noting that Biolab’s partnership with KHIA started in
tional Airport (KHIA) and Aqaba Port contributed an
Key Performance Indicators
Walk-in Segment
Contract Segment
Total
FY20
FY21*
Change
FY20
FY21*
Change
FY20
FY21*
Change
Net sales^ (EGP mn)
1,222
Total Covid-19-related net sales (EGP mn)
314
Patients ('000)
% of Patients
Revenue per Patient (EGP)
2,288
32%
534
2,162
1,063
3,464
34%
624
Tests ('000)
% of Tests
7,052
8,693
26%
26%
77%
1,434
239%
335
51%
4,825
68%
297
17%
23%
2,885
1,533
6,853
66%
421
101%
357%
42%
2,656
649
5,048
2,596
90%
300%
7,113
10,317
45%
42%
25%
373
489
27,073
33,659
31%
24%
20,021
24,966
74%
74%
Total Covid-19-related tests (‘000)
Net Sales per Test (EGP)
Test per Patient
659
173
3.1
1,745
165%
1,501
3,372
125%
2,160
5,117
249
2.5
44%
-19%
72
4.1
116
3.6
61%
-12%
98
3.8
150
3.3
137%
53%
-14%
21 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting
markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company
opted to include in the classification as “other Covid-19-related tests” due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.
2021 Annual Report IDH 67
Performance Financial & Operational Review
August 2020, followed by the company’s agreement with
House Call Service
Aqaba Port which kicked off in May 2021, and its part-
IDH’s house call service in Egypt, which has been suc-
nership with QAIA which commenced in August 2021.
cessfully ramped up to capitalise on the service’s growing
Walk-in Segment
popularity, recorded revenue of EGP 935 million in FY
2021, up 94% year-on-year. The service’s contribution to
The Group’s walk-in segment recorded revenue and
the country’s revenues stood at 23% in FY 2021, versus
net sales (IFRS and APM measures for walk-in segment
the 22% contribution made in FY 2020. Core Covid-19
were identical for the year) of EGP 2,162 million in FY
tests performed through its house call service made up
2021, up 77% versus the previous year. The year-on-year
30% of total core Covid-19 tests performed by IDH in the
growth was supported by a 23% increase in tests per-
country throughout the year. It is also important to note
formed and a 44% increase in average price per test. The
that, tests performed through IDH’s house call service
segment’s contribution to total net sales stood at 43%
are offered at the same price as at traditional branches,
versus the 46% in FY 2020. Meanwhile, the contribution
with only an additional house call delivery fee charged to
of Covid-19-related tests to the walk-in segment stood
patients to cover the transportation costs of the chemist.
at 49% in FY 2021, compared to 26% in FY 2020. Exclud-
ing Covid-19-related contributions, conventional walk-
Al-Borg Scan
in net sales recorded a 21% increase versus the previous
IDH’s fast-growing radiology venture, Al-Borg Scan,
year, as conventional walk-in tests volumes grew 9%
reported revenue of EGP 45 million in FY 2021, a solid
year-on-year and net sales per conventional walk-in
81% year-on-year increase. Revenue growth was sup-
test increased 11% versus FY 2020.
ported by a 70% rise in both exams performed and
Revenue Analysis: Contribution by Geography
on the rising patient demand for IDH’s radiology service,
patients served versus the previous year. To capitalise
Egypt
the Group inaugurated two new Al-Borg Scan branches
in September and November of this year. In 2022, the
In Egypt, IDH reported revenue of EGP 4,108 million,
Company will look to inaugurate additional Al-Borg
89% above the previous year’s figure and contributing
Scan branches to further expand its reach across
to 81.4% of total net sales for the year. The impressive
Great Cairo.
result was supported by a 21% year-on-year rise in test
performed coupled with a 56% year-on-year increase
Overall, IDH served 8.5 million patients in Egypt and
in average revenue per test. As with the consolidated
performed 29.7 million tests in FY 2021, up 34% and
performance, Egypt’s revenues were supported by both
the Group’s Covid-19-related22 test offering which in FY
2021 made up 49% of the Egypt’s revenues, as well as the
21% year-on-year, respectively.
Jordan
country’s conventional test offering, which made up the
In Jordan, the Group recorded revenue of EGP 1,046
remaining 51% of Egypt’s revenues. When controlling for
million in FY 2021, up 156% from the previous year.
contributions made by Covid-19-related tests during the
Meanwhile, IDH’s Jordanian operations saw net sales
year, revenue generated by conventional tests increased
a solid 23% versus the previous year supported by a 15%
rise in conventional tests performed and a 7% expansion
more than double year-on-year to reach EGP 869 million
for the year, up 113% versus FY 2020 (Jordan’s revenues23
(IFRS) recorded EGP 1,046 million in FY 2021, up 156%
in average revenue per conventional test.
year-on-year). Net sales growth was driven by an 75%
22 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting
markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company
opted to include in the classification as “other Covid-19-related tests” due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.
23 Biolab’s revenues for the period are calculated as net sales plus concession fees paid to QAIA and Aqaba Port as part of their revenue sharing agreement.
68 IDH 2021 Annual Report
Detailed Egypt Revenue Breakdown
FY 2020
FY 2021
Total revenue (EGP mn)
Conventional revenues
Total Covid-19-related revenues
Core Covid-19 tests (PCR, Antigen, Antibody)
Other Covid-19-related tests
2,173
1,713
460
248
213
Contribution to consolidated results
Conventional tests
Total Covid-19-related tests
Core Covid-19 tests (PCR, Antigen, Antibody)
Other Covid-19-related tests
79%
21%
11%
10%
4,108
2,103
2,005
1,626
379
51%
49%
40%
9%
increase in test performed coupled with a 21% rise
PCR testing for Covid-19 to passengers arriving in Jor-
in Biolab’s average net sales per test. During the year,
dan. The stations also offer additional diagnostic tests
Covid-19-related tests contributed to 68% of Biolab’s net
to patients including rapid PCR testing for Covid-19 for
sales and to 37% of its tests performed. Covid-19-related
departing passengers and other, more generic diagnostic
net sales in Jordan was boosted by contributions of EGP
tests. Meanwhile, conventional test net sales increased
185 million from Biolab’s new partnership with QAIA
26% year-on-year on the back of a 28% increase in con-
coupled with the EGP 107 million in net sales coming
ventional tests performed. Meanwhile, the country’s net
from its partnerships with KHIA and Aqaba Port. As part
sales continued to be supported by Biolab’s house call
of these agreements, Biolab has been operating testing
service which generated EGP 55 million in net sales in
stations across all three locations primarily focused on
FY 2021, up 12% year-on-year.
Detailed Jordan Net Sales Breakdown
FY 2020
FY 2021
Total Net Sales
Conventional Net Sales
Total Covid-19-related Net Sales (PCR and Antibody)
409
220
189
Contribution to consolidated results
Conventional Net Sales
Total Covid-19-related Net Sales (PCR and Antibody)
54%
46%
869
278
591
32%
68%
2021 Annual Report IDH 69
Performance Financial & Operational Review
Nigeria
At the Group’s Nigerian subsidiary, revenue expanded
following the easing of restrictive measures enforced
49% year-on-year to reach EGP 54 million in FY 2021.
to curb the spread of Covid-19 throughout 2020.
Growth was even more pronounced in local currency
terms with revenue up 53% year-on-year supported
Sudan
by a 31% year-on-year expansion in tests performed
Finally in Sudan, IDH reported a 56% year-on-year
(patients served were up 16%) coupled with a 14% rise
contraction in revenue to EGP 17 million for the year.
in average revenue per test. Over the last two years,
The country’s results continue to be significantly
Echo-Lab’s has consistently delivered solid volume
impacted by the devaluation of the Sudanese pound
growth thanks to an effective revamp strategy which
in early 2021 with the average SDG/EGP rate in FY
has involved the complete renovation of the venture’s
2021 standing at 0.05 versus 0.29 in FY 2020. None-
branches combined with the rollout of targeted
theless, management’s continued success in raising
marketing campaigns aimed at stimulating demand
prices in step with inflation throughout the year, saw
for the venture’s services. Volumes for the year also
revenue in local currency terms grow an impressive
benefitting from a gradual normalisation of traffic
159% in FY 2021.
Net Sales Contribution by Country
Egypt Net Sales (EGP mn)
Covid-19-related (EGP mn)
Egypt Contribution to Consolidated Net Sales
Jordan Net Sales (EGP mn)
Covid-19-related (EGP mn)
Jordan Revenues (EGP mn) (IFRS)
Jordan Net Sales ( JOD mn)
Jordan Revenues ( JOD mn) (IFRS)
Jordan Contribution to Consolidated Net Sales
Nigeria Net Sales (EGP mn)
Nigeria Net Sales (NGN mn)
Nigeria Contribution to Consolidated Net Sales
Sudan Net Sales (EGP mn)
Sudan Net Sales (SDG mn)
Sudan Contribution to Consolidated Net Sales
70 IDH 2021 Annual Report
FY 2020
FY 2021
Change
2,173
460
82%
409
189
409
19
18
15%
36
898
1%
38
129
1.4%
4,108
2,005
81%
869
591
1,046
39
47
17%
54
1,373
1%
17
335
0.3%
89%
335%
112%
213%
156%
113%
157%
49%
53%
-56%
159%
Patients Served and Tests Performed by Country
FY 2020
FY 2021
Change
Egypt Patients Served (mn)
Egypt Tests Performed (mn)
Covid-19-related tests (mn)
Jordan Patients Served (k)
Jordan Tests Performed (k)
Covid-19-related tests (k)
Nigeria Patients Served (k)
Nigeria Tests Performed (k)
Sudan Patients Served (k)
Sudan Tests Performed (k)
Total Patients Served (mn)
Total Tests Performed (mn)
Branches by Country
Egypt
Jordan
Nigeria
Sudan
Total Branches
6.3
24.4
1.9
550
2,011
269
131
215
130
409
7.1
27.1
8.5
29.7
3.8
1,627
3,529
1,302
153
281
70
182
10.3
33.7
34%
21%
102%
196%
75%
383%
16%
31%
-46%
-55%
45%
24%
31 December 2020
31 December 2021
Change
429
20
12
20
481
452
21
10
19
502
23
1
-2
-1
21
Cost of Net Sales24
IDH’s cost of net sales rose 71% year-on-year to
(identical in absolute terms in IFRS and APM mea-
record EGP 2,244 million in FY 2021, rising at a
sures). IDH’s gross profit margin on consolidated
slower pace than the Group’s for the year. This
revenue recorded 54% in FY 2021 versus 51% in the
supported a 109% year-on-year rise in IDH’s gross
previous year. Meanwhile, gross profit margin on
profit for FY 2021 which recorded EGP 2,804 million
net sales of 56% versus 51% in FY 2020.
Cost of Net Sales Breakdown as a Percentage of Net Sales
Raw Materials
Wages & Salaries
Depreciation & Amortisation
Other Expenses
Total
FY 2020
FY 2021
18.4%
14.7%
6.1%
10.3%
49.5%
19.6%
12.6%
4.2%
8.1%
44.4%
24 Cost of net sales is calculated as cost of sales (IFRS) for the period excluding commission fees paid to QAIA and Aqaba Port by Biolab as part of its revenue sharing
agreements with the two terminals. According to IFRS 15, cost of sales recorded EGP 2,421 million in FY 2021, up 84% year-on-year.
2021 Annual Report IDH 71
Performance Financial & Operational Review
Raw material costs, which include cost of specialized
higher call center costs and a new contract with PwC
analysis at other laboratories, recorded EGP 987 million
for external auditing services.
for the year, continuing to make up the largest share of
total COGS at 44%. As a share of net sales, raw material
Marketing and advertising expenses came in at EGP 97
costs increased to 19.6% in FY 2021 compared to 18.4%
million in FY 2021, up 57% year-on-year. The increase
in the previous year. This increase is primarily attribut-
largely reflects an overall expansion in IDH’s market-
able to higher raw material costs as a share of net sales
ing and advertisement efforts, which throughout the
recorded by Biolab, driven by both the retesting of
year saw the Company launch targeted campaigns
Covid-19 positive cases in the first part of the year, and
across a wide variety of channels.
by additional fees incurred by the company as part of its
revenue sharing agreement with QAIA.
Direct salaries and wages for the year rose 63% year-
EBITDA
IDH’s adjusted EBITDA27 recorded EGP 2,530 million
(identical in absolute terms when using IFRS or APM)
on-year to EGP 635 million, making the second largest
in the twelve months to 31 December 2021, up a solid
share of total COGS at 28%. The increase comes on
116% versus the previous year. Adjusted EBITDA mar-
the back of a 116% year-on-year rise in the share of
gin on consolidated revenue recorded 48% in FY 2021
profits allocated to direct salaries and wages to EGP
versus 44% in the previous year. Meanwhile, adjusted
175 million in FY 2021 from EGP 81 million in FY 2020
following higher net profit recorded at its Egyptian
operations,26 in addition to higher bonuses and incen-
tives paid during FY 2021 in light of this year’s record-
breaking performance.
EBITDA margin on net sales expanded to 50% in FY
2021 versus 44% in FY 2020.28 Improved EBITDA level
profitability was supported by robust net sales growth
for the year and the subsequent dilution of fixed costs.
EBITDA growth was also supported by the decrease in
level of receivable provisions for expected credit, which
Direct depreciation and amortisation increased 31%
recorded EGP 25 million versus the EGP 42 million
year-on-year in FY 2021 to EGP 214 million, principally
booked in the previous twelve months to account for
due to the incremental amortisation of new branches
expected credit losses in accordance with IFRS 9. It
(IFRS 16 right-of-use assets).
is important to note that adjusted EBITDA excludes
one-off listing fees of EGP 29 million incurred in FY
Other expenses for the year increased 49% versus FY
2021 related to the Company’s dual listing on the EGX
2020, to record EGP 407 million. The increase was pri-
completed in May 2021.
marily driven by higher transportation costs related
to IDH’s house call service, and increased utilities and
In IDH’s home market of Egypt, EBITDA recorded EGP
cleaning expenses mainly due to the net addition of 24
2,206 million in FY 2021, up 112% year-on-year on the
new branches throughout the year.
back of strong revenue growth. EBITDA margin on net
Selling, General and Administrative Expenses
Total SG&A outlays for the year stood at EGP 513 mil-
IDH’s Jordanian operations recorded EBITDA of EGP
lion, up 44% from FY 2020. The increase was driven by
331 million in FY 2021, up 155% versus the previous
rising salaries and marketing spending, coupled with
year on the back of strong net sales growth. In local
sales increased six percentage points to 54% the year.
26 According to IAS1, employee profit share is recorded in wages and salaries.
27 Adjusted EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in FY 2021 related to the Company’s EGX listing
completed in May 2021.
28 It is important to note that while in absolute terms the Adjusted EBITDA figure is identical when using IFRS or APM, its margin differs between the two sets of
performance indicators.
72 IDH 2021 Annual Report
currency terms, EBITDA grew 156% compared to the
adjustment related to the previous year. Controlling
previous year. EBITDA margin on net sales recorded
for the one-off adjustment, EBITDA would come in at
38% in FY 2021 compared to 32% in FY 2020. It is
EGP 2.6 million, significantly narrowing from the previ-
important to note that Jordan’s EBITDA calculated
ous year’s figure. In light of the steady improvements
using revenues for the year (in compliance with IFRS),
witnessed throughout 2021, Nigeria is expected to turn
recorded the same absolute value as the APM figure
EBITDA positive during the first half of 2022.
for the year which utilises net sales. However, EBITDA
margin calculated on revenues (IFRS compliant) would
Finally, in Sudan the Company recorded an EBITDA
stand at 32% in FY 2021 unchanged versus last year.
loss of EGP 0.5 million in FY 2021, compared to a posi-
Operations in Nigeria posted an EBITDA loss of EGP 7
the year was impacted by the sharp SDG devaluation
million, in line with the previous year’s figure. Losses
in February 2021. In SDG terms EBITDA declined 148%
for the year partially reflect a one-off EGP 4.4 million
year-on-year.
tive EBITDA of EGP 6.1 million in FY 2020. EBITDA for
Regional EBITDA in Local Currency
Mn
Egypt
Margin on net sales
Jordan
Margin on net sales
Margin on revenues (IFRS)
Nigeria
Margin on net sales
Sudan
Margin on net sales
FY 2020
FY 2021
EGP
JOD
NGN
SDG
1,041
48%
5.9
32%
32%
-170
-19%
21
16%
2,206
54%
15.0
38%
32%
-179
-13%
-10
-3%
Change
112%
156%
6%
-148%
Interest Income / Expense
IDH recorded interest income of EGP 113 million
in Egypt and Jordan and the renewal of medical
in FY 2021, up 113% year-on-year on the back of
equipment agreements with our main equip-
higher cash balances during the year coupled with
ment suppliers.
an optimised cash allocation between T-bills and
• Higher bank charges resulting from increased pen-
time deposits.
etration of, and reliance on, POS machines and elec-
tronic payments in both Egypt and Jordan during
Interest expense recorded EGP 118 million in the
the period. It is important to note that bank charges
twelve months to year-end 2021, up 65% year-on-
recorded by IDH’s Jordanian operations represented
year. The increase in attributable to:
58% of total bank charges during FY 2021, which is
• Higher interest on lease liabilities related to
mainly related to Biolab’s partnership with QAIA.
IFRS 16 following the addition of new branches
• Loan-related expenses incurred by IDH during
2021 Annual Report IDH 73
Performance Financial & Operational Review
the period as the Company secured a new eight-
specifically, IDH booked loan-related expenses of
year US$ 45 million facility with the International
EGP 20.3 million in FY 2021 including a front-end
Finance Corporation (IFC) in May 2021. More
fee, syndication fee, and legal advisory fees.
Interest Expense Breakdown
EGP Mn
FY 2020
FY 2021
Change
Interest on Lease Liabilities (IFRS 16)
Interest Expenses on Borrowings29
Loan-related Expenses on IFC facility
Interest Expenses on Leases
Bank Charges
Total Interest Expense
51.4
12.4
-
4.1
3.7
71.5
59.5
9.4
20.3
8.8
20.0
118.0
16%
-24%
N/A
117%
445%
65%
Foreign Exchange
IDH recorded a net foreign exchange loss of EGP 18
versus EGP 360 million in the previous twelve months.
million in FY 2021 compared to EGP 13 million in FY
The effective tax rate stood at 33% for the year versus 37%
2020. The figure largely reflects FX losses on the back of
in FY 2020. The lower effective tax rate largely reflects
the SDG devaluation versus the EGP in February 2021.
the recognition of Echo-Scan’s deferred tax assets. It is
Taxation
Tax expenses recorded EGP 740 million in FY 2021
important to note that there is no tax payable for IDH’s
two companies at the holding level, while tax was paid
on profits generated by operating subsidiaries.
Taxation Breakdown by Region
EGP Mn
Egypt
Jordan
Nigeria
Sudan
Total Tax Expenses
FY 2020
340.6
19.0
-1.0
1.0
359.6
FY 2021
Change
704.8
54.0
-20.0
1.0
739.8
107%
184%
N/A
0%
106%
Net Profit
IDH’s consolidated net profit expanded 145%
stood at 30% for the year, up seven percentage
year-on-year in FY-2021 to record EGP 1,493 mil-
points from the previous twelve month period. Net
lion (identical in absolute terms between IFRS and
profitability improvements for the year were sup-
APM measures). Net profit margin on consolidated
ported by strong revenue growth coupled with the
revenue recorded 29% for the year, versus 23% in FY
dilution of fixed costs, and normalising provisions
2020. Meanwhile, net profit margin on net sales30
for the year.
29 Interest expenses on medium-term loans divided as EGP 2.6 million related to its medium term facility with the Commercial International Bank (CIB) and EGP 6.5
million to its facility with Ahli United Bank Egypt (AUBE).
30 It is important to note that while in absolute terms the net profit figure is identical when using IFRS or APM, its margin differs between the two sets of performance
indicators.
74 IDH 2021 Annual Report
Balance Sheet Analysis
Assets
Property, Plant and Equipment
attributable to EGP 115.7 million in equipment
related to the Reagent deals and to EGP 53.7 million
spent on the purchase of a new radiology branch
IDH held gross property, plant and equipment
during the year. It is worth noting that IDH engages
(PPE) of EGP 1,659 million as at year-end 2021,
in Reagent deals whereby the majority of its testing
up from the EGP 1,252 million as of 31 December
equipment is provided at no upfront payment as
2020. Meanwhile, CAPEX outlays excluding pay-
part of a wider agreement to purchase a minimum
ments on account and accounting for the impact
volume of kits from the equipment supplier. These
of hyperinflation, represented 8.6% of consolidated
contracts typically have tenors ranging from 5 to 7
net sales in FY 2021. The increase in CAPEX outlays
years, with the equipment substituted following the
as a share of total net sales for the year is in part
contract’s renewal.
Total CAPEX Breakdown
EGP Mn
Mega Lab
Al-Borg Scan Expansion
Leasehold Improvements/others
Total CAPEX Additions
FY 2021
% of Net Sales
132.5
154.0
147.6
434.1
2.6%
3.1%
2.9%
8.6%
Accounts Receivable and Provisions
due to agreements with various airline companies
As at 31 December 2021, accounts receivables’ Days on
as part of QAIA and KHIA agreements. Accounts
Hand (DOH) stood at 107 days compared to 144 days
receivables’ DOH for Jordan is calculated based
at year-end 2020. The significant decline witnessed
on credit revenues amounting to EGP 221 million
throughout the year highlights a sustained improvement
during FY 2021.
in collections versus the previous year. Accounts receiv-
ables’ DOH is calculated based on credit revenues (credit
Provision for doubtful accounts established during
revenues relates to patients who paid for IDH’s services
the twelvemonths to 31 December 2021 amounted
on credit) amounting to EGP 1.28 billion during FY 2021.
to EGP 25 million, down from the EGP 42 million
booked in the previous year.
The receivables balance in Egypt and Jordan stood
at EGP 366 million as at year-end 2021. More specifi-
Inventory
cally, in Egypt account receivables’ DOH declined to
As at year-end 2021, the Group’s inventory balance
96 days as at 31 December 2021 compared to 145
reached EGP 223 million, up from EGP 100 million
days as at year-end 2020. Accounts receivables’ DOH
as at year-end 2020. Meanwhile, days Inventory Out-
for Egypt is calculated based on credit revenues
standing (DIO) decreased to 61 days as at year-end
amounting to EGP 1.04 billion during FY 2021. Mean-
2021 from 72 days as at year-end 2020. The decline
while, in Jordan accounts receivables’ DOH increased
largely reflects the high turnover of PCR testing for
from 150 days to 154 days as at year-end 2021 largely
Covid-19.
2021 Annual Report IDH 75
Performance Financial & Operational Review
Cash and Net Debt/Cash
IDH’s cash balances increased to EGP 2,350 million
at IDH’s Mega Lab, and EGP 54 million for equip-
as at year-end 2021 compared to EGP 877 million as
ment at Al-Borg Scan. The rise in interest-bearing
at 31 December 2020.
debt is related to IDH’s two medium-term facilities
with Commercial International Bank (CIB) and Ahli
Net cash balance31 amounted to EGP 1,483 million as
of year-end 2021, an increase of 361% compared to
United Bank of Egypt (AUBE). More specifically, IDH’s
interest-bearing debt as of year-end 2021 is split as
EGP 321 million as of 31 December 2020.
EGP 13 million related to its medium-term facility
Lease liabilities on property stood at EGP 532 million
AUBE. It is worth noting that interest-bearing debt in
as at year-end 2021, up from the EGP 390 million
both twelve-month periods includes accrued interest.
with CIB and EGP 85 million related to its facility with
booked as at year-end 2020. The increase is attribut-
able to the addition of new branches throughout 2021.
Liabilities
Meanwhile, financial obligations related to equipment
recorded EGP 229 million as of 31 December 2021,
up from EGP 69 million as of year-end 2020, reflect-
Accounts Payable34
As of year-end 2021, accounts payable balance recorded
ing the renewal of the Company’s contracts and the
EGP 311 million up from EGP 178 million as of 31
addition of new equipment. The main components of
December 2020. Nonetheless, the Group’s days payable
total financial obligations related to equipment in FY
outstanding (DPO) decreased to 93 days as of year-end
2021 included EGP 116 million related to equipment
2021 down from 127 days as at 31 December 2020. The
EGP Mn
Time Deposits
T-Bills
Current Accounts
Cash on Hand
Total
EGP Mn
31 Dec 2020
31 Dec 2021
162
461
234
19
877
628
1,461
239
22
2,350
31 Dec 2020
31 Dec 2021
Cash and Financial Assets at Amortised Cost32
Interest Bearing Debt (“Medium Term Loans”)33
Lease Liabilities Property
Long-term Equipment Liabilities
Net Cash Balance
Note: Interest Bearing Debt includes accrued interest for both periods.
877
96*
390
69
321
2,350
106*
532
229
1,483
31 The net cash balance is calculated as cash and cash equivalent balances including includes financial assets at amortised cost, less interest-bearing debt (medium term
loans), finance lease and Right-of-use liabilities.
32 As outlined in Note 18 of IDH’s Consolidated Financial Statements, some term deposits and treasury bills cannot be accessed for over 90 days and are therefore
not treated as cash. Term deposits which cannot be accessed for over 90 days stood at EGP 148 million in FY 2021, while there were no such term deposits in the
previous year. Meanwhile, treasury bills not accessible for over 90 days stood at EGP 1,311 million in FY 2021, up from EGP 277 million in FY 2020.
33 IDH’s interest bearing debt as at year-end 2021 is split as EGP 13 million related to its medium term facility with the Commercial International Bank (CIB) and EGP
85 million to its facility with Ahli United Bank Egypt (AUBE).
34Accounts payable is calculated based on average payables at the end of each year.
76 IDH 2021 Annual Report
decline is mainly related to the fact that PCR testing kit
non-controlling interest (NCI). However, based on
suppliers are paid within a period of 15 days. It is worth
discussions and ongoing business relationship, there is
noting that accounts payable is calculated on the aver-
no expectation that this will happen in next 18 months.
age payables at the end of each reporting period.
Put Option
The put option non-current liability is related to the
option granted in 2018 to the International Finance
The put option current liability is related to the option
Corporation from Dynasty – shareholders in Echo
granted in 2011 to Dr. Amid, Biolab’s CEO, to sell his
Lab – and it is exercisable in 2024. The put option is
stake (40%) to IDH. The put option is in the money
calculated based on fair market value (FMV).
and exercisable since 2016 and is calculated as 7 times
LTM EBITDA minus net debt. Biolab’s put option
liability increased following the subsidiary’s EBITDA
Cash Flow Analysis
Net cash flow from operating activities recorded EGP
year-on-year growth of 155% in EGP terms. The vendor
2,269 million in FY 2021 compared to EGP 883 million
has not exercised this right at 31 December 2021. It is
in FY 2020. The 157% year-on-year increase versus
important to note that the put option liability is treated
FY 2020 demonstrates once more IDH’s strong cash
as current as it could be exercised at any time by the
generation ability.
2021 Annual Report IDH 77
Performance Corporate Social Responsibility
Corporate Social Responsibility
Corporate Social Responsibility
IDH is committed to operating in a way that recog-
The Foundation focuses in particular on making
nizes the interconnection between business growth
a difference in the lives of residents of Cairo’s Al
and the needs of the communities it operates in.
Duweiqa community, along with several other
Through its Moamena Kamel Foundation, the Com-
villages across Egypt. The Foundation deploys an
pany provides medical assistance and services to
integrated program and vision for the communities
individuals unable to afford or access them through
it helps that include economic, social and health-
traditional avenues. IDH also provides free or dis-
care development initiatives with primary services
counted diagnostic services to thousands of people
that include:
every year. In parallel, it collaborates with charitable
• Female empowerment initiatives
organisations around the country to provide access
• Free healthcare clinics
to medical service, nutrition and education to
• Educational services for the children of Al Duweiqa
hundreds of families in need, while also supporting
community
the renovation and expansion of medical facilities
• Providing food for families in need of such
around the country.
assistance
Moamena Kamel Foundation
Founded on the principle of providing quality medical
• Coverage of running costs for the ICU at Cairo’s
public-sector Kasr El Aini Hospital
assistance and services to better the lives of individu-
Female Empowerment
als and the community at large, IDH views corporate
social responsibility initiatives as an extension of its
Supporting Baheya Breast Cancer Hospital
core purpose, with the aim of improving the commu-
IDH has had an ongoing collaboration with Baheya
nities in which it does business.
breast cancer hospital to support the facility’s patients.
The Moamena Kamel Foundation for Training and
200 chemotherapy sessions and funded the complete
Skill Development was established in 2006 by Dr.
cure journey of 50 breast cancer patients.
As part of the partnership, IDH has sponsored over
Moamena Kamel, a Professor of Pathology at Cairo
University, founder of IDH subsidiary Al-Mokhtabar
Volunteers from IDH organised a visit to support and
Labs, and mother of the CEO, Dr. Hend El Sherbini.
encourage the hospital’s patients during the Interna-
IDH commits up to 1% of the net after-tax profit of
tional Breast Cancer Awareness Month and conducted
the subsidiaries Al Borg and Al Mokhtabar to the
an awareness session on nutrition and the importance
Foundation. In 2021, this in 2021 amounted to EGP
of a healthy diet. Moreover, patients from Baheya
9.6 million compared with EGP 6.5 million in 2020.
organised an exhibition at the IDH headquarters
78 IDH 2021 Annual Report
promoting their hand made products. On the same
• IDH’s other social development and inclusion ini-
day, patients organised an awareness session on early
tiatives have included partnerships with Elsondos
detection and self-examination to raise breast cancer
People with Disabilities Orphanage and Rotary
awareness for IDH employees.
Other Initiatives
NGO. Through these partnerships, IDH provides
free and discounted medical tests to underprivi-
• IDH also provides loans for entrepreneurial women
leged Egyptians in need.
through its Moamena Kamel Foundation.
• Al Maryoutiya Axis Development through a collabo-
Social Development and Inclusion
Initiatives
ration with Al Giza Governorate. Supported creation
of three kiosks dedicated to start-up projects.
Food Program & Nutritional Support Initiative
IDH in collaboration with the Egyptian Food Bank
“Thank You” Programme
Covid-19 Support
launched its Food Program & Nutritional Support
Through its project “Thank you”, the Company offered
initiative providing suitable nutritional components
discounts on Covid-19-related tests for medical
to the families in need in various marginalized areas.
personnel to help frontline workers during Covid-19
IDH employees supported in the distribution and
crisis. The programme provided discounted tests to
packing of the nutritional boxes. The programme
more than 17 thousand healthcare workers.
has so far supported more than 103 thousand people
across 10 districts.
Other Initiatives
• Financial support to unemployed citizens as part of
Other Initiatives and Partnerships
the Egyptian government’s Covid-19 response plan.
• Financial and in-kind support for under-privileged
Collaborations and Sponsorship of Medical Facilities
families across Greater Cairo and Upper Egypt
Kasr El Aini Hospital
regions. This has seen IDH help more than 140
As part of its collaboration with Kasr El Aini Hospi-
families, providing medical assistance, discounted
tal, IDH has donated or sponsored:
testing, and other assistance.
• Medical supplies to the ICU and other units;
• Financial and in-kind support to the Egyptian peo-
• Monthly incentives for nurses in the ICU;
ple during natural disasters and other accidents
• 12-20 hospital beds; and
like the Sohag train crash in March 2021.
• Medical devices and equipment to the ICU and
• Ramadan Iftar ( feast) meals to underprivileged
kidney dialysis units.
Egyptians during the holy month of Ramadan.
2021 Annual Report IDH 79
Performance Corporate Social Responsibility
Al Asmarat Medical Center
Training and Development Programmes
IDH collaborates with Al Asmarat Medical Center
to assist the 250 thousand families who depend on
the centre for their medical needs. As part of the
International Medical Laboratory Scientists
(ASCPi-MLS) Training Program
collaboration, IDH has donated vital medical equip-
Through the International Medical Laboratory Sci-
ment including a Complete Blood Count device. The
entists (ASCPi-MLS) Training Program launched in
Company estimates that its donations have directly
collaboration with the American University in Cairo,
impacted more than four thousand patients since
IDH has provided 84 chemists and technicians
the start of its partnership in 2019.
through six training cycles with key training in the
Al Sadr Hospital
fields of haematology, chemistry, microbiology, and
blood banking. The Company also offered on-the-
As part of IDH’s partnership with Al Sadr Hospital,
ground training inside IDH laboratories, and aided
the Company funded the renovation of 25 children-
in the candidates receiving their American Society of
dedicated units, including funding for new, state-of-
Clinical Pathology certificates.
the-art beds at the hospital.
Other Initiatives
El Abasseya Chest Hospital
• IDH sponsors events organised by the Egyptian
In cooperation with Maxim foundation, Al Mokh-
Paralympic Committee.
tabar has supported the renovation of the paediatric
• IDH strictly adheres to government guidelines for
section in El Abasseya chest hospital helping to
the treatment and disposal of medical waste.
expand the hospital’s capacity.
• IDH supported the renovation of Al Manial Palace
Medical Conveys
IDH, in collaboration with Ibrahim Badran Founda-
through supporting a fundraising concert of the
musician “Ramzy Yassa” in November 2021.
tion, has for years been providing high-quality medi-
Diversity and Equal Opportunities, Economic
cal support for nearly 12 thousand patients through
Empowerment, and Social Care
140 conveys with the participation of volunteers
IDH takes pride in the fact that 34% of its workforce are
from IDH staff.
Other Collaborations
females, with 41% of new hires in 2020 being female.
Moreover, IDH is delighted to note that 100% of its 1,600
female employees entitled to maternity leaves have
• Financial and in-kind support to El Manial Hospital.
returned to work following the end of the period.
• Financial and in-kind support to Cairo University’s
hospitals.
• IDH took part in the Union of Medical Syndicates
Campaign on 21 January 2021.
80 IDH 2021 Annual Report
2021 Annual Report IDH 81
Corporate
Governance
Striving for best industry
practices in governance to build
a profitable and sustainable
business as well as safeguarding
shareholder interests
6 Board Members
7 Board Meetings in 2021
82 IDH 2021 Annual Report
2021 Annual Report IDH 83
Corporate Governance Board of Directors
Board of Directors
IDH’s Board of Directors is comprised of four independent members, including the independent
non-executive chairman, one non-executive member and one executive director, all of whom offer
significant experience in the healthcare market, MENA region and investment activities.
Lord St John of Blesto (Age 64)
Prof. Dr. Hend El Sherbini (Age 53)
Independent Non-Executive Chairman
Group Chief Executive Officer
Lord St John has been a member of the House of
Dr. Hend has been IDH Group’s Chief Executive Offi-
Lords of the U.K. Parliament since 1978. He serves on
cer since 2012 and prior to that served as the CEO of
the boards of several listed and unlisted companies
Al Mokhtabar – Egypt’s oldest brand - between 2004
including Yellow Cake plc, Smithson Investment Trust
and 2012. She received her MBBCh and her Master’s
plc, Gulf Marine Services plc, GMS Resources, Strand
degree in Clinical & Chemical Pathology from Cairo
Hanson Ltd, KneoWorld UK Ltd. and Choice Mauri-
University in the early 1990s, and also holds a Master’s
tius. He also holds advisory roles with Farrant Group
degree in Public Health from Emory University in
Ltd., Shyft Network Inc., Tyvak Orbital Networks Ltd.,
Atlanta. Dr. Hend completed her PhD in Immunol-
Qredo Ltd., BetWay Ltd., Geobear LTd., ROC Technolo-
ogy from Cairo University in 2000, where she is also
gies Ltd. and the Institute for Emerging Technologies
a professor of clinical pathology at the university’s
and Social Impact (ETSI) think tank. Lord St John has
Faculty of Medicine. She sits on the Board of American
a strong interest in the charitable sector and serves
Society of Clinical Pathology (Egypt) and consults on
as a trustee to several charities focused on wildlife
the international certification process. Dr. Hend com-
conservation, poverty reduction, education and
pleted an Executive MBA from the London Business
healthcare. Lord St John received a BA and BSocSc
School in 2015 and was featured as one of Forbes most
in Psychology from Cape Town University, a BProc in
powerful women between 2016 and 2021.
Law from the University of South Africa and an LLM
from the London School of Economics. He practised
as an attorney before his 25-year career in financial
services in the City in London.
84 IDH 2021 Annual Report
Hussein Choucri (Age 71)
Dan Olsson (Age 54)
Independent Non-Executive Director and Chairman
of the Remuneration Committee
Independent Non-Executive Director
Mr. Choucri is Chairman and Managing Director of HC
Mr. Olsson has long and extensive international experi-
Securities & Investment, which he established in May
ence in the diagnostic and healthcare services sector,
1996. He currently sits on the boards of EDITA Food
where he has served in a range of executive positions.
Industries S.A.E, Fawry Banking & Payment Technol-
Among others as head of diagnostics in the pan-European
ogy Services Ltd.(Fawry) and Integrated Diagnostic
healthcare group Capio, CEO of Unilabs, a pan-European
Holdings (IDH). Mr. Choucri served as a Managing
diagnostic provider, CEO of Helsa, a Swedish healthcare
Director of Morgan Stanley from 1987 to 1993 and
group as well as CEO of Team Olivia Group, a Nordic care
served as Advisory Director at Morgan Stanley from
services group. He currently holds non-executive posi-
1993-2007. He received his Management Diploma
tions at Purch AB, Batten AB, Svenska Labex AB, Hedera
from the American University in Cairo in 1978.
Group AB and is Chairman of Nämndemansgården i
Sverige AB. Mr. Olsson has worked in the healthcare
sector since 1999. Mr. Olsson studied economics at the
University of Lund in Sweden.
2021 Annual Report IDH 85
Corporate Governance Board of Directors
Richard Henry Phillips (Age 57)
Non-Executive Director
Yvonne Stillhart (Age 54)
Independent Non-Executive Director
Mr. Phillips is a founding partner of Actis LLP, the
Ms. Stillhart is an experienced Senior Executive work-
emerging markets private equity group. As Actis
ing with innovation and growth driven companies
LLP is one of the Company’s major shareholders,
across a wide range of industries and geographical
Mr. Phillips is not considered by the Board as being
regions, including Europe, USA, North Africa and
independent. He is the Head of Private Equity for Actis
Sub-Sahara Africa. She has been a Non-Executive
and is a member of the Actis Investment Committee.
Director and Audit and Risk Committee Member for
Mr. Phillips is a director on the board of a number of
more than 12 years. She has co-founded and led as a
companies including Honoris Holding Limited, Les
Senior Partner a specialised private equity manager
Laboratories Medis SA, and others. Mr. Phillips holds
in Switzerland. Ms. Stillhart serves currently as a non-
a degree in Economics from the University of Exeter.
executive Director of UBS Asset Management Switzer-
land Ltd. and is the Chairperson of the South African
EPE Capital Ltd. She is also on the Board of abrdn
Private Equity Opportunities Trust Plc. Ms. Stillhart
holds a Director Certificate from Harvard Business
School, the Corporate Risk Certificate from the DCRO
Institute and the ESG Competent Boards Certificate.
Yvonne will join IDH’s board of directors on 1 March
2022, replacing James Nolan who resigned on 1 Sep-
tember 2021.
86 IDH 2021 Annual Report
2021 Annual Report IDH 87
Corporate Governance Corporate Governance Report
Corporate Governance Report
The Board of Directors (“the Board”) is responsible
assist us in building a profitable and sustainable busi-
for providing strong leadership and effective decision
ness as well as safeguarding shareholder interests.
making, safeguarding in the process the interests of
all shareholders of Integrated Diagnostics Holdings.
We are compliant with Financial Conduct Authority
Under my chairmanship, the Board has maintained
Disclosure Guidance and Transparency Rules (DTR)
an unwavering commitment to provide oversight and
subchapters 7.1 and 7.2, which set out certain manda-
guidance to senior management as the Group contin-
tory disclosures: 7.1 concerns audit committees and
ues to execute its regional growth strategy.
bodies carrying out equivalent functions; 7.2 concerns
IDH is a Jersey-registered entity with a Standard
in the Directors Report or, in this case, as part of the
corporate governance standards that are included
Listing on the Main Market of the London Stock
Strategic Review (DTR 7.2.1).
Exchange (LSE) since May 2015 with a secondary
listing on the Egyptian Stock Exchange (EGX) since
To that end, we have an Audit Committee as well as
May 2021.
Remuneration and Nomination Committees. The Board
may establish additional committees as appropriate
Given the company’s standard listing on the LSE, it is
going forward. This Annual Report includes reports
thus not required to comply with the requirements of
from both the Audit and Remuneration Committees.
the 2018 UK Corporate Governance Code (“the Code”)
as issued by the Financial Reporting Council. IDH does
Moreover, over the course of the past year, IDH has
not voluntarily comply with the Code in full, however
worked on complying with EGX listing rules and dis-
the Company has put in place a framework which
closure and corporate governance requirements that
enables the Company to voluntarily comply with
are set for foreign companies with dual listing.
many aspects of the Code that it considers appropri-
ate for the size and nature of the business. That said,
The Board is committed to implementing best prac-
it is the view of your Board that we continue our path
tices in corporate governance, calling on both the
of improving our corporate governance structure. In
expertise of individual Directors as well as that of
2021 the Board carried out a corporate governance
outside parties, including legal counsel and global
review facilitated by external lawyers. The Board will
professional services firms.
work through the recommendations of the review
during 2022 and seek to implement enhancements to
the corporate governance structure where we believe
Functioning of the Board
We met seven times as a Board during the course of
it to be in the best interests of the Company and its
2021, details of the individual Directors attendance is
shareholders. We strongly believe that the gradual
shown on page 91. The Board has invested significant
adoption of best industry practices in governance will
time discussing and evaluating the Group’s strategy
88 IDH 2021 Annual Report
and prospects for future growth, the outcome of which
excluding the Independent Non-Executive Chairman.
is presented in our statement of strategy on page
James Nolan resigned as Independent Non-Executive
50. We are confident that we have in place the right
Director on 1 September 2021 and following a suc-
strategy and the right management team to deliver
cessful search process we were pleased to welcome
shareholder returns going forward.
Yvonne Stillhart as an Independent Non-Executive
Composition of the Board
Under its Articles of Association, the Group must
Director on 1 March 2022, further enhancing the
skills and diversity on the Board. Together, the Direc-
tors offer IDH a world standard mix of expertise in
have a minimum of two Directors. While there is no
areas including strategy, finance and medical diag-
maximum number of Directors, the Board presently
nostics — as well as diverse experience in Europe,
includes six Board members and following the most
the Middle East and Africa. We have relevant com-
recent appointment, has no intention of appointing
mercial and technical experience to help direct the
additional Board members. Notably, Directors do not
Group as it delivers on its strategy in a very technical
need to be shareholders of the Group in order to serve.
field and across rapidly changing geographies. The
Board and their biographies are set out on pages 84
I am pleased to report that since March 2022, we
to 86 of this Annual Report and are summarised in
have four Independent Non-Executive Directors,
the following table.
Board of Directors of Integrated Diagnostics Holdings Plc
Name
Position (Date of Appointment)
Lord St John of Bletso
Independent Non-Executive Chairman (12 January 2015)
Prof. Dr. Hend El Sherbini
Group Chief Executive Officer (23 December 2014)
Hussein Choucri
Independent Non-Executive Director (12 January 2015)
Dan Olsson
Independent Non-Executive Director (12 January 2015)
Richard Henry Phillips
Non-Executive Director (23 December 2014)
James Patrick Nolan
Independent Non-Executive Director (resigned 1 September 2021)
Yvonne Stillhart
Independent Non-Executive Director (1 March 2022)
2021 Annual Report IDH 89
Corporate Governance Corporate Governance Report
Leadership
We continue to operate on the basis of a clear division
• approving annually a strategic plan and objectives
of responsibilities between the role of the Chairman
for the following year for the Group;
and that of the Group Chief Executive. This segrega-
• approving any decision to cease to operate all or
tion of roles was agreed at the Board meeting held on
any material part of the Group’s business or to
12 January 2015. The Board believes that this segrega-
enter into any new business or geographic areas;
tion of roles remains appropriate, taking into account
• monitoring the delivery of the Group’s strategy,
the size and structure of the Group.
objectives, business plan and budget;
• adopting or amending the Group’s business plan or
As Chairman, I ensure the Board is effective in the execu-
annual budget;
tion of all aspects of its role. The Group Chief Executive
• approving
the Group’s annual
report and
Officer, meanwhile, is responsible for managing the day-
accounts and half-yearly financial statements
to-day running of the business. In this, she is supported
and/or any change in the accounting principles
by a senior management team. The Group Chief Execu-
or tax policies of any member of the IDH group
tive and I have a good working relationship and discuss
and/or any change in the end of the financial
matters of Group strategy and performance on a regular
year of any member of the IDH group except as
basis. We also work together to ensure that Board meet-
contemplated by the business plan or annual
ings cover relevant matters, including a quarterly review
budget, as required by law or to comply with a
of financial and operational performance (including key
new accounting standard;
performance indicators), and in partnership with the
• any member of the IDH group declaring or paying
Group Secretary ensure that all Directors:
any dividend or distribution;
• are kept advised of key developments;
• approving the issue of all circulars, prospectuses,
• receive accurate, timely and clear information upon
listing particulars and general meeting notices to
which to call in the execution of their duties; and
shareholders of the Group;
• actively participate in the decision-making process.
• ensuring the Group has effective systems of inter-
nal control and risk management in place by (i)
Agendas for meetings of the Board are reviewed and
approving the Group’s risk appetite statements
agreed in advance to ensure each Board meeting is
and (ii) approving policies and procedures for the
efficiently run, allowing all Directors to openly and
detection of fraud, the prevention of bribery and
constructively challenge the proposals made by the
other areas considered by the Board to be material;
Group’s senior management. I am pleased to report that
• undertaking an annual review of the effectiveness of
throughout the year, each Director has properly exer-
the Group’s risk management and internal control
cised those powers with which they have been vested
and reporting on that review in the Group’s annual
by the Group’s Articles of Association and relevant laws.
report. The review should cover all controls, includ-
ing financial, operational and compliance controls
The Board operates under a Schedule of Matters
and risk management;
Reserved, the details of which are unchanged since
• carrying out a robust assessment of the principal
our last Annual Report. Matters reserved to the Board
risks facing the Group, including those that threaten
means any decision that may affect the overall direc-
its business, future performance, solvency or liquid-
tion, supervision and management of the Group,
ity and to report on such assessment in the Group’s
including, but not limited to:
annual report; and
90 IDH 2021 Annual Report
• reviewing the Group’s overall corporate governance
Board Meetings During 2021
The Board met seven times during the year, four
arrangements and approving any changes thereto.
of which were held on an ad hoc basis to consider
the Group acquisitions. Details of our Directors’
Apart from these Reserved matters, the Board del-
attendance at Board and Committee meetings are
egates specific items to its principal committees,
shown in the table below. All of the meetings were
namely the committees on Audit, Remuneration and
held via teleconference due to the ongoing travel
Nomination. Each Committee is authorised to seek
restrictions from COVID-19. In the event that
any information it requires from senior management.
any Director is unable to attend a meeting of the
The Board has not established separate committees
Board or Committee of which they are a member,
for governance, risk or compliance. The review of
he or she receives the necessary papers, including
governance arrangements is the responsibility of the
agendas, meeting outcomes and any documents
Board, as noted above, and the Audit Committee has
presented for review or information. Furthermore,
within its remit, the oversight of risk and compliance
I endeavour to discuss with them in advance of the
matters relating to the Group.
meeting to obtain their views and decisions on the
proposals to be considered.
Below are brief recaps on each of these committees.
Reports from the Chairmen of the Audit and Remu-
neration Committees appear starting pages 98 and
102 of this Annual Report, respectively.
Table of Director Attendance at 2021 Meetings
Name
Number of Meetings
Directors:
Lord St John of Bletso
Prof. Dr. Hend El Sherbini
Hussein Choucri
Dan Olsson
James Patrick Nolan (a)
Richard Henry Phillips
Yvonne Stillhart (b)
Board
Audit (c)
Remuneration
Nomination (d)
7
7
7
7
7
3
7
n/a
4
n/a
n/a
4
4
3
n/a
n/a
3
n/a
n/a
3
3
2
n/a
n/a
2
2
n/a
1
2
1
n/a
n/a
(a) James Patrick Nolan resigned on 1 September 2021.
(b) Yvonne Stillhart was not appointed until 1 March 2022.
(c) the Audit Committee met on one occasion on an ad hoc basis.
(d) the Nomination Committee met on one occasion on an ad hoc basis.
2021 Annual Report IDH 91
Corporate Governance Corporate Governance Report
Effectiveness
Having spent considerable time in both formal meetings
minutes in my capacity as Chairman before these
and in learning about the skills of our Directors one on
minutes are circulated to all Directors in attendance
one — and drawing on my past experience as a Direc-
and then tabled for approval at the next meeting, at
tor — I am confident that the Board has the skills, talent
which time any necessary amendments are made.
and industry knowledge it needs to effectively deliver
the Group’s agreed strategy. The Board, facilitated by
The Group has obtained customary directors’ and
the Company Secretary, carries out regular internal
officers’ indemnity insurance covering the Chairman
evaluations and consider the feedback from each Direc-
and the Non-Executive Directors.
tor in setting the agenda and strategic direction of the
Company. In addition, training requirements for each
The Board has delegated several areas of responsibil-
Director are considered, and the Board receive regular
ity to its committees. The composition of the Board’s
updates from the Company Secretary or specific training
committees was considered during the year and sub-
from external legal counsel as deemed appropriate.
sequently Dan Olsson was appointed as Chair of the
Audit Committee following James Nolan’s resignation
It is my considered judgement that the Board receives
on 1 September 2021.
from senior management sufficiently detailed budgets,
forecasts, strategy proposals, reviews of the Group’s
financial position and operating performance, and
Nomination Committee
The Nomination Committee assists the Board in
annual and half yearly reports to ensure that it may be
reviewing the structure, size and composition of the
effective. This enables us to effectively ask questions
Board. It is also responsible for reviewing succession
of senior management and to hold discussions on
plans for the Directors, including the Chairman and
the Group’s strategy and performance. In 2021, senior
Chief Executive and other senior management.
management delivered regular reports to the Board
ahead of regularly scheduled Board meetings.
I note in this instance that all members of the Nomi-
nation Committee are Non-Executive Directors. At
Any concerns raised by Directors are clearly recorded
the date of this report the following were members of
in the minutes of each meeting. I review Board
the Nomination Committee:
Name
Lord St John of Bletso
Hussein Choucri
Dan Olsson
Position
Chairman of the Committee
Committee Member
Committee Member
James Nolan was a member of the Nomination Committee until his resignation on 1 September 2021.
92 IDH 2021 Annual Report
Remuneration Committee
The Remuneration Committee recommends the
The full report of the Remuneration Committee for
Group’s policy on executive remuneration determines
2021 appears starting on page 102 of this Annual
the levels of remuneration for Executive Directors
Report. At the date of this report the following were
and the Chairman and other senior management and
members of the Remuneration Committee:
prepares an annual remuneration report.
Name
Hussein Choucri
Dan Olsson
Yvonne Stillhart
Position
Chairman of the Committee
Committee Member
Committee Member (Appointed 1 March 2022)
James Nolan was a member of the Remuneration Committee until his resignation on 1 September 2021.
Audit Committee
The Audit Committee’s role is to assist the Board with the
The Audit Committee will meet not less than three
discharge of its responsibilities in relation to financial
times a year. The Audit Committee comprises three
reporting, including: reviewing the Group’s annual and
Independent Non-Executive Directors who hold the
half-year financial statements and accounting policies
necessary competence in accounting and /or audit-
and internal and external audits and controls; review-
ing, recent financial experience and have competence
ing and monitoring the independence and scope of the
relevant to the sector in which the Group is operating.
annual audit and the extent of the non-audit work under-
The full report of the Audit Committee for 2021
taken by external auditors; advising on the appointment
appears starting on page 98 of this Annual Report. At
of external auditors; and reviewing the effectiveness of
the date of the report, the following were members of
the internal audit, internal controls, whistleblowing and
the Audit Committee:
fraud systems in place within the Group.
Name
Dan Olsson
Hussein Choucri
Yvonne Stillhart
Position
Chairman of the Committee
Committee Member
Committee Member (Appointed 1 March 2022)
James Nolan was a member of the Audit Committee until his resignation on 1 September 2021.
Dan Olsson stepped in as temporary chairman following James Nolan’s resignation and was officially
appointed the Chair of the Committee at the end of the 2021.
2021 Annual Report IDH 93
Corporate Governance Corporate Governance Report
Internal Control and Risk Management
Given the business and geographies in which the Group
Your Board has furthermore put in place a control
operates, I believe as Chairman that risk mitigation
framework at the Group level that applies to all sub-
will be key not just to the creation and preservation
sidiaries, including:
of shareholder value, but in the Group’s growth going
• Board approval of the overall Group budget and
forward. The Company’s risk matrix, outlined on pages
strategic plans;
52-59, is sufficiently vital that it must be owned equally
• a clear organisational structure delineating lines of
by the management team and members of the Board.
responsibility, authorities and reporting requirements;
• defined expenditure authorisation levels;
Our view as a Board is that the Group must be proactive
• a regular process for operational reviews at the
on risk in order to meet shareholder expectations, and
senior management level on a weekly, monthly and
I have advised that I expect the IDH management team
quarterly basis covering all aspects of the business;
to be ahead of the curve in this area. You may expect
• a strategic planning process that defines the key
risk and its mitigation will be a theme to which your
steps senior management must take to deliver on the
Board returns repeatedly in 2022, as we did in 2021.
Group’s long-term strategy;
• a comprehensive system of financial reporting
The Board has ultimate responsibility for the Group’s
including weekly flash reports to management,
internal controls; however, they have delegated
monthly reporting to management and an annual
oversight of the Group’s system of internal controls
budget process involving both senior management
to the Audit Committee so as to safeguard the assets
and the Board; the Board received reports on a quar-
of the Group and the interests of shareholders. The
terly basis in 2021; and
Audit Committee thus reviews the effectiveness of the
• as part of the reporting process in 2021, management
Group’s internal controls on an ongoing basis to ensure
reviewed monthly and year-to-date actual results
the keeping of proper accounting records, safeguarding
against prior year, against budget and against forecast;
the assets of the Group and detecting fraud and other
these reports were circulated to the Board; any signifi-
irregularities. The Audit Committee reports back to the
cant changes and adverse variances are reviewed by
Board with their findings and recommendations.
the Group Chief Executive and by senior management
and remedial action is taken where appropriate.
The Board has accordingly established that the Group
has in place internal controls to manage risk including:
• the identification and management of risk at the
Investor Relations
Engagement with shareholders continues to be a key
level of operating departments by the heads of those
function at both the senior management and the Board
departments; and
level. Our investor relations function held numerous
• regular Board level discussion of the major business
meetings with current and potential investors during
risks of the Group, together with measures being
the course of the year. Management met with investors
taken to contain and mitigate those risks.
at eight virtual investor conferences during 2021; in
• The Group’s principal risks and uncertainties and
addition to two roadshows arranged by brokers, while
mitigation for them are set out on pages 52-59 of this
handling hundreds of one-on-one call requests and
Annual Report.
queries throughout the year.
94 IDH 2021 Annual Report
2021 Annual Report IDH 95
Corporate Governance Corporate Governance Report
The Board is committed to best
practices in corporate governance,
calling on both the expertise of
individual Directors as well as that
of outside parties, including legal
counsel and global professional
services firms
our investor relations program to ensure that our
shareholders and stakeholders remain informed
of the Group’s strategy and ongoing financial and
business performance.
Annual Reporting and Annual General
Meeting of Shareholders
We publish our Annual Report by the end of April in
respect of the prior year ended 31 December. Where
possible we follow corporate governance best practice
to send a Notice of Meeting of an Annual General Meet-
ing (AGM) and related papers to shareholders at least
20 working days prior to the meeting.
In 2021, we published half-year, nine-month reviewed
results in addition to audited full-year results and
The Group’s is looking to hold its sixth Annual General
further released trading update on performance at
Meeting as a listed company on 7 June 2022 in London,
the three-month periods. We intend to continue
UK, subject to Covid-19-related restrictions. Further
publishing reviewed results for the first, second and
details regarding the Group’s AGM will be communi-
third-quarter marks in 2022, to abide by the Egyptian
cated when available.
Exchange’s listing rules.
Due to the ongoing restrictions and safety concerns
The Board communicates with shareholders
as a result of the Covid-19 pandemic, the AGM
through public announcements disseminated via
will be run as a closed meeting with Shareholders
the London Stock Exchange, analyst briefings,
unable to attend the meeting in person. The Board
roadshows and press interviews. Copies of public
remains keen to encourage engagement with Share-
announcements and financial results are published
holders. To that end, the Directors would like to
on the Group’s website, along with a number of
invite questions from Shareholders in advance of
other investor relations tools. It is worth highlight-
and during the AGM. Should Shareholders wish to
ing that the Group launched new corporate and
submit questions to the Board prior to the deadline
investor relations websites in 2018, offering more
for proxy voting they can do so, and these will be
comprehensive and better structured information
responded to on an individual basis. In addition,
on the Group along with additional shareholder
the Board will offer shareholders the opportunity
tools and a richer interface.
to dial into the AGM, at which time they can also
The Board receives regular updates from the senior
management team on the views of shareholders
Details of the AGM are included in the Notice of Meet-
and on milestones in the investor relations pro-
ing that accompanies this Annual Report and which is
gram. We will continue throughout 2022 to grow
available on our website.
submit questions to the Board.
96 IDH 2021 Annual Report
At the AGM, all of the Group’s Directors will retire and
In formulating this Annual Report, we have called on
submit themselves for re-election with the exclusion of
the Group Chief Executive and her senior management
Yvonne Stillhart who will be seeking election.
staff to provide us with clear documentary evidence
The outcome of the voting at the AGM will be
Audit Committee has confirmed to us that the financial
announced by way of a London/Egypt Stock Exchange
statements as contained in the 2021 Annual Report are
announcements and full details will be published on
true and fair and that the work of the external auditors
the Group’s website shortly after the AGM.
has been accurate and effective.
of the Group’s performance and policies for 2021. The
Limitations of this Report
As I noted earlier, the Group is not bound to adhere to
the requirements of the 2018 UK Corporate Governance
Code. Nevertheless, we have endeavoured to ensure
that this Annual Report is, as a whole, fair, balanced
Lord St John of Bletso
Chairman
and understandable.
20 April 2022
2021 Annual Report IDH 97
Corporate Governance Audit Committee Report
Audit Committee Report
relevant financial experience in financial and health-
care industry matters to carry out its duties with the
appropriate knowledge and challenge as set out under
the 2018 UK Corporate Governance Code (“the Code”)
as issued by the Financial Reporting Council. The
Committee has also been actively working to ensure
IDH’s financial reporting complies with EGX rules
and requirements set out for foreign companies with
a dual listing.
During 2021, the Audit Committee met four times. The
Committee members reviewed the integrity and content
of external financial reporting, risk management and
internal controls and reported the findings and recom-
mendations to the Board. Outside of scheduled meet-
ings, the Audit Committee also communicated regularly
Dan Olsson
Independent Non-Executive Director
throughout 2021 with the Group Chief Financial Officer
and Vice President of Finance & Strategies and the
external auditors. During the year KPMG, the external
The Audit Committee is responsible for overseeing
auditors who served since July 2015 resigned and Price-
IDH’s financial reporting and ensuring the integrity
waterhouseCoopers LLP (“PwC”) were appointed.
of the Group’s financial statements. The Committee
is also responsible for reviewing and monitoring the
The audit partner and audit manager from the
effectiveness of the Group’s risk management processes
Group’s external auditors are invited to attend meet-
and internal controls, as well as for ensuring that audit
ings of the Committee on a regular basis. During
processes are robust.
2021, they attended all meetings. The Group Chief
Financial Officer and Vice President of Finance
During the year, the composition of the Audit Com-
& Strategies, who is not a member of the Board,
mittee changed. James Nolan resigned from the Board
also attends the meetings by invitation, and other
and consequently as Chair of the Audit Committee
members of the senior management team attend
and I was appointed to that position. At the date of
as required; these include the Director of Investor
this report, the Audit Committee comprises three
Relations, the Chief Internal Audit Director and the
Non-Executive Directors, all of whom are considered
Group Secretary.
independent. In addition to myself, Hussein Choucri
and Yvonne Stillhart are also members of the Com-
There are also private meetings between the Audit
mittee. The Committee as a whole considers it has the
Committee and the external auditors outside the
98 IDH 2021 Annual Report
audit timetable at which senior management is
not present. The Committee will continue with the
Roles and Duties of the Audit Committee
The Audit Committee’s role is to assist the Board with
practice of meeting in private with the external
the discharge of its responsibilities in relation to finan-
auditors in the future.
cial reporting, including:
• reviewing the Group’s annual and half-year financial
FRC Audit Quality Review
The FRC is the UK’s independent regulator respon-
statements and quarterly financial statements;
• reviewing the Group’s accounting policies, internal
sible for promoting high-quality corporate gover-
and external audits and controls;
nance and reporting to foster investment. The FRC’s
• reviewing and monitoring the scope of the annual
responsibilities
include
independent monitoring
audit and the extent of the non-audit work under-
of audits of listed and certain other public interest
taken by external auditors; and
entities performed by firms registered to conduct
• advising on the appointment of external auditors
audits in the UK by a Recognised Supervisory Body
and reviewing the effectiveness of the internal audit,
( further details are set out on the FRC’s website).
internal controls, whistleblowing and fraud systems
This monitoring is performed by the FRC’s Audit
in place within the Group.
Quality Review (‘AQR’) team. The reviews of indi-
vidual audit engagements are intended to contribute
to safeguarding and promoting improvement in the
Audit Committee Meetings During 2021
During 2021 the Audit Committee had four scheduled
overall quality of auditing in the UK. The Group’s
meetings. At each scheduled meeting, the Committee
previous accounts have not been subject to a review
considers the matters outlined above under the sub-
in the period.
heading “Roles and Duties of the Audit Committee.”
Committee Member
James Nolan
Dan Olsson
Hussein Choucri
Meeting attended
3/3
4/4
4/4
Significant Issues
The audit committee have held regular meetings across
subsidiaries and valuations of options over non con-
trolling interests. Detailed discussions have been held
the period with the external auditors. In these meetings
around corporate governance and steps being taken to
the external auditors have presented their audit plan
strengthen the control environment.
and shared their assessment of financial statement
risks. Areas of risk and focus for the audit include
revenue recognition, procedures around management
Internal Auditors
The scope of internal auditor encompasses, but is
override of controls, assessments of control over our
not limited to, the examination and evaluation of the
2021 Annual Report IDH 99
Corporate Governance Audit Committee Report
adequacy and effectiveness of the Group’s governance,
• Evaluating specific operations at the request of
risk management, and internal controls as well as
the Board / Audit Committee or management,
the quality of performance in carrying out assigned
as appropriate.
responsibilities to achieve the Group’s stated goals
and objectives. This includes:
The Internal Auditor reports to the Audit Commit-
• Evaluating risk exposure relating to achieve-
tee and the Committee received three reports on
ment of the Group’s strategic objectives.
the findings of the internal audit in 2021. The Com-
• Evaluating the reliability and integrity of infor-
mittee also received a report from internal audit on
mation and the means used to identify, measure,
their annual review of the system of internal control
classify, and report such information.
and risk management. The Committee continues to
• Evaluating the systems established to ensure
monitor and reviews the effectiveness and capabili-
compliance with those policies, plans, proce-
ties of the internal audit during the year.
dures, laws, and regulations which could have a
significant impact on the Group.
• Evaluating the means of safeguarding assets
External Auditors Independence
Since July 2015 up until June 2021, KPMG acted as
and, as appropriate, verifying the existence of
the Group’s external auditors. At the AGM in June
such assets.
2021, KPMG resigned and PwC were appointed.
• Evaluating the effectiveness and efficiency with
During the year, the Committee met regularly with
which resources are employed.
representatives of the external auditors, without
• Evaluating operations or programs to ascertain
management present and also met with manage-
whether results are consistent with established
ment without the presence of the external auditors.
objectives and goals and whether the operations
The Auditors’ independence was considered by the
or programs are being carried out as planned.
Committee during the year and following care-
• Monitoring and evaluating governance processes.
ful consideration, it was agreed that the Auditors
• Reporting periodically on the internal audit
remained independent.
activity’s purpose, authority, responsibility, and
performance relative to its plan.
The Audit Committee reviewed the work com-
• Reporting significant risk exposures and control
pleted by the external auditors. The Audit Com-
issues, including fraud risks, governance issues,
mittee confirms that during 2021, PwC audit
and other matters needed or requested by the
services amounted to EGP 28.8 million compared
Board / Audit Committee.
to the EGP 12.6 million paid to KPMG in 2020.
100 IDH 2021 Annual Report
The increase in external auditors fees is due to
financial statements, the Audit Committee advised the
the dual-listing of IDH’s shares on both the LSE
Board at its meeting on 20 April 2022 that is their opin-
and the EGX which necessitated the publishing
ion that the financial statements as at 31 December
of three reviewed financial statements for 1Q, 2Q
2021 provide a true and fair view of the financial perfor-
and 3Q in addition to audited financial statements
mance of the Group and recommend that it be adopted
for the full year in consolidated and standalone
by the Board and recommended to shareholders for
forms versus only consolidated audited full-year
approval at the forthcoming Annual General Meeting.
financial statements in 2020.
External Auditors
Following consideration of the performance of the
Auditors, the services provided during the year and a
review of its independence and objectivity, the Com-
mittee has recommended to the Board the appoint-
Dan Olsson
Chairman, Audit Committee
ment of PwC as Auditors to the Company. As such, the
20 April 2022
notice of the 2022 Annual General Meeting includes a
resolution, to be approved by shareholders, that PwC
be re-appointed as Auditors.
Recommendation
Ultimately, it is the Board’s responsibility to review and
approve the Group’s full-year and half-year financial
statements, as well as to determine that, taken as a
whole, the Annual Report is balanced, understandable
and provides the information necessary for sharehold-
ers to assess the Group’s position and performance,
business model and strategy. It is the Audit Commit-
tee’s role to assist the Board in discharging its responsi-
bilities with regards to financial reporting, external and
internal audits and controls. Following a review of the
process around the annual audit and the content of the
2021 Annual Report IDH 101
Corporate Governance Remuneration Committee Report
Remuneration Committee Report
Following this review, it was agreed to increase the
fees for the independent non-executive directors
with effect from 1 September 2021.
Chairman: Lord St John of Bletso is entitled to receive
an annual salary of US$ 100,000. He is entitled to the
reimbursement of reasonable expenses; indepen-
dent Non-Executive Directors: Hussein Choucri and,
Dan Olsson, and Yvonne Stillhart have been engaged
by the Group as Independent Non-Executive Direc-
tors under letters of appointment. Hussein Choucri
and Yvonne Stillhart are each entitled to an annual
fee of US$ 65,000, while Dan Olsson is entitled to an
annual fee of US$ 70,000, in recognition of his role as
Chairman of the Audit Committee. The Independent
Non-Executive Directors are all entitled to the reim-
bursement of reasonable expenses; non-Executive
Hussein Choucri
Independent Non-Executive Director and Chairman
Directors: Richard Henry Phillips has been engaged
of the Remuneration Committee
by the Group as a Non-Executive Director under let-
In this report from the Remuneration Committee,
tive Directors are all entitled to the reimbursement
I outline on behalf of my colleagues and myself the
of reasonable expenses.
ter of appointment. He will not be entitled to receive
any fee from the Group for this role. The Non-Execu-
basis on which Directors and select members of senior
management will be remunerated for their service in
2021. A detailed discussion of the basis on which the
aforementioned (as well as one key member of senior
management) were remunerated for their service in
2021 appears below.
During 2021, the Committee commissioned a
consultant to review the non-executive remunera-
tion to ensure these were aligned to the market.
102 IDH 2021 Annual Report
Remuneration of Directors in 202135
Figures in EGP36
Executive Director
Base Salary /
fees 2021
Base Salary /
fees 2020
Annual Bonus
202137
Annual Bonus
202037
Total 2021
Total 2020
Dr. Hend El Sherbini38
8,495,102
8,532,450
450,000
450,000
8,945,102
8,982,450
Non-Executive Directors
Lord St John of Bletso
1,303,371
1,172,228
Hussein Choucri
912,358
859,634
James Patrick Nolan
703,823
937,782
Dan Olsson
912,358
859,634
Richard Henry Phillips39
-
-
-
-
-
-
-
-
-
-
-
-
1,303,371
1,172,228
912,358
859,634
703,823
937,782
912,358
859,634
-
-
Yvonne Stillhart was appointed on 1 March 2022 and therefore did not receive any fees for the year ended 2021.
Hussein Choucri
Chairman, Remuneration Committee
20 April 2022
35 There are no taxable benefits, corporate pensions or long-term incentive plans for the Company’s directors.
36 Average USD:EGP exchange rate was 15.63 in 2020 and 15.64 in 2021.
37 BOD members are not eligible for profit share distributions.
38 All amounts shown are paid in USD, except for part of Dr. Hend El Sherbini’s annual bonus which is paid in EGP in the form of an annual award amounting to EGP
450,000.
39 Mr. Philips is the board representative of a major shareholder, Actis, and is therefore not remunerated.
2021 Annual Report IDH 103
Corporate Governance Directors’ Report
Directors’ Report
The statements and reviews on pages 4 to 59 comprise
Report in sections including the Chairman’s Message
the Strategic Report, which contains certain informa-
(page 16 and 17), Chief Executive’s Report (pages 18 to
tion that is incorporated into this Directors’ Report
25), Strategic Report (beginning page 4) and particu-
by reference, including indications as to the Group’s
larly the Performance section (beginning on page 60).
likely future business developments.
Financial statements for 2021 appear in the Audited
Financial Statements (starting on page 110).
Directors
The Directors who held office at 31 December 2021
and up to the date of this report are set out on pages
Results and Dividends
The Group’s Results for 2021 are set out in the Audited
84 to 86 along with their biographies. The remunera-
Financial Statements starting on page 110. The Board
tion of the Directors is set out in the Remuneration
of Directors is pleased to recommend a final dividend
Report on page 103.
of EGP 2.17 per share, or EGP 1.3 billion in aggregate
(exact US dollar amount is subject to the exchange
Directors’ and Officers’ Liability Insurance and Indem-
rate at the time of the upstreaming from the subsidiar-
nification of Directors.
ies to the holding company), in respect of the financial
year ended 31 December 2021. This represents an sig-
Subject to the conditions set out in the Companies (Jer-
nificant increase compared to a final dividend of US$
sey) Law 1991 (as amended), the Group has arranged
29.1 million in aggregate in the previous financial year.
appropriate Directors’ and Officers’ liability insurance
to indemnify the Directors against liability in respect of
proceedings brought by third parties. Such provisions
Principal Risks and Uncertainties
The principal risks and uncertainties that may affect
remain in force at the date of this report.
IDH’s business, as well as their potential mitigants, are
outlined on pages 52 to 59 of this Annual Report.
Principal Activities
The Group’s principal activity is the provision of
medical diagnostics services. An overview of the
Share Capital
The Group has 600,000,000 ordinary shares each with
Group’s principal activities is an integral component
a nominal value of US$ 0.25. There are no other shares
of the Strategic Review included in this Annual Report
in issue, other than ordinary shares.
beginning on page 4.
Business Review and Future
Developments
A review of the development and performance of the
Substantial Share Holdings
As at 31 December 2021, the Company ascertained
from its own analysis that the following held inter-
ests of 3% or more of the voting rights of its issued
Group’s business forms an integral part of this Annual
share capital:
104 IDH 2021 Annual Report
Shareholder
Hena Holdings Limited
Actis IDH B.V.
International Finance Corporation (IFC)
and IFC MENA Fund
Fidelity Investments
T. Rowe Price International
Number of Voting Rights
% of Voting Rights
152,982,356
126,000,000
28,456,384
26,451,142
23,946,015
25.50
21.00
4.70
4.41
3.99
Note (1): The table displays the top 5 shareholders in IDH across both exchanges (LSE and EGX).
Note (2): As at year-end 2021, 92.9% of IDH’s shares were listed on the LSE, with the remaining 7.1% listed on the EGX.
And that the table is actually demonstaring the top 5 shareholders aggregately among both exchnages
The Directors certify that there are no issued securities
that carry special rights with regard to control of the
Corporate Responsibility
The Group’s report on Corporate Responsibility is set
Company. There are similarly no restrictions on voting
out on page 78.
rights. Chief Executive Officer Dr. Hend El-Sherbini
and her mother, Dr. Moamena Kamel jointly hold the
shares held by Hena Holdings Limited which include
Corporate Governance
The Group’s report on Corporate Governance is on
the described voting rights.
pages 82 to 108.
The Company has not been informed of any changes
to the above interests between 31 December 2021 and
Articles of Association
The Company’s Articles of Association set out the
the date of this Report.
Committees of the Board
The Board has established Audit, Nomination and
rights of shareholders including voting rights, distri-
bution rights, attendance at general meetings, powers
of Directors, proceedings of Directors as well as bor-
rowing limits and other governance controls. A copy
Remuneration Committees. Details of these Commit-
of the Articles of Association can be requested from
tees, including membership and their activities during
the Group Company Secretary.
2021, are contained in the Corporate Governance sec-
tion of this Annual Report and in the Remuneration
The Articles of Association may be amended by
and Audit Reports.
members of the Company via special resolution at
2021 Annual Report IDH 105
Corporate Governance Directors’ Report
a General Meeting of the Company, the Company
is not seeking any amendments at the forthcoming
Political Donations
The Group made no political donations in 2021 (2020: nil).
annual general meeting.
Rules on the Appointment and
Replacement of Directors
Rules on the appointment and replacement of Direc-
Financial Instruments
The Group’s principal financial instruments comprise
cash balances, balances with related parties, trade
receivables and payables and other payables and
tors are set out in the Group’s Articles of Association,
receivables that arise in the normal course of busi-
a copy of which may be requested from the Group
ness. The Group’s financial instruments risk manage-
Company Secretary.
ment objectives and policies are set out in Note 2 to
the Financial Statements.
Agreements Related to Change of Control
of the Group
There is an agreement related to the IFC’s $45
Employees
The Group has one (1) Executive Director, namely
million loan agreement whereby within 60 days of
Group Chief Executive Dr. Hend El Sherbini, as
receipt of notice from IFC that a Major Shareholder
identified in the Corporate Governance section. Her
Event has occurred, IDH should prepay the aggre-
biographical information appears on page 84 of this
gate outstanding principal amount of the loan in
Annual Report, and her compensation is reported in
full together with accrued interest and Increased
the Remuneration Committee Report on page 103.
Costs (if any) thereon and all other amounts pay-
IDH has service agreements with the Group Chief
able under the agreement, including the amount
Executive and with the Group Chief Financial Officer
payable under unwinding costs if the prepayment
and Vice President of Finance & Strategies, Mr. Omar
is not made on an Interest Payment Date.
Bedewy, who is not a Company Director. Dr. Hend El
Sherbini leads the Company’s Executive Committee,
Major Shareholder Event means the aggregate eco-
which also includes all heads of departments and
nomic and voting interests (a) directly held by the
meets every second week to review and discuss per-
Major Shareholder and (b) indirectly held by Dr. Hend
formance, priorities and upcoming events in light of
El Sherbini and Dr. Moamena Kamel in the Parent’s
the Group’s strategic plan. In view of the Company’s
share capital falling below 12.5% (determined on a
regional growth plans, IDH is committed to building
fully diluted basis).
Conflicts of Interest
During the year, no Director held any beneficial inter-
out its senior management team in preparation for
a larger footprint. The Group and its subsidiaries
had total of 5,346 employees as at 31 December 2021
(2020: 4,754) employed in Egypt, Jordan, Sudan and
est in any contract significant to the Group’s business,
Nigeria.
other than a contract of employment. The Company
has procedures set out in the Articles of Association
for managing conflicts of interest. Should a Director
Creditor Payment Policy
Individual subsidiaries of the Group are responsible for
become aware that they, or their connected parties,
agreeing on the terms and conditions under which busi-
have an interest in an existing or proposed transac-
ness transactions with their suppliers are conducted. It is
tion with the Group, they are required to notify the
the Group’s policy that payments to suppliers are made
Board as soon as reasonably practicable.
in accordance with all relevant terms and conditions.
106 IDH 2021 Annual Report
Going Concern
The Directors have considered a number of downside
• make judgements and accounting estimates that
are reasonable and prudent; and
scenarios, including the most severe but plausible
• prepare the financial statements on the going con-
scenario, for a period of 16 months from the signing
cern basis unless it is inappropriate to presume
of the financial statements. They have also assessed
that the group will continue in business.
the likelihood of any key one off payments arising
such as dividends or those in respect of M&A activity.
The directors are responsible for safeguarding the
Under all of these scenarios there remains significant
assets of the group and hence for taking reasonable
headroom from a liquidity and covenant perspective.
steps for the prevention and detection of fraud and
Reverse stress tests have been performed to determine
other irregularities.
the level of downside required to cause a liquidity or
covenant issue with these scenarios not considered
The directors are also responsible for keeping ade-
plausible. Therefore the Directors believe the Group
quate accounting records that are sufficient to show
has the ability to meet its liabilities as they fall due
and explain the group’s transactions and disclose
and the use of the going concern basis in preparing
with reasonable accuracy at any time the financial
the financial statements is appropriate.
position of the group and enable them to ensure that
Statement of directors’ responsibilities in
respect of the financial statements
The directors are responsible for preparing the Annual
the financial statements comply with the Companies
( Jersey) Law 1991.
The directors are responsible for the maintenance
Report and the financial statements in accordance
and integrity of the group’s website. Legislation in
with applicable law and regulation.
the United Kingdom governing the preparation and
dissemination of financial statements may differ
Company law requires the directors to prepare financial
from legislation in other jurisdictions.
statements for each financial year. Under that law the
directors have prepared the group financial statements
in accordance with International Financial Reporting
Directors’ confirmations
Each of the directors, whose names and functions are
Standards (IFRSs) as adopted by the European Union.
listed in the Board of Directors section of the Annual
Report confirm that, to the best of their knowledge:
Under company law, directors must not approve the
• the group financial statements, which have been
financial statements unless they are satisfied that
prepared in accordance with IFRSs as adopted by the
they give a true and fair view of the state of affairs
European Union, give a true and fair view of the assets,
of the group and of the profit or loss of the group for
liabilities, financial position and profit of the group; and
that period. In preparing the financial statements, the
• the Financial & Operational Review includes a fair
directors are required to:
review of the development and performance of the
• select suitable accounting policies and then apply
business and the position of the group, together
them consistently;
with a description of the principal risks and uncer-
• state whether applicable IFRSs as adopted by the
tainties that it faces.
European Union have been followed, subject to any
material departures disclosed and explained in the
In the case of each director in office at the date the
financial statements;
directors’ report is approved:
2021 Annual Report IDH 107
Corporate Governance Directors’ Report
• so far as the director is aware, there is no relevant
Details of the AGM are included in the Notice of Meet-
audit information of which the group’s auditors are
ing that accompanies this Annual Report and which is
unaware; and
available on our website.
• they have taken all the steps that they ought to
have taken as a director in order to make them-
At the AGM, all of the Group’s Directors will retire and
selves aware of any relevant audit information and
submit themselves for re-election with the exclusion
to establish that the group’s auditors are aware of
of Yvonne Stillhart who will be seeking election.
that information.
Annual General Meeting (AGM)
IDH is looking to hold its 2022 AGM on 7 June 2022 in
announced by way of a London/Egypt Stock Exchange
announcements and full details will be published on
London, UK, subject to Covid-19-related restrictions.
the Group’s website shortly after the AGM.
The outcome of the voting at the AGM will be
Further details regarding the Group’s AGM will be com-
municated when available.
Auditors
PwC have confirmed their willingness to act as the
Due to the ongoing restrictions and safety concerns
Company’s external auditors and a separate resolu-
as a result of the COVID-19 pandemic, the AGM will
tion will be proposed at the forthcoming AGM con-
be run as a closed meeting with Shareholders unable
cerning their appointment and to authorise the Board
to attend the meeting in person. The Board remains
to agree their remuneration.
keen to encourage engagement with Shareholders. To
that end, the Directors would like to invite questions
By order of the Board
from Shareholders in advance of and during the AGM.
Should Shareholders wish to submit questions to the
Board prior to the deadline for proxy voting they can
do so, and these will be responded to on an individual
basis. In addition, the Board will offer shareholders the
Dr. Hend El Sherbini
Executive Director
opportunity to dial into the AGM, at which time they
20 April 2022
can also submit questions to the Board.
108 IDH 2021 Annual Report
2021 Annual Report IDH 109
Consolidated
Financial
Statements
110 IDH 2021 Annual Report
2021 Annual Report IDH 111
Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc
Report on the audit of the financial statements
Opinion
In our opinion, Integrated Diagnostics Holdings plc’s consolidated financial statements:
• give a true and fair view of the state of the group’s affairs as at 31 December 2021 and of its profit and cash
flows for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards as adopted in
the European Union; and
• have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
We have audited the financial statements, included within the 2021 Annual Report (the “Annual Report”), which
comprise: the Consolidated statement of financial position as at 31 December 2021; the Consolidated income
statement, Consolidated statement of comprehensive income/(expenses), Consolidated statement of cashflows,
and Consolidated statement of changes in equity for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for
the audit of the financial statements section of our report. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes the Financial Reporting Council’s (“FRC”) Ethical
Standard, as applicable to listed public interest entities in accordance with the requirements of the Crown
Dependencies’ Audit Rules and Guidance for market-traded companies, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
Other than those disclosed in note 8.5 to the consolidated financial statements, we have provided no non-audit
services to the company or its controlled undertakings in the period under audit.
112 IDH 2021 Annual Report
Financial Statements Independent Auditors’ Report Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
Our audit approach
Context
Integrated Diagnostics Holdings plc (“IDH”) is a company incorporated in Jersey with shares listed on the
London Stock Exchange (“LSE”) and the Egyptian Exchange (“EGX”). PricewaterhouseCoopers LLP (“PwC UK”)
are appointed to audit the consolidated financial statements of IDH for the purposes of the requirements of the
LSE and Jersey law. All trading operations of IDH are outside of the UK (Generally in the Middle East and Africa).
Therefore, the role of PwC UK is predominantly that of a group auditor with other PwC network firms acting as
component auditors.
Overview
Audit scope
• Components were considered to be individual legal entities within the group. Full scope audits were
performed on 4 significant components which covered 98% of reported revenues and 96% of reported profits.
The four components included the 3 main trading subsidiary companies in Egypt and the trading subsidiary
company in Jordan. These were selected due to their relative size (i.e. being more than 10% of the reported
profits before tax).
• Additional testing was performed on “non-significant components” where individual balances represented
at least 5% of the consolidated balance and was above group materiality.
• For all other balances not included in the above, analytical review procedures and enquiries of management
were performed by the group auditor.
• Testing over the consolidation and the Annual Report and consolidated financial statements was all
performed by the group auditor.
Key audit matters
• Revenue recognition from customers
Materiality
• Overall materiality: EGP89,293,000 based on 4% of consolidated profit before tax.
• Performance materiality: EGP44,646,500
2021 Annual Report IDH 113
Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in
the audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by the auditors, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter
Revenue recognition from customers
The Group reported revenue of EGP5,224,712,000 from
health diagnostics related activities, during the year
ended 31 December 2021.
Revenue is processed involving large volumes of data
with a combination of different products, services, and
pricing mechanisms. We therefore considered this to be
a key audit matter, as there is an inherent risk around the
recognition of revenue from the services rendered by the
Group.
In addition, there was a significant increase in the
covid-19 related tests and services in comparison to prior
periods.
Consequently, a significant portion of our audit effort was
directed towards the accuracy of reported revenues.
Refer to the following notes to the consolidated financial
statements for details:
• Note 3.2: Significant accounting policies
• Note 6: Revenue
114 IDH 2021 Annual Report
How our audit addressed the key audit matter
We performed audit procedures over this significant
area, which included a combination of tests of controls
and substantive procedures as described below:
• We obtained an understanding of the various
significant revenue streams and identified the
relevant controls, IT systems and reports;
• We assessed the Group’s revenue accounting policies,
including the key judgements and estimates applied
by management in consideration of the requirements
of IFRS 15;
• We performed manual controls testing and
substantive procedures, to verify accuracy and
occurrence of revenue. This included testing the end-
to-end reconciliations from data records extracted
from source systems to the cash / credit balances
ledger.
• We used data analytic tools to assess the
reasonableness of the total value of the revenue
recorded based on pricelists and traced them back to
that charged to customers.
• We performed a reconciliation between revenue
transactions and cash collected and selected a
sample to test the occurrence, accuracy and validity
of the underlying source documentation and its
related postings, including those journals we
considered unusual in nature.
• We also assessed the adequacy of the Group’s
disclosures in the consolidated financial statements
with respect to revenue.
Based upon the procedures performed above we
concluded that sufficient and appropriate audit evidence
was obtained in relation to this risk.
Financial Statements Independent Auditors’ Report Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the group, the accounting processes and
controls, and the industry in which it operates.
IDH is Headquartered in Egypt, where the finance team manages the group operations and those of the Egyptian
subsidiaries. There are other operations, notably in Sudan and Nigeria, with the largest non-Egyptian operation
being in Jordan. All of these operate under common systems and controls, but with separate local management
and finance teams reporting into the Egyptian head office team.
Components were considered to be individual legal entities within the group. There were 14 individual
components within the group (including the Company). Those components which represented at least 10% of
the reported profit before tax were considered to be significant components. Full scope audits were performed
on these components (4 in total) which covered 98% of reported revenues and 96% of reported profits. The four
components included 3 trading companies in Egypt and the trading company in Jordan.
We considered the out of scope components and the potential for material error. Additional procedures were
performed, where the balances represented a significant proportion of the relevant consolidated balance
(deemed to be 5%) and the balance was above materiality. This resulted in four additional areas being tested
across the out of scope components.
For each individual Financial Statement Line Item (“FSLI”) we considered if sufficient coverage was obtained
from the combination of the above two areas. Sufficient coverage was deemed to be 45% for a normal risk, 55%
for an elevated risk and 65% for a significant risk. Based upon this final assessment no other areas were brought
into the scope of our audit.
For all other balances not included in the above, analytical review procedures and enquiries of management were
performed. We also considered if any other risk criteria would result in additional areas being included within
the scope of our audit. We concluded that, based upon the coverage obtained above and our understanding of
the group, that no further components or balances were included in our scope.
All initial underlying audit work on the significant components and additional areas selected on the out of scope
components, was performed by component auditors. The work was planned, directed, supervised and reviewed
by the group auditor through regular meetings (both on video calls and through visits to the local country)
throughout the audit between July 2021 and April 2022. These discussions included risk assessment, materiality,
testing approaches (i.e. the nature, extent and timing of audit testing and expected controls reliance) and the
response to fraud and completeness of related party transactions.
2021 Annual Report IDH 115
Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
How we tailored the audit scope (continued)
Working papers for the component auditors were reviewed by the group auditor for all significant components
and local management and the auditors were challenged regarding the conclusions reached and evidence
obtained. Where significant, further consultations were also performed by the Group auditor regarding
significant accounting matters or judgements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall group materiality
EGP89,293,000
How we determined it
4% of consolidated profit before tax
Rationale for benchmark applied
We believe that profit before tax is the key measure used by the shareholders
in assessing the performance of the group. It is also a widely accepted
benchmark for assessing materiality for listed groups.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was between EGP81,800,000 to EGP15,800,000.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance
materiality in determining the scope of our audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality
was 50% of overall materiality, amounting to EGP44,646,500 for the group financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements,
risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the
lower end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit
above EGP4,464,500 as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
116 IDH 2021 Annual Report
Financial Statements Independent Auditors’ Report
Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s ability to continue to adopt the going concern basis of
accounting included:
• discussions with management and those charged with governance around the performance in 2021, the budgets
for 2022 and beyond and the performance in the 2022 financial year to date. These discussions included the impact
of current events on management’s forecasts and the key drivers behind any expected changes to the current level
of performance;
• We compared the forecasted profits and cashflows to the latest approved budgets and actuals achieved in the
prior year and sought evidence for any unexpected trends. We considered the level of underperformance required
prior to their being insufficient facilities and compared this to the past levels of budget accuracy;
• We validated management’s assessment of available cash and debt facilities to bank confirmations and committed
debt facilities, including assessing managements forecasts regarding any covenants or other such requirements
attached to the debt facilities;
• We considered the plausible but severe downsides included in managements model for reasonableness based
upon our understanding of the group and known commitments such as any remaining amounts payable under
prior acquisitions;
• Testing the accuracy of the model containing management’s forecasted future financial performance and
cashflows; and
• Reviewing the disclosures made within the Annual Report for consistency with our audit work and compliance
with the respective legal and accounting requirements
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to
the group’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and
our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or any form of
assurance thereon.
2021 Annual Report IDH 117
Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
Reporting on other information (continued)
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report based on these responsibilities.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities in respect of the financial statements, the directors
are responsible for the preparation of the financial statements in accordance with the applicable framework and for
being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is
detailed below.
118 IDH 2021 Annual Report
Financial Statements Independent Auditors’ Report Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
Auditors’ responsibilities for the audit of the financial statements (continued)
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance
with laws and regulations related to compliance with employment legislation, and we considered the extent to
which non-compliance might have a material effect on the financial statements. We also considered those laws
and regulations that have a direct impact on the financial statements such as compliance with taxation laws and
legislation and the Companies (Jersey) Law 1991. We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that
the principal risks were related to overstatement of revenues or the financial performance/position of the Group
through inappropriate use of journal entries, manipulation of significant management estimates or inappropriate
recording of significant or unusual transactions/events. The group engagement team shared this risk assessment
with the component auditors so that they could include appropriate audit procedures in response to such risks
in their work. Audit procedures performed by the group engagement team and/or component auditors included:
• Discussions with management and those charged with governance regarding any known or suspected
instances of fraud, non-compliance with laws and regulations or claims being made against the Group. Where
claims were noted, management had taken legal advice in the respective country or Jersey regarding the
impact (if any) on the financial position of the Group. We have confirmed matters directly with the Group’s
legal counsel and considered the recording and disclosure of these matters, in light of the requirements of
IFRS and the respective legal requirements;
• Reviewing board minutes and performing legal confirmations to ascertain the completeness of the above
disclosures made to us;
• Auditing key management estimates and judgements, including assessment of compliance with the
accounting requirements and validity of the estimates (underlying data and accuracy of past assumptions);
• Reviewing the progress made by the Group on their risk mitigation plan. This was a plan which was created
following our appointment as auditors, to address the matters identified by KPMG relating to the Group’s
corporate governance. We have assessed the progress made and the implications in respect of our work in
relation to fraud and non-compliance with laws and regulations and concluded that no significant matters
have arisen;
• Reviewing the disclosures provided within these consolidated financial statements for appropriateness
based upon the Group’s legal and accounting requirements; and
• Testing journal entries made during the year, using a risk-based target testing approach, focusing on those
which impacted reported revenues or had unusual account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or through collusion.
2021 Annual Report IDH 119
Independent auditors’ report to the members
of Integrated Diagnostics Holdings plc (continued)
Auditors’ responsibilities for the audit of the financial statements (continued)
Our audit testing might include testing complete populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically involves selecting a limited number of items for testing,
rather than testing complete populations. We will often seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the
population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies (Jersey) Law 1991 exception reporting
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the directors on 2 July 2021 to
audit the financial statements for the year ended 31 December 2021 and subsequent financial periods. The total
period of our uninterrupted engagement as auditor is 1 year, covering the year ended 31 December 2021.
David Teager
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Recognized Auditor
East Midlands
20 April 2022
120 IDH 2021 Annual Report
Financial Statements Independent Auditors’ Report Consolidated statement of financial position
As at 31 December 2021
Assets
Non-current assets
Property, plant and equipment
Intangible assets and goodwill
Right of use assets
Financial assets at fair value through profit and loss
Total non-current assets
Current assets
Inventories
Trade and other receivables
Financial assets at amortized cost
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Share premium reserve
Capital reserves
Legal reserve
Put option reserve
Translation reserve
Retained earnings
Equity attributable to the owners of the Company
Non-controlling interests
Total equity
Non-current liabilities
Provisions
Borrowings
Other financial obligations
Non-current put option liability
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Other financial obligations
Current put option liability
Borrowings
Current tax liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2021
EGP’000
2020
EGP’000
11
12
26
14
15
16
18
17
19
19
19
19
19
19
2
21
24
26
25
9
22
26
23
24
29
1,061,808
1,658,867
462,432
10,470
3,193,577
222,612
469,727
1,458,724
891,451
3,042,514
6,236,091
1,072,500
1,027,706
(314,310)
51,641
(956,397)
150,730
1,550,976
2,582,846
211,513
2,794,359
4,088
76,345
645,196
35,037
332,149
1,092,815
777,354
115,478
921,360
21,721
513,004
2,348,917
3,441,732
6,236,091
793,013
1,659,755
354,688
9,604
2,817,060
100,115
383,480
276,625
600,130
1,360,350
4,177,410
1,072,500
1,027,706
(314,310)
49,218
(314,057)
145,617
603,317
2,269,991
156,383
2,426,374
3,408
67,617
398,525
31,790
240,333
741,673
383,623
60,517
282,267
25,416
257,540
1,009,363
1,751,036
4,177,410
The accompanying notes on pages 126-182 form an integral part of these consolidated financial statements.
These consolidated financial statements were approved and authorised for issue by the Board of Directors and
signed on their behalf on 20 April 2022 by:
Dr. Hend El Sherbini
Hussein Choucri
Chief Executive Officer
Independent Non-Executive
Director
2021 Annual Report IDH 121
Consolidated income statement
For the year ended 31 December 2021
Revenue
Cost of sales
Gross profit
Marketing and advertising expenses
Administrative expenses
Impairment loss on trade and other receivable
Other Income
Operating profit
Finance costs
Finance income
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Profit attributed to:
Owners of the Company
Non-controlling interests
Earnings per share
Basic and Diluted
Notes
6
8.1
8.2
8.3
16
8.6
8.6
8.6
9
10
2021
EGP’000
5,224,712
(2,420,647)
2,804,065
(163,163)
(370,014)
(24,656)
15,828
2,262,060
(142,917)
113,178
(29,739)
2,232,321
(739,815)
1,492,506
1,412,609
79,897
1,492,506
2020
EGP’000
2,656,264
(1,313,688)
1,342,576
(107,216)
(221,874)
(42,131)
14,191
985,546
(84,107)
67,643
(16,464)
969,082
(359,600)
609,482
594,015
15,467
609,482
2.35
0.99
The accompanying notes on pages 126-182 form an integral part of these consolidated financial statements.
122 IDH 2021 Annual Report
Financial Statements Consolidated Consolidated statement of comprehensive
income/(expenses)
For the year ended 31 December 2021
Net profit for the year
Other comprehensive income/(expenses):
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations
Other comprehensive income/(expenses) for the year, net of tax
Total comprehensive income/loss for the year
Attributable to:
Owners of the Company
Non-controlling interests
2021
EGP’000
1,492,506
2020
EGP’000
609,482
7,808
7,808
1,500,314
1,417,722
82,592
1,500,314
(20,292)
(20,292)
589,190
583,809
5,381
589,190
The accompanying notes on pages 126-182 form an integral part of these consolidated financial statements.
2021 Annual Report IDH 123
Consolidated statement of cash flows
For the year ended 31 December 2021
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortisation of intangible assets
Unrealised foreign exchange gains and losses
Finance income
Finance Expense
Gain on disposal of Property, plant and equipment
Impairment in trade and other receivables
Equity settled financial assets at fair value
ROU Asset/Lease Termination
Hyperinflation
Change in Provisions
Change in Inventories
Change in Trade and other receivables
Change in Trade and other payables
Cash generated from operating activities before income
tax payment
Taxes paid
Net cash generated from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Interest received on financial asset at amortised cost
Payments for acquisition of property, plant and equipment
Payments for acquisition of intangible assets
Decrease / (increase) in restricted cash
Payments for the purchase of financial assets at amortized cost
Proceeds for the sale of financial assets at amortized cost
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payments of lease liabilities
Payment of financial obligations
Dividends paid
Interest paid
Bank charge paid
Injection of cash by non-controlling interest
Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate
Cash and cash equivalents at the end of the year
Notes
2021
EGP’000
2020
EGP’000
2,232,321
969,082
11
26
12
8.6
8.6
8.6
16
21
28
28
17
151,826
79,617
7,201
17,912
(113,178)
118,029
(78)
24,656
(866)
1,351
6,976
681
(127,643)
(106,458)
351,803
2,644,150
(374,305)
2,269,845
6,627
111,367
(253,385)
(10,354)
-
(1,599,238)
417,139
(1,327,844)
30,450
(25,416)
(50,227)
(9,383)
(478,748)
(93,799)
(20,026)
-
(647,149)
294,852
600,130
(3,531)
891,451
118,632
60,803
5,926
12,580
(53,120)
71,527
(98)
42,131
(3,213)
(609)
(14,523)
(1,866)
(17,121)
(140,563)
53,822
1,103,390
(220,875)
882,515
5,316
51,187
(118,372)
(7,638)
247
(112,115)
57,107
(124,268)
11,727
(25,416)
(33,509)
(9,237)
(450,737)
(73,736)
-
17,372
(563,536)
194,711
408,892
(3,473)
600,130
Non-cash investing and financing activities disclosed in other notes are:
• acquisition of right-of-use assets – note 26
• Property plant and equipment – note 11
• Put option liability – note 23 and 25
The accompanying notes on pages 126-182 form an integral part of these consolidated financial statements.
124 IDH 2021 Annual Report
Financial Statements Consolidated ,
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Notes to the Consolidated Financial
Statements
For the year ended 31 December 2021
(In the notes all amounts are shown in Egyptian Pounds “EGP’000” unless otherwise stated)
Corporate information
1.
The consolidated financial statements of Integrated Diagnostics Holdings plc and its subsidiaries (collectively,
“the Group”) for the year ended 31 December 2021 were authorised for issue in accordance with a resolution of
the directors on 20 April 2022. Integrated Diagnostics Holdings plc “IDH” or “the company” has been established
according to the provisions of the Companies (Jersey) law 1991 under No. 117257. The registered office address of
the Company is 12 Castle Street, St Helier, Jersey, JE2 3RT. The Company is a dually listed entity, in both London
stock exchange (since 2015) and in the Egyptian stock exchange (in May 2021).
The principal activity of the Company is investments in all types of the healthcare field of medical diagnostics
(the key activities are pathology and Radiology related tests), either through acquisitions of related business in
different jurisdictions or through expanding the acquired investments IDH has. The key jurisdictions that the
group operates are in Egypt, Jordan, Nigeria, and Sudan
The Group’s financial year starts on 1 January and ends on 31 December each year.
126 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Group information
2.
Information about subsidiaries
The consolidated financial statements of the Group include:
Principal activities
Country of
Incorpora-
tion
% Equity
interest
Non-Controlling
interest
2021
2020
2021
2020
Medical diagnostics service
Egypt
99.30% 99.30%
0.70%
0.70%
Medical diagnostics service
Egypt
99.90% 99.90%
0.10%
0.10%
Medical diagnostics service
Egypt
55.00% 55.00%
45.00% 45.00%
Al Borg Laboratory Company
(“Al-Borg”)
Al Mokhtabar Company for Medical
Labs (“Al Mokhtabar”)
Medical Genetic Center
Al Makhbariyoun Al Arab Group
Medical diagnostics service
Jordan
60.00% 60.00%
40.00% 40.00%
Holding company of SAMA
Medical diagnostics service
Medical diagnostics service
Golden Care for Medical Services
Integrated Medical Analysis Company
(S.A.E)
SAMA Medical Laboratories
Co. (“Ultralab medical laboratory “)
AL-Mokhtabar Sudanese Egyptian Co. Medical diagnostics service
Intermediary holding
company
Intermediary holding
company
Intermediary holding
company
Medical diagnostics service
Integrated Diagnostics Holdings
Limited
Dynasty Group Holdings Limited
Eagle Eye-Echo Scan Limited
Echo-Scan*
Egypt 100.00% 100.00%
0.00%
0.00%
Egypt
99.60% 99.60%
0.40%
0.40%
Sudan
80.00% 80.00%
20.00% 20.00%
Sudan
Caymans
Island
England
and Wales
65.00% 65.00%
35.00% 35.00%
100.00% 100.00%
0.00%
0.00%
51.00% 51.00%
49.00% 49.00%
Mauritius
76.50% 76.50%
23.50% 23.50%
Nigeria 100.00% 100.00%
0.00%
0.01%
0.00%
0.01%
WAYAK Pharma
Medical services
Egypt
99.99% 99.99%
* The group consolidate “Echoscan” a subsidiary based in Nigeria despite of 37% indirect ownership for more details refer to note 4-2.
Non-Controlling interest
Non-Controlling Interest is measured at the proportionate share basis.
Financial information of subsidiaries that have material non-controlling interests is provided below:
Proportion of equity interest held by non-controlling interests:
Medical Genetic Center
Al Makhbariyoun Al Arab Group (Hashemite Kingdom of
Jordan)
SAMA Medical Laboratories Co. “ Ultra lab medical laboratory “
Al Borg Laboratory Company
Dynasty Group Holdings Limited
Eagle Eye-Echo Scan Limited
Country of
incorporation
Egypt
Jordan
Sudan
Egypt
England and
Wales
Mauritius
2021
45.0%
40.0%
20.0%
0.7%
49%
2020
45.0%
40.0%
20.0%
0.7%
49%
23.53%
23.53%
2021 Annual Report IDH 127
The summarised financial information of these subsidiaries is provided below. This information is based on
amounts before inter-company eliminations.
Medical
Genetic
Center
Al Makh-
bariyoun
Al Arab
Group
Alborg
Labora-
tory
Company
Other
subsidiar-
ies with
immate-
rial NCI
Dynasty
Group
Total
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
Summarised statement of Income for 2021:
Revenue
Profit
3,092
1,046,107
1,594,275
3,821,004
53,604
6,518,082
(2,627)
214,588
401,401
1,162,009
(8,795)
1,766,576
Other comprehensive income
-
(56)
-
10,935
(4,733)
6,146
Total comprehensive income
(2,627)
214,532
401,401 1,172,944
(13,528)
1,772,722
Profit allocated to non-controlling interest
Other comprehensive income allocated to
non-controlling interest
(1,193)
86,747
2,841
(3,261)
(5,237)
79,897
-
64
-
5,667
(3,036)
2,695
Summarised statement of financial
position as at 31 December 2021:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attributable to non-controlling
interest
682
3,975
211,430
432,149
541,782
707,847
90,509
1,629,987
598,084
2,017,197
24,356
3,051,276
(27)
(76,599)
(361,520)
(303,142)
20,743
(741,272)
(7,148)
(237,206)
(266,796)
(701,516)
28,313 (1,216,878)
(2,518)
329,774
511,550 1,720,386
163,921 2,723,113
(1,143)
133,310
3,621
(4,626)
80,351
211,513
128 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Medical
Genetic
Center
Al Makh-
bariyoun
Al Arab
Group
Alborg
Labora-
tory
Company
Other
subsidiar-
ies with
immate-
rial NCI
Dynasty
Group
Total
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
2,822
409,069
911,923
1,731,237
36,089
3,091,140
(3,412)
71,043
238,889
454,318
(26,832)
734,006
-
(2,691)
-
1,060
(15,789)
(17,420)
(3,412)
(1,549)
68,352
238,889
455,378
(42,621)
716,586
28,719
1,691
2,599
(15,992)
15,468
-
(1,088)
-
263
(9,261)
(10,086)
736
4,105
183,237
155,185
357,303
556,725
113,941
1,211,942
436,895
1,040,393
43,615
1,680,193
(27)
(64,249)
(199,597)
(216,983)
(23,621)
(504,477)
(4,705)
(104,517)
(254,625)
(462,853)
(24,121)
(850,821)
109
169,656
339,976
917,282
109,814 1,536,837
49
68,582
2,405
40,324
45,023
156,383
Summarised statement of profit or loss for
2020:
Revenue
Profit
Other comprehensive expense
Total comprehensive income
Profit allocated to non-controlling interest
Other comprehensive expense allocated to
non-controlling interest
Summarised statement of financial
position as at 31 December 2020:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attributable to non-controlling
interest
Basis of preparation
3.
Statement of compliance
Integrated Diagnostics Holdings plc “IDH” or “the company” has been established according to the provisions of
the Companies (Jersey) law 1991 under No. 117257. The Company is a dually listed entity, in both London stock
exchange and in the Egyptian stock exchange. The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting Standards as adopted by the European Union
and the Companies (Jersey) Law 1991.
2021 Annual Report IDH 129
Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis, except where adopted IFRS man-
dates that fair value accounting is required which is related to financial assets and liabilities measured at fair value.
New standards and interpretations adopted
The Group has applied the following amendments for the first time for their annual reporting period commenc-
ing 1 January 2021:
• Covid-19-Related Rent Concessions – amendments to IFRS 16,
• Interest Rate Benchmark Reform – Phase 2 – amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16.
• Annual Improvements to IFRS Standards 2018–2020, and
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – amendments to IAS 12.
The amendments listed above did not have any impact on current and prior years and and not expected to affect
future years
New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been pub-
lished that are not mandatory for 31 December 2021 reporting period and have not been early adopted by the
company. These standards, amendments or interpretations are not expected to have a material impact on the
group in the current or future reporting periods and on foreseeable future transactions.
Going concern
These consolidated financial statements have been prepared on the going concern basis. At 31 December 2021,
the Group had net assets amounting to KEGP 2,794,359. The Directors have considered a number of downside
scenarios, including the most severe but plausible scenario, for a period of 16 months from the signing of the
financial statements. They have also assessed the likelihood of any key one-off payments arising such as divi-
dends or those in respect of M&A activity. Under all of these scenarios there remains significant headroom from
a liquidity and covenant perspective. Reverse stress tests have been performed to determine the level of down-
side required to cause a liquidity or covenant issue with these scenarios not considered plausible. Therefore the
Directors believe the Group has the ability to meet its liabilities as they fall due and the use of the going concern
basis in preparing the financial statements is appropriate.
130 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements 3.1.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as
at 31 December 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
i.
Subsidiaries
Subsidiaries are all entities over which the group has control. The group controls an entity where the group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between group companies are elimi-
nated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated state-
ment of income statement of comprehensive income, statement of changes in equity and statement of financial
position respectively.
ii.
Changes in ownership interests
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised in a separate reserve within equity attributable to owners of the group.
When the group ceases to consolidate or equity account for an investment because of a loss of control, joint con-
trol or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in
carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes
of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition,
any amounts previously recognised in other comprehensive income in respect of that entity are accounted for
as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are
reclassified to profit or loss where appropriate.
2021 Annual Report IDH 131
3.2.
Significant accounting policies
The accounting policies set out below have been consistently applied to all the years presented in these Consoli-
dated financial statements.
a)
Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsid-
iary comprises the:
• fair values of the assets transferred
• liabilities incurred to the former owners of the acquired business
• equity interests issued by the group
• fair value of any asset or liability resulting from a contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The group recognises any
non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the
non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
• consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the
net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a
bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing
rate, being the rate at which a similar borrowing could be obtained from an independent financier under com-
parable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising
from such remeasurement are recognised in profit or loss.
132 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements b)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value
less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows
from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suf-
fered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
c)
Fair value measurement
The Group measures financial instruments such as non-derivative financial instruments and contingent consid-
eration assumed in a business combination at fair value at each balance sheet date.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible.
Fair value is categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measure-
ment is directly or indirectly observable.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measure-
ment is unobservable.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the
Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisa-
tion (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of
each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
The fair value less any estimated credit adjustments for financial assets and liabilities with maturity dates less
than one year is assumed to approximate their carrying value. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contracted cash flows at the current market interest rate that is
available to the Group for similar transactions.
2021 Annual Report IDH 133
d)
Revenue recognition:
Revenue represents the value of medical diagnostic services rendered in the year and is stated net of discounts.
The Group has two types of customers: Walk-in patients and patients served under contracts. For patients under
contracts, rates are agreed in advance on a per-test, client-by-client basis based on the pricelists agreed within
these contracts.
The following steps are considered for all types of patients:
1.
Identification of the Contracts: written contracts are agreed between IDH and customers. The contracts
stipulate the duration, price per test and credit period.
2. Determining performance obligations are the diagnostics tests within the pathology and radiology services.
The performance obligation is achieved when the customer receives their test results, and so are recognised
at point in time.
3. Transaction price: Services provided by the Group are distinct in the contract, as the contract stipulates the
series of tests’ names/types to be conducted along with its distinct prices.
4. Allocation of price to performance obligations: Stand-alone selling price per test is stipulated in the con-
tract. In case of discounts, it is allocated proportionally to all of tests prices in the contract.
5. Revenue is being recorded after the satisfaction of the above mentioned conditions.
The group considers whether it is the principal or the agent in each of its contractual arrangements. In line
with IFRS 15 “Revenue from contracts” in assessing the appropriate treatment of each contract, factors that are
considered include which party is controlling the service being performed for the customer and bears the inven-
tory risk. Where the group is largely controlling the service and bearing the inventory risk it is deemed to be the
principal and the full consideration received from the customer is recognised as revenue, with any amounts paid
to third parties treated as cost of sales.
Customer loyalty program:
The group operates a loyalty program where customers accumulate points for purchases made which entitle
them to a discount on future purchases. The points are valid for 24 months from the time they are awarded. The
value of points to be provided is based on the expectation of what level will be redeemed in the future before
their expiration date. This amount is netted against revenue earned and included as a contract liability and only
recognised as revenue when the points are then redeemed.
134 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements e)
Income Taxes
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
i.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of
previous years.
ii.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred
income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other
than a business combination and differences relating to investments in subsidiaries to the extent that they will
probably not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised. Deferred tax is determined using tax rates (and laws) that have
been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred
income tax asset is realized, or the deferred income tax liability is settled.
f)
i)
Foreign currency translation
Functional and presentation currency
Each of the Group’s entities is using the currency of the primary economic environment in which the entity
operates (‘the functional currency’). The Group’s consolidated financial statements are presented in Egyptian
Pounds, being the reporting currency of the main Egyptian trading subsidiaries within the Group and the pri-
mary economic environment in which the Group operates.
ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates,
are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges
and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
2021 Annual Report IDH 135
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss
on a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at
fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary
assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as
part of the fair value gain or loss, and translation differences on non-monetary assets such as equities classified
as at fair value through other comprehensive income are recognised in other comprehensive income.
g)
Property, plant and equipment
All property and equipment are stated at historical cost or fair value at acquisition, less accumulated deprecia-
tion. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent
costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the group and the cost of the
item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to the consolidated statement of income during the financial period in which they are
incurred. Land is not depreciated.
Depreciation expense is calculated using the straight-line method to allocate the cost or to their residual value
over their estimated useful lives, as follows:
Buildings
Medical, electric and information systems equipment
Leasehold improvements
Fixtures, fittings & vehicles
50 years
4-10 years
4-5 years
4-16 years
The assets useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised within ‘Other (losses)/gains – net’ in the consolidated
statement of income.
136 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements h)
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite
lives is recognised in the statement of income in the expense category that is consistent with the function of the
intangible assets. The Group amortises intangible assets with finite lives using the straight-line method over the
following periods:
• IT development and software 4-5 years
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to deter-
mine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to
finite is made on a prospective basis.
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over
interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the
fair value of the non-controlling interest in the acquire.
Goodwill is stated at cost less any accumulated impairment losses. For the purpose of impairment testing, good-
will acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of
CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the
goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal
management purposes. the impairment assessment is done on an annual basis.
Brand
Brand names acquired in a business combination are recognised at fair value at the acquisition date and have
an indefinite useful life.
2021 Annual Report IDH 137
The Group brand names are considered to have indefinite useful life as the Egyptian brands have been estab-
lished in the market for more than 40 years and the health care industry is very stable and continues to grow.
The brands are not expected to become obsolete and can expand into different countries and adjacent busi-
nesses, in addition, there is a sufficient ongoing marketing efforts to support the brands and this level of market-
ing effort is economically reasonable and maintainable for the foreseeable future.
Impairment of intangible assets
The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impair-
ment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use.
The recoverable amounts of cash generating units have been determined based on value in use. The value in use
calculation is based on a discounted cash flow (“DCF”) model.
The cash flows are derived from the budget for the next five years and do not include restructuring activities that
the Group is not yet committed to or significant future investments that will enhance the asset’s performance of
the CGU being tested.
We test for impairment at the smallest grouping of CGUs at which a material impairment could arise or at the
lowest level at which goodwill is monitored. References to testing being performed at a CGU level throughout
the rest of the financial statements is referring to the grouping of CGUs at which at the test is performed. The
grouping of CGUs are shown in note 13 where the assumptions for the impairment assessment are disclosed.
I)
Financial instruments – initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
i)
Financial assets
Classification
The group reclassifies debt investments when and only when its business model for managing those assets changes.
The group classifies its investments in debt Instruments in the following measurement categories:
• those to be measured subsequently at fair value (either through OCI or through income statement), and
• those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
For investment is equity instrument measured at fair value, gains and losses will either be recorded in income
statement or OCI.
138 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements For investments in equity instruments that are not held for trading, this will depend on whether the group has
made an irrevocable election at the time of initial recognition to account for the equity investment at fair value
through other comprehensive income (FVOCI).
Recognition and derecognition
According to the standard purchases and sales of financial assets are recognised on trade date, being the date
on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the group has transferred
substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the group’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the group
classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows rep-
resent solely payments of principal and interest, are measured at amortised cost. Interest income from
these financial assets is included in finance income using the effective interest rate method. Any gain or
loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses)
together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in
the consolidated income statement.
• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where
the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Move-
ments in the carrying amount are taken through OCI, except for the recognition of impairment losses, inter-
est income and foreign exchange gains and losses, which are recognised in profit or loss. When the financial
asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to
profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included
in finance income using the effective interest rate method. Foreign exchange gains and losses are presented
in other gains/(losses), and impairment expenses are presented as separate line item in the consolidated
income statement.
2021 Annual Report IDH 139
• FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss
on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net
within other gains/(losses) in the period in which it arises. Management has assessed the underlying nature
of the investments and designated upon investment that this should be treated as an investment held at fair
value with movements going through the income statement on the basis of the size of the investment and the
reasons for making the investment.
Equity instruments
The group subsequently measures all equity investments at fair value. Where the group’s management has
elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassifica-
tion of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from
such investments continue to be recognised in profit or loss as other income when the group’s right to receive
payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of
income as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Impairment
The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments
carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been
a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted
by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Further disclosures relating to impairment of financial assets are also provided in the following notes:
Disclosures for significant estimates and assumptions
Financial assets
Trade receivables
Note 4.2
Note 5
Note 16
The Group uses an allowance matrix to measure the ECLs of trade receivables from individual customers, which
comprise a very large number of small balances.
Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through
successive stages of delinquency to write-off. Roll rates are calculated separately for exposures in different seg-
ments based on credit risk characteristics, age of customer relationship.
Loss rates are based on actual credit loss experience over the past three years. These rates are multiplied by scalar
factors to reflect differences between economic conditions during the period over which the historical data has been
collected, current conditions and the Groups view of economic conditions over the expected lives of the receivables.
140 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements ii.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified at
FVTPL if it is classified as held for trading, financial liabilities at FVTPL are measured at fair value and net gains
and losses including any interest expenses are recognised in profit or loss.
Put options included in put option liabilities are carried at the present value of the redemption amount in accor-
dance with IAS 32 in regard to the guidance on put option on an entity’s own equity shares. The group has written
put options over the equity of its (Bio Lab and Echo Scan) subsidiaries the option on exercise is initially recognised
at the present value of the redemption amount with a corresponding charge directly to equity. The charge to equity
is recognised separately as written put options reserve and that this is in line with paragraph 23 of IFRS 10 with
the non-controlling interests, adjacent to non-controlling interests in the net assets of consolidated subsidiaries.
All of the Group’s financial liabilities are classified as financial liabilities carried at amortised cost using the
effective interest method. The Group does not use derivative financial instruments or hedge account for any
transactions. Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a reason-
able approximation of their fair values.
The Group’s financial liabilities include trade and other payables, put option liabilities, borrowings, and other
financial obligations.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of income.
iii.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement
of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
2021 Annual Report IDH 141
j)
Impairment of non-financial assets
Further disclosures relating to impairment of non-financial assets are also provided in the following notes:
Disclosures for significant assumptions and estimates
Goodwill and intangible assets
Note 4.2
Note 13
The Group assesses at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of
disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of assets. When the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast
calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project
future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in the statement of profit or loss in expense catego-
ries consistent with the function of the impaired asset.
For assets excluding goodwill and indefinite lived intangible assets, an assessment is made at each reporting
date to determine whether there is an indication that previously recognised impairment losses no longer exist
or have decreased.
If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying
amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such
reversal is recognised in the consolidated income statement.
142 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Goodwill is tested for impairment annually as at 31 October and when circumstances indicate that the carry-
ing value may be impaired. Management takes into consideration any changes that occur and have impacts
between the impairment report date of 31 October and date of end year of 31 December.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs)
to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an
impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.
Intangible assets with indefinite useful lives are tested for impairment annually as at 31 October at the CGU
level, as appropriate, and when circumstances indicate that the carrying value may be impaired.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circum-
stances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are largely independent cash inflows (CGU). Prior impair-
ments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.
k)
Inventories
Raw materials are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct
labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated
on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of
weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
l)
Cash and short-term deposits
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and
short-term deposits with an original maturities of three months or less, which are subject to an insignificant risk
of changes in value.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and
short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part
of the Group’s cash management.
2021 Annual Report IDH 143
m)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently mea-
sured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount
is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent
there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the statement of financial position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has
been extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
n)
Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or produc-
tion of a qualifying asset are capitalised during the period of time that is required to complete and prepare the
asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time
to get ready for their intended use or sale. Investment income earned on the temporary investment of specific
borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for
capitalisation. Other borrowing costs are expensed in the period in which they are incurred.
o)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or
all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised
as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is
presented in the statement of profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provi-
sion due to the passage of time is recognised as a finance cost.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation
using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to
the obligation. The increase in the provision due to passage of time is recognised as a finance cost.
144 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements p)
Pensions and other post-employment benefits
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate
entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold
sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Obligations for contributions to defined contribution pension plans are recognized as an expense in the income
statement in the periods during which services are rendered by employees.
q)
Segmentation
The Group has four operating segments based on geographical location rather than two operating segments
based on service provided.
r)
Leases as lessee (IFRS 16)
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
As a lessee
At commencement or on modification of a contract that contains a lease component, along with one or more
other lease or non-lease components, the Group accounts for each lease component separately from the non-
lease components. However, for the non-leases element of the underlying asset, the Group has elected not to
separate non-lease components and account for the lease and non-lease components as a single lease compo-
nent. The Group allocates the consideration in the contract to each lease component on the basis of its relative
stand-alone price and the aggregate stand-alone price of the non-lease components.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end
of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In
that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is deter-
mined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
2021 Annual Report IDH 145
The lease liability is initially measured at the present value of the lease payments that are not paid at the com-
mencement date, discounted using the incremental borrowing rate for the IFRS 16 calculations. This is set based
upon the interest rate attached to the groups financing and adjusted, where appropriate, for specific factors
such as asset or company risk premiums..
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable under a residual value guarantee; and
• the exercise price under a purchase option that the Group is reasonably certain to exercise,
• lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension
option, and
• penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, there is a change in the Group’s
estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assess-
ment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance
fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, to the extent that the right-of-use asset is reduced to nil, with any further adjustment
required from the remeasurement being recorded in profit or loss.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for lease of low-value assets and
short-term leases. The Group recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
4.
4.1.
Judgement and estimates
Judgement
Useful economic lives of Brands
Management have assessed that the brands within the group which have a value have an indefinite life. This is
based on their strong history and existence in the market over a large number of years, in addition to the fact
that these brands continue to grow and become more profitable. As the brands have been assigned an indefinite
life then they are not amortised and assessed for impairment on an annual basis.
146 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Control over subsidiaries
The group makes acquisitions that often see a non-controlling interest retained by the seller. The assessment of if the
group has control of these acquisitions in order to consolidate is a critical judgement in these financial statements.
The group consolidate the subsidiaries assessed for the following reasons:
1. The group has the majority on shareholder stake
2. The group has the majority on the board of subsidiaries
3. The group has full control of the operations and is involved in all decisions.
The group consolidate “Echoscan” a subsidiary based in Nigeria despite of 37% indirect ownership for the fol-
lowing reasons:
1. The group has control over all intermediate entities between the parent and Echoscan
2. The group has a technical service agreement which enables them to direct and control the operations in Nigeria.
4.2.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabili-
ties within the next financial year, are described below.
The Group based its assumptions and estimates on parameters available when the consolidated financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may
change due to market changes or circumstances arising that are beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
Impairment of intangible assets
The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impair-
ment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use.
The recoverable amounts of cash generating units have been determined based on value in use. The value in use
calculation is based on a discounted cash flow (“DCF”) model.
The cash flows are derived from the budget for the next five years and do not include restructuring activities that
the Group is not yet committed to or significant future investments that will enhance the asset’s performance
of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as
well as the expected future cash-inflows and the growth rate used for extrapolation purposes. For more detailed
assumptions refer to (note 13).
2021 Annual Report IDH 147
Customer loyalty program
The group operates a loyalty program where customers accumulate points for purchases made which entitle them
to a discount on future purchases. A contract liability is recognised for the points awarded at the time of the sale
based on the expected level of redemption. At 31 December 2021 the level of points accumulated by customers
which had not expired was equivalent to 24m EGP. The estimate made by management is how much of this amount
ought to be recognised as a liability based on future usage. The level of future redemption is estimated using his-
torical data and adjustments for likely future trends in usage. Therefore, upon initial recognition of the sale to a
customer, if management expects the group to be entitled to a breakage amount (i.e. not all points will be redeemed
and so it is highly probable that there will be no significant reversal of revenue) this breakage amount is recognised
within revenue. This assessment is reviewed periodically, to ensure that only revenue which is highly probable not
to result in a significant reversal in future periods is recognised. Management has estimated that 24m EGP out of
the total potential amount that could be redeemed is likely to be utilised by customers
Financial assets and financial liabilities
5.
The fair values of all financial assets and financial liabilities by class shown in the balance sheet are as follows:
Cash and cash equivalent
Short term deposits - treasury bills
Trade and other receivables (Note 16)
Total financial assets
Trade and other payables
Put option liability
Financial obligation
Loans and borrowings
Total other financial liabilities
Total financial instruments*
2021
EGP’000
891,451
1,458,724
447,080
2,797,255
2020
EGP’000
600,130
276,625
364,117
1,240,872
2021
2020
EGP’000
EGP’000
749,272
956,397
760,674
101,545
2,567,888
229,367
380,201
314,057
459,043
96,455
1,249,756
(8,884)
* The financial instruments exclude prepaid expenses, deferred revenue, and tax (current tax, payroll tax, withholding tax,…etc).
The fair values measurements for all the financial assets and liabilities have been categorized as Level 3, it is fair
value can’t be determined by using readily observable measures and Echo-Scan put option (note 26) has been
categorized as Level 3 as the fair value of the option is based on un-observable inputs using the best information
available in the current circumstances, including the company’s own projection and taking into account all the
market assumptions that are reasonably available.
148 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Financial instruments risk management objectives and policies
The Group’s principal financial liabilities are trade and other payables, put option liabilities, borrowings and other
financial liabilities. The Group’s principal financial assets include trade and other receivables, financial asset at
amortised cost, financial asset at fair value and cash and cash equivalent that derive directly from its operations.
The Group is exposed to market risk, credit risk and liquidity risk. The Group’s overall risk management pro-
gram focuses on the unpredictability of markets and seeks to minimize potential adverse effects on the Group’s
financial performance. The Group’s senior management oversees the management of these risks. The Board of
Directors reviews and agrees policies for managing each of these risks, which are summarised below.
The board provides written principles for overall risk management, as well as written policies covering specific
areas, such as foreign exchange risk, interest rate risk, and credit risk, use of derivative financial instruments and
non-derivative financial instruments, and investment of excess liquidity.
- Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other
price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include
borrowings and deposits.
The sensitivity analysis in the following sections relate to the position as at 31 December in 2021 and 2020 The
sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating
interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.
The analysis exclude the impact of movements in market variables on provisions; and the non-financial assets and
liabilities of foreign operations. The following assumptions have been made in calculating the sensitivity analysis:
• The sensitivity of the relevant consolidated income statement item is the effect of the assumed changes in
respective market risks. This is based on the financial assets and financial liabilities held at 31 December
2021 and 2020.
- Interest rate risk
The Group is trying to minimize its interest rate exposure, especially in Egypt region, which has seen several
interest rate cuts over the last two years. Minimising interest rate exposure has been achieved partially by enter-
ing into fixed-rate instruments.
2021 Annual Report IDH 149
Exposure to interest rate risk
The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of
the group is as follow:
Fixed-rate instruments
Financial obligation (note 26)
CIB - BANK Loans and borrowings (note 24)
Variable-rate instruments
AUB - BANK Loans and borrowings (note 24)
2021
EGP’000
760,674
13,238
2020
EGP’000
459,043
-
84,828
93,033
The Group does not account for any fixed-rate financial liabilities at FVTPL. Therefore, a change in interest rates
at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
A reasonable possible change of 100 basis points in interest rates at the reporting date would have increased
(decreased) profit or loss by the amounts EGP 980K (2020: EGP 930K). This analysis assumes that all other vari-
ables, remain constant.
- Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates.
The Group operates internationally and is exposed to foreign exchange risk arising from various currency expo-
sures, primarily with respect to the US Dollar, Sudanese Pound, the Jordanian Dinar and Nigerian Naira. Foreign
exchange risk arises from the Group’s operating activities (when revenue or expense is denominated in a foreign
currency), recognized assets and liabilities and net investments in foreign operations. However, management
aims to minimize open positions in foreign currencies to the extent that is necessary to conduct its activities.
Management has set up a policy to require group companies to manage their foreign exchange risk against their
functional currency. Foreign exchange risk arises when future commercial transactions or recognised assets or
liabilities are denominated in a currency that is not the entity’s functional currency.
150 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements At year end, major financial assets / (liabilities) denominated in foreign currencies were as follows (the amounts
presented are shown in thousands in EGP):
Assets
Liabilities
31-Dec-21
Net
exposure
Cash
and cash
equiva-
lents
Other
assets
Total
assets
Put
option
Finance
lease
Trade
payables
Total
liability
US
Euros
JOD
SDG
NGN
917,673
11,880
929,553
397
-
397
-
-
(56,744)
(140,808)
(197,552)
732,001
-
(342)
(342)
55
297,154
112,409
409,563
(921,360)
(93,999)
(171,481)
(1,186,840)
(777,277)
1,010
8,591
604
5,094
1,614
13,685
-
(35,037)
(850)
(9,104)
(1,718)
(9,413)
(2,568)
(53,554)
(954)
(39,869)
Assets
Liabilities
31-Dec-20
Net
exposure
Cash
and cash
equiva-
lents
81,956
176
76,954
2,429
8,749
US
Euros
JOD
SDG
NGN
Other
assets
Total
assets
Put
option
Finance
lease
Trade
payables
Total
liability
5,138
-
87,094
176
-
-
(67,764)
(29,120)
(96,884)
-
(1,588)
(1,588)
(9,790)
(1,412)
62,062
139,015
(282,266)
(75,365)
(70,489)
(428,121)
(289,106)
2,712
9,211
5,140
17,960
-
(6,682)
(6,376)
(31,790)
(14,825)
(14,574)
(13,058)
(61,189)
(7,918)
(43,229)
2021 Annual Report IDH 151
The following is the exchange rates applied:
US Dollars
Euros
GBP
JOD
SAR
SDG
NGN
US Dollars
Euros
GBP
JOD
SAR
SDG
NGN
Average rate for the year ended
31-Dec-21
31-Dec-20
15.64
18.46
21.51
22.03
4.17
0.06
0.04
15.71
17.85
20.25
22.13
4.21
0.29
0.04
Spot rate for the year ended
31-Dec-21
31-Dec-20
15.65
17.73
21.12
22.05
4.17
0.04
0.04
15.66
19.23
21.38
22.06
4.18
0.28
0.04
At 31 December 2021, if the Egyptian Pound had weakened/strengthened by 10% against the US Dollar with all
other variables held constant, total equity for the year would have increased/decreased by EGP (73m) (2020:
EGP (0.9m)), mainly as a result of foreign exchange gains/losses and translation reserve on the translation of US
dollar-denominated financial assets and liabilities as at the financial position of 31 December 2021.
At 31 December 2021, if the Egyptian Pound had weakened / strengthened by 10% against the Jordanian Dinar
with all other variables held constant, total equity for the year would have increased/decreased by EGP 77m
(2020: EGP 28m), mainly as a result of foreign exchange gains/losses and translation reserve on translation of
JOD -denominated financial assets and liabilities as at the financial position of 31 December 2021.
At 31 December 2021, if the Egyptian Pound had weakened / strengthened by 25% against the Sudanese Pound
with all other variables held constant, total equity for the year would have increased/decreased by by EGP
0.238 (2020: EGP (1.9m)), mainly as a result of foreign exchange gains/losses and translation reserve on the
translation of SDG - denominated financial assets and liabilities as at the financial position of 31 December 2021.
At 31 December 2021, if the Egyptian Pound had weakened / strengthened by 10% against the Nigeria Naira with
all other variables held constant, total equity for the year would have increased/decreased by EGP 3.9m (2020:
4.3m), mainly as a result of foreign exchange gains/losses and translation reserve on the translation of Naira -
denominated financial assets and liabilities as at the financial position of 31 December 2021.
152 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements -
Price risk
The group’s exposure to equity securities price risk arises from investments held by the group and classified in
the balance sheet as at fair value through profit or loss (FVPL) (note 14).
-
Credit risk
Credit risk is the risk a financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations and it arises principally from under the Groups receivables. The Group is
exposed to credit risk from its operating activities (primarily trade receivables) and financial assets at amortised
cost, such as term deposits and treasury bills.
Credit risk is managed on a group basis, except for credit risk relating to accounts receivable balances. Each
local entity is responsible for managing and analysing the credit risk for each of their new clients before stan-
dard payment and delivery terms and conditions are offered. Credit risk arises from cash and cash equivalents,
derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables and committed transactions.
The cash balance and financial assets at amortized cost within the group is held within financial institutions,
86% with a rating of B+ and 7% is rated at least BB.
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base, includ-
ing the default risk associated with the industry and country or region in which customers operate. Details of
concentration of revenue are included in the operating segment note (see Note 6).
The risk management committee has established a credit policy under which each new customer is analysed
individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are
offered and credit limit is set for each customer. The Group’s review includes external ratings, if available, finan-
cial statements, industry information and in some cases bank references. Receivable limits are established for
each customer and reviewed quarterly. Any receivable balance exceeding the set limit requires approval from the
risk management committee. In response to the COVID-19 pandemic, the risk management committee has also
been performing more frequent reviews of sales limits for customers in regions and industries that are severely
impacted. Outstanding customer receivables are regularly monitored and the average general credit terms given
to contract customers are 45 - 60 days.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition,
a large number of minor receivables are grouped into homogenous groups and assessed for impairment col-
lectively. The calculation is based on actual incurred historical data and expected future credit losses. The Group
does not hold collateral as security. Any receivables balances over 365 days are fully provided for by the group.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets
disclosed in Note 16.
2021 Annual Report IDH 153
Cash and cash equivalents
Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department
in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties
and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group’s
Board of Directors on an annual basis and may be updated throughout the year subject to approval of the
Group’s management. The limits are set to minimise the concentration of risks and therefore mitigate financial
loss through a counterparty’s potential failure to make payments.
The maximum exposure to credit risk at the reporting date is the carrying value of cash and cash equivalents
disclosed in Note 17.
- Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
finance leases and loans.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undis-
counted cashflows:
31 December 2021
Financial obligations
Put option liabilities
Borrowings
Trade and other payables
31 December 2020
Financial obligations
Put option liabilities
Borrowings
Trade and other payables
1 year or less
1 to 5 years
211,242
921,360
31,107
749,272
1,912,981
701,084
35,037
94,490
-
830,611
1 year or less
1 to 5 years
126,999
282,267
33,977
380,201
823,444
463,646
31,790
70,001
-
565,437
more than 5
years
191,229
-
-
-
Total
1,103,555
956,397
125,597
749,272
191,229
2,934,821
more than 5
years
131,605
-
11,252
-
142,857
Total
722,250
314,057
115,230
380,201
1,531,738
Cash flow forecasting is performed in the operating entities of the group and aggregated by group finance. Group
finance monitors rolling forecasts of the group’s liquidity requirements to ensure it has sufficient cash to meet
operational needs. Such forecasting takes into consideration the group’s compliance with internal financial posi-
tion ratio targets and, if applicable external regulatory or legal requirements – for example, currency restrictions.
The group’s management retain cash balances in order to allow repayment of obligations in due dates, without
taking into account any unusual effects which it cannot be predicted such as natural disasters. All suppliers and
creditors will be repaid over a period not less 30 days from the date of the invoice or the date of the commitment.
154 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Segment reporting
6.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the steering committee that makes
strategic decisions.
The preparation of the Group’s consolidated financial statements in conformity with adopted IFRSs requires
management to make judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities.
The Group has four operating segments based on geographical location rather than two operating segments
based on service provided, as the Group’s Chief Operating Decision Maker (CODM) reviews the internal manage-
ment reports and KPIs of each geography. The CODM does not separately review assets and liabilities of the
group by reportable segment.
The Group operates in four geographic areas, Egypt, Sudan, Jordan, and Nigeria. As a provider of medical diag-
nostic services, IDH’s operations in Sudan are not subject to sanctions. The revenue split, EBITDA split (being
the key profit measure reviewed by CODM), impairment loss on trade receivables and net profit and loss between
the four regions is set out below.
For the year ended
Egypt region Sudan region Jordan region Nigeria region
Revenue by geographic location
4,108,357
2,173,411
16,644
37,695
1,046,107
409,069
53,604
36,089
Total
5,224,712
2,656,264
Adjusted EBITDA by geographic location
Egypt region Sudan region Jordan region Nigeria region
2,177,160
1,041,359
(500)
6,100
331,042
129,885
(6,998)
(6,826)
Dual listing
fees
29,033
-
Total
2,529,737
1,170,518
31-Dec-21
31-Dec-20
For the year
ended
31-Dec-21
31-Dec-20
Impairment loss on trade receivables by geographic location
For the year ended
Egypt region Sudan region Jordan region Nigeria region
31-Dec-21
31-Dec-20
21,537
38,051
-
440
1,412
3,230
1,707
410
Total
24,656
42,131
For the year ended
Egypt region Sudan region Jordan region Nigeria region
Total
31-Dec-21
31-Dec-20
1,309,247
557,743
(22,533)
7,529
214,588
71,043
(8,796)
(26,833)
1,492,506
609,482
Net profit and loss by geographic location
2021 Annual Report IDH 155
The following additional analysis of performance by service has been provided as it is also reviewed by
the CODM:
Walk-in
Contract
Conventional test revenues
Covid-19-related test revenue
Radiology
Pathology
Radiology
Revenue by categories
2021
EGP’000
2,162,415
3,062,297
5,224,712
2020
EGP’000
1,119,953
1,536,311
2,656,264
Revenue Analysis Performance
2021
EGP’000
2,352,870
2,773,043
98,799
5,224,712
2020
EGP’000
1,945,327
649,000
61,937
2,656,264
Net profit by type
2021
EGP’000
1,528,132
(35,626)
1,492,506
2020
EGP’000
645,307
(35,826)
609,482
Pathology profits include profits from conventional tests and Covid 19 tests.
The operating segment profit measure reported to the CODM is EBITDA, as follows:
Profit from operations
Property, plant and equipment and Right of use depreciation
Amortization of Intangible assets
EBITDA
Nonrecurring items “Dual listing fees”
Adjusted EBITDA
2021
EGP’000
2,262,060
231,443
7,201
2,500,704
29,033
2,529,737
The non- current assets reported to CODM is in accordance with IFRS are as follows:
For the year ended
Egypt region Sudan region Jordan region Nigeria region
31-Dec-21
31-Dec-20
2,803,954
2,415,220
7,234
24,132
291,880
263,767
90,509
113,941
Non-current assets by geographic location
156 IDH 2021 Annual Report
2020
EGP’000
985,546
179,046
5,926
1,170,518
-
1,170,518
Total
3,193,577
2,817,060
Financial Statements Notes to the Consolidated Financial Statements Capital management
7.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue in order to pro-
vide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to share-
holders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The repatriation of a declared dividend from Egyptian group entities are subject to regulation by Egyptian
authorities. The outcome of an Ordinary General Meeting of Shareholders declaring a dividend is first certified
by the General Authority for Investment and Free Zones (GAFI).
Approval is subsequently transmitted to Misr for Central Clearing, Depository and Registry (MCDR) to distribute
dividends to all shareholders, regardless of their domicile, following notification of shareholders via publication
in one national newspapers.
The Group monitors capital on the basis of the net debt to equity ratio. This ratio is calculated as net debt divided
by total equity. Net debt is calculated as (short-term and long-term financial obligation plus short-term and long
term borrowings) less cash and cash equivalents and financial assets at amortised cost.
Financial obligations (note 26)
Borrowings
Less: Financial assets at amortised cost (note 18)
Less: Cash and cash equivalents (Note 17)
Net debt
Total Equity
Net debt to equity ratio
2021
EGP’000
2020
EGP’000
760,674
459,043
105,693
96,455
(1,458,724)
(276,625)
(891,451)
(600,130)
(1,483,808)
(321,257)
2,794,359
2,426,374
-53.1%
-13.2%
No changes were made in the objectives, policies or processes for managing capital during the years ended 31
December 2021 and 31 December2020.
2021 Annual Report IDH 157
Expense
8.
Included in consolidated income statement are the following:
8.1
Cost of sales
Raw material
Cost of specialized analysis at other laboratories
Wages and salaries
Property, plant and equipment, right of use depreciation and Amortisation
Other expenses
Total
8.2
Marketing and advertising expenses
Advertisement expenses
Wages and salaries
Property, plant and equipment and Amortisation
Other expenses
Total
8.3
Administrative expenses
Wages and salaries
Property, plant and equipment and Right of use depreciation
Other expenses
Total
2021
EGP’000
962,748
24,086
635,407
213,919
584,487
2020
EGP’000
466,679
20,992
390,020
162,928
273,069
2,420,647
1,313,688
2021
EGP’000
96,745
44,739
518
21,161
2020
EGP’000
61,530
30,187
340
15,158
163,163
107,215
2021
EGP’000
146,929
24,207
198,878
370,014
2020
EGP’000
104,211
21,704
95,959
221,874
158 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements
8.4
Expenses by nature
Raw material
Wages and Salaries
Property, plant and equipment, right of use depreciation and Amortisation
Advertisement expenses
Cost of specialized analysis at other laboratories
Transportation and shipping
cleaning expenses
Call Center
Hospital Contracts
consulting Fees
Utilities
License Expenses
Other expenses
Total
2021
EGP’000
962,748
827,075
238,644
96,745
24,086
101,239
60,488
33,531
39,051
112,398
28,307
19,792
409,720
2,953,824
2020
EGP’000
466,679
524,419
184,972
61,530
20,991
73,570
50,967
16,822
19,227
47,743
34,891
15,776
125,189
1,642,776
8.5
Auditors’ remuneration
The group paid or accrued the following amounts to its auditor PWC year 2021 (KPMG 2020) and its associates
in respect of the audit of the financial statements and for other services provided to the group
Fees payable to the Company’s auditor for the audit of the Group’s annual financial
statements
The audit of the Company’s subsidiaries pursuant to legislation
Tax compliance and advisory services
Assurance services
8.6
Net finance costs
Loss on hyperinflationary net monetary position
Interest expense
Net foreign exchange loss
Bank Charges
Total finance costs
Interest income
Gain on hyperinflationary net monetary position
Total finance income
Net finance cost
2021
EGP’000
21,759
6,998
-
302
29,059
2021
EGP’000
(6,976)
(98,003)
(17,912)
(20,026)
(142,917)
2021
EGP’000
113,178
-
113,178
(29,739)
2020
EGP’000
8,544
4,008
55
-
12,607
2020
EGP’000
-
(67,851)
(12,580)
(3,676)
(84,107)
2020
EGP’000
53,120
14,523
67,643
(16,464)
2021 Annual Report IDH 159
8.7
Employee numbers and costs
The average number of persons employed by the Group (including directors) during the year and the aggregate
payroll costs of these persons, analysed by category, were as follows:
2021
Administra-
tion and
market
Medical
5,364
1,024
Total
6,388
2020
Administra-
tion and
market
Medical
4,813
798
Total
5,611
2021
2020
Medical Administration
Total
Medical Administration
600,527
26,735
183,611
784,138
6,003
32,738
363,397
19,736
127,655
5,269
Total
491,052
25,005
8,145
2,054
10,199
6,888
1,473
8,361
635,407
191,668
827,075
390,021
134,397
524,418
Average number of
employees
Wages and salaries
Social security costs
Contributions to
defined contribution
plan
Total
Details of Directors’ and Key Management remuneration and share incentives are disclosed in the Remunera-
tion Report, the Remuneration Committee Report on note 27.
9.
a)
Income tax
Amounts recognised in profit or loss
Current year tax
WHT suffered
Current tax
DT on undistributed reserves
DT on reversal of temporary differences
Total Deferred tax
Tax expense recognized in profit or loss
2021
EGP’000
(579,262)
(68,737)
(647,999)
(106,767)
14,951
(91,816)
(739,815)
2020
EGP’000
(268,796)
(24,470)
(293,266)
(67,124)
790
(66,334)
(359,600)
160 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements b)
Reconciliation of effective tax rate
The company is considered to be a UK tax resident, and subject to UK taxation. Dividend income into the com-
pany is exempt from taxation when received from a wholly controlled subsidiary, and costs incurred by the
company are considered unlikely to be recoverable against future UK taxable profits and therefore form part
of our unrecognised deferred tax assets. Our judgement on tax residency has been made based on where we
hold board meetings, our listing on the London Stock Exchange and interactions with investors, and where our
company secretarial function is physically based. Our external company secretarial function manages a number
of activities of our parent and its board. During the year and due to the ongoing impact of Covid, although our
board meetings are still actively managed through London, directors have largely attended virtually. Our view is
our tax residency has not changed, however if it were deemed that the company was no longer a UK tax resident,
our assessment is this would not lead to a material change to the taxation payable by the group.
Profit before tax
Profit before tax multiplied by rate of corporation tax in Egypt of 22.5% (2020: 22.5%)
Effect of tax rate in UK of 19% (2020: Jersey 0%)
Effect of tax rates in Cayman, Jordan, Sudan and Nigeria of 0%, 21%, 30% and 30%
respectively (2020: 0%, 21%, 30% and 30%)
Tax effect of:
Recognition of previously unrecognised deferred tax
Deferred tax not recognised
Deferred tax arising on undistributed dividend
Non-deductible expenses for tax purposes - employee profit share
Non-deductible expenses for tax purposes - other
Tax expense recognised in profit or loss
2021
EGP’000
2,232,321
502,272
3,445
(6,676)
(24,435)
28,132
175,504
39,419
22,154
739,815
2020
EGP’000
969,082
218,044
(346)
9,855
-
20,454
91,593
18,223
1,777
359,600
Deferred tax
Deferred tax relates to the following:
Property, plant and equipment
Intangible assets
Undistributed reserves from group
subsidiaries*
Tax Losses
Total deferred tax assets - liability
2021
Assets
EGP’000
-
-
-
25,559
25,559
Liabilities
EGP’000
(28,925)
(105,358)
(223,425)
-
(357,708)
(332,149)
2020
Assets
EGP’000
-
-
-
1,360
1,360
-
Liabilities
EGP’000
(18,334)
(106,702)
(116,657)
-
(241,693)
(240,333)
All deferred tax amounts are expected to be recovered or settled more than twelve months after the reporting period.
2021 Annual Report IDH 161
The difference between net deferred tax balances recorded on the income statement is as follows:
2021
Property, plant and equipment
Intangible assets
Undistributed dividend from group
subsidiaries
Tax losses
2020
Property, plant and equipment
Intangible assets
Undistributed dividend from group
subsidiaries
Tax losses
Net Balance
1 January
Deferred tax
recognized in
profit or loss
WHT tax
paid
Net Balance
31 December
(18,333)
(106,702)
(116,658)
1,360
(240,333)
(10,592)
1,344
(175,504)
24,199
(160,553)
(28,925)
(105,358)
(223,425)
25,559
(332,149)
68,737
68,737
Net balance
at 1 January
Deferred tax
recognised in
profit or loss
WHT tax paid
Net balance
31 December
(17,460)
(108,365)
(49,534)
1,360
(173,999)
(873)
1,663
(91,593)
-
(90,803)
24,469
(18,333)
(106,702)
(116,658)
1,360
24,469
(240,333)
All movements in the deferred tax asset/liability in the year have been recognised in the profit or loss account.
Deferred tax liabilities and assets have been calculated based on the enacted tax rate at 31 December 2021 for
the country the liabilities and assets has arisen. The enacted tax rate in Egypt is 22.5% (2020: 22.5%), Jordan 21%
(2020: 21%), Sudan 30% (2020: 30%) and Nigeria 30% (2020: 30%).
* Undistributed reserves from group subsidiaries
The Group’s dividend policy is to distribute any excess cash after taking into consideration all business cash
requirements and potential acquisition considerations. The expectation is to distribute profits held within sub-
sidiaries of the Group in the near foreseeable future. During 2015 the Egyptian Government imposed a tax on
dividends at a rate of 5% of dividends distributed from Egyptian entities. On September 30, 2020, the Egyptian
government issued a law to increase the tax rate to 10%. As a result a deferred tax liability has been recorded for
the future tax expected to be incurred from undistributed reserves held within the Group which will be taxed
under the new legislation imposed and were as follows:
Al Mokhtabar Company for Medical Labs
Alborg Laboratory Company
Integrated Medical Analysis Company
Al Makhbariyoun Al Arab Group
162 IDH 2021 Annual Report
2021
EGP’000
85,546
38,545
75,841
23,493
223,425
2020
EGP’000
58,558
24,122
22,319
11,659
116,658
Financial Statements Notes to the Consolidated Financial Statements Unrecognized deferred tax assets
The following items make up unrecognised deferred tax assets. The local tax law does not permit deductions for
provisions against income tax until the provision becomes realised. No deferred tax asset has been recognised
on tax losses for both Echo-Scan Nigeria and Wayak Egypt due to the uncertainty of the available future taxable
profit, which the Group can use the benefits therefrom.
Impairment of trade receivables (Note 16)
Impairment of other receivables (Note 16)
Provision for legal claims (Note 21)
Tax losses*
Unrecognized deferred tax asset
2021
Gross
Amount
EGP’000
101,183
8,585
4,088
320,391
434,247
2021
Tax Effect
EGP’000
22,766
1,932
920
78,142
103,760
103,760
There is no expiry date for the Unrecognized deferred tax assets.
* The company has carried forward tax losses on which no deferred tax asset is recognised as follow:
Company
Integrated
Diagnostics
Holdings plc
Dynasty Group
Holdings Limited
Eagle Eye-Echo
Scan Limited
Echo-Scan
WAYAK Pharma
Medical Genetic
Center
Golden care
2021
Gross
Amount
EGP’000
2021
Tax Effect
EGP’000
Country
Jersey
271,689
67,922
England and
Wales
Mauritius
Nigeria
Egypt
Egypt
Egypt
13,446
3,556
-
16,269
6,421
9,010
2,555
533
-
3,660
1,445
2,027
320,391
78,142
2020
Gross
Amount
EGP’000
77,727
8,509
3,134
107,341
196,711
2020
Gross
Amount
EGP’000
-
12,371
1,222
81,450
8,503
3,795
-
107,341
2020
Tax Effect
EGP’000
17,489
1,915
705
29,736
49,845
49,845
2020
Tax Effect
EGP’000
-
2,350
183
24,435
1,913
854
-
29,736
2021 Annual Report IDH 163
Earnings per share (EPS)
10.
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during the year. There are no dilutive effects from
ordinary share and no adjustment required to weighted-average numbers of ordinary shares.
The following table reflects the income and share data used in the basic and diluted EPS computation:
Profit attributable to ordinary equity holders of the parent for basic earnings
Weighted average number of ordinary shares for basic and dilutive EPS
Basic and dilutive earnings per share
2021
EGP’000
1,412,609
600,000
2.35
2020
EGP’000
594,015
600,000
0.99
Earnings per diluted share are calculated by adjusting the weighted average number of shares by the effects
resulting from all the ordinary potential shares that causes this dilution.
The Company has no potential diluted shares as of the 31 December 2021 and 31 December 2020, therefore; the
earnings per diluted share are equivalent to basic earnings per share.
164 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements
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2021 Annual Report IDH 165
12.
Intangible assets and goodwill
Goodwill
EGP’000
Brand Name
EGP’000
Software
EGP’000
Cost
At 1 January 2020
Additions
Effect of movements in exchange rates
At 31 December 2020
Additions
Effect of movements in exchange rates
1,264,086
384,414
-
(2,278)
1,261,808
-
(843)
-
(492)
383,922
-
(13)
At 31 December 2021
1,260,965
383,909
Amortisation and impairment
At 1 January 2020
Amortisation
Effect of movements in exchange rates
At 31 December 2020
Impairment*
Amortisation
Effect of movements in exchange rates
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
1,849
-
-
1,849
341
-
2,362
4,552
-
-
-
-
47
-
325
372
1,256,413
1,259,959
383,537
383,922
59,558
7,639
(40)
67,157
10,354
(117)
77,394
45,373
5,926
(16)
51,283
-
7,201
(7)
58,477
18,917
15,874
Total
EGP’000
1,708,058
7,639
(2,810)
1,712,887
10,354
(973)
1,722,268
47,222
5,926
(16)
53,132
388
7,201
2,680
63,401
1,658,867
1,659,755
* The impairment amount in goodwill and brand name related to Ultra lab company in Sudan has full impaired in impairment study due to the severe devaluation
of SDG currency.
166 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Goodwill and intangible assets with indefinite lives (note 3.2-h)
13.
Goodwill acquired through business combinations and intangible assets with indefinite lives are allocated to the
Group’s CGUs as follows:
Medical Genetics Center
Goodwill
Al Makhbariyoun Al Arab Group (“Biolab”)
Goodwill
Brand name
Golden Care for Medical Services (“Ultralab”)
Goodwill
Brand name
Alborg Laboratory Company (“Al-Borg”)
Goodwill
Brand name
Al Mokhtabar Company for Medical Labs (“Al-Mokhtabar”)
Goodwill
Brand name
Echo-Scan
Goodwill
Balance at 31 December
2021
EGP’000
2020
EGP’000
1,755
1,755
46,145
20,153
66,298
-
-
-
497,275
142,066
639,341
699,102
221,319
920,421
12,136
12,136
1,639,950
1,755
1,755
46,174
20,165
66,339
2,703
372
3,075
497,275
142,066
639,341
699,102
221,319
920,421
12,950
12,950
1,643,881
The Group performed its annual impairment test in October 2021. Nothing occurred between the impairment
test and the balance sheet date that would require the assumptions in the models to be updated. The Group
considers the relationship between its market capitalisation and its book value, among other factors, when
reviewing for indicators of impairment.
Assumptions used in value in use calculations and sensitivity to changes in assumptions
IDH worked with Alpha Capital, management’s expert, to prepare an impairment assessments of the Group’s
CGUs. The assessment was carried out based on business plans provided by IDH.
2021 Annual Report IDH 167
These plans have been prepared based on criteria set out below:
Average annual patient growth rate
from 2022 -2026
Average annual price per test growth
rate from 2022 -2026
Annual revenue growth rate from
2022 -2026
Average gross margin from 2022
-2026
Terminal value growth rate from 1
January 2027
Discount rate
Average annual patient growth rate
from 2021 -2025
Average annual price per test growth
rate from 2021 -2025
Annual revenue growth rate from
2021 -2025
Average gross margin from 2021
-2025
Terminal value growth rate from 1
January 2026
Discount rate
Ultra Lab
Bio Lab Al-Mokhtabar
Al-Borg
Echo-Scan
Year 2021
4%
49%
56%
35%
3%
0.2%
-7%
-5%
38%
3%
-0.1%
-2%
0.4%
52%
5%
2%
3%
6%
48%
5%
26%
7%
40%
39%
3%
40.6%
14.8%
20.19%
20.4%
21.7%
Ultra Lab
Bio Lab Al-Mokhtabar
Al-Borg
Echo-Scan
Year 2020
8%
2%
11%
36.5%
1%
34.5%
6%
0%
6%
46.4%
2%
18.6%
5%
7%
12%
55%
3%
5%
7.5%
13%
49%
3%
20.3%
20.3%
25%
9.5%
54%
53%
2%
20%
Management have compared the recoverable amount of CGUs to the carrying value of CGUs. The recoverable
amount is the higher of value in use and fair value less costs of disposal. In the exercise performed and the
assumptions noted above the value in use was noted to be higher than the fair value less costs of disposal.
During year 2021, The management has conducted business plan projection with the help of a management’s
expert, (Alpha Capital), using the assumptions above to be able to calculate the net present value of the asset
in use and determine the recoverable amount. The projected cash flows from 2022- 2026 have been based on
detailed forecasts prepared by management for each CGU and a terminal value thereafter. Management have
used experience and historic trends achieved to determine the key growth rate and margin assumptions set
out above. The terminal value growth rate applied is not considered to exceed the average growth rate for the
industry and geographic locations of the CGUs.
As a sensitivity analysis, Management considered a change in the discount rates of 2% increase to reflect addi-
tional risk that could reasonably be foreseen in the marketplaces in which the Group operates. This has not
result to an impairment under any of the CGUs.
168 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Management has also considered a change in the terminal growth rate by 1% decrease to reflect additional risk,
which did not result in any impairment under any of the CGUs.
This recoverable amount is then compared to the carrying value of the asset as recorded in the books and records
of IDH plc. The WACC has been used considering the risks of each CGU. These risks include country risk, cur-
rency risk as well as the beta factor relating to the CGU and how it performs relative to the market.
The headroom between the carrying value and value in use as follows:
Company
Almokhtabar
Alborg
Bio Lab
Echo Scan
Value in use
CGU carrying
value
Headroom
EGP'000
3,373,147
2,727,434
572,968
233,476
EGP'000
1,161,565
1,007,779
152,963
44,190
2,211,582
1,719,655
420,005
189,286
14.
Financial asset at fair value through profit and loss
Equity investment*
Balance at 31 December
2021
EGP’000
10,470
10,470
2020
EGP’000
9,604
9,604
*On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT purchase Agreement with JSC Mega Lab (Buyer) to transfer and install the Laboratory Information
Management System (LIMS) for a purchase price amounted to USD 400 000, which will be in the form of 10% equity stake in JSC Mega Lab. In case the valuation of the
project is less or more than USD 4,000,000, the seller stake will be adjusted accordingly, in a way that the seller equity stake shall not fall below 5% of JSC Mega Lab.
• ownership percentage in JSC Mega Lab at the transaction date on April 8, 2019, and as of December 31,
2021, was 8.25%.
• On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed a Shareholder Agreement with JSC Mega
Lab and JSC Georgia Healthcare Group (CHG), whereas, BioLab Shall have a put option, exercisable within
12 months immediately after the expiration of five(5) year period from the signing date, which allows Bio-
Lab stake to be bought out by CHG at a price of the equity value of BioLab Shares/total stake (being USD
400,000.00) plus 15% annual IRR (including preceding 5 Financial years). After the expiration of above 12
months from the date of the put option period expiration, which allows CHG to purchase Biolab’s all shares
at a price of equity value of Biolab’s stake (having value of USD 400,000) plus higher of 20% annual IRR or
6X EV/EBITDA (of the financial year immediately preceding the call option exercise date. In case the Man-
agement Agreement or the Purchase Agreement and/or the SLA is terminated/cancelled within 6 months
period from the date of such termination/cancellation, CHG shall have a call option, which allows the CHG
to purchase Biolab’s all Shares at a price of the equity value of BioLab’s stake in JSC Mega Lab (having value of
USD 400,000.00) plus 205 annual IRR. If JCI accreditation is not obtained, immediately after the expiration of
2021 Annual Report IDH 169
the additional 12 months period of the CHG shall have a call option (the Accreditation Call option), exercis-
able within 6 months period, which allows CHG to purchase BioLab’s all Shares at a price of the equity value
of BioLab’s stake in JSC Mega Lab (having value of USD 400,00.00) plus 20% annual IRR.
15.
Inventories
Chemicals and operating supplies
2021
EGP’000
222,612
222,612
2020
EGP’000
100,115
100,115
During 2021, EGP 962,748k (2020: EGP 466,679k) was recognised as an expense for inventories, this was recog-
nised in cost of sales. The major balance of the raw material is represented in the Kits, slow-moving items of
those Kits are immaterial. It is noted that day’s inventory outstanding (based on the average of opening and
closing inventory) stands as 61 days at 31 Dec 2021.
No impairment of inventory during the year 2021.
16.
Trade and other receivables
Trade receivables – net
Prepayments
Due from related parties note (27)
Other receivables
Accrued revenue
2021
EGP’000
371,051
22,647
5,237
67,974
2,818
2020
EGP’000
325,770
19,363
2,910
34,431
1,006
469,727
383,480
170 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements As at 31 December 2021, the expected credit loss related to trade and other receivables was EGP 109,768K (2020:
EGP 86,237k). Below show the movements in the provision for impairment of trade and other receivables:
At 1 January
Charge for the year
Utilised
Unused amounts reversed
Exchange differences
At 31 December
2021
EGP’000
86,237
24,656
-
(32)
(1,093)
109,768
2020
EGP’000
44,528
42,131
(3,629)
(837)
4,044
86,237
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk
of loss (historical customer’s collection, Customers’ contracts conditions) and applying experienced credit judgement.
Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default.
Expected credit loss assessment is based on the following:
1. The customer list was divided into 9 sectors
2. Each sector was divided according to customers aging
3. Each sector was studied according to the historical events of each sector. According to the study conducted,
the expected default rate was derived from each of the aforementioned period.
4. General economic conditions
Based on the expected credit loss assessment, an additional provision was calculated for the year, yielding an
additional Expected Credit Losses (ECL) for IDH Group amounting to EGP 24 million. On quarterly basis, IDH
revises its forward-looking estimates and the general economic conditions to assess the expected credit loss,
which will be mainly based on current and expected inflation rates. The results of the quarterly assessment will
increase/decrease the percentage allocated to each period.
Balances overdue by at least one year are fully provided for.
Impairment of trade and notes receivables
The requirement for impairment of trade receivables is made through monitoring the debts aging and reviewing
customer’s credit position and their ability to make payment as they fall due. An impairment is recorded against
receivables for the irrecoverable amount estimated by management. At the year end, the provision for impair-
ment of trade receivables was EGP 101,183K (31 December 2020: EGP 77,727K)
A reasonable possible change of 100 basis points in the expected credit loss at the reporting date would have
increased (decreased) profit or loss by the amount of EGP 4,347K. This analysis assumes that all other variables
remain constant.
2021 Annual Report IDH 171
The following table provides information about the exposure to credit risk and ECLs for trade receivables from
individual customers For the nine segments at:
31-Dec-21
Current (not past due)
1–30 days past due
31–60 days past due
61–90 days past due
91–120 days past due
121–150 days past due
More than 150 -365days past due
31-Dec-20
Current (not past due)
1–30 days past due
31–60 days past due
61–90 days past due
91–120 days past due
121–150 days past due
More than 150-365 days past due
Weighted
average loss
rate
EGP’000
0.00%
1.79%
5.25%
5.89%
9.06%
18.45%
87.89%
Weighted
average loss
rate
EGP’000
0.00%
5.06%
6.18%
13.61%
18.85%
36.38%
89.98%
Gross carry-
ing amount
EGP’000
151,592
85,764
74,505
31,028
17,469
8,576
Loss
allowance
EGP’000
-
(1,532)
(3,911)
(1,828)
(1,582)
(1,582)
103,300
(90,748)
Gross carry-
ing amount
EGP’000
187,705
63,771
46,097
17,322
9,816
6,436
72,350
Loss
allowance
EGP’000
-
(3,228)
(2,847)
(2,358)
(1,850)
(2,341)
(65,103)
As at 31 December, the ageing analysis of trade receivables is as follows:
2021
2020
Total
371,051
325,770
< 30 days
30-60 days
61-90 days
> 90 days
235,824
248,248
70,594
43,250
29,200
14,964
35,433
19,308
172 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements 17.
Cash and cash equivalents
Cash at banks and on hand
Treasury bills (less than 90 days)
Term deposits (less than 90 days)
2021
261,430
150,431
479,590
891,451
2020
253,225
184,525
162,380
600,130
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits and trea-
sury bills are made for varying periods of between one day and three months, depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit weighted average rate 7.75%
(2020: 7%) and Treasury bills 12.44% (2020: 10%) per annum.
18.
Financial assets at amortised cost
Term deposits (more than 90 days)
Treasury bills (more than 90 days)
2021
EGP’000
148,136
1,310,588
1,458,724
2020
EGP’000
-
276,625
276,625
The maturity date of the fixed term deposit and treasury bills is between 3–12 months and the effective interest
rate on the treasury bills is 12.44% (2020: 10%) and deposits is 7.75%.
Share capital and reserves
19.
The Company’s ordinary share capital is $150,000,000 equivalent to EGP 1,072,500,000.
All shares are authorised and fully paid and have a par value $0.25.
In issue at beginning of the year
In issue at the end of the year
Ordinary share capital
Name
Hena Holdings Limited
Actis IDH B V
Free floating
Ordinary
shares
31-Dec-21
600,000,000
Ordinary
shares
31-Dec-20
150,000,000
600,000,000
600,000,000*
Number of
shares
% of
contribution
Par value
USD
152,982,356
126,000,000
321,017,644
600,000,000
25.50%
21.00%
53.50%
100%
38,245,589
31,500,000
80,254,411
150,000,000
* At the Extraordinary General Meeting of the Company held on 23 December 2020, it was resolved that the Company’s existing issued ordinary share capital
of 150,000,000 ordinary shares of US$1.00 each (the “Existing Ordinary Shares”) will be sub-divided into 600,000,000 ordinary shares of US$0.25 each (the
“New Ordinary Shares”) (the “Sub-Division”). The Sub-Division was successfully completed with effect from 24 December 2020.
2021 Annual Report IDH 173
Capital reserve
The capital reserve was created when the Group’s previous parent company, Integrated Diagnostics Holdings
LLC – IDH (Caymans) arranged its own acquisition by Integrated Diagnostics Holdings PLC, a new legal parent.
The balances arising represent the difference between the value of the equity structure of the previous and new
parent companies.
Legal reserves
Legal reserve was formed based on the legal requirements of the Egyptian law governing the Egyptian subsidiar-
ies. According to the Egyptian subsidiaries’ article of association 5% (at least) of the annual net profit is set aside
to from a legal reserve. The transfer to legal reserve ceases once this reserve reaches 50% of the entity’s issued
capital. If the reserve falls below the defined level, then the entity is required to resume forming it by setting aside
5% of the annual net profits until it reaches 50% of the issued share capital.
Put option reserve
Through acquisitions made within the Group, put option arrangements have been entered into to purchase
the remaining equity interests in subsidiaries from the vendors at a subsequent date. At acquisition date an
initial put option liability is recognised and a corresponding entry recognised within the put option reserve.
After initial recognition the accounting policy for put options is to recognise all changes in the carrying value of
the liability within put option reserve. When the put option is exercised by the vendors the amount recognised
within the reserve will be reversed.
Translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign subsidiaries.
20.
Distributions made and proposed
Cash dividends on ordinary shares declared and paid:
US$ 0.0485 per qualifying ordinary share (2020: US$ 0.19)
After the balance sheet date, the following dividends were proposed by the direc-
tors (the dividends have not been provided for):
EGP 2.17 per share (2020: $0.049) per share
2021
EGP’000
455,182
455,182
1,300,000
1,300,000
2020
EGP’000
441,855
441,855
455,831
455,831
174 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements 21.
Provisions
At 1 January 2021
Provision made during the year
Provision used during the year
Provision reversed during the year
At 31 December 2021
Current
Non- Current
At 1 January 2020
Provision made during the year
Provision used during the year
Provision reversed during the year
At 31 December 2020
Non- Current
Legal claims provision
Egyptian
Government
Training
Fund for
employees
Provision for
legal claims
EGP’000
EGP’000
Total
EGP’000
3,408
2,146
(993)
(473)
4,088
3,217
2,146
(993)
(282)
4,088
4,088
4,088
Provision for
legal claims
EGP’000
5,082
3,194
(5,040)
(19)
3,217
3,217
Total
EGP’000
5,273
3,194
(5,040)
(19)
3,408
3,408
191
-
-
(191)
-
-
Egyptian
Government
Training
Fund for
employees
EGP’000
191
-
-
-
191
191
The amount comprises the gross provision in respect of legal claims brought against the Group. Management’s
opinion, after taking appropriate legal advice, is that the outcome of these legal claims will not give rise to any
significant loss beyond the amounts provided as at 31 December 2021.
In addition to the provisions for legal claims recognised, there is also an Arbitration Claim that has been made
and includes the Company as a respondent. No provision is recognised for this claim, as the Group believes it will
succeed in this matter as demonstrated by previous claims by the claimant that have been successfully defended.
2021 Annual Report IDH 175
22.
Trade and other payables
Trade payables
Accrued expenses
Due to related parties note (27)
Other payables
Deferred revenue
Accrued finance cost
23.
Current put option liability
Put option – Biolab Jordan
2021
EGP’000
311,321
325,677
13,234
99,040
24,603
3,479
777,354
2021
EGP’000
921,360
921,360
2020
EGP’000
177,603
151,201
439
50,959
-
3,421
383,623
2020
EGP’000
282,267
282,267
The accounting policy for put options after initial recognition is to recognise all changes in the carrying value of
the put liability within equity.
Through the historic acquisitions of Makhbariyoun Al Arab the Group entered into separate put option arrange-
ments to purchase the remaining equity interests from the vendors at a subsequent date. At acquisition a put
option liability has been recognised for the net present value for the exercise price of the option.
The options is calculated at seven times EBITDA of the last 12 months – Net Debt and exercisable in whole from
the fifth anniversary of completion of the original purchase agreement, which fell due in June 2016. The vendor
has not exercised this right at 31 December 2021. It is important to note that the put option liability is treated
as current as it could be exercised at any time by the NCI. However, based on discussions and ongoing business
relationship, there is no expectation that this will happen in next 18 months. The option has no expiry date.
Loan and borrowings
24.
The terms and conditions of outstanding loans are as follows:
Currency
Nominal interest rate
Maturity
31 Dec 21
31 Dec 20
A) CIB _ BANK
A) AUB _ BANK
EGP
EGP
Secured rate 9.5%
5 April 2022
CBE corridor rate*+1% 26 April 2026
Amount held as:
Current liability
Non- current
liability
176 IDH 2021 Annual Report
13,238
84,828
98,066
21,721
76,345
98,066
38,654
54,379
93,033
25,416
67,617
93,033
Financial Statements Notes to the Consolidated Financial Statements
A)
In April 2017 AL-Mokhtabar for medical lab, one of IDH subsidiaries, was granted a medium term loan amount-
ing to EGP 110m from Commercial International Bank “CIB Egypt” to finance the purchase of the new administrative
building for the group. Starting May 2021, the loan has been secured through restricted time deposits.
B)
In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a medium term loan amounting to EGP 130.5m
from Ahli United Bank “AUB Egypt” to finance the investment cost related to the expansion into the radiology
segment. As at 31 December 2021 only EGP 84.8m had been drawn down from the total facility available. The loan
contains the following financial covenants which if breached will mean the loan is repayable on demand:
1. The financial leverage shall not exceed 0.7 throughout the period of the loan
“Financial leverage”: total bank debt divided by net equity
2. The debt service ratios (DSR) shall not be less than 1.35 starting 2020
“Debt service ratio”: cash operating profit after tax plus depreciation for the financial year less annual maintenance
on machinery and equipment adding cash balance (cash and cash equivalent ) divided by total financial payments.
“Cash operating profit”: Operating profit after tax, interest expense, depreciation and amortization, is calculated as
follows: Net income after tax and unusual items adding Interest expense, Depreciation, Amortisation and provisions
excluding tax related provisions less interest income and Investment income and gains from extraordinary items
“Financial payments”: current portion of long-term debt including interest expense and fees and dividends distributions.
3. The current ratios shall not be less than 1.
“Current ratios”: Current assets divided current liabilities.
*As at 31 December 2021 corridor rate 9.25% (2020: 9.25%)
AL- Borg company didn’t breach any covenants for MTL agreements.
The group signed two agreements of debt facilities. The debt package includes the US$ 45.0 million facilities
secured an 8-year period starting May 2021 from International Finance Corporation (IFC), and an additional
US$ 15.0 million IFC syndicated facility from Mashreq Bank in Dec 2021 debt has not been withdrawn by IDH.
25.
Non-current put option liability
Put option liability*
2021
EGP’000
35,037
35,037
2020
EGP’000
31,790
31,790
*According to definitive agreements signed on 15 January 2018 between Dynasty Group Holdings Limited and International Finance Corporation (IFC) related
to the Eagle Eye-Echo Scan Limited transaction, IFC has the option to put it is shares to Dynasty Group Holdings Limited in year 2024. The put option price will
be calculated on the basis of the fair market value determined by an independent valuer.
2021 Annual Report IDH 177
According to the International Private Equity and Venture Capital Valuation Guidelines, there are multiple
ways to calculate the put option including Discounted Cash Flow, Multiples, Net assets. Multiple valuation was
applied and EGP 35 million was calculated as the valuation as at 31 December 2021 (2020; EGP 32m). In line
with IAS 32 the entity has recognised a liability for the present value of the exercise price of the option price. The
ramp-up of Echo-Scan operations driven by the new radiology equipment installed during Q4 2019 in Lagos and
the following years yielding a Compounded Annual Growth Rate of 40% from 2022 to 2025.
Financial obligations
26.
The Group leases property and equipment. Property leases include branches, warehouse, parking and adminis-
tration buildings. The leases typically run for average period from 5-10 years, with an option to renew the lease
after that date. Lease payments are renegotiated with renovation after the end of the lease term to reflect market
rentals. For certain leases, the Group is restricted from entering into any sub-lease arrangements. The property
leases were entered into as combined leases of land and buildings.
Adding to remaining agreement signed in 2015, to service the Group’s state-of-the-art Mega Lab. The agreement peri-
ods are 5 and 8 years which is deemed to reflect the useful life of the equipment. If the minimum annual commitment
payments are met over the agreement period ownership of the equipment supplied will legally transfer to the IDH. The
finance asset and liability has been recognised at an amount equal to the fair value of the underlying equipment. This
is based on the current cost price of the equipment supplied provided by the suppliers of the agreement. The averaged
implicit interest rate of finance obligation has been estimated to be 9.85%. The equipment is being depreciated based
on units of production method as this most closely reflects the consumption of the benefits from the equipment.
Information about the agreements for which the Group is lessee is presented below.
a)
Right-of-use assets
Balance at 1 January
Addition for the year
Depreciation charge for the year
Terminated Contracts
Exchange differences
Balance at 31 December
Buildings
Buildings
2021
EGP’000
354,688
198,402
(79,617)
(7,643)
(3,398)
462,432
2020
EGP’000
264,763
152,030
(60,803)
(1,302)
-
354,688
b)
Other Financial obligations
Future minimum financial obligation payments under leases and sales purchase contracts, together with the
present value of the net minimum lease payments are, as follows:
*Financial liability– laboratory equipment
*Lease liabilities building
*The financial obligation liabilities for the laboratory equipment and building are payable as follows:
178 IDH 2021 Annual Report
2021
EGP’000
228,870
531,804
760,674
2020
EGP’000
69,123
389,920
459,043
Financial Statements Notes to the Consolidated Financial Statements At 31 December 2021
Less than one year
Between one and five years
More than 5 years
At 31 December 2020
Less than one year
Between one and five years
More than 5 years
Minimum
payments
2021
EGP’000
211,242
701,084
191,229
1,103,555
Minimum
payments
2020
EGP’000
126,999
463,646
131,605
722,250
Interest
2021
EGP’000
95,764
227,314
19,803
342,881
Interest
2020
EGP’000
66,481
176,312
20,415
263,208
Principal
2021
EGP’000
115,478
473,770
171,426
760,674
Principal
2020
EGP’000
60,518
287,334
111,190
459,042
c)
Amounts other financial obligations recognised in consolidated income statement
Interest on lease liabilities
Expenses related to short-term lease
2021
EGP’000
68,352
18,875
2020
EGP’000
58,864
13,771
Related party transactions disclosures
27.
The significant transactions with related parties, their nature volumes and balance during the period 31 Decem-
ber 2021 and 2020 are as follows:
2021
Related Party
Nature of
transaction
Nature of
relationship
ALborg Scan (S.A.E)*
Expenses paid on behalf Affiliate
International Fertility (IVF)**
Expenses paid on behalf Affiliate
H.C Security
Provide service
Life Health Care
Provide service
Dr. Amid Abd Elnour
Put option liability
International Finance corporation (IFC) Put option liability
International Finance corporation (IFC) Current account
Integrated Treatment for Kidney
Diseases (S.A.E)
Rental income
Medical Test analysis
Total
Entity owned by
Company’s board
member
Entity owned by
Company’s CEO
Bio. Lab C.E.O and
shareholder
Eagle Eye – Echo Scan
limited shareholder
Eagle Eye – Echo Scan
limited shareholder
Entity owned by
Company’s CEO
Transaction
amount of
the year
Amount due
from / (to)
EGP’000
EGP’000
1
-
(243)
351
1,767
(319)
(11,232)
2,094
(639,093)
(921,360)
(3,247)
(35,037)
(12,915)
(12,915)
(298)
530
1,025
(964,394)
2021 Annual Report IDH 179
2020
Related Party
Nature of
transaction
Nature of
relationship
ALborg Scan (S.A.E)*
Expenses paid on behalf Affiliate
International Fertility (IVF)**
Expenses paid on behalf Affiliate
H.C Security
Provide service
Life Health Care
Provide service
Dr. Amid Abd Elnour
Put option liability
International Finance corporation (IFC) Put option liability
Integrated Treatment for Kidney
Diseases (S.A.E)
Rental income
Medical Test analysis
Total
Entity owned by
Company’s board
member
Entity owned by
Company’s CEO
Bio. Lab C.E.O and
shareholder
Eagle Eye – Echo Scan
limited shareholder
Entity owned by
Company’s CEO
Transaction
amount of
the year
Amount due
from / (to)
EGP’000
EGP’000
6
(3,449)
(412)
350
1,767
(76)
(11,058)
(363)
(83,126)
(282,267)
(1,757)
(31,790)
-
588
793
(311,586)
* ALborg Scan is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
** International Fertility (IVF) is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
Chief Executive Officer Dr. Hend El-Sherbini and her mother, Dr. Moamena Kamel jointly hold the 25.5% of
shares held by Hena Holdings Limited, Hena Holdings Limited is a related party and received dividends of USD
7,419,644 in year 2021 and USD 7,151,925 received in year 2020.
Terms and conditions of transactions with related parties
The transactions with the related parties are made on terms equivalent to those that prevail in transactions.
Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have
been no guarantees provided or received for any related party receivables or payables. For the year ended 31
December 2021, the Group has not recorded any impairment of receivables relating to amounts owed by related
parties (2020: nil). This assessment is undertaken each financial year through examining the financial position
of the related party and the market in which the related party operates.
IDH opts to pay up to 1% of the net after-tax profit of the subsidiaries Al Borg and Al Mokhtabar to the Moamena
Kamel Foundation for Training and Skill Development. Established in 2006 by Dr. Moamena Kamel, a Professor of
Pathology at Cairo University and founder of IDH subsidiary Al-Mokhtabar Labs and mother to the CEO Dr. Hend
El Sherbini. The Foundation allocates this sum to organisations and groups in need of assistance. The foundation
deploys an integrated program and vision for the communities it helps that include economic, social, and health-
care development initiatives. In 2021 EGP 9,578 K (2020: EGP 6,510K) was paid to the foundation by the IDH Group.
180 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements Compensation of key management personnel of the Group
Key management people can be defined as the people who have the authority and responsibility for planning,
directing, and controlling some of the activities of the Company, directly or indirectly
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period
related to key management personnel.
Short-term employee benefits
Total compensation paid to key management personnel
2021
EGP’000
55,082
55,082
2020
EGP’000
51,556
51,556
28. Reconciliation of movements of liabilities to cash flows arising from
financing activities
EGP’000
Balance at 1 January 2021
Proceeds from loans and borrowings
Repayment of borrowings
Payment of liabilities
Interest paid
Total changes from financing cash flows
New agreements signed in the period
Terminated contracts during the year
Interest expense
Total liability-related other changes
Balance at 31 December 2021
EGP’000
Balance at 1 January 2020
Proceeds from loans and borrowings
Repayment of borrowings
Payment of liabilities
Interest paid
Total changes from financing cash flows
New agreements signed in the period
Terminated contracts during the year
Interest expense
Total Liability – related other changes
Balance as at 31 December 2020
Other
loans and
borrowings
96,455
30,450
(25,416)
-
(25,446)
(20,412)
-
-
29,651
29,651
105,694
Other
loans and
borrowings
111,750
11,727
(25,416)
-
(14,160)
(27,849)
-
-
12,554
12,554
96,455
Other
financial
obligation
459,043
-
-
(59,610)
(68,354)
(127,964)
367,533
(6,292)
68,353
429,594
760,673
Other
financial
obligation
338,073
-
-
(42,746)
(59,576)
(102,321)
166,339
(1,912)
58,864
223,291
459,043
2021 Annual Report IDH 181
29.
Current tax liabilities
Debit withholding Tax (Deduct by customers from sales invoices)
Income Tax
Credit withholding Tax (Deduct from vendors invoices)
Other
2021
EGP’000
(34,166)
521,929
17,922
7,319
513,004
2020
EGP’000
(37,282)
281,777
9,672
3,373
257,540
Post Balance Sheet Events
30.
On the 20th of December 2021, Integrated Diagnostics Holdings Plc announced the signing of a sale and purchase
agreement (the “SPA”) to acquire 50% shareholding in Base Consultancy FZ LLC, the holding company of Islamabad
Diagnostic Centre Limited (“IDC”), from the Evercare Group, an emerging markets healthcare delivery platform man-
aged by TPG for a total consideration of US$ 72.35 million. The transaction, which is subject to the satisfaction of a
number of key conditions precedent including, but not limited to, the receipt of regulatory approval from the Competi-
tion Commission of Pakistan, will see IDH acquire a stake in one of Pakistan’s leading diagnostic providers and partner
with the founder Dr Rizwan Uppal. IDC will be fully consolidated on IDH’s accounts following the completion of the
transaction and transfer of funds to the Evercare Group. The transaction is expected to close in the first half of 2022.
IDH plans to finance the transaction through a combination of existing cash and committed debt facilities. The debt
package includes the US$ 45.0 million facility secured an 8-year period starting May 2021 from International Finance
Corporation (IFC), and an additional US$ 15.0 million IFC syndicated facility from Mashreq Bank.
On 21 March 2022, the Central Bank raised policy rates by 100bps and allowed the Egyptian Pound to devalue by
more than 17% against the US Dollar which is expected to impose Inflationary pressures in the short to medium
term. Inflation rates are expected to average around 13% to 15% during 2022, up from 5.9% in December 2021.
Moreover, GDP growth in FY22/23 was revised downward to 5.5% from 5.7% by the Egyptian government in
March 2022. The Group is closely monitoring the situation and the impact that may arise.
Contingent liabilities
31.
As required by article 134 of the labour law on Vocational Guidance and Training issued by the Egyptian Government
in 2003, Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs are required to conform to the
requirements set out by that law to provide 1% of net profits each year into a training fund. Integrated Diagnostics
Holdings plc have taken legal advice and considered market practice in Egypt relating to this and more specifically
whether the vocational training courses undertaken by Al Borg Laboratory Company and Al Mokhtabar Company
for Medical Labs suggest that obligations have been satisfied through training programmes undertaken in-house
by those entities. Since the issue of the law on Vocational Guidance and Training, Al Borg Laboratory Company and
Al Mokhtabar Company for Medical Labs have not been requested by the government to pay or have voluntarily
paid any amounts into the external training fund. Should a claim be brought against Al Borg Laboratory Company
and Al Mokhtabar Company for Medical Labs, an amount of between EGP 24m to EGP 54m could become payable,
however this is not considered probable.
182 IDH 2021 Annual Report
Financial Statements Notes to the Consolidated Financial Statements IDHCORP.COM