2022
Annual Report
A Year of Sustainable
Growth and Expansion
Table of
Contents
04
Strategic Report
IDH at a Glance
Chairman’s Message
06
10 Highlights of 2022
14
18 Chief Executive’s Report
24 Our Markets
42 Our Brands
46 Our Services
50 Competitive Strengths & Growth Strategy
54
Principal Risks, Uncertainties, & Their Mitigation
62
Performance
66
80
86
Financial & Operational Review
TCFD Report
Corporate Social Responsibility
90
Corporate Governance
Board of Directors
Corporate Governance Report
92
96
104 Audit Committee Report
108 Remuneration Committee Report
110 Directors’ Report
116
Financial Statements
118
Independent Auditors’ Report
127 Consolidated Financial Statements
132 Notes to the Consolidated Financial Statements
2022
Annual Report
Strategic
Report
3.6 EGP/BN
Revenue
in 2022
18%
Conventional
revenue growth in
2022
527 EGP/MN
Net profit
in 2022
4 IDH 2022 Annual Report
01 2022 Annual Report IDH 5
Strategic Report
IDH at a Glance
Integrated Diagnostics Holdings (“IDH”, the “Group”, or
In parallel with its continuous investment in organic
the “Company”) is a leading consumer clinical laboratory,
growth, the Group actively pursues strategic acquisition
and one of the largest diagnostic players, in the Middle
opportunities in new markets where IDH can leverage its
East and Africa (MEA) with operations in Egypt, Jordan,
business model to capitalise on healthcare and consumer
Nigeria, and Sudan. With a track record spanning over
trends in line with those witnessed across its current
40 years, IDH is a trusted and fully integrated provider of
geographies. IDH has been a Jersey-registered entity with
pathology and radiology services with prestigious inter-
a Standard Listing on the Main Market of the London
nationally recognised accreditations. Today, the Group
Stock Exchange (LSE) since May 2015. The Company’s
offers patients a broad portfolio of over 2,000 high-quality
EGP-dominated and dual-listed ordinary shares made
diagnostic tests, in addition to an encompassing radiol-
their debut on the Egyptian Exchange (EGX) in May 2021.
ogy offering ranging from MRI to PET-CT scans. As at 31
December 2022, IDH operated a network of 552 branches
across its geographic footprint, utilizing a Hub, Spoke, and
Spike business model to fuel its continued expansion.
+40
7
552
years track record at the
subsidiary levels
key brands with strong awareness
in underserved markets
operational branches as at
31 December 2022
3.6EGP/BN
in revenue in 2022,
-31% vs 2021
EGX
LSE
listed since May 2021
listed since May 2015
Our Brands
IDH’s core brands include Al Borg, Al Borg Scan, Al Mokhtabar, and Wayak in Egypt; Biolab in Jordan; Ultralab and
Al Mokhtabar Sudan in Sudan; and Echo-Lab in Nigeria.
6 IDH 2022 Annual Report
Our Markets
With a geographic footprint spanning the Middle East and Africa, and
including Egypt, Jordan, Nigeria, and Sudan, IDH operates in gener-
ally underpenetrated markets. The nature of these underserved mar-
kets’ diagnostic service industries provides significant drivers for the
Group’s future growth. In line with the Group’s growth ambitions, IDH
announced the launch of a new Saudi Arabian venture in October 2022.
The new subsidiary, which was launched in partnership with Fawaz
Alhokair Group, will begin operations in 2023.
Egypt
Jordan
Nigeria
Sudan
4
countries across the
Middle East and Africa
1
greenfield expansion in
new market (Saudi Arabia)
in 2023
Our Services
Through IDH’s brands, the Group offers over 2,000 inter-
nationally accredited pathology tests ranging from basic
blood glucose tests for diabetes to advanced molecular
testing for genetic disorders. IDH also offers a full suite
of radiology services through Al Borg Scan in Egypt
and Echo-Lab in Nigeria. Finally, IDH also offers highly
tailored healthcare management services through its
Egypt-based subsidiary, Wayak.
01
Immunology
02
Microbiology
03
Haematology
04
Endocrinology
05
Clinical Chemistry
06
Molecular Biology
07
Cytogenetics
08
Histopathology
09
Genetics
2022 Annual Report IDH 7
Strategic Report | IDH at a Glance
Radiology Offering
IDH offers a vast array of radiology services through Al
Borg Scan in Egypt and Echo-Lab in Nigeria. Al Borg
Scan is also the sole radiology provider in Africa boast-
ing the prestigious American College of Radiology
(ACR) accreditation, a testament to the high-quality
services delivered by the venture. IDH’s Scan services
include PET-CT, CT, MRI, Mammography, Ultra-
sound, X-Ray, EMG, EEG, ECG, and Gamma Camera.
Today, Al Borg Scan in Egypt operates six centres,
having served more than 230 thousand patients since
its establishment.
01
Diagnostic Radiology
02
Interventional Radiology
03
Nuclear Radiology
PET-CT
CT
Mammography
Ultrasound
EMG
EEG
MRI
X-Ray
ECG
the Group’s key relationships with suppliers facilitate
rapid expansion opportunities without the need to
purchase expensive medical diagnostic equipment.
Hub, Spoke, and Spike
The Group’s CAP-accredited Mega Lab operates
as the “Hub” and is equipped with state-of-the-art
equipment. This provides the necessary tools and the
Our Clients
IDH serves two principal types of clients: contract
(corporate) and walk-in (individuals). The Group also
offers house call services to each of these segments,
and it provides a lab-to-lab service for the corporate
segment.
IDH’s walk-in clients, also referred to as “self-payers”,
represented 42% of the Group’s 2022 revenues, and they
include individuals who pay out of pocket for diagnostic
tests and other services.
IDH’s contract clients, who accounted for the remaining
58% of the Group’s revenues in 2022, are comprised of
institutions, such as unions, syndicates, private and
public insurance companies, banks, and corporations
that enter into renewable one-year contracts at agreed
rates per-test and on a per-client basis.
An Asset-Light Business Model
Utilizing an asset-light business model for its labo-
ratory offering, IDH can grow in a capital-efficient
manner. The model is comprised of two strategic com-
ponents; first, IDH’s easily scalable “Hub, Spoke, and
Spike” network of branch laboratories, and second,
8 IDH 2022 Annual Report
capacity to process all tests and services for samples
collected by the B-Labs (Spokes) and C-Labs (Spikes).
The Group utilises its B-Labs to process routine tests
and leverages their capacity to manage traffic to
IDH’s Mega Lab when needed. In parallel, C-Labs
or Spikes serve primarily as collection centres and
significantly increase the Group’s geographic reach
to clients nationwide. IDH has also recently launched
a full-fledged radiology venture to complement its
traditional lab and pathology offering. The new radi-
ology offering not only diversifies the Group’s revenue
streams but will further fuel growth at its conventional
pathology segment. This “plug and play” business
model forms the operational backbone of the Group
and provides considerable leverage in extracting
superior revenue and cost synergies.
Supplier Relationships
IDH’s unique business model solidifies the Company’s
position in its relationship with its suppliers. As one of
the MENA region’s largest providers of diagnostics, IDH
has built strong partnerships that enable the negotiation
of favourable contract terms with medical equipment
and test kit suppliers. The Group’s contracts with its
key suppliers of medical testing kits also include the
IDH’s contract stipulations
provision of the equipment to analyse the laboratory
test results. These agreements have minimum annual
commitment payments to cover the medical diagnostic
equipment, kits, and chemicals to be used for testing,
as well as ongoing maintenance and support services.
typically
Additionally,
include tenors ranging between five and seven years,
with equipment substitution following the renewal of
contracts. These extended tenors effectively shield IDH
from unexpected temporary price fluctuations, provid-
ing a notable advantage considering increasing inflation
rates during 2022. Due to IDH’s scale and market reputa-
tion, the Group works principally with top international
suppliers, including Siemens, Roche, Abbott Laborato-
ries, Sysmex, General Electric, and Philips.
As a direct result of the Group’s sheer business size
and consistently growing test volumes, IDH comfort-
ably covers minimum annual payments. Moreover,
economies of scale achieved through the Company’s
significant operating volumes increases its pricing
power, reduces costs per test, and avoids the initial
capital outlay typically required for the purchase of
medical diagnostic equipment.
Integrated Diagnostics Holdings
Suppliers
2022 Annual Report IDH 9
Strategic Report
2022 Highlights
Financial Highlights
Conventional1 Revenues
posted robust 18% year-on-year growth on the back of a
continued normalisation of patient traffic post-Covid-19.
Covid-19-related2
Revenues
recorded EGP 702 mil-
lion in 2022, down 75%
year-on-year.
Covid-19-related Net Sales3
declined sharply, contracting by 75% year-
on-year to EGP 639 million in 2022.
Consolidated Revenue
declined 31% year-on-year to record EGP
3,605 million in 2022.
Consolidated Net Sales
recorded EGP 3,542 million
during 2022, a 30% year-on-year
contraction wholly reflecting the
fall in Covid-19-related net sales,
which had boosted consolidated
results in 2021.
Gross Profit
recorded EGP 1,462 million for 2022, down 48%
year-on-year from the EGP 2,804 million recorded
in 2021. Gross profit margin on revenue and net
sales recorded 41% in 2022 versus a margin of 54%
on revenue and 56% on net sales in 2021. Lower
gross profitability for the year principally reflects a
normalisation of margins following the year-on-year
decline in Covid-19-related business.
1 Conventional (non-Covid-19) tests include IDH’s full service offering excluding the Covid-19 related tests outlined below.
2
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.
5
3 A reconciliation between revenues (compliant with IFRS) and net sales is presented on page 64 of this report.
4
EBITDA is calculated as operating profit plus depreciation and amortization. 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.
Adjusted EBITDA is calculated as EBITDA excluding one-off expenses incurred by the Group. These include one-off listing expenses in FY 2021 of EGP 29.0
million related to IDH’s dual listing on the EGX, and one-off transaction expenses in FY 2022 of EGP 22.3 million related to IDH’s aborted acquisition
in Pakistan. Adjusted measures eliminate the one-off impacts of items in the year to provide a measure of underlying performance, which is regularly
utilized by management.
10 IDH 2022 Annual Report
EBITDA4
recorded EGP 1,150
million in 2022, down
54% from the EGP 2,501
million recorded in 2021.
EBITDA margin on revenue
and net sales both stood
at 32% for the year.
Adjusted EBITDA5
which adjusts for non-recurring expenses incurred by IDH
in 2021 and 2022, came in at EGP 1,172 million in 2022,
representing a 54% year-on-year decrease. Adjusted
EBITDA margin on revenue recorded 33% in 2022 versus
48% the previous year. Meanwhile, Adjusted EBITDA
margin on net sales came in at 33% versus 50% in 2021.
The decline is attributable to lower gross profitability for
the year coupled with an increase in SG&A expenses.
Net Profit
recorded EGP 527 million for FY 2022, down 65% year-
on-year. Adjusting for losses resulting from transactions
completed by the Company to secure the US$ balance
needed to fulfil its FY 2021 dividend obligations to
shareholders and transaction cost related to the
aborted Pakistan acquisition,6 the Group would have
recorded a net profit of EGP 692 million in 2022, with a
margin on revenue of 19% and on net sales of 20%.
Earnings per Share
stood at EGP 0.90 in
2022 compared to EGP
2.35 in 2021.
6
In December 2021, the Company signed a sale and purchase agreement to acquire 50% shareholding in Base Consultancy FZ LLC, the holding company
of Islamabad Diagnostic Centre (IDC). While the original SPA expired on 29 August 2022, IDH and the Seller continued negotiations aimed at concluding
a transaction on modified terms. Despite the efforts of the parties, extensive delays in the regulatory review process, the challenging global economic
environment, and the condition precedent related to repatriating funds have resulted in the discontinuation of negotiations towards completing the
transaction in January 2023.
2022 Annual Report IDH 11
Strategic Report | 2022 Highlights
Operational Highlights
Expanding Reach
IDH continued expanding its reach
and delivery capabilities, rolling out an
additional 52 branches7 throughout the
year across Egypt, Jordan, and Nigeria. In
parallel, the Group continued to capitalise
on its house call services, which contrib-
uted to 18% of Egypt’s revenues, well
above its pre-pandemic average.
Enhanced Service Offering
The Group continued to develop its service
offering, delivering on its ramp-up targets for
Al Borg Scan in Egypt. The venture posted
impressive 91% year-on-year revenue growth
supported by two new branch launches
throughout the year. Al Borg Scan also became
the first lab in Africa to boast the prestigious
American College of Radiology (ACR)
accreditation.
Sustained Conventional Growth in
Egypt and Jordan
Across both Egypt and Jordan, IDH
continued to record sustained growth
in conventional revenues as both test
volumes and average revenue per
conventional test increased versus the
previous year. In Egypt, conventional
revenues expanded 16% year-on-year,
while in Jordan, conventional revenues
were up 29% in EGP terms and 2% in JOD
terms. This partially offset a contraction in
IDH’s Covid-19-related business year-on-
year to EGP 639 million in 2022.
Steady Growth in Nigeria
In Nigeria, IDH continued to record robust
revenue growth, up 47% year-on-year
in EGP terms and 24% in NGN terms,
supported by an increasingly favourable
test mix and higher test volumes. Despite
this, Echo-Lab’s profitability continued to
be impacted by rising diesel prices.
Resilience in Sudan
In Sudan, IDH recorded solid growth in both
SDG and EGP terms, supported by rising
test prices.
7 Net branch additions for the year stood at 50 when considering the closure of two underperforming branches in Sudan during the year.
12 IDH 2022 Annual Report
2022 Annual Report IDH 13
Strategic Report
Chairman’s Message
I am pleased to report that despite the exceptional
challenges faced in Egypt and across our other
geographies, your Company continued to deliver
solid results in 2022, marked by impressive growth
in our traditional non-Covid-19 business and clear
progress on our longer-term value creation strategy.
Overcoming Challenges
Since March 2022, the fallout from the war in Ukraine
and the lingering global impact of Covid-19 have had
significant knock-on effects on Egypt: The Egyptian
pound (EGP) has devalued by over 50%, inflation has
risen sharply, and interest rates are at multi-year highs.
Despite these challenges, we once again demonstrated
the resilience of our business model and the appeal of
our value proposition, generating double-digit year-
on-year growth in conventional revenue, which now
stands a remarkable 33% above pre-Covid-19 levels.
Throughout the year, we performed over 31 million
conventional tests — the highest test volumes ever
recorded by IDH. In parallel, we honoured our respon-
sibility as a leading healthcare company by sharing the
burden of inflation with our patients, limiting price
increases to ensure our services remained accessible to
the millions of patients who entrust us with their health
tests every year. We will continue to pass on price rises
judiciously and in a manner that preserves our clear
leadership in an increasingly competitive market.
Also last year, we added new branches in Egypt, Jor-
dan, and Nigeria, guaranteeing greater accessibility
and coverage. We also added new medical services,
I am pleased to report
that despite the
exceptional challenges
faced in 2022, your
Company continued to
deliver solid results,
marked by impressive
growth in our traditional
non-Covid-19 business.
14 IDH 2022 Annual Report
ensuring that our offering remained competitive and
in line with patients’ evolving needs and expectations.
We maintained the service quality for which our
brands are known.
In 2022, IDH became the first provider in Africa
to earn the American College of Radiology (ACR)
accreditation.
Expanding Our Footprint
We continue to enjoy strong organic growth prospects
at the same time that we continue to consider M&A
opportunities across new African, Middle Eastern,
and Asian markets.
We look forward to officially launching operations
in Saudi Arabia in the coming months, marking
our official entry in the Kingdom’s fast-growing and
under-served diagnostic market. We are confident
that the strategic partnership of Biolab, IDH, and
Izhoor, a company owned by Fawaz Alhokair, will
ensure we have the mix of strengths needed to serve
the Saudi people and ensure the long-term success
of this new venture.
In parallel, after thorough due diligence and in light
of social, economic, and political developments in
Pakistan, IDH decided not to pursue its planned
acquisition of the Islamabad Diagnostics Centre.
Our commitment to ESG
We are committed to expanding our global opera-
tions in a sustainable and responsible manner. ESG
is of fundamental importance to our long-term strat-
egy. Early last year, we issued our first Sustainability
Report, outlining our ESG vision and strategy and
providing a clear framework to evaluate our perfor-
mance and guarantee our accountability. Building
on this, we will continue to monitor and address all
areas of ESG within our new and existing geogra-
phies (for TCFD disclosures, see pages 80 to 84).
Risk Matrix
Management proactively monitors and revises our
risk matrix and heat map to ensure we have the right
controls and governance in place and ensure busi-
ness continuity processes.
A Growing Team
Over the last 12 months, we continued to strengthen our
management team with several new additions that have
brought in new skills and multidisciplinary expertise.
We appreciate our loyal and hard-working workforce
and continuously evaluate and monitor their KPIs to
help them develop professionally in line with their
ambitions. We have prepared an employee incentive
plan to reward and incentivize our team for their con-
sistent efforts, and the plan is ready for roll-out, subject
to necessary approvals.
We would like to thank Dr. Upal and his team for their
continued professionalism throughout the entire process,
and we wish them the best in their future endeavours.
Our headquarter office in Smart Village continues to
provide significant benefits and economies of scale.
2022 Annual Report IDH 15
Heading into 2023,
your Company is well-
placed to deliver new
growth and profitability
while generating
sustainable value for
its communities and
shareholders.
Strategic Report | Chairman’s Message
Gratitude to Our Shareholders
Our gratitude goes out to our valued and loyal share-
holders. We are confident that the attractive underlying
fundamentals of our markets, our unique value proposi-
tion, and our proven strategy should translate into an
appreciation of our share price over the coming period.
Your Company has always been committed to paying our
shareholders a regular dividend. Egypt’s current foreign
exchange restrictions have posed a temporary chal-
lenge that has led your Board to postpone a decision on
dividend pay-out for the year ended 31 December 2022.
We have not changed our dividend policy. As part of our
asset-light strategy, our dividend policy is to return to
shareholders the maximum amount of excess cash after
taking careful account of the capital needed to support
operations, capital expenditure plans, organic expansion
opportunities, and potential acquisitions.
We look forward to updating our valued shareholders on
developments following our Board meeting in August.
Heading into 2023, your Company is well-placed to
deliver new growth and profitability while generating
sustainable value for its communities and shareholders.
Lord St John of Bletso
Chairman
16 IDH 2022 Annual Report
2022 Annual Report IDH 17
Strategic Report
Chief Executive’s Report
2022 has been a year of confirmations for IDH, which
saw us demonstrate the resilience and potential of
our traditional business, the effectiveness of our
post-Covid-19 strategy, and the fundamentals of our
markets. During the past 12 months, the Company
reaped the fruits of our tremendous efforts over the last
three years and delivered robust, double-digit revenue
growth at its conventional business, in line with our
guidance to investors and supported by record test vol-
umes. Meanwhile, we continued to push forward our
multi-pronged growth strategy, expanding our reach
and service offering across existing markets, while
penetrating a new geography.
This year’s successes came against a difficult operat-
ing backdrop with our markets, and particularly our
home market of Egypt, facing an unprecedented mix
of economic challenges stemming from the ongoing
conflict in Ukraine and lingering impacts of the pan-
demic. Throughout the year, businesses in Egypt had
to confront a wide range of troubles, starting with the
multiple devaluations of the EGP, which ended the
year down more than 50% (and was down 96% as at
12 March 2023); the subsequent rise in inflation and
interest rates, with the former reaching multi-year
highs and increasingly weighing on patients’ purchas-
ing power; and the imposition of capital and import
restrictions. In parallel, we also witnessed currency
devaluations in both Nigeria and Sudan and continued
troubles related to global supply chains.
While economic troubles were on the rise, 2022 brought
significant positive developments in the fight against
Covid-19. In fact, following a new wave of infections
in January and February, we witnessed a widespread
decrease of infection rates starting in March of last
year as countries made headway on their vaccination
2022 has been a
year of confirmations
for IDH, which saw
us demonstrate the
resilience and potential of
our traditional business,
the effectiveness of our
post-Covid-19 strategy,
and the fundamentals of
our markets.
18 IDH 2022 Annual Report
campaigns, and individuals became increasingly able
to coexist with the virus. This supported the gradual
lifting of all remaining Covid-19-related regulations,
including the removal of mandatory testing and
quarantines. As expected, this translated into a rapid
decline in our Covid-19-related revenue and net sales8
as demand and pricing for Covid-19-related testing
fell throughout the year.
Despite these setbacks, the Company successfully
leveraged its resilient business model, proven strate-
gies, leading market positioning, and unmatched value
proposition to deliver a remarkable set of results in 2022
and position itself for new growth in the coming years.
Sustained Growth of Our Conventional
Offering
Over the course of the last three years, despite the
pandemic-related challenges and opportunities, IDH
never lost sight of its conventional business, continu-
ing to care for its traditional patients’ needs even at
the height of the Covid-19 crisis. Our efforts not only
focused on expanding our service offering and delivery
capabilities but also on organising special campaigns
and launching dedicated test packages aimed at rais-
ing healthcare awareness and ensuring continued
affordability
from chronic
for patients suffering
diseases. Simultaneously, we also focused on patient
retention, aiming to build long-term relationships with
new patients initially acquired through our Covid-
19-dedicated offering.
Our efforts delivered the desired results in 2022,
with conventional revenue posting sustained growth
throughout the year dually driven by rising test volumes
and increasingly favourable pricing. More specifically,
conventional revenue expanded 18% year-on-year to
record EGP 2.9 billion in 2022, on the back of a 9% year-
on-year increase in both conventional test volumes and
average net sale per test. What is arguably even more
impressive, and what clearly displays the effectiveness
of our strategy over the last three years, is the fact that
our conventional revenue now stands at a remarkable
33% above its pre-pandemic value, with test volumes
also recording 11% higher than their corresponding
figure in 2019, adjusting for increased testing due to
the 100 Million Healthy Lives Campaign during 2019.
Sustained growth in our conventional business helped
to partially offset a 75% year-on-year decline in Covid-
19-related revenue as both tests performed and average
revenue per test fell throughout the 12-month period.
Overall, we recorded revenues of EGP 3.6 billion, down
31% year-on-year, and net sales9 of EGP 3.5 billion, down
30% from the previous year when our consolidated
results had been boosted by an exceptional contribution
made by our Covid-19-related offering.
Robust test volumes growth over the last 12 months,
and in the three years since the start of the pandemic,
is directly attributable to our investment strategy, which
has seen us devote substantial resources to expand
our delivery capabilities and reach. In the year ended
31 December 2022, we inaugurated 52 new branches,
including 48 in Egypt, two in Jordan, and two in Nigeria.
This brought our total network to 552, with our Egyptian
network reaching the 500 mark, a historic achievement
that saw us reaffirm our leadership position in the local
diagnostic market. Of the new additions in Egypt, I was
pleased to note the two new Al Borg Scan branches
launched in 2022, which took our total radiology network
to six branches and enabled us to successfully capital-
ise on the rapidly growing demand for our radiology
offering. In parallel to new branch roll-outs, we have
8 A reconciliation between revenues (compliant with IFRS) and net sales is available on page 64 of this report.
9 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.
2022 Annual Report IDH 19
Strategic Report | Chief Executive’s Report
also been actively investing to make our services
more accessible through non-traditional avenues,
including home services and digital. The former,
which peaked in popularity during the pandemic,
continues to outperform our expectations, contrib-
uting 18% of Egypt’s revenues in 2022, well above
its pre-Covid-19 averages. This demonstrates our
ability to transform Covid-19-related opportunities
into long-term gains for the Company, which I am
confident will continue to support our revenues
and profitability in the coming years. Similarly, we
continued to invest in our digital capabilities. Our
AI-focused subsidiary, Wayak, continued to ramp
up operations with total orders completed in 2022
jumping a solid 29% year-on-year and EBITDA
losses narrowing further. Meanwhile, we continued
to enhance our digital outreach channels, making it
increasingly easy for patients to reserve their tests
and access their results and reports.
Regionally, in both Egypt and Jordan, we recorded
similar trends as those witnessed at the consolidated
level. In Egypt, despite the fast-rising inflation, our
conventional top line expanded a solid 16% year-
on-year to reach EGP 2.4 billion compared to EGP
2.1 billion in 2021. This saw conventional revenue
contribute to 84% of our Egyptian top line for the
year, significantly above the 51% contribution made
in the previous year. Meanwhile, Covid-19-related
revenues declined 78% year-on-year, making up just
16% of Egypt’s top line compared to 49% in the previ-
ous 12 months. Total revenues in Egypt for 2022 sub-
sequently declined 30% versus their corresponding
value in 2021, as our test mix normalised through-
out the year. Egypt’s top line for the year were also
buoyed by our fast-growing radiology venture, Al
Borg Scan. Revenues at Al Borg Scan expanded an
impressive 91% year-on-year in 2022 to reach EGP
85 million supported by new branch launches (four
since October 2021) and an aggressive marketing
campaign implemented by the team throughout
the past year. We expect the rapid growth trend to
continue in 2023 as Al Borg Scan cements its posi-
tion in the highly fragmented Egyptian market.
In Jordan, conventional revenues increased 29%
year-on-year in EGP terms, partially reflecting the
translation effect resulting from the multiple devalu-
ations of the EGP. We were also pleased to note
Biolab’s year-on-year expansion in JOD terms sup-
ported by rising conventional test volumes. Higher
conventional revenues were overshadowed by a 67%
year-on-year decline in Covid-19-related revenues
(Covid-19-related net sales declined 68% year-on-
year) as demand decreased significantly. It is also
worth highlighting that due to the lifting of interna-
tional travel restrictions, Biolab’s agreements to pro-
vide Covid-19-related testing at Jordan’s Queen Alia
International Airport (QAIA) and Aqaba Port were
terminated at the end of the first quarter of 2022,
further weighing on the segment’s performance for
the year. As such, overall revenue at Biolab declined
41% in EGP terms and 50% in JOD terms. Similarly,
net sales10 decreased 37% year-on-year in EGP terms
and 47% in JOD terms.
Our Nigerian subsidiary, Echo-Lab, continued its
impressive expansion, growing 24% in NGN terms
and up 47% year-on-year in EGP terms. Top-line
growth was supported by an increasingly favourable
test mix and higher test volumes despite the difficult
operating environment. Over the past year, we wit-
nessed sustained growth in Echo-Lab’s average net
sale per test, reflecting the increase in the number of
patients visiting the venture to undergo the generally
higher-priced CT and MRI exams, directly in line
with our commercial strategy at the venture. It is also
worth highlighting that test and patient volumes in
the first part of the year were impacted by our deci-
sion to shut down two underperforming branches.
Volumes picked up again following the launch of two
new branches in the second quarter of 2022 and have
remained strong since. Echo-Lab’s 2022 performance
reaffirms our conviction in its growth potential.
10 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 2022, in Jordan, IDH recorded revenue of EGP 612 million (down 42% year-on-year) and net sales of EGP 549 million (down 37% year-on-year).
20 IDH 2022 Annual Report
Finally, in Sudan, economic and political instability,
coupled with the devaluation of the SDG in March
2022, significantly impacted our subsidiaries’ opera-
tions and results. Nonetheless, our Sudanese opera-
tions posted an impressive 63% year-on-year rise in
revenue in local currency terms on the back of a 114%
rise in the average revenue per test in SDG terms.
Further down the income statement, we observed a
contraction in gross, EBITDA, and net profitability,
largely reflecting a post-Covid-19 normalisation.
Gross profitability was also impacted by increased
outlays related to additional staffing requirements
for the new branches, annual salary increases, and
a marginal increase in raw material prices in the
second half of the year following the EGP’s devalu-
ation. Our ability to restrict the increase in raw
material costs despite the significant devaluation
of the EGP reflected both our proactive inventory
management strategy and our long-lasting relation-
ships with major test kit providers, which enable us
to consistently secure favourable pricing for new
stock. Meanwhile, EBITDA profitability was par-
tially impacted by higher marketing spending as we
invested to support the ramp-up of new branches
and of a new patient loyalty programme. Finally, our
bottom line, which contracted 65% year-on-year, was
also impacted by losses resulting from transactions
completed by the Company to secure the US$ bal-
ance needed to fulfil our 2021 dividend obligations
to shareholders and transaction costs related to the
Pakistan transaction. Adjusting for these, net profit
would have recorded EGP 692 million in 2022, with
a margin on revenue of 19% and on net sales of 20%.
Expanding Our Footprint
Over the years, we have adhered to a clearly defined
inorganic growth strategy centred on identifying and
investing in greenfield and brownfield assets in new
African, Middle Eastern, and Asian markets where
our business model is best suited to capitalize on
healthcare trends and serve local communities. With
this in mind, in 2022, we signed a landmark agreement
with Biolab and Fawaz Alhokair’s healthcare subsid-
iary, Izhoor, to launch a new greenfield diagnostic
venture in Saudi Arabia. Ultimately, we are looking
to build a full-fledged diagnostic services provider
capable of catering to the underserved demand for
high-quality services in the Kingdom and supporting
the local government’s ambitious healthcare agenda.
I am particularly excited about starting this journey
with our two partners, both of whom bring comple-
mentary experiences and resources that will play
crucial roles in guaranteeing the venture’s success.
The Saudi Arabian market represents an ideal new
addition to our portfolio due to its attractive growth
profile underpinned by favourable demographics, an
increasingly health-conscious patient base, robust
macroeconomic fundamentals, changing healthcare
sector dynamics in favour of private providers, and a
supportive regulatory framework. Overall, Saudi Ara-
bia currently records some of the highest per-capita
spending on healthcare in the region, with the num-
ber set to rise further in the coming years. Moreover,
reforming and developing the Kingdom’s healthcare
sector is a top priority for the local government, with
new regulatory reforms and incentives rolled out to
attract private sector participation.
Meanwhile, in Pakistan, we decided in early 2023
to forego negotiations to acquire a 50% stake of the
Islamabad Diagnostic Centre (IDC). Despite sus-
tained negotiations and relentless efforts on both
sides, the current economic conditions and contin-
ued regulatory hurdles have led to the termination of
the transaction. Nevertheless, we remain committed
to researching and identifying suitable potential
markets for future investments, as IDH remains ada-
mant on realising its long-term goal of expanding its
footprint to different markets across the Middle East,
Africa, and Asia.
2022 Annual Report IDH 21
Strategic Report | Chief Executive’s Report
Our Commitment to Excellence
Sustaining and improving the quality of our services
has always been a central priority for the Group. This
commitment to excellence has translated in IDH earn-
ing prestigious accreditations and certificates over
the years, including multiple new ones in 2022.
Most notably, we received the American College
of Radiology (ACR) accreditation for both Al Borg
Scan’s nuclear medicine (NucMed) and ultrasound
units in August 2022. This makes Al Borg Scan
the first radiology centre in Africa, as well as one
of the select few in the Middle East, to boast this
prestigious accreditation which complements our
previously obtained College of American Patholo-
gists (CAP) accreditation. Meanwhile, we have now
secured the Egyptian government’s full General
Authority for Healthcare Accreditation and Regula-
tion (GAHAR) for 10 of our labs (at the time of writ-
ing this report). This makes us the private provider
with the most GAHAR-accredited labs in the country
and will enable us to play a central role in supporting
the roll-out of the Egyptian government’s Universal
Healthcare Insurance system.
Our Sustainability Journey
As we continue to serve a growing community
across four markets, we have only renewed our com-
mitment to building and developing our environ-
mental, social, and governance (ESG) monitoring
and compliance framework to ensure we continue
to deliver sustainable value to all stakeholders. In
2021, we issued our first ever Sustainability Report,
providing investors and stakeholders with an initial
strategy and monitoring framework. Meanwhile, we
also worked closely with a leading ESG consultant to
design an encompassing ESG strategy that will set
clear long-term goals and targets to guide our sus-
tainability efforts in the coming years. These goals
will not only provide milestones for the Company
but will also increase accountability to our investors,
stakeholders, and regulators. Once defined, our ESG
strategy will be implemented and monitored by a
specialized ESG board committee. In addition to
publishing a GRI-compliant sustainability report,
management is enclosing the Task Force on Climate-
Related Financial Disclosures (TCFD) in this annual
report in line with listing requirements.
As always, we continue to be supported and guided by
our seasoned Board of Directors, which is comprised
of leading executives who have been overseeing all
aspects of our business and operations since IDH’s
listing on the LSE in 2015. The Board of Directors
is made up mainly of independent, non-executive
directors and is further supported by updated and
robust policy framework.
2023 Outlook
While progress has been made to overcome the
economic challenges faced throughout 2022, it has
become increasingly apparent that they will remain
with us throughout 2023. Despite this, I am confident
that we possess the needed experience, resources,
and strategy to continue navigating them success-
fully. In fact, IDH boasts a long track record of success
in manoeuvring through unanticipated times of eco-
nomic turmoil, including the 2011 Egyptian Revolu-
tion and the devaluation of the EGP in 2016. With this
in mind, our targets and priorities for the new year
remain unchanged, and I look forward to reporting
on our progress throughout the coming year.
Front and central will be the continued double-digit
growth of our conventional business, in particular
across our two largest markets of Egypt and Jordan.
To deliver on this, we are targeting the roll-out of
an additional 20 to 25 branches, including three
new branches in Jordan and two new Al Borg Scan
branches in Egypt. Meanwhile, on the pricing front,
22 IDH 2022 Annual Report
functions to further streamline operations and extract
additional efficiencies where possible.
Dividend Policy and Proposed Dividend
While we maintain our long-term dividend policy that
sees us return to shareholders the maximum amount
of excess cash after taking careful account of the cash
needed to support operations and expansions, our
Board of Directors will postpone the dividend deci-
sion in light of the ongoing uncertainty and lack of
foreign currency availability in Egypt. We will review
the situation in our upcoming Board meeting in
August and assess the Group’s cash position and the
macroeconomic situation in Egypt at the time before
a decision is made and a distribution date is set.
Dr. Hend El-Sherbini
Chief Executive Officer
while throughout 2022 and early 2023 we introduced
multiple price adjustments to partially account for
the fast-rising inflation in Egypt, we have thus far
refrained from passing on the full burden to patients.
We believe that as a leading healthcare provider in
the country, we have a responsibility to ensure that
our services remain accessible to as many patients
as possible. Moreover, we are confident that pro-
viding additional support to patients in time of
financial need will translate into increased loyalty,
enhancing long-term patient retention, and revenue
generation. Finally, across both geographies, we are
looking to leverage our market leading position to
continue attracting and retaining new patients to the
Group, offering them appealing value propositions
that only a Group boasting our scale can offer.
In light of the above and the results recorded in the
first three months of the year, we are confident that
despite the ongoing economic challenges witnessed
in our geographies, we have put in place the neces-
sary strategies and mitigation mechanisms to con-
tinue delivering double-digit conventional revenue
growth in 2023.
On the profitability front, we expect margins for
the coming year to remain healthy and broadly
unchanged compared to the year just ended despite
rising inflation, in particular in Egypt. Meanwhile,
in the longer-term, we see margins converging back
to our historical averages as the impacts of the post-
Covid-19 normalisation and the recent EGP devalua-
tions subside. As always, a main component of our cost
control strategy has been the continued collaboration
with our main test kit providers to maintain adequate
stocks and secure new stock at competitive prices
(with a less than proportionate increase compared to
inflation caused by the EGP devaluation). At the same
time, we are looking to introduce a wide range of
cost optimisation initiatives across the Group’s main
2022 Annual Report IDH 23
Strategic Report
Our Markets
The characteristics of the emerging markets in
which IDH operates are notably different from those
of many Western ones. In these emerging markets,
the simultaneous operation of both publicly funded
and private healthcare systems is common, giving
patients freedom of choice in selecting the service
that best suits their personal needs. Moreover, the
availability of general practitioners (also referred
to as family medicine practitioners or primary
care specialists) is not widespread; consequently,
they are not the typical gatekeepers through which
patients are accustomed to receiving primary or
specialist medical care.
Patients seeking medical care in emerging markets
may select several routes to do so, including visiting
an emergency room or outpatient clinic, referring
to a polyclinic, or directly seeking the services of a
specialized physician. In turn, physicians ordering
tests may recommend a specific service provider to
conduct testing, but in the majority of cases, patients
enjoy a large degree of freedom in selecting their own
service provider. This choice is usually a direct result
of perceived quality and safety standards offered by
the provider, pricing compared to its competitors,
and insurance or corporate arrangements benefit-
ting the patient. Walk-in patients (also referred to
as “self-payers”) pay out of pocket in advance of the
required tests being completed.
Patients usually receive test results in-person (usu-
ally accompanied by a specialist report) and return
to their referring physician who originally ordered
testing. IDH also offers the option of delivering
same-day test results to patients electronically via
SMS, with test results also available on the mobile
app. The Group’s sales and marketing activities
separately target:
• Physicians: through direct sales visits to individual
practitioners, educational and peer congresses,
client information leaflets, volume-based loyalty
programmes, and the organisation or sponsorship
of conferences;
• Walk-in Patients: through social media channels,
mass-market and targeted health awareness cam-
paigns, outdoor advertising, television, radio, and
online advertising; and
• Contract Patients: through direct outreach to
insurers and employers.
Key Market Dynamics
4
countries of
operation
+1
new geographical
market (Saudi Arabia) in
2023
552
operational branches,
+50 versus 2021
24 IDH 2022 Annual Report
Barriers to Market Entry
Brand Equity and Reputation
Patients are loyal to leading brands with a strong
track record.
Accreditation of Facilities
Attracting contract clients requires accredited, high-quality testing
capabilities and facilities. IDH currently boasts accreditations from CAP,
ACR, IDO, JAS, HCAC, and JCI.
Market Reach
Fragmented market necessitates a wide geographic presence to allow for
broad customer reach. Today, IDH operates the largest private labs market in
Egypt, with established market presence in three other markets.
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 (higher margins), decades of
know-how, and cutting-edge equipment mitigate against new
entrants.
2022 Annual Report IDH 25
Strategic Report | Our Markets
Covid-19 Across IDH’s Markets
Following the outbreak of Covid-19, governments
across all IDH’s countries of operation instituted strict
restrictive measures to curb the spread of the virus.
These included curfews, the shutting of non-essential
business, travel bans, and restrictions on public gather-
ings. Though these policies were imperative to ensure
the safety of citizens, they led to significant disruptions
to operations across IDH’s geographies, including
reduced operating hours and complete branch clo-
sures during the first months of the pandemic.
Gradual easing of these restrictive measures began
in the latter half of 2020, and vaccine campaigns were
launched in early 2021. Towards the end of 2021, patient
volumes returned to their pre-pandemic levels across
all IDH’s geographies. For the remainder of 2021, and
carrying on throughout the first few months of 2022,
the Group has actively assisted local authorities in their
efforts of mitigating the spread of emerging variants by
providing PCR testing in Egypt and Jordan. The Com-
pany has also supported in the return of international
travel, offering PCR testing to travellers in major ports of
entry as part of our agreements with airports, airlines,
and insurance providers. It is worth noting that in line
with trends seen globally, COVID-19 caseloads declined
substantially across IDH’s markets starting in spring
2022 as vaccine roll-outs accelerated.
High infection rates throughout 2021 led to strong
demand for the Company’s Covid-19-related test
offering. In turn, this significantly boosted IDH’s
performance in 2021, with the Company booking
record-high revenues and profitability throughout
the year. As caseloads declined throughout 2022, the
Company registered a sharp decline in demand for
Covid-19-testing and a normalisation of revenues
and profitability in line with the Group’s expecta-
tions. It is also worth highlighting that IDH’s ability to
consistently cater to its conventional patients (non-
Covid-19) translated in the segment reporting solid
growth throughout 2022, with conventional revenues
expanding a solid 18% versus 2021 and a remarkable
33% versus their pre-pandemic value in 2019.11
11 2019 figure excludes revenues generated as part of the Company’s 100 Million Healthy Lives Campaign.
26 IDH 2022 Annual Report
2022 Annual Report IDH 27
Strategic Report | Our Markets
Egypt
80%
Egypt 2022
Key Highlights
Contribution to consolidated
revenue in 2022
IDH’s home market and the largest contributor to
consolidated revenues, Egypt has boasted a long track
record of over four decades of continued success. The
Company’s Egyptian operations operate under two
distinct segments, pathology and radiology, with IDH
operating two leading pathology labs in the country, Al
Mokhtabar and Al Borg Laboratories. In 2018, in line
with the Group’s strategy to provide an encompassing
service offering for its patients, IDH embarked on its
radiology venture, Al Borg Scan, capturing the attrac-
tive opportunities offered by the fast-growing market.
The Egyptian diagnostic market can be broadly divided
into public and private sector infrastructures, with
the latter including both labs attached to private hos-
pitals and independent standalone labs (chains and
single-doctor labs). Egypt’s large cities account for the
majority of labs, providing considerable opportunity
to increase accessibility throughout the country’s 27
governorates for greater coverage of the population.
In addition, the corporate market is growing as a main
driver for diagnostic services as more companies
expand healthcare coverage for their employees.
500
Branches as at year-end 2022,
+48 versus 2021
2,894 EGP/MN
Revenues in 2022, down 30% y-o-y
7.6 MN
Patients served in 2022,
down 10% y-o-y from the 8.5 mn
patients seved in 2021
released, IDH commissioned the Boston Consulting
Group (BCG) in 2016 to complete a comprehensive study
of the Egyptian diagnostic market. As a result of this study,
BCG estimated IDH’s two lab brands accounted for over
50% of revenues in the Egyptian private chain market.
IDH enjoys a strong competitive position in the Egyptian
diagnostic industry, creating remarkable barriers to entry
by leveraging its successful 40-year track record and wide
network of 500 branches at year-end 2022. Although
there have been no recent official government statistics
To complement its existing offering and capitalize on
the Group’s established brand, IDH launched its radiol-
ogy service offering in Egypt in 2018 under the name Al
Borg Scan. The venture has witnessed rapid operational
28 IDH 2022 Annual Report
and financial ramp-up, posting volume and revenue
growth consistently above the Group’s expectations.
Today, the venture operates six branches strategically
located across Greater Cairo and is the only provider in
Africa to boast the prestigious ACR accreditation.
Established brands with stellar
reputations that have produced
strong patient loyalty
Robust relationships with key
stakeholders, including physicians,
patients, corporate clients,
suppliers, and hospitals
A scalable, asset-light business
model that enables expansion in
fragmented markets
International accreditations,
most notably the coveted College
of American Pathologists (CAP)
certification of the Mega Lab, as
well as the ACR accreditation
Growth in the Egyptian diagnostics industry is sup-
ported by robust market fundamentals, including:
• A large and growing population of over 100 million,
making Egypt the most populous country in the
Middle East North Africa (MENA) region; in terms
of demographics, it hosts a significant and growing
elderly population.
• An increasing prevalence of diseases, including com-
municable and non-communicable diseases, tropical
diseases, and lifestyle diseases, such as diabetes.
• A growing governmental role to increase awareness
on the importance of diagnostic testing in preventa-
tive healthcare, supporting the growth in laboratory
diagnostics as a tool in clinical practice.
• The roll-out of mandatory health insurance and
the subsequent increase in demand for private
diagnostic testing.
Macroeconomic Developments
Although Covid-19 preventative measures have largely
seceded, and testing significantly declined starting the
second quarter of 2022, January and February saw a
renewed spread of Covid-19 with a widespread surge
in cases. The effects of this outbreak, however, were
not long-lasting, with both positive cases and testing
demand declining steadily as the year progressed.
Economically, Egypt underwent several hardships
over the course of the year as the EGP saw two separate
devaluations that pushed the currency to record lows.
The first, which was announced in late March 2022, saw
the pound weaken by almost 16% to reach 18.3 EGP/
US$. The announcement came as the Egyptian govern-
ment sought to secure a new loan from the Interna-
tional Monetary Fund (IMF). Subsequently, a second
devaluation in late October pushed the pound past the
24.5 EGP/US$ threshold, with the currency experienc-
ing an overall devaluation of over 55% throughout the
course of the year. It is worth noting that in October
2022, Egypt and the IMF reached a staff-level agree-
ment for a new US$ 3 billion, 46-month extended fund
facility (EFF). The facility was approved in December,
with the first tranche disbursed soon after. The EGP
was devalued for a third time at the start of the new
year, reaching 29.5 EGP/US$ by mid-January. It has
since continued to weaken and, in mid-March 2023,
registered consistently above the 30.0 EGP/US$ mark.
2022 Annual Report IDH 29
Strategic Report | Our Markets
Despite the multiple
challenges faced in
2022 in IDH’s home
market, conventional
revenues continued
their steady expansion,
supported by rising test
volumes and prices.
As a direct consequence of the currency depreciations
and worsening global economic conditions, inflation
rates in IDH’s home and largest market rose steadily dur-
ing 2022, increasing by 14 percentage points to record
21.3% in December versus 7.3% at the start of the year.
In the new year, inflation maintained its rising trend,
recording 31.9% in February 2023. In response to the
rising inflation, throughout the year the Central Bank of
Egypt (CBE) announced an increase in key interest rates
by a cumulative 800 basis points. The hikes, which were
introduced during four separate meetings, are expected
to help rein in inflation down to the CBE’s long-term
targets. The CBE raised its rates by a further 200 basis
points during its March 2023 meeting, taking the main
operation and discount rates to 18.75%.
Financial and Operational Highlights
The Company’s Egyptian operations delivered solid
year-on-year growth in conventional revenues, driven
by higher test volumes and average revenue per
test. On the other hand, Covid-19-related revenues
declined sharply as both demand and prices decreased
throughout the year. Lower pricing reflected increased
competition. This was particularly visible in the 70%
year-on-year drop in PCR test volumes for 2022 and
the 44% year-on-year decline in the average revenue
per PCR test in 2022 compared to 2021.
Al Borg Scan, IDH’s Egyptian radiology venture,
recorded an impressive 91% year-on-year increase in
revenues to book EGP 85.2 million during 2022. The
sustained top-line expansion was primarily driven by a
93% year-on-year rise in case volumes (patients served
rose 89% for the year). The continued operational
ramp-up during 2022 was supported by the opening of
two new branches over the 12-month period, with Al
Borg Scan’s network now standing at a total of six stra-
tegically located branches spanning the full Greater
Cairo area. Meanwhile, IDH also successfully obtained
the ACR accreditation for both Al Borg Scan’s nuclear
medicine (NucMed) and ultrasound units, making Al
Borg Scan the first radiology centre in Africa, as well as
one of the few radiology facilities in the Middle East,
to boast this prestigious certification. Throughout the
year, IDH supported new branch openings with large-
scale marketing campaigns, which played a key role in
growing patient volumes at the venture.
30 IDH 2022 Annual Report
Operationally, IDH rolled out 48 new branches in
Egypt during 2022, including two new Al Borg Scan
branches rolled out in March and October. Through
its expanded branches and house call services, IDH
served 7.6 million patients in 2022, down 10% year-on-
year, and performed 29.5 million tests, largely in line
with last year’s figure. Meanwhile, conventional test
volumes jumped a solid 9% year-on-year, demonstrat-
ing the strong underlying demand for the Company’s
traditional offering in its home market.
IDH’s house call service in Egypt recorded revenue of EGP
517 million in 2022, contributing to 18% of Egypt’s rev-
enues for the year, well above the service’s pre-pandemic
contributions. The robust contribution was recorded
despite the fall in Covid-19-related revenue generated
through the house call service as infection rates in the
country declined significantly starting March.
Finally, Wayak recorded a 29% year-on-year increase in
the number of orders, which reached 132 thousand for
2022 compared to 102 thousand orders during 2021.
Meanwhile, the venture’s EBITDA losses declined a
solid 33% year-on-year to record EGP 3.8 million com-
pared to negative EGP 5.7 million in 2022.
In Egypt, EBITDA recorded EGP 1,031 million in 2022,
down 53% year-on-year and with an associated margin
on revenue of 36%. Meanwhile, adjusted EBITDA12
recorded EGP 1,053 million for 2022, down 52% year-
on-year. Adjusted EBITDA margin on revenue in Egypt
also stood at 36% for the full year, declining from the
high base of 54% recorded in 2021. Adjusted EBITDA
from IDH’s Egyptian operations contributed 90% to the
Company’s consolidated Adjusted EBITDA in 2022.
12 Adjusted EBITDA is calculated as EBITDA excluding one-off expenses incurred by the Group in Egypt. These include one-off listing expenses in FY 2021
of EGP 29.0 million related to IDH’s dual listing on the EGX and one-off transaction expenses in FY 2022 of EGP 22.3 million related to IDH’s aborted
acquisition in Pakistan.
2022 Annual Report IDH 31
Strategic Report | Our Markets
Jordan
17%
Jordan 2022
Key Highlights
Contribution to consolidated
revenue in 2022
IDH first entered the Jordanian market in 2011 when it
acquired a 60% stake in Biolab. The private diagnostic
testing provider is a market leader in the country, boast-
ing a track record of over 20 years. The company is run
by Dr. Abdelnour, who is also the venture’s founder, and
currently operates a network of 23 branches located
both in Amman and across other major cities in Jordan.
Jordan boasts one of the most developed healthcare
infrastructures in the Middle East, with Amman
consolidating a significant proportion of services and
c.70% of Jordanians medically insured. Characterised
by strong fundamentals, the Jordanian market allows
IDH to deliver continual growth despite strict price
regulations on medical laboratories, with a fixed price
list that has remained unchanged since its issuance by
the Jordanian Ministry of Health in 2008. As a result,
Biolab has focused on driving volume growth in the
market, utilizing a host of strategies to expand its ser-
vices portfolio and packages to encourage increased
testing per patient. Currently, Biolab, IDH’s Jordanian
subsidiary, is the largest lab in the Jordanian private
sector in terms of profitability.
Unlike its Egyptian counterparts, Al Borg and Al
Mokhtabar, Biolab does not operate a Hub, Spoke,
and Spike business model. Although Biolab’s 23 labs
perform many of the 1,000+ pathology tests offered
to patients, the specialized tests are performed at
32 IDH 2022 Annual Report
23
Branches as at year-end 2022,
+2 versus 2021
612 EGP/MN
Revenues in 2022, down 42% y-o-y
0.9 MN
Patients served in 2022,
down 45% y-o-y from the 1.6 mn
patients seved in 2021
the four core labs, considered specialty labs, creating
a testing hub in Amman’s most acclaimed medical
area. Tests performed include, but are not limited
to, haematology, endocrinology, immunochemistry,
parasitology, oncology,
immunology, transfusion
medicine, molecular genetics, antenatal diagnostics
and gene sequencing. Additionally, Biolab does not
share purchasing, supply and logistics, IT, marketing,
or sales functions with its Egyptian parent company.
In 2020, Biolab finalized its agreement with Georgia
Healthcare Group PLC (GHG) to establish a Mega
Laboratory (Mega Lab) in Tbilisi, the Georgian capital.
At 7,500 square meters, the multidisciplinary Mega Lab
is the largest of its kind in Georgia. Since 2019, Mega
Lab has been collaborating with around 100 medical
institutions, including several leading hospitals. Today,
Mega Lab serves over 3,000 patients daily, although
its capacity comfortably surpasses 6 million different
profile tests per year. In exchange for the provision of
IT and management services, Biolab holds an 8.025%
equity stake in the project and receives annual IT sup-
port service fees for 10 years, as well as annual man-
agement fees for two years.
In light of the global Covid-19 pandemic, its associ-
ated impacts, and its restrictions on international
travel affecting planned audit visits, logistics, and
external quality control, Biolab and GHG had
previously reached an agreement to postpone the
implementation of the management agreement and
previously scheduled payments to 2022. In January
2022, it was mutually decided by both Biolab and
Mega Lab to continue management services and
resume efforts to achieve Joint Commission Inter-
national (JCI) accreditation. To expedite efforts, a
member of the Quality Assurance Department (QAD)
at Biolab was physically re-assigned a role at Mega
Lab Georgia for a three-month period, in addition to
receiving remote support from Biolab’s QAD in the
form of online trainings for Mega Lab staff. In parallel,
the application for JCI accreditation was submitted
in January 2022. During that time, Mega Lab policies
were revised, staff underwent rigorous training pro-
grammes and competency assessments, and all devi-
ations were addressed and resolved. Additionally,
multiple “Mock Audits” were conducted to ensure
readiness for JCI inspection. In July 2022, the formal
JCI audit was assigned and, following a thorough
inspection week, Mega Lab Georgia was awarded the
prestigious JCI accreditation. With the accreditation
awarded, Biolab has fulfilled the services stipulated
in the management agreement.
Despite sustained difficulties in the operating environ-
ment throughout 2020 and 2021 due to the Covid-19
pandemic, the planned integration of Mega Lab with
GHG’s network progressed as scheduled, with mid-2021
marking the successful technology transfer completion
of all 76 locations, including the installation of the lab’s
Laboratory Information Management Systems (LIMS).
Initially serving GHG’s network, which is expected to
utilize only one-third of the facility’s total capacity, Mega
Lab plans to develop and introduce a B2B network of
healthcare providers outside the Group to reach its full
operating capacity.
Macroeconomic Developments
To counteract the spread of the Covid-19 virus in 2020,
the Jordanian government ordered the closure of all
educational institutions and governmental and private
entities and introduced a curfew. These restrictions
impacted Biolab’s branches, which were required to
fully shut down or operate at reduced working hours
during the first months of the pandemic. The gradual
easing of these restrictions in early 2021 saw the nor-
malisation of conventional test volumes and revenues,
with total revenues at Biolab remaining elevated on
the back of the exceptional contributions made by the
venture’s Covid-19-related offering. Throughout 2022,
all major restrictions on businesses and individuals
were lifted. Most notably, in March 2022, the govern-
ment announced the suspension of mandatory testing
for international travellers, an important development
that led to a sharp decline in demand at Biolab’s testing
stations in Queen Alia International Airport (QAIA)
and King Hussain International Airport (KHIA).
2022 Annual Report IDH 33
Strategic Report | Our Markets
Economically, Jordan remains on the recovery track
post-Covid-19 turbulence. Despite global economic tur-
moil, the country has continued its upward trend, with
GDP expected to grow at 2.7% during 2023, greater than
the previous forecast of 2.4%. Meanwhile, inflation for
the year is expected to narrow to 3.8% in 2023 from 4.2%
in 2022, well below rates recorded by regional peers and
continuing to reflect the effectiveness of the country’s
policy to curb inflation. At the same time, improving
economic conditions have supported a rapid rise in
Foreign Direct Investment (FDI) in the country, which
in the first nine months of 2022 posted an impressive
94% year-on-year increase. The government has also
successfully reduced public debt as a proportion of GDP.
More specifically, after excluding debt held by the social
security investment fund, Jordan’s debt to GDP ratio at
the end of 2022 stood at 89.7% compared to 91.9% at
the end of 2021. This figure is projected to drop further
to 88.2% in 2023. On this front, the IMF has reached an
agreement with Jordan to target a fiscal deficit of 2.9%
for 2023, with a commitment to reduce public debt to
80% of GDP by 2027. This agreement will help ease the
country’s access to grants and loans at preferential rates
to aid in servicing annual debt.
Financial and Operational Highlights
IDH’s Jordanian subsidiary, Biolab, delivered con-
ventional revenue year-on-year growth of 2% in
JOD terms (in EGP terms, revenues were up 29%
year-on-year), supported by a marginal rise in
conventional test volumes for the year. On the other
hand, similar to trends witnessed in Egypt, Biolab’s
Covid-19-related revenue and net sales declined
substantially throughout the year. As such, total
revenue in JOD terms contracted 50% year-on-year
and 41% in EGP terms. On a similar note, net sales
in JOD terms declined 47% year-on-year in 2022 to
record JOD 21.1 million, while in EGP terms, net
sales contracted 37% year-on-year in 2022.
Biolab’s full-year results were supported by con-
tributions of EGP 189 million from the company’s
Covid-19-related offering. During the year, net sales
generated by Biolab’s Covid-19-related offering were
boosted by the company’s agreements with QAIA,
Aqaba Port, and KHIA. More specifically, Biolab
generated EGP 140 million in net sales at QAIA and
EGP 17 million in net sales at the Aqaba Port. It is
worth noting that while the testing stations experi-
enced heavy traffic during the first two months of the
year, the lifting of mandatory testing saw volumes
decline sharply starting March 2022. Biolab’s agree-
ments with all three locations were terminated at the
end of Q1 2022.
34 IDH 2022 Annual Report
Biolab, IDH’s Jordanian subsidiary, reported an EBITDA
contraction of 59% in EGP terms and 63% in JOD terms.
Similarly, EBITDA margin was down both on revenues
and net sales versus the previous year. Lower EBITDA
profitability reflected lower gross profits following a post-
Covid-19 normalisation, as well as increased expenses at
the Company’s testing booths in QAIA and Aqaba Port.
Operationally, Biolab inaugurated two new labs in
2022, taking its total network to 23 branches as at 31
December 2022. During the past year, Biolab served
890 thousand patients, performing nearly 2.8 million
tests. Conventional tests performed reached 2.2 mil-
lion, up marginally from the previous year.
Biolab continued to
showcase its underlying
potential delivering solid
growth in both EGP and
JOD terms for 2022.
2022 Annual Report IDH 35
Strategic Report | Our Markets
Nigeria
2.2%
Nigeria 2022
Key Highlights
Contribution to consolidated
revenues in 2022
IDH’s operations in Nigeria began in February 2018
following its acquisition of Eagle Eye Echo-Scan
Limited (Echo-Scan) through a strategic 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. Subsequently, Dynasty partnered
with the International Finance Corporation (IFC) to
invest in Echo-Scan (since rebranded as Echo-Lab)
with the aim of capitalizing on the opportunity pre-
sented by the country’s large diagnostics industry,
which was valued at c.US$ 140 million in 2017 and
estimated to reach US$ 830 million by 2025 based on
research done at the time of the due diligence.13
The Nigerian healthcare system is attractive and
provides underleveraged opportunities for the Group
to capture. Additionally, investment in the Nigerian
market supports the Group’s overall goal of expanding
its regional footprint. The country’s underpenetrated
and highly fragmented diagnostic services industry
provides significant opportunities for growth and
achieving economies of scale. Nigeria’s diagnostics
industry can be broadly divided into three main
groups, the largest of which being independent labs
(chains and single labs), followed by public and private
hospitals. Moreover, Nigeria boasts the largest popula-
tion in Africa, standing at over 215 million in 2022, and
13 Source: Boston Consulting Group
36 IDH 2022 Annual Report
12
Branches as at year-end 2022,
+2 versus 2021
79 EGP/MN
Revenues in 2022, up 47% y-o-y
149 K
Patients served in 2022,
down 3% y-o-y from the 153k
patients seved in 2021
shares several similarities with Egypt’s market during
the 1980s and 1990s in terms of structure, development
pace, and shifting disease profiles.
Since its acquisition of Echo-Lab, IDH has intro-
duced a comprehensive integration and value-add-
ing plan, including expanding its network to widen
coverage throughout Nigeria, renovating existing
equipment
branches, procuring
cutting-edge
utilizing the latest medical technology, and growing
the lab’s pathology and radiology service offerings
while strengthening its quality standards. As of year-
end 2022, IDH has invested over US$ 13.6 million
in the venture. Operations continue to increase in
Nigeria, with efforts already producing favourable
results in the form of driving notable improvements
in Echo-Lab’s brand equity and recognition, strong
revenue growth, and a steady narrowing of under-
lying losses (controlling for highly volatile energy
prices). In light of the strong momentum enjoyed by
the venture, IDH is looking to launch a new invest-
ment programme of US$ 2 million aimed at further
enhancing existing infrastructure and operations.
Macroeconomic Developments
Over the last three years, IDH’s Nigerian operations
have been impacted by Covid-19-related lockdowns in
several cities, waves of protests and civil unrest that led
to branch closures, as well as a volatile economy and
rising inflation.
of 2022. This downturn has further fuelled inflationary
pressures, with year-on-year inflation rates reaching
21.8% in December 2022.
Financial and Operational Highlights
Echo-Lab recorded an impressive year-on-year revenue
growth rate in NGN terms of 24% in 2022, as average rev-
enue per test increased 15% year-on-year in NGN terms
and tests performed rose 8% versus 2021. Sustained
growth in Echo-Lab’s average revenue per test reflects
the increase in the number of patients visiting the ven-
ture to undergo the generally higher-priced CT and MRI
exams. It is worth highlighting that the termination of
operational activities at under-performing branches in
Q4 2021 impacted results in Q1 2022. Meanwhile, the
launch of two new branches during Q2 2022 generated
immediate positive contributions for Echo-Lab, boost-
ing revenues for the second half of the year. Echo-Lab
now boasts 12 fully operational branches across Nigeria.
In EGP terms, revenues for the year rose 47% to record
EGP 79 million.
2020 saw Nigeria’s worst economic downturn in four
decades, in addition to a significant surge in diesel
prices, which more than tripled during the year. The
economy remains in its recovery phase, with 2021
GDP growth recording 4.0% (exceeding previously
forecasted growth of 3%) and 2022 GDP recording 3.2%
(versus its previous forecast of 3.4%). Slowing growth
over the past year has come mainly on the back of weak
oil production and rising insecurity in the country’s
main oil producing regions. Meanwhile, despite an
increase in oil export revenues, surging petrol subsi-
dies, political volatility, and decreasing foreign reserves
have seen the Nigerian Naira (NGN) devalue further in
line with trends seen in the past seven years, with the
currency dropping a further 8.3% since the beginning
In Nigeria, EBITDA losses recorded EGP 17.1 million
for 2022, widening significantly from EBITDA losses
in 2021 despite the strong revenue growth recorded by
the venture in the past year. Widening EBITDA losses
were largely attributable to rising diesel costs, which
posted a three-fold year-on-year increase in 2022 from
NGN 250 per litre in 2021 to NGN 805 per litre in 2022.
It is worth noting that Echo-Lab’s branches in Nigeria
require electricity for which the company utilises its
own diesel powered generators; therefore, the rise in
diesel prices has a significant impact on the business.
During 2022, Echo-Lab served 149 thousand patients
and performed 303 thousand tests, up from the 281
thousand tests performed in 2021.
2022 Annual Report IDH 37
Strategic Report | Our Markets
Sudan
0.6%
Sudan 2022
Key Highlights
Contribution to consolidated
revenue in 2022
IDH operates under two brand names in Sudan, Ultra-
lab and Al Mokhtabar Sudan. Al Borg acquired a major-
ity interest in Ultralab in 2011, while Al Mokhtabar
Sudan was established in 2010 prior to the Group’s
acquisition of Al Mokhtabar in Egypt.
Sudan’s economic development continues to be
hindered by the social and political turmoil that has
endured since the 2011 secession of South Sudan, as
well as the subsequent loss of c.75% of oil produc-
tion. This unrest has continued to deprive the country
of the necessary fundamentals by which economic
growth can be realised, including the availability of
needed foreign currency sources that culminated in
a major currency devaluation in 2018, with the SDG
losing c.85% of its value. Economic hardships contin-
ued throughout 2019, leading to major protests that
resulted in the removal of long-time president Omar
Al-Bashir in April 2019.
17
Branches as at year-end 2022,
-2 versus 2021
20 EGP/MN
Revenues in 2022, up 22% y-o-y
70K
Patients served in 2022,
unchanged y-o-y
Civil unrest persisted following the removal of
President Al-Bashir, culminating in a military coup
in October 2021, where the military took control of
the government. 2021 also saw the devaluation of
the SDG, as the government sought to close the gap
between official rates and the parallel market. As a
result, the SDG fell by 19% in February 2021. Political
turmoil, coupled with the rapid devaluation of the
SDG, saw record-high inflation rates, reaching over
380% for the year.
While civil unrest largely persists in Sudan, 2022
brought about a significant easing of tensions as infla-
tion was cut by half, and encouraging steps forward
38 IDH 2022 Annual Report
were taken to secure the country’s future political
stability. More details on major developments are
provided in the following section.
mitigation strategy to protect staff, ensure the
wellbeing of its patients, and safeguard the Group’s
operations in the country.
Financial and Operational Highlights
IDH’s operations in Sudan booked revenue of SDG
547 million in 2022, up 63% year-on-year on the back
of a 114% rise in the average revenue per test in SDG
terms. In EGP terms, revenue recorded a 22% rise to
reach EGP 20 million. Throughout the year, IDH shut
down two underperforming branches in the country,
taking the total number of operating branches to 17 as
at year-end 2022.
In Sudan, the Company booked an EBITDA loss of
SDG 1.9 million, a significant improvement from the
EBITDA losses of SDG 47 million booked in 2021.
In EGP terms, EBITDA recorded a loss of EGP 196
thousand in 2022, up from the EGP 500 thousand loss
recorded in 2021.
Overall, IDH served 70 thousand patients in 2022, per-
forming 139 thousand tests during the 12-month period.
Macroeconomic Developments
In December 2020, the US government officially
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 IMF, paving the way for
the country’s economic growth. The lifting of sanctions
also opens 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.
Record-high inflation rates resulting from the devalu-
ation of the SDG in 2021 have largely smoothened
in 2022, with inflation decreasing by half to settle
around 150% at the end of 2022. Decreasing inflation
is expected to continue through 2023, with inflation
expected to fall to c.75%.
In October 2021, a military coup led to the seizure of
power from the government and brought about a new
round of civil unrest. However, on 7 December 2022,
the UN announced the signing of a new framework
in Sudan, committing to the formation of a civilian
government over the next two years. This ease of
tension, coupled with lowering inflation rates, has
drastically changed the economic outlook from the
past year. Management continues to monitor the
situation and has introduced an all-encompassing
2022 Annual Report IDH 39
Strategic Report | Our Markets
Saudi Arabia
(Expected to launch within the first half of 2023)
In October 2022, IDH and Biolab signed a partnership
with Izhoor Medical, a company owned by Fawaz
Alhokair, aimed at launching a full-fledged pathology
diagnostic services provider in Saudi Arabia. This new
venture will be owned 50% by IDH, while the remain-
ing 50% will be owned by Izhoor. The venture’s total
investments are set to reach US$ 19.7 million over the
coming four years. IDH will consolidate the results of
the new venture.
The new venture will be led by Dr. Amid Abdelnour,
Biolab’s founder and CEO, with day-to-day operations
overseen by the Biolab team that will look to transfer
its operational expertise and high-quality standards
to the Saudi Arabian market. This deal is in line with
the Group’s strategy of regional expansion and will
see IDH penetrate a fifth geography to expand its
customer base worldwide.
Market Overview
Through this strategic partnership, IDH will be
entering one of the region’s most attractive markets
offering solid growth potential underpinned by
favourable demographics, an increasingly health-
conscious patient base, robust macroeconomic
fundamentals, changing healthcare sector dynam-
ics in favour of private providers, and a supportive
regulatory framework. Today, the Kingdom boasts a
population of 36 million (growing at c.2% per year),
and ranks third in the Middle East behind only Iran
and Iraq. Meanwhile, the Saudi Arabian diagnostics
labs market is set to be one of the fastest growing
in the MEA region over the coming six years. Faster
growth is expected to be supported by several fac-
tors, including robust population growth fuelled by
both Saudi and non-Saudi nationals, as well as gov-
ernment efforts to increase the contribution from
private sector labs. Overall, the country currently
records some of the highest per-capita spending on
healthcare in the region, with the number set to rise
further in the coming years.
In line with the country’s 2030 Vision, reforming and
growing the country’s healthcare sector is a top priority
for the Saudi government. On the reform side, a lot of
focus has been put on the sector’s privatisation, with
nearly 300 hospitals and more than 2,250 healthcare
centres to be privatised by 2030. This is expected to
create ample opportunities for growth for new and
existing private players. The government has been
investing significant resources in the sector, with 14.4%
of the 2022 budget being spent on healthcare (KSA
accounts for 60% of total healthcare spending in the
GCC). Despite this, growing demand has seen public
facilities rely increasingly on private sector outsourc-
ing, including in the diagnostic testing space.
The launch of IDH’s KSA
venture will see the
Company penetrate a
fifth, fast-growing, and
underserved market
with significant future
growth potential.
40 IDH 2022 Annual Report
2022 Annual Report IDH 41
Strategic Report
Our Brands
IDH’s core brands include Al Mokhtabar, Al Borg,
and Al Borg Scan in Egypt; Biolab in Jordan; Ultra-
lab and Al Mokhtabar Sudan in Sudan; and Echo-
Lab in Nigeria. In 2019, the Group introduced its
Egypt-based data analytics venture, Wayak, which
utilises a proprietary data analytics tool to offer
patients healthcare management services and com-
pile electronic medical records.
Al Mokhtabar – Egypt
Al Mokhtabar was first launched more than four decades ago when
Dr. Moamena Kamel, Professor of Immunology at Cairo University,
founded MK Lab in 1979. MK Lab was later rebranded in line with
Al Mokhtabar and has since built a reputation as a top-notch quality
care provider with a portfolio of over 1,200 clinical analyses in the
areas of immunology, haematology/coagulation, clinical chemistry,
parasitology, microbiology/infectious diseases, toxicology, cytol-
ogy, surgical pathology, flowcytometry, molecular biology, and
cytogenetics. As of 31 December 2022, Al Mokhtabar operated a
network of 277 branches across Egypt and has served 4.5 million
patients who received more than 17 million tests.
Al Mokhtabar Key Highlights
277
operational branches as at 31
December 2022
4.5 MN
patients served in 2022
17.5 MN
tests performed in 2022
Al Borg Laboratories – Egypt
Founded in 1991, Al Borg Laboratories is the first medical labora-
tory in the Middle East to successfully implement a fully operational
Hub, Spoke, and Spike business model. Al Borg now offers more than
2,000 tests covering all fields of medical testing, both conventional
and non-conventional. The company serves outpatient walk-in cus-
tomers, in addition to corporate, insurance, and lab-to-lab clients.
Al Borg Laboratories Key
Highlights
216
operational branches as at 31
December 2022
3.0 MN
patients served in 2022
11.8 MN
tests performed in 2022
42 IDH 2022 Annual Report
Al Borg Scan – Egypt
Established by IDH in 2018 to capture growth opportunities in
Egypt’s high-value and high-fragmented radiology sector, Al Borg
Scan now offers a full range of radiology services. Additionally, it
leverages the strong brand equity and reputation associated with
Al Borg to access its wide customer base and solidify its position
as Egypt’s premium provider of medical imaging. Operations at the
Group’s Egyptian radiology venture continue to ramp up, with the
Company investing significant resources to expand Al Borg Scan’s
branch network. As of year-end 2022, the company operated 216
state-of-the-art facilities in Egypt, with plans to launch an addi-
tional two branches in the coming 12 months. Al Borg Scan draws
on the latest technology to offer the highest quality in MRI, CT,
ultrasound, x-ray, mammogram, and cath lab services. Operated by
some of Egypt’s forefront radiologists, Al Borg Scan is an integral
component of IDH’s strategy of building a national brand in Egypt
and enables the Group to deliver on its vision of providing patients
with a one-stop shop service offering combining both pathology
and ACR-accredited radiology.
Wayak – Egypt
Launched in 2019, IDH’s Egypt-based subsidiary, Wayak, leverages
the Group’s vast and growing patient database and wide geographic
reach to initiate electronic medical records and offer patients cus-
tomized services. Wayak has enabled IDH to provide an encompass-
ing service offering to its chronic patients, starting with medication
home-delivery and later expanding services to include diagnostic
testing reminders, referrals to service providers under the Group’s
network with discounted prices, and follow-up services.
Al Borg Scans Key Highlights
6
operational branches as at 31
December 2022
116K
patients served in 2022
151K
tests performed in 2022
Wayak Key Highlights
132,215
orders completed in 2022
102,171
orders completed in 2021
29%
year-on-year growth in orders
completed in 2022
2022 Annual Report IDH 43
Strategic Report | Our Brands
Biolab – Jordan
Biolab was launched in 2001 as IDH sought to realise its goal of
becoming a leader in Jordan’s private medical laboratory sector.
Through a nationwide network of 23 branches fitted with state-of-
the-art medical technology, Biolab offers an encompassing array of
over 1,000 diagnostic tests to a customer base comprised of patients,
physicians, hospitals, and referring clinical laboratories. Biolab is
accredited by the Jordanian Ministry of Health (MOH), with two
branches accredited with ISO 15189 and Joint Commission Interna-
tional (JCI) and one branch boasting CAP accreditation since 2018.
Echo-Lab – Nigeria
IDH acquired Nigerian medical diagnostics firm Echo-Lab (previ-
ously Echo-Scan) in 2018 to continue the Group’s expansion strat-
egy. The acquisition boosted IDH’s exposure to the fragmented and
underpenetrated Nigerian market, enabling the Group to capitalize
on favourable market conditions similar to those prevalent in other
geographies in which IDH operates. Echo-Lab boasts a comprehen-
sive suite of pathology and radiology diagnostic testing, bringing
together different test categories under the one umbrella.
UltraLab – Sudan
UltraLab was founded in 2008 and quickly evolved to become
Sudan’s largest and most reputable laboratory chain. As at year-end
2022, UltraLab operated 11 laboratories, including one independent
labs and 10 hospital/clinical centre-based labs. The company also
has vast exposure across Sudan, with its network of branches span-
ning Khartoum, Om Dorman, and Port Sudan.
44 IDH 2022 Annual Report
Biolab Key Highlights
23
operational branches as at 31
December 2022
890K
patients served in 2022
2.8 MN
tests performed in 2022
Echo-Lab Key Highlights
12
operational branches as at 31
December 2022
149K
patients served in 2022
303K
tests performed in 2022
UltraLab Key Highlights
11
operational branches as at 31
December 2022
59K
patients served in 2022
108K
tests performed in 2022
Al Mokhtabar Sudan – Sudan
Established in 2010 prior to IDH’s acquisition of Al Mokhtabar in Egypt,
Al Mokhtabar Sudan provides a similar diagnostic service offering as
that of UltraLab. Similarly, both the Group’s Sudanese subsidiaries
follow IDH’s efficient Hub, Spoke, and Spike model, mimicking the
approach utilized by Al Borg and Al Mokhtabar in Egypt.
UltraLab Key Highlights
6
operational branches as at 31
December 2022
11K
patients served in 2022
31K
tests performed in 2022
2022 Annual Report IDH 45
Strategic Report
Our Services
Through IDH’s brands, the Group offers a full
spectrum of diagnostic testing services, with over
2,000 internationally accredited pathology tests
ranging from basic blood glucose tests for diabetes
to advanced molecular testing for genetic disorders.
IDH also offers the full suite of radiology services
through Al Borg Scan in Egypt and Echo-Lab in
Nigeria. Additionally, IDH’s Egypt-based subsidiary,
Wayak, leverages the Group’s vast and growing
patient database and wide geographic reach to ini-
tiate electronic medical records and offer patients
customized services, including home-delivery of
medications, diagnostic testing reminders, and
referrals to service providers.
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
Genetics
46 IDH 2022 Annual Report
Radiology
IDH’s comprehensive radiology services offered through Al Borg Scan (Egypt) and Echo-Lab (Nigeria) include,
but are not limited to, magnetic resonance imaging (MRI), computed tomography (CT), ultrasound, x-ray, mam-
mograms, and cath lab facilities.
Internationally Accredited Test Portfolio
Across its brand portfolio, IDH boasts international-quality accreditations with a stringent internal audit process
to ensure it continues to deliver the world-class services patients have come to expect from IDH’s facilities.
ISO
ISO accreditation requires an initial inspection of laboratory practices, calibration, and medi-
cal analysis by an accreditation body. For Al Mokhtabar and Al Borg, it was URS Certification
(accredited internationally by the United Kingdom Accreditation Service). Meanwhile, for
Biolab, the initial inspection was carried out by the Jordanian Accreditation System (JAS).
The inspection involves the clinical chemistry area, the virology unit, the haematology unit
and the general laboratory management practice. The accreditation’s standards include both
management and technical requirements. The Company’s ISO 9001 accreditations for both Al
Mokhtabar and Al Borg passed accreditation reviews in December 2020 and are valid for three
years. Additionally, in 2022, the Company obtained ISO 45001, pertaining to occupational
health and safety, and ISO 14001, pertaining to environmental safety, accreditations for Al
Mokhtabar and Al Borg.
College of American Pathologists (CAP)
Unlike ISO accreditation, CAP certification is awarded to individual labs, rather than the Group’s
operations as a whole, and is widely considered the global leader in laboratory quality assur-
ance. The Group’s central Mega Lab in Cairo, which was inaugurated in 2015, first received its
CAP certification in February 2018, and the certification is renewable every two years. The Mega
Lab replaces two smaller, independent “A-labs”, one of which was also CAP-certified. IDH oper-
ates the only laboratory in Egypt to receive this distinguished certification, which was renewed
in October 2021.
American College of Radiology (ACR)
In 2022, both Al Borg Scan’s nuclear medicine (NucMed) and ultrasound units obtained the pres-
tigious ACR accreditation, making Al Borg Scan the first laboratory to earn the accreditation in
Africa. ACR accreditation is widely considered one of the most prestigious certifications for radiol-
ogy service providers in the world. Through a complete review of a facility’s equipment, medical
personnel, and quality assurance processes, ACR accreditation helps guarantee that patients
receive the highest level of image quality and safety. To obtain the certificate, Al Borg Scan under-
went a rigorous examination of its facilities and operational practices. Over the last two years, IFC
healthcare quality experts worked with Al Borg Scan to evaluate the baseline level of implemen-
tation of quality standards and provided guidance on required improvements in infrastructure,
policies, and processes to fully comply with ACR standards and requirements.
2022 Annual Report IDH 47
Strategic Report | Our Services
General Authority for Healthcare Accreditation and Regulation (GAHAR)
Established in step with the Egyptian government’s pursuit of ensuring quality healthcare pro-
vision for its citizens, and in line with the Egyptian healthcare direction set out under Egypt’s
2030 Vision, GAHAR accreditation standards were set forth with a patient-centric focus,
matching the highest international accreditation standards, while accounting for Egyptian
laws and culture. IDH acquired GAHAR accreditation in 10 labs.
Quality Assurance
IDH’s quality assurance programme ensures
that all internal diagnostic processes, lab
testing procedures, and results analyses are
accurate. The quality assurance programme
ensures that all the standards of the CAP
and ISO accreditations are met by inspecting
hardware and equipment, ensuring compli-
ance with procedure manuals, inspecting
the accuracy of results, and administering
competency assessments for employees. The
quality assurance programme also ensures
the timely renewal of all accreditations. The
internal audit team also maintains a specific
audit checklist for the basic and routine tests
conducted in the Group’s C-labs, including
conformity of process; testing the competency
of employees through oral, observational,
practical, and written tests; and conducting
managerial audits to assess the labs’ manage-
ment and administrative efficiency.
Employee Training
The Group views education as an essential means
of ensuring quality across its laboratories. To
help develop the skills of employees, IDH has
a dedicated training facility in Cairo with four
training laboratories. In 2022, the training team
was composed of one manager, two medical con-
sultants, three supervisors, two administrators,
and four full-time training specialists. The centre
provides training to around 566 employees per
month, including doctors, chemists, reception-
ists, branch and area managers, sales personnel,
and administrators. The training curriculum is
determined based on performance KPIs, internal
audit reports, management reviews, competency
assessment reports, and analysis of customer
feedback and complaints. IDH’s employee train-
ing is structured along four modules covering
both technical and non-technical skills: new
employee training and competency based, need-
based, and practical re-training.
48 IDH 2022 Annual Report
2022 Annual Report IDH 49
Strategic Report
Competitive Strengths
& Growth Strategy
IDH’s distinguished market position and adaptive business model, coupled with its scalable platform and
seasoned management, provide the necessary tools to deliver on the Group’s ambitious long-term growth
strategy while navigating the challenges posed across its markets.
Competitive Strengths
Exposure to resilient markets with favourable dynamics
The Group operates in markets underpinned by strong structural growth drivers, with gener-
ally under-penetrated and underserved diagnostic services sectors. Given the counter-cyclical
nature of the diagnostic and healthcare industries, IDH remains resilient in the face of eco-
nomic and political hurdles across its geographic footprint. This has been displayed by IDH’s
consistent top- and bottom-line growth in recent years despite the unprecedented challenges
posed by global and regional economic hardships.
Strong market position with over four decades of industry experience
Across all its markets, IDH benefits from strong barriers to entry (as detailed in Our Markets
on page 24). This provides a significant edge for players who, like IDH, maintain a strong mar-
ket position. Relying on strong brand equity and a stellar reputation, IDH’s subsidiaries have
achieved a successful track record spanning more than 40 years, earning patients’ trust and
loyalty and positioning themselves as the go-to service providers in their respective markets.
IDH also leverages its internationally accredited facilities to attract contract clients, while its
scalable business model and relationships with key stakeholders enable the Group to extend
its reach in a fragmented market.
Scalable asset-light business model
IDH’s Hub, Spoke, and Spike business model enables a capital efficient expansion of the Group’s
geographic footprint. 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
testing 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. Given the large
volumes required to achieve the economies of scale necessary to implement this asset-light
business model, IDH’s Mega Lab provides a unique competitive advantage unmatched by any
of its regional peers.
50 IDH 2022 Annual Report
Strong balance sheet and cash generation capacity
The Group’s asset-light model, which enables minimal borrowing and significant strategic
flexibility, allows the Company to maintain a strong financial position with a balance sheet
with a low amount of leverage. Meanwhile, core profitability remains strong, with the Group
delivering high EBITDA margins and sustaining healthy cash balances despite the challeng-
ing operating conditions to which IDH has been subjected throughout the years.
Experienced and entrepreneurial management
IDH has a highly qualified management team with several decades of healthcare experience
at its helm, while its seasoned Board of Directors brings a wealth of healthcare, MENA region,
and investment experience to the table.
2022 Annual Report IDH 51
Strategic Report | Competitive Strengths & Growth Strategy
Long-Term Growth Strategy
IDH leverages its competitive advantages to capture
significant opportunities and deliver on a four-pillar
growth strategy focused on (1) the continued expan-
sion of its customer base; (2) the expansion of its
service portfolio to increase tests per patient; (3) the
penetration of new geographic markets through selec-
tive, value-accretive acquisitions; and (4) the introduc-
tion of new medical services by leveraging the Group’s
network and reputable brand position.
Expand Customer Reach
The Group is constantly searching for opportunities that increase patient accessibility and expand
its customer base, capitalising on the favourable market dynamics and strong demand for private
healthcare services, which are commonly shared characteristic across its entire geographical
footprint. IDH expands at a rate of 25–30 branches per annum, making the Company the largest
branded private sector player in Egypt, its largest market. IDH’s scalable, asset-light business model
allows the quick and efficient roll-out of new labs and the further expansion of its presence in the
MEA region. In addition to its core offerings, the Group provides a host of complementary services,
including house calls, e-services, and results delivery, which create an easy and well-rounded
experience for both existing and prospective patients. IDH’s house call services have gained sig-
nificant traction over the last two years as a result of the Covid-19 pandemic, accounting for 18%
of Egypt’s revenues in 2022, well above its pre-pandemic averages. In response to higher demand
during the Covid-19 pandemic, the Company effectively expanded the service and can now per-
form up to 5,000 house call visits per day and handle as many as 10,000 daily calls. This has enabled
the Company to successfully meet growing demand while still enjoying ample spare capacity to
further accelerate the service. The Group also seeks to expand its customer reach through negotiat-
ing more deals with institutions for its corporate segment, with institutions ranging from public
entities, such as ministries and syndicates, to purely private companies. Additionally, the Company
participates in governmental campaigns, such as the 100 Million Healthy Lives Campaign that ran
from November 2018 until June 2019 and served 224 thousand patients.
Increase Tests per Patient
The Group’s state-of-the-art Mega Lab further facilitates the delivery of a growing number of
increasingly complex tests that are not typically available at competing labs. Additionally, IDH
bundles testing services into discounted health packages offered to existing customers, further
driving volume growth and revenue per patient, a particularly important growth driver during
a period of high inflation. Building on this, in 2022, the Group launched its first ever loyalty
programme dedicated to the contract segment. The new scheme immediately generated posi-
tive results, boosting tests per patient to a record high in the segment. Moreover, IDH actively
participates in awareness campaigns focusing on particular illnesses and educating people on
lifestyle diseases, such as diabetes and high cholesterol, and highlighting the importance of
frequent testing. These efforts and the associated community engagement have successfully
boosted IDH’s volume growth and bolstered average tests and revenues per patient
52 IDH 2022 Annual Report
52
new branches in 2022
8.7 MN
patients served in 2022
Geographic Expansion
IDH is continuously seeking strategic acquisition opportunities within the MEA region where
markets are largely characterised by under-penetration and high fragmentation. IDH’s business
model is well-positioned to leverage prevailing healthcare and consumer trends in the region.
Relying on the strength of its balance sheet, IDH delivers on its strategic objective through value-
accretive acquisitions and strategic partnerships. Most recently, the Group announced a landmark
partnership (majority owned by IDH) with Biolab and Izhoor Holding to launch a new full-fledged
pathology diagnostic service provider in Saudi Arabia. Saudi Arabia presents an attractive market
opportunity for IDH, characterised by a growing and ageing population with a high rate of non-
communicable diseases due to unhealthy lifestyle choices. Additionally, the Saudi market offers a
favourable regulatory environment on the back of the government’s resolve to minimise influence
in the healthcare field and encourage private investment.
Diversify into New Medical Services
The Group believes that its brand equity, experience, and patient following ideally position it to
pursue opportunities in adjacent markets. For this reason, IDH began its expansion into the high-
value radiology segment in October 2018 through Al Borg Scan. On top of IDH’s revenue streams,
Al Borg Scan enabled the Group to capitalise on the important growth opportunities offered by
Egypt’s fragmented radiology market while delivering on our vision of providing patients with a
one-stop shop service offering featuring both pathology and radiology.
Additionally, IDH marked its expansion into data-driven, tailored healthcare management services
in September 2019 through Wayak. These new services enable the Group to provide an increasingly
well-rounded and tailored experience to its patients, further boosting loyalty and retention rates.
2022 Annual Report IDH 53
Strategic Report
Principal Risks, Uncertainties,
& their Mitigation
As in any corporation, IDH has exposure to risks and uncertainties that may adversely affect its performance.
IDH Chairman Lord St John of Bletso has emphasised that ownership of the risk matrix is sufficiently important
to the Group’s long-term success that it must be equally shared by the Board and senior management. While no
system can mitigate every risk — and some risks, as at the country level, are largely without potential mitigants —
the Group has in place processes, procedures, and baseline assumptions that provide mitigation. The Board and
senior management agree that the principal risks and uncertainties facing the Group include:
Specific Risk
Mitigation
Country/regional risk — Economic & Forex
Egypt: 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.80% of our revenues in
2022 (2021: c.81%) and 90% of adjusted EBITDA (2021: 87%).
While the Russia-Ukraine war has had significant eco-
nomic repercussions on countries all over the world,
Egypt’s dependency on both countries for wheat imports
and tourism revenues, its high import bill, the widespread
outflow of capital from emerging markets at the start of
the war, and the tight monetary conditions globally have
left the country in a particularly weak position.
As part of the government’s plans to boost FX reserves and
investor confidence, the country finalised a US$ 3 billion
loan from the IMF in December 2022. A central condition
within the agreement was the move to a flexible exchange
rate in the country. As a result of multiple devaluations
throughout the year, in March 2023, the EGP was down
97% year-on-year recording an EGP/US$ rate of 30.9 in
March 2023 from 15.7 in early March 2022 (prior to the
first devaluation). Despite this, pressure on the currency
persists stemming from a strong US$, a US$ shortage in the
market, and further speculation of a weaker currency.
As a result of the devaluation, rising global food and
energy prices, and import restrictions imposed through-
out most of 2022 by the CBE, Egypt recorded high and
rising inflation throughout 2022, with inflation hitting a
five-year high in January 2023 of 25.8%. In an attempt to
rein in inflation, the central bank has raised rates by 800
bps since the beginning of 2022.
54 IDH 2022 Annual Report
Overall, management notes that IDH has a resilient and defen-
sive business model and that the business continued to grow
year-on-year through two revolutions, as well as under the
extremely difficult operating conditions faced between 2016
and 2022, during which time the country faced the Covid-19
pandemic and several rounds of currency devaluation.
IDH has historically taken a proactive approach to
shield the business from exchange rate fluctuations. As
part of IDH’s mitigation strategy the Company secures
contracts with tenors ranging from five to seven years
(with semi-fixed FX rates) and purchases laboratory
test kits on contract with volume-linked pricing. More-
over, thanks to IDH’s significant volume and scale, and
its long-lasting supplier relationships, the Company is
in a favourable position to negotiate test kit prices with
all its major suppliers.
During FY 2022, only 12% of IDH’s cost of supplies (c.2%
of revenues) were payable in US$, minimising the Group’s
exposure to foreign exchange (FX) scarcity and, in part,
the volatility of the EGP. During the first part of 2022, the
Group had secured its stock at pre-devaluation rates,
helping to further minimise the impact of the devalua-
tion. Moreover, during the course of 2022, the Company
was able to renegotiate supplier prices at a lower rate
than the devaluation rates, which resulted in an overall
increase in the proportion of raw materials to sales of
20.7%, compared to 19.6% in 2021. Going forward, IDH’s
management will continue to leverage its long-lasting
relationships with test kit providers to secure additional
stock at competitive prices, shielding our business from
the impacts of rising inflation and the EGP devaluation.
Specific Risk
Mitigation
In an effort to mitigate high inflationary environment in
Nigeria, management is increasing prices and focusing
on cutting unnecessary cost.
The Group is closely monitoring the economic situ-
ation in Sudan and has implemented several price
increases to keep in step with inflationary pressures.
IDH is also working to limit expatriate salaries and
foreign currency needs by increasing dependence on
local hires.
Foreign currency risk: The Group is exposed to for-
eign currency risk on the cost side of the business. The
majority of supplies it acquires are paid in EGP, but
given they are imported, their price will vary with the
rate of exchange between the EGP and foreign curren-
cies. In addition, a portion of supplies are priced and
paid in foreign currencies.
Nigeria: Depreciation of the NGN would make imported
products and raw materials more expensive and would
reduce Nigeria’s contribution to consolidated Company
revenues. Meanwhile, inflation in Nigeria surged in
2022, reaching 21.3% in December 2022. Higher price
levels were driven by the sharp rise in diesel prices,
which increased from NGN 250 per litre in 2021 to NGN
805 per litre in 2022.
Sudan: Following substantial currency devaluation
in Sudan during 2018, the currency lost 85% of its
value. In 2019, the SDG’s official rate versus the US$
remained relatively stable at 45.11 as at 31 December
according to the Central 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 aggra-
vated by the Covid-19 pandemic. In February 2021,
the currency was devalued again, and fuel subsidies
were completely removed in June 2021, which led to
a further increase in consumer prices. In March 2022,
the Sudanese government floated the SDG, which saw
the currency end 2022 at a rate of 571.5 versus the US$.
Sudan’s headline inflation rate has been gradually
declining throughout 2022, ending the year at a rate of
87.3%, down from 259.8% in January 2022.
2022 Annual Report IDH 55
Strategic Report | Principal Risks, Uncertainties & their Mitigation
Specific Risk
Mitigation
It is important to note that in FY 2022 Sudan made up
just 0.6% of IDH’s revenues. Moreover, while nationwide
protests do affect patient and test volumes 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, 2021, and 2022, the geog-
raphy recorded solid year-on-year revenue growth in
SDG terms. In FY 2022, IDH’s Sudanese operations also
returned to growth in EGP terms.
IDH’s management on the ground continues to moni-
tor the evolving situation and has put in place an all-
encompassing mitigation strategy to safeguard staff and
patient wellbeing and protect IDH’s operations in case
of any future unrest.
Country risk — Political & Security
Sudan: In 2019, severe political unrest and protests led the
military to remove long-time president Omar Al-Bashir.
Following his removal, the military signed a power-shar-
ing agreement 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 Minis-
ter, Abdalla Hamdok, 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, leading to mass rallies and civilian
unrest. 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. On 5
December 2022, a new deal was signed between military
generals and political parties that would pave the way for
a civilian-led transition. However, civil unrest and protests
are continuing 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 worth noting that in December 2020, the 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 invest-
ment, including the International Monetary Fund, pav-
ing the way for the country’s economic growth.
Nigeria: The country faces security challenges on sev-
eral fronts, including re-emerging ethnic tensions and
resurgent attacks by Islamist militants in the northeast.
Against the backdrop of a sluggish economy and the
slow implementation of reforms, mounting discontent
could translate into further social unrest.
Following the disbandment of the special division known
as Special Anti-Robbery Squad (SARS) by the Nigerian
government in October 2020, protests have decreased
significantly across the country, but a potential escalation
of civil unrest remains possible. Throughout 2022, there
were several instances of escalation following multiple
terrorist attacks and widespread cases of kidnapping.
Nigeria held elections in the first quarter of 2023.
It is worth highlighting that in FY 2022, Nigeria made
up just 2.2% of IDH’s consolidated revenues. More-
over, while nationwide security challenges do affect
patient and test volumes in the country, the diagnos-
tic industry is relatively immune given the inelastic
demand for healthcare services. This is showcased by
the healthy rise in both patient and test volumes that
has been recorded by the venture since IDH’s takeover
of operations in 2018. While security challenges and
ethnic tensions are relatively hard to mitigate, IDH is
continuously evaluating its processes to safeguard its
employees and operations. Overall, IDH applies rigor-
ous standards to evaluating all aspects of its business
processes in Nigeria to ensure it is well-equipped to
respond to the evolving situation.
56 IDH 2022 Annual Report
Specific Risk
Covid-19
Mitigation
The risks posed by Covid-19 on the business have declined
significantly in 2022 as vaccination campaigns ramped
up, infection rates declined, and governments and busi-
nesses continued to effectively coexist with the virus.
As of December 2022, no new restrictions have been
imposed following the rise of new Covid-19 variants
throughout the past year. As at the end of 2022, the
share of the population having received at least one
Covid-19 vaccine dose stood at approximately 46%
in Egypt, 47% in Jordan, 30% in Nigeria, and 15% in
Sudan, and all four countries are currently free from
any Covid-19 related restrictions.
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 vaccinated 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.
Covid-19 impact on IDH Financials
Throughout FY 2022, IDH generated around 18% of
its revenues from Covid-19-related testing. In light
of the increasing roll-out of vaccines and the wide-
spread decline in infection rates, Covid-19-related
revenues rapidly declined as the year progressed
and in Q4 2022 made up just 3% of total revenues
versus 43% in Q1 2022.
Throughout the Covid-19 crisis, IDH has maintained
a strong focus on growing its conventional (non-
Covid19-related) business, which expanded 18% in FY
2022 versus FY 2021, and came in 33% above pre-covid
levels recorded in FY 2019 (adjusting for the contribu-
tion generated by the 100 Million Healthy Lives Cam-
paign in 2019). As part of the Group’s post-Covid-19
strategy in both Egypt and Jordan, IDH’s focus has now
turned to patient retention as it looks to maintain the
new relationships established during the pandemic
thanks to its Covid-19-dedicated offering.
2022 Annual Report IDH 57
Strategic Report | Principal Risks, Uncertainties & their Mitigation
Specific Risk
Mitigation
The Russia-Ukraine War
The conflict between Russia and Ukraine, which has
been ongoing since February 2022, has negatively
impacted the global economy and IDH’s markets
of operation. In particular, IDH’s home and largest
market of Egypt saw a rapid rise in inflation and a large
outflow of capital following the outbreak of the conflict.
This is due to multiple factors, including the country’s
reliance on the imports of oil and wheat, coupled
with a relatively weak FX position. Rising inflation has
increasingly eaten away at patients’ purchasing power
in the country. Fast-rising inflation was also recorded
across IDH’s other markets.
As with similar situations in the past, IDH expects pro-
tracted high inflation, in particular in Egypt, to have the
most significant impact on patients who pay for their own
healthcare. IDH has been developing marketing pro-
grammes targeted to this patient segment with a strong
health awareness message in combination with a com-
pelling value component. This includes offering bundled
diagnostic test packages for lifestyle-related diseases and
chronic health conditions, as well as an in-house point
redemption system. The Company is also exploring vari-
ous solutions to offer more affordable payment plans to
retain patients despite rising inflation.
At the same time, IDH enjoys a strong brand equity built
over many years, which has translated into strong loyalty,
ensuring that patients continue to choose the Group as
their trusted diagnostic services provider irrespective of
the ongoing inflationary pressures.
On the costs front, IDH has been actively working with
suppliers to negotiate favourable test kit prices and con-
tracts to mitigate the impact of a weaker EGP on its raw
material cost base.
Global Supply Chain Disruptions
The Russia-Ukraine conflict has exacerbated supply
chain disruptions that had already come about as a result
of restrictions imposed to curb the spread of Covid-19,
labour shortages, and fast-rising demand for goods,
causing delays and shortages worldwide. The ongoing
global supply chain disruptions has had limited impacts
on IDH’s operations throughout 2022 and in early 2023.
IDH’s management team continually monitors the
evolving situation and has 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.
Throughout 2022 and in the first part of 2023, thanks
to IDH’s proactive inventory build-up and sourcing
strategy, the Group continued to face no problems
acquiring raw materials.
58 IDH 2022 Annual Report
Specific Risk
Supplier Risk
Mitigation
IDH faces the risk of suppliers re-opening negotiations
in the face of cost pressure owing to the prevailing
inflationary environment and/or a possible albeit
limited devaluation risk.
IDH has strong, longstanding relationships with its sup-
pliers, to whom it is a significant regional client. Due to
the volumes of kits the Group purchases, IDH was typi-
cally able to negotiate favourable pricing and maintain
raw material costs increases at a rate slower than local
currency devaluation. It is worth highlighting that IDH’s
supplier relations were not impacted by Covid-19.
IDH’s supplier risk is concentrated among three key
suppliers — Siemens, Roche, and Sysmex— who pro-
vide it with kits representing 31% of the total value of
total raw materials in 2022 (2021: 24%).
Total raw material costs as a percentage of revenues
stood at 20.4% in 2022 versus 18.9% in 2021 (raw mate-
rials to net sales stood at 20.7% in 2022 compared to
19.6% in 2021).
Remittance of dividend regulations and repatria-
tion of profit risk
The Group’s ability to remit dividends abroad may be
adversely affected by the imposition of remittance
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. Additionally, in
line with the most recent devaluation of the EGP, there
have been significant shortages of foreign currency at
Egyptian banks, with the ability to source foreign cur-
rency becoming more difficult under strict regulations.
As a foreign investor in Egypt, IDH did not have issues
with the repatriation of dividends. However, starting
in early 2022, the Company has faced significant dif-
ficulties in sourcing the US$ balance needed to fulfil its
dividend obligations. Heading into 2023, the Company
expects the difficulties to persist and is closely moni-
toring the evolving situation to shield the business
from potential challenges.
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 anti-
trust and competition-related restrictions, as well as the
possibility of investigation by the Egyptian Competition
Authority.
The Group’s general counsel and the quality assurance
team work together to keep IDH abreast of, and in com-
pliance with, both legislative and regulatory changes.
On the antitrust front, the private laboratory segment
(of which IDH is a part) accounts for a small propor-
tion of the total market, which consists of small private
labs, private chain labs, and large governmental and
quasi-governmental institutions.
2022 Annual Report IDH 59
Strategic Report | Principal Risks, Uncertainties & their Mitigation
Specific Risk
Mitigation
Risk from contract clients
Contract clients, including private insurers, unions, and
corporations, account for 58% of Group revenues for the
year. Should IDH’s relationship with these clients deterio-
rate, 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.
Pricing pressure in a competitive, regulated environment
The Group may face pricing pressure from various
third-party payers, including national health insurance,
syndicates, and other governmental bodies, which could
materially and adversely affect its revenue. Pricing may be
restrained in cases by recommended or mandatory fees
set by the government’s ministries and other authorities.
This risk may be more pronounced in the context of the
imminent inflationary pressures following the recent
depreciation of the EGP.
The Group might face pricing pressure from existing com-
petitors and new entrants to the market.
Cybersecurity risks
The Company controls a vast amount of confidential data
for its patients’ records; to this end, there is a cybersecurity
risk for both data confidentiality and data security.
60 IDH 2022 Annual Report
IDH diligently works to maintain sound relationships
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.
In an effort to mitigate risks from contact clients, no
single client contract accounts for more than 3% of
total revenues or 4% of contract revenues.
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.58% of IDH revenues in 2022 is
generated by servicing contract clients (private 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 among all private
sector players. Moreover, in its home market of Egypt, which
accounted for 80% of total revenues in FY 2022, the Group
faces no potential risk of price regulation by the government.
The Company has stringent control over its data security
and regularly stress tests its IT infrastructure to assess the
robustness of its internal controls. Moreover, its cyber-
security controls and protocols are regularly updated to
proactively address potential shortcomings, keep them
in full adherence with data security regulations in the
Group’s markets of operation, and maintain them in line
with global best practices.
Specific Risk
Mitigation
Business continuity risks
Management concentration risk: IDH is dependent on
the unique skills and experience of a talented manage-
ment 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 extensively
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 inter-
ruption at one of the Group’s larger laboratory facilities
could result in significant losses and reputational dam-
age 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.
Business Interruption: across 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 engag-
ing 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
systems as alternatives to landlines, among multiple
other factors. IDH tests its disaster recovery plans on
a regular basis, with regular updating and internal
and external audits.
In Egypt and Jordan, to mitigate the impact of potential
branch closures on operations, the Group has been
ramping up its house call services. Moreover, the
Group’s important role in conducting PCR testing for
Covid-19 in both Egypt and Jordan makes it unlikely
that branches would be closed, even if new restrictive
measures were introduced.
Climate-related risks
IDH’s operations currently face low physical and tran-
sitional risks related to climate change.
For the first time, the Company is reporting, based on
the Task Force on Climate-Related Financial Disclosures
(TCFD) programme, disclosures to provide stakehold-
ers with a clear framework to assess its climate-related
risks and opportunities. Overall, the risk and opportuni-
ties related to climate change are considered immate-
rial, especially in the short-to-medium term. For TCFD
disclosures, please refer to pages 80 to 84 of this report.
2022 Annual Report IDH 61
Performance
3.5EGP/BN
Net sales
in 2022
1.2EGP/BN
Adjusted EBITDA
in 2022
15%
Net profit margin
in 2022
62 IDH 2022 Annual Report
02 2022 Annual Report IDH 63
Performance
Important Notice
As part of IDH’s efforts to support local authorities in
Jordan in the fight against the pandemic, Biolab (IDH’s
Jordanian subsidiary) secured several revenue-sharing
agreements to operate testing stations, primarily dedi-
cated to PCR testing for Covid-19, in multiple locations
across the country, including Queen Alia International
Airport (QAIA) and Aqaba Port. These agreements
kicked off in May 2021 at Aqaba Port and in August 2021
at QAIA. However, following the decision by Jordanian
authorities on 1 March 2022 to end mandatory testing,
testing booths across both locations recorded sharp
declines in patient traffic.
Under these agreements, Biolab received the full revenue
(gross sales) for each test performed and paid a propor-
tion to QAIA (38% of gross sales excluding sales tax) and
Aqaba Port (36% of gross sales) as concession fees to
operate in the facilities, thus effectively earning the net
of these amounts (net sales) for each test supplied. Start-
ing in Q4 2021, the treatment of these agreements was
altered in accordance with IFRS 15 paragraph B34, which
considers Biolab as a Principal (and not an Agent). Sub-
sequently, revenues generated from these agreements
are reported in the Consolidated Financial Statements
as gross (inclusive of concession fees), and the fees paid
to QAIA and Aqaba Port are reported as a separate line
item in the direct cost. It is important to note that sales
generated from these agreements were reflected in the
Company’s results in Q1 2022 only as the agreements
were terminated at the end of the first quarter of 2022.
In an effort to present an accurate picture of IDH’s perfor-
mance for the 12-month period ended 31 December 2022,
throughout the report, management utilizes net sales of
EGP 3,542 million for FY 2022 (IFRS revenues stand at
EGP 3,605 million for the 12-month period). Net sales for
the year ended 31 December 2022 are calculated as total
gross revenues excluding concession fees and sales taxes
paid as part of Biolab’s revenue sharing agreements with
QAIA and Aqaba Port. This is a similar approach taken by
IDH in the Company’s FY 2021 Results Announcement.
It is worth nothing that following the reduction in activity,
net sales will not be reported as an Alternative Perfor-
mance Measures (APM) in 2023.
It is important to note that aside from revenue and cost
of sales, all other figures related to gross profit, operat-
ing profit, EBITDA, and net profit are identical in the
APM and IFRS calculations. However, the margins
related to the aforementioned items differ between the
two sets of performance indicators due to the use of net
sales in the APM calculations and the use of revenues
for the IFRS calculations.
Adjustments Breakdown
EGP mn
Net Sales
QAIA and Aqaba Port Concession Fees
Revenues
Cost of Net Sales
Q1 2022
Q2 2022
Q3 2022
Q4 2022
FY 2022
1,117
63
1,180
(586)
774
0
774
846
0
846
805
0
805
3,542
63
3,605
(473)
(497)
(524)
(2,080)
Adjustment for QAIA and Aqaba Port
Agreements
(63)
(0)
(0)
(0)
(63)
Cost of Sales
(649)
(473)
(497)
(524)
(2,143)
64 IDH 2022 Annual Report
Adjustments Breakdown
EGP mn
Egypt
Jordan
Nigeria
Sudan
Group total
Note: differences between IFRS and APM figures are highlighted in grey.
Alternative Performance Measures (APM)
FY 2022 (IFRS)
FY 2022 (APM)
2,894
612
79
20
3,605
2,894
549
79
20
3,542
EGP mn
Net Sales
Conventional Revenue
Covid-19-Related Net Sales
Cost of Net Sales
Gross Profit
Gross Profit Margin on Revenue
Gross Profit Margin on Net Sales14
Operating Profit
EBITDA15
Adjusted EBITDA16
Adjusted EBITDA Margin on Revenue
Adjusted EBITDA Margin on Net Sales
Net Profit
Net Profit Margin on Revenue
Net Profit Margin on Net Sales
Cash Balance
FY 2021
FY 2022
Change
5,048
2,452
2,596
(2,244)
2,804
54%
56%
2,291
2,501
2,530
48%
50%
1,493
29%
30%
2,350
3,542
2,903
639
(2,080)
1,462
41%
41%
854
1,150
1,172
33%
33%
527
15%
15%
816
-30%
18%
-75%
-7%
-48%
-13 pts
-15 pts
-63%
-54%
-54%
-15 pts
-17 pts
-65%
-14 pts
-15 pts
-65%
Note: differences between IFRS and APM figures are highlighted in grey.
14 Gross profit, EBITDA, and net profit margins are calculated on net sales for APM in both periods.
15 EBITDA is calculated as operating profit plus depreciation and amortization.
16 Adjusted EBITDA is calculated as EBITDA excluding one-off expenses incurred by the Group.
2022 Annual Report IDH 65
Performance | Financial & Operational Review
Financial & Operational Review
EGP mn
Revenues
Conventional Revenues
Covid-19-Related Revenues
Cost of Sales
Gross Profit
Gross Profit Margin
Operating Profit
EBITDA17
Adjusted EBITDA18
EBITDA Margin
Net Profit
Net Profit Margin
Cash Balance
FY 2021
FY 2022
Change
5,225
2,452
2,773
(2,421)
2,804
54%
2,291
2,501
2,530
48%
1,493
29%
2,350
3,605
2,903
702
(2,143)
1,462
41%
854
1,150
1,172
33%
527
15%
816
-31%
18%
-75%
-11%
-48%
-13 pts
-63%
-54%
-54%
-15 pts
-65%
-14 pts
-65%
Note (1): Throughout the document, percentage changes between reporting periods are calculated using the exact value (as per the Consolidated Financials)
and not the corresponding rounded figure.
Revenue and Cost Analysis
Consolidated Revenue
IDH witnessed sustained growth at its conventional
business (which includes IDH’s full test roster except
for its Covid-19-related offering) in FY 2022 as patient
traffic continued to normalise post-Covid-19 and IDH
capitalised on its post-pandemic growth strategy.
Growth for the year was dual driven as conventional
test volumes and average revenue per test each posted
solid year-on-year expansions. Meanwhile, Covid-
19-related19 revenues declined sharply throughout the
year. Demand for Covid-19-related tests fell rapidly
starting in the second quarter of this year as infection
rates declined and governments lifted mandatory test-
ing. Meanwhile, price drops were primarily seen in the
first quarter of the year.
Combined, this saw the Group book consolidated
revenue (IFRS) of EGP 3,605 million in FY 2022, a 31%
year-on-year decrease, and consolidated net sales20 of
EGP 3,542 million, down 30% year-on-year. It is worth
noting that the year-on-year decline in part reflects the
high base effect from FY 2021 when the consolidated
figure had been boosted by an exceptional contribu-
tion made by IDH’s Covid-19-related test offering.
17 EBITDA is calculated as operating profit plus depreciation and amortization.
18 Adjusted EBITDA is calculated as EBITDA excluding one-off expenses incurred by the Group.
19 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 the Covid-19 pandemic.
20 A reconciliation between revenue and net sales is available earlier in this announcement.
66 IDH 2022 Annual Report
Revenue Analysis
FY 2021
FY 2022
Change
Total revenue (EGP mn)
Total net sales (EGP mn)
Conventional revenue (EGP mn)
Total Covid-19-related revenue (EGP mn)
Total Covid-19-related net sales (EGP mn)
Core Covid-19 net sales (PCR, Antigen, Antibody) (EGP mn)
Other Covid-19-related net sales (EGP mn)
5,225
5,048
2,452
2,773
2,596
2,217
379
Contribution to Consolidated Results
Conventional revenue
Total Covid-19-related net sales
Core Covid-19 tests (PCR, Antigen, Antibody)
Other Covid-19-related tests
49%
51%
44%
7%
3,605
3,542
2,903
702
639
556
83
82%
18%
16%
2%
-31%
-30%
18%
-75%
-75%
-75%
-78%
Test Volume Analysis
FY 2021
FY 2022
Change
Total tests (mn)
Conventional tests performed (mn)
Core Covid-19 tests performed (k)
Other Covid-19-related tests performed (k)
33.6
28.5
2,611
2,507
Contribution to Consolidated Results
Conventional tests performed
Core Covid-19 tests performed
Other Covid-19-related tests performed
85%
8%
7%
-3%
9%
-57%
-77%
32.7
31.0
1,128
572
95%
3%
2%
Revenue/Net Sale per Test Analysis
Total revenue per test (EGP)
Total net sale per test (EGP)
Conventional revenue per test (EGP)
Covid-19-related net sale per test (EGP)
FY 2021
FY 2022
Change
155
150
86
507
110
108
94
376
-29%
-28%
9%
-26%
2022 Annual Report IDH 67
Performance | Financial & Operational Review
Revenue Analysis: Contribution by
Patient Segment
Contract Segment (58% of total Group revenue)
Conventional revenue at IDH’s contract segment (86% of
total contract revenue) recorded a significant expansion of
32% year-on-year to book EGP 1,784 million in FY 2022 on
the back of year-on-year increases in test volumes and rev-
enue per test. Test volumes benefitted from several new ini-
tiatives introduced by management over the course of 2022,
including the inauguration of a new loyalty programme for
the first time in the contract segment, as well as a normalisa-
tion of IDH’s patient mix as Covid-19-related volumes sub-
sided. The immediate effects of the newly introduced loyalty
programme were significant, with average tests per patient
increasing 14% year-on-year to reach 4.1 in FY 2022 from
3.6 tests per patient in the prior year. Despite the sustained
expansion in the contract segment’s conventional revenue,
a steep 80% year-on-year decrease in Covid-19-related21
contract revenue resulted in an overall contraction of con-
tract revenue of 28% year-on-year in FY 2022.
Walk-in Segment (42% of total Group revenue)
Meanwhile, at IDH’s walk-in segment, conventional
revenue (constituting 74% of total walk-in net revenues)
reported a 2% year-on-year increase on the back of 9%
year-on-year rise in the average revenue per test which
more than offset a decline in conventional test volumes
at the segment. On the other hand, Covid-19-related
revenues at the segment declined 68% year-on-year to
record EGP 400 million. Similarly Covid-19-related net
sales22 at the walk-in segment also declined 68% year-
on-year to EGP 337 million. As a result, total revenues
at the walk-in segment declined to EGP 1,519 million in
FY 2022, 35% below last year’s figure. Meanwhile, net
sales at the walk-in segment decreased to EGP 1,456
million in FY 2022, a 33% year-on-year decline.
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 the Covid-19 pandemic.
22 Covid-19-related walk-in net sales is calculated as Covid-19-related walk-in revenues excluding concession fees paid as part of Biolab’s agreements with
QAIA, KHIA, and Aqaba Port.
68 IDH 2022 Annual Report
Key Performance Indicators
The table presents Alternative Performance Measures (APM) for each period (further information available
earlier in the release)
Walk-in Segment
Contract Segment
Total
FY21
FY22
Change
FY21
FY22
Change
FY21
FY22
Change
Revenue (EGP mn)
2,339 1,519
-35% 2,885
2,086
-28% 5,225
3,605
-31%
Net Sales (EGP mn)
2,163 1,456
-33% 2,885
2,086
-28% 5,048
3,542
-30%
Conventional Revenue (EGP mn)
1,100
1,119
2%
1,352
1,784
32%
2,452
2,903
18%
Total Covid-19-Related Net
Sales (EGP mn)
1,063
337
-68%
1,533
302
-80%
2,596
639
-75%
Patients (‘000)
3,464 2,592
-25% 6,853
6,129
-11% 10,317
8,721
-15%
% of Patients
34%
30%
66%
70%
Revenue per Patient (EGP)
Net sales per Patient (EGP)
675
624
586
562
-13%
-10%
421
421
340
340
-19%
-19%
506
489
413
406
-18%
-17%
Tests (‘000)
% of Tests
8,693 7,313
-16% 24,966 25,372
2%
33,659 32,685
-3%
26%
22%
74%
78%
Conventional Tests (‘000)
6,948
6,462
-7%
21,594
24,523
14%
28,542
30,985
9%
Total Covid-19-Related Tests (‘000) 1,745
851
-51%
3,372
849
-75%
5,117
1,700
-67%
Revenue per Test (EGP)
Net Sales per Test (EGP)
Test per Patient
269
249
2.5
208
199
2.8
-23%
-20%
12%
116
116
3.6
82
82
4.1
-29%
-29%
14%
155
150
3.3
110
108
3.7
-29%
-28%
12%
Revenue Analysis: Contribution by
Geography
Egypt (80.3% of revenue)
The Company’s Egyptian operations delivered solid
year-on-year growth in conventional revenues, driven
by higher test volumes and average revenue per
test. On the other hand, Covid-19-related revenues
declined sharply as both demand and prices decreased
throughout the year. Lower pricing reflected increased
competition. This was particularly visible in the 70%
year-on-year drop in PCR test volumes for FY 2022 and
the 44% year-on-year decline in the average revenue
per PCR test in FY 2022 compared to FY 2021.
Al Borg Scan
Al Borg Scan, IDH’s Egyptian radiology venture,
recorded an impressive 91% year-on-year increase in
revenues to book EGP 85.2 million during FY 2022. The
sustained top-line expansion was primarily driven by a
93% year-on-year rise in case volumes (patients served
rose 89% for the year). The continued operational
ramp-up during FY 2022 was supported by the opening
of two new branches over the 12-month period, with Al
Borg Scan’s network now standing at a total of six stra-
tegically located branches spanning the full Greater
2022 Annual Report IDH 69
Performance | Financial & Operational Review
Cairo area. Meanwhile, IDH also successfully obtained
the ACR accreditation for both Al Borg Scan’s nuclear
medicine (NucMed) and ultrasound units, making Al
Borg Scan the first radiology centre in Africa, as well as
one of the few radiology facilities in the Middle East,
to boast this prestigious certification. Throughout the
year, IDH supported new branch openings with large-
scale marketing campaigns, which played a key role in
growing patient volumes at the venture.
House Calls
IDH’s house call service in Egypt recorded revenue
of EGP 517 million in FY 2022, contributing to 18% of
Egypt’s revenues for the year, well above the service’s
pre-pandemic contributions. The robust contribu-
tion was recorded despite the fall in Covid-19-related
revenue generated through the house call service as
infection rates in the country declined significantly
starting March.
Wayak
Wayak recorded a 29% year-on-year increase in the
number of orders, which reached 132 thousand for FY
2022 compared to 102 thousand orders during FY 2021.
Meanwhile, the venture’s EBITDA losses declined a
solid 33% year-on-year to record EGP 3.8 million com-
pared to negative EGP 5.7 million in FY 2022.
Detailed Egypt Revenue Breakdown
EGP mn
Total Revenue
Conventional Revenue
Radiology Revenue
Total Covid-19-Related Revenue
Core Covid-19 Revenue (PCR, Antigen, Antibody)
Other Covid-19-related Revenue
Contribution to Consolidated Results
Conventional Revenue
Radiology Revenue
Total Covid-19-Related Revenue
Core Covid-19 Revenue (PCR, Antigen, Antibody)
Other Covid-19-related Revenue
51%
1.1%
49%
40%
9%
FY 2021
FY 2022
Change
4,108
2,103
45
2,005
1,626
379
-30%
16%
91%
-78%
-77%
-78%
2,894
2,444
86
450
367
83
84%
2.9%
16%
13%
3%
Jordan (16.9% of revenue)
IDH’s Jordanian subsidiary, Biolab, delivered conven-
tional revenue year-on-year growth of 2% in JOD terms
(in EGP terms, revenues were up 29% year-on-year)
supported by a marginal rise in conventional test vol-
umes for the year. On the other hand, similar to trends
witnessed in Egypt, Biolab’s Covid-19-related revenues
and net sales23 declined substantially throughout the
year. As such, total revenues in JOD terms declined 50%
year-on-year to record JOD 23.9 million (in EGP terms,
revenues were down 37% year-on-year). Meanwhile,
net sales in JOD terms declined 47% year-on-year in
FY 2022 to record JOD 21.1 million (down 37% year-on-
year in EGP terms).
23 Biolab’s net sales for the period are calculated as revenues excluding concession fees paid to QAIA and Aqaba Port as part of their revenue sharing
agreement.
70 IDH 2022 Annual Report
Biolab’s full-year revenues were supported by EGP 253
million in Covid-19-related revenue booked during the
year. Meanwhile, Covid-19-related net sales recorded
by Biolab in FY 2022 stood at EGP 189 million. During
the year, revenues and net sales generated by Biolab’s
Covid-19-related offering were boosted by the com-
pany’s agreements with QAIA, Aqaba Port, and KHIA.
More specifically, Biolab generated EGP 140 million
in net sales at QAIA and EGP 17 million in net sales
at Aqaba Port. It is worth noting that while the testing
stations experienced heavy traffic during the first two
months of the year, the lifting of mandatory testing saw
volumes decline sharply starting March 2022. Biolab’s
agreements with all three locations were terminated at
the end of Q1 2022.
Detailed Jordan Revenue/Net Sales Breakdown
EGP mn
Total Revenue
Total Net Sales
Conventional Revenue
Total Covid-19-related Net Sales (PCR and Antibody)
1,046
869
278
591
Conventional Revenue
Total Covid-19-related Net Sales (PCR and Antibody)
32%
68%
Contribution to Consolidated Results
FY 2021
FY 2022
Change
-41%
-37%
29%
-68%
612
549
359
190
65%
35%
2022 Annual Report IDH 71
Performance | Financial & Operational Review
Nigeria (2.2% of revenue)
The Company’s Nigerian subsidiary, Echo-Lab,
recorded an impressive year-on-year revenue growth
rate in NGN terms of 24% in FY 2022 as average reve-
nue per test increased 15% year-on-year in NGN terms
and tests performed rose 8% versus FY 2021. Sustained
growth in Echo-Lab’s average revenue per test reflects
the increase in the number of patients visiting the
venture to undergo the generally higher-priced CT and
MRI exams. In EGP terms, revenue for the year rose
47% to record EGP 79 million.
Sudan (0.6% of revenue)
IDH’s operations in Sudan booked revenue of SDG 547
million in FY 2022, up 63% year-on-year on the back
of a 114% rise in the average revenue per test in SDG
terms. In EGP terms, revenue recorded a 22% rise to
reach EGP 20 million.
Revenue/Net Sales Contribution by Country
FY 2021
FY 2022
Change
Egypt Revenue (EGP mn)
Conventional (EGP mn)
Covid-19-Related (EGP mn)
Egypt Contribution to IDH Revenue
Egypt Contribution to IDH Net Sales
Jordan Revenues (EGP mn) (IFRS)
Jordan Net Sales (EGP mn)
Conventional (EGP mn)
Covid-19-Related (EGP mn)
Jordan Revenues (JOD mn) (IFRS)
Jordan Net Sales (JOD mn)
Jordan Revenue Contribution to IDH Revenue
Jordan Net Sales Contribution to IDH Net Sales
Nigeria Revenue (EGP mn)
Nigeria Revenue (NGN mn)
Nigeria Contribution to IDH Revenue
Nigeria Contribution to IDH Net Sales
Sudan Revenue (EGP mn)
Sudan Revenue (SDG mn)
Sudan Contribution to IDH Revenue
Sudan Contribution to IDH Net Sales
72 IDH 2022 Annual Report
4,108
2,103
2,005
78.6%
81.4%
1,046
869
278
591
47.5
39.4
20.0%
17.2%
53
2,894
2,444
450
80.3%
81.7%
612
549
359
190
23.9
21.0
17.0%
15.5%
79
1,374
1,698
1.0%
1.1%
16.7
335
0.3%
0.3%
2.2%
2.2%
20.3
547
0.6%
0.6%
-30%
16%
-78%
-42%
-37%
29%
-68%
-50%
-47%
47%
24%
22%
63%
Patients Served and Tests Performed by Country
Egypt Patients Served (mn)
Egypt Tests Performed (mn)
Conventional tests (mn)
Covid-19-related tests (mn)
Jordan Patients Served (k)
Jordan Tests Performed (k)
Conventional tests (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
FY 2021
FY 2022
Change
8.5
29.7
25.9
3.8
1,627
3,530
2,228
1,302
153
281
70
182
10.3
33.6
7.6
29.5
28.3
1.2
890
2,789
2,243
546
149
303
70
139
8.7
32.7
-11%
-1%
9%
-68%
-45%
-21%
1%
-58%
-3%
8%
N/A
-24%
-16%
-3%
31 December 2021
31 December 2022
Change
452
21
10
19
502
500
23
12
17
552
48
2
2
-2
50
Cost of Sales24
Cost of sales declined 11% year-on-year in FY 2022 to reach EGP 2,143 million. Similarly, cost of net sales declined
7% year-on-year to record EGP 2,080 million in FY 2022, reflecting a fall in raw material outlays as net sales dropped.
Cost Breakdown as a Percentage of Net Sales/ Revenue
Raw Materials
Wages and Salaries
Depreciation and Amortisation
Other Expenses
Total
% of Revenue
% of Net Sales
FY 2021
-18.9%
-12.2%
-4.1%
-7.8%
-43.0%
FY 2022
-20.4%
-17.0%
-7.9%
-12.4%
-57.7%
FY 2021
19.6%
12.6%
4.2%
8.1%
44.5%
FY 2022
20.7%
17.3%
8.0%
12.6%
58.6%
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 2,143 million in FY 2022, down 11% year-on-year.
2022 Annual Report IDH 73
Performance | Financial & Operational Review
Raw material costs, including the cost of specialized
analysis at other laboratories (35% of consolidated cost
of sales), made up the lion share of total cost of net sales,
recording EGP 734 million in FY 2022, down 26% year-
on-year. Although raw material costs declined in absolute
terms, raw material expenses increased as a percentage
of net sales to 20.7% in FY 2022 versus 19.6% in FY 2021.
The increase primarily reflects high raw material costs
incurred in the second half of the year, particularly in the
final quarter, in IDH’s home market of Egypt following
the multiple devaluations of the EGP over the course of
2022. The increase in raw material costs was widespread,
impacting both IDH’s conventional and Covid-19-related
test offering. It is also worth noting that during the first
quarter, IDH’s raw material to net sales ratio increased sig-
nificantly, reflecting a large decline in the average selling
price of Covid-19-related tests during the quarter.
Wages and salaries, including employee share of profits
(29% share of consolidated cost of sales), declined 3%
year-on-year, recording EGP 613 million for FY 2022 and
representing the second largest share of consolidated cost of
net sales. The decrease for the year is attributable to lower
employee share of profits, which declined reflecting lower
net profits for the 12-month period. Direct wages and sala-
ries (excluding employee profit share), however, increased
17% year-on-year due to staffing requirements at new
branches and annual salary increases for existing employ-
ees. It is worth noting that there was a 9% quarter-on-quarter
increase in direct wages and salaries (excluding profit share)
in the final three months of the year versus Q3 2022, in part
reflecting the translation effect in Jordan (EGP 9 million).
Direct depreciation and amortization costs (14% of
consolidated cost of sales) recorded EGP 285 million
for FY 2022, a 33% year-on-year increase from the EGP
214 million recorded in FY 2021. Depreciation and amor-
tization expenses increased on the back of incremental
depreciation of new branches (mainly new radiology
branches) (IFRS 16 right-of-use assets), as the Company
added 50 new branches during FY 2022.
Other expenses (21% of consolidated cost of sales) for
the period increased by 10% year-on-year to EGP 447 mil-
lion. The year-on-year increase was primarily attributable
to higher branch cleaning, repair, and maintenance costs,
which together increased 41% year-on-year and made
up 29% of total other expenses for the year. This reflected
both the roll-out of new branches in the year (+50) and
the introduction of a new model for the maintenance and
cleaning of new and existing branches.
Gross Profit
Gross profit booked EGP 1,462 million for FY 2022,
down 48% year-on-year. IDH’s gross profit margin25 on
revenue stood at 41% in FY 2022 versus 54% in FY 2021.
Similarly, IDH’s gross profit margin on net sales recorded
41% FY 2022 versus 56% in FY 2021 when strong results
from IDH’s Covid-19-related segment had boosted gross
profitability. It is worth highlighting that gross profit in
absolute terms is identical for both APM and IFRS in both
FY 2022 and FY 2021.
Lower gross profitability for the year principally reflected
a post-Covid-19 normalisation, with Covid-19-related
business declining sharply in FY 2022. Gross profitability
was also weighed down by the aforementioned increases
in direct salaries and wages, as well as higher direct depre-
ciation expenses following the new branch additions. Gross
profit was also partially impacted by an increase in raw
material prices in the second half of the year, reflecting the
devaluation of the EGP throughout the year.
Selling, General, and Administrative
Expenses
Total SG&A outlays amounted to EGP 608 million for
the full year, an 18% year-on-year increase from the
513 million recorded in FY 2021. Increases in SG&A
expenses for the year are attributable to:
• An increase in accounting fees related to the external
auditor “PwC”, which reached EGP 38 million in FY
2022 compared to EGP 29 million in FY 2021, as well
as a one-off legal consulting fee paid by the Com-
pany during FY 2022. Both items were impacted by
the multiple devaluations of the EGP.
• Increased advertising expenses, which rose by 28%
compared to FY 2021, mainly related to marketing
efforts launched to support Al Borg Scan’s ramp-up
and to boost operations at newly launched branches.
• Due to the economic circumstances faced across the
Company’s markets of operation, IDH has booked
higher provisions, reflecting an increase in the period
of time it takes to collect from debtors and a higher
provision rate being applied to older balances.
25 It is important to note that while in absolute terms the Gross Profit figure is identical when using IFRS or APM, its margin differs between the two sets of
performance indicators.
74 IDH 2022 Annual Report
Selling, General, and Administrative Expenses
Wages and Salaries
Accounting and Professional Services Fees
Market – Advertisement Expenses
Other Expenses
Depreciation and Amortisation
Impairment Loss on Trade and Other Receivables
Travelling and Transportation Expenses
Other Income
Total
FY 2021
FY 2022
Change
192
197
114
130
97
65
25
25
11
(16)
513
123
90
33
30
17
(12)
608
3%
14%
27%
38%
32%
20%
55%
-25%
18%
EBITDA
IDH’s EBITDA26 came in at EGP 1,150 million in FY 2022,
down 54% from the EGP 2,501 million recorded in the
previous 12 months. Meanwhile, adjusted EBITDA,
which excludes one-off expenses incurred by the Group
in FY 2021 and FY 2022, recorded EGP 1,172 million in
FY 2022 compared to EGP 2,530 in FY 2021. Adjusted
EBITDA margin on revenues recorded 33% in FY 2022
versus 48% the previous year. Meanwhile, EBITDA mar-
gin on net sales recorded 33% for the year down from 50%
in FY 2021.27 Lower EBITDA level profitability is attribut-
able to lower gross profitability for the year, coupled with
the aforementioned increase in SG&A expenses and
particularly marketing outlays, as well as the launch of a
new patient loyalty programme. It is important to men-
tion that the absolute values of EBITDA and Adjusted
EBITDA are identical for both IFRS and APM measures.
EBITDA by Country
In Egypt, EBITDA came in at EGP 1,031 million,
down 53% year-on-year. Similarly, Adjusted EBITDA
recorded EGP 1,053 million for FY 2022, down 52%
year-on-year. Adjusted EBITDA margin on revenue
(IFRS and APM figures are identical) stood at 36%
for the full year, declining from the high base of 54%
recorded in FY 2021. Adjusted EBITDA from IDH’s
Egyptian operations contributed 90% to the Company’s
consolidated Adjusted EBITDA in FY 2022.
Biolab, IDH’s Jordanian subsidiary, reported an EBITDA
contraction of 59% in EGP terms and 63% in JOD terms.
Similarly, EBITDA margin was down both on revenues
and net sales (IFRS and APM). Lower EBITDA profitabil-
ity reflected lower gross profits following a post-Covid-19
normalisation, as well as increased expenses at the Com-
pany’s testing booths in QAIA and Aqaba Port.
In Nigeria, EBITDA losses recorded EGP 17.1 million
for FY 2022, widening significantly from EBITDA
losses in FY 2021 despite the strong revenue growth
recorded by the venture in the past year. Widening
EBITDA losses were largely attributable to rising
diesel costs, which posted a three-fold year-on-year
increase in FY 2022 from NGN 250 per litre in FY
2021 to NGN 805 per litre in FY 2022.
In Sudan, the Company booked an EBITDA loss of
SDG 1.9 million, a significant improvement from the
EBITDA losses of SDG 47 million booked in FY 2021.
In EGP terms, EBITDA recorded a loss of EGP 196
thousand in FY 2022, up from the EGP 500 thousand
loss recorded in FY 2021.
26 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.
27 It is important to note that while in absolute terms the EBITDA figure is identical when using IFRS or APM, its margin differs between the two sets of
performance indicators.
2022 Annual Report IDH 75
Performance | Financial & Operational Review
Regional EBITDA in Local Currency
mn
Egypt EBITDA
EBITDA Margin on Revenue
Egypt Adjusted EBITDA28
Adj. EBITDA Margin on Revenue
Jordan
Margin on Net Sales (APM)
Margin on Revenues (IFRS)
Nigeria
Margin on Revenue
Sudan
Margin on Revenue
FY 2021
FY 2022
Change
2,177
53%
2,206
54%
15.0
38%
32%
-179
-13%
-10
-3%
1,031
36%
1,053
36%
5.5
26%
23%
-337
-20%
-1.9
-0.3%
-53%
-52%
-63%
88%
-81%
Interest Income / Expense
IDH recorded interest income of EGP 95 million for FY
2022, a 16% decrease from the EGP 113 million recorded
during FY 2021. Lower interest income came on the back
of lower cash balances over the 12-month period as IDH
paid out a record cash dividend for FY 2021.
Interest expense booked EGP 136 million for the full
year, increasing 15% year-on-year from EGP 118 mil-
lion in 2021. The increase in attributable to:
• Higher interest on lease liabilities related to IFRS
16 following the addition of new branches and the
renewal of medical equipment agreements with the
Group’s main equipment suppliers.
• Fees amounting to EGP 12.5 million related to the
US$ 45 million facility with the International Finance
Corporation (IFC) granted in May 2021 and the US$
Interest Expense Breakdown
15 million IFC syndicated facility from Mashreq Bank
in December 2021. Fees include commitment and
supervisory fees. It is worth nothing that fees related
to the IFC facility decreased 38% year-on-year.
• Higher interest expenses following the CBE’s deci-
sion to increase rates by 800 bps over the course of
FY 2022. It is worth highlighting that IDH’s interest
bearing debt balance increased by EGP 18.3 mil-
lion year-on-year to reach EGP 116 million as at 31
December 2022 related to Ahli United Bank loan
granted to finance Al Borg Scan’s expansionary plan.
The loan will be fully repaid in January 2027.
• Interest expenses related to IDH’s Deferral Agree-
ment with Hena Holdings Ltd and Actis IDH Limited
for the disbursement of the Company’s FY 2021
dividend amounting to EGP 3.4 million.
EGP mn
FY 2021
FY 2022
Change
Interest on Lease Liabilities (IFRS 16)
Interest Expenses on Leases
Bank Charges
Loan-related Expenses on IFC facility
Interest Expenses on Borrowings29
Shareholder Dividend Deferral Agreement30
Total Interest Expense
59.5
8.8
20.0
20.3
9.4
-
73.4
21.4
12.9
12.5
11.9
3.4
118.0
135.5
23%
143%
-36%
-38%
27%
N/A
15%
28 Adjusted EBITDA in Egypt is calculated as EBITDA excluding one-off expenses incurred by the Group. These include one-off listing expenses in FY 2021
of EGP 29.0 million related to IDH’s dual listing on the EGX and one-off transaction expenses in FY 2022 of EGP 22.3 million related to IDH’s aborted
acquisition in Pakistan.
29 Interest expenses on medium-term loans include EGP 11.6 related to the Group’s facility with Ahli United Bank Egypt (AUBE) and interest expense
amounting to EGP 3.4 million was booked related to shareholders dividends deferral agreement, and EGP 0.3 million related to CIB facility. Meanwhile,
the Group’s facility with the Commercial International Bank (CIB) was fully repaid as of 5 April 2022.
30 As announced on 27 July 2022, as part of IDH’s agreement with Hena Holdings Ltd and Actis IDH Limited (its two largest shareholders) in consideration
for the two shareholders agreeing to defer their right to receive their pro rata share of the Dividend Payment, IDH agreed to pay to each interest on the
outstanding amounts due at the rate of 10% per annum (with interest accruing on a daily basis) for a two-month period starting 27 July 2022. Payment to
both shareholders was successfully completed on 18 August 2022.
Foreign Exchange
The Company recorded a foreign exchange gain of EGP
188 million during FY 2022 compared to a net foreign
exchange loss of EGP 18 million recorded in FY 2021.
Fair Value through Profit and Loss (FVTPL)
IDH booked a FVTPL loss related to Global Depository
Receipts (GDRs) of EGP 143 million in FY 2022. The
loss is associated with transactions undertaken by the
Company to secure the necessary US$ balance to fulfil
its FY 2021 dividend obligations to shareholders. As
part of its strategy to secure the necessary US$ balance,
the Company purchased GDRs in EGP on the EGX to
later sell them on the LSE for US$.
Tax Expense Breakdown
EGP mn
Egypt
Jordan
Nigeria
Sudan
Taxation
Tax expenses (income tax and deferred tax) recorded
in FY 2022 were EGP 327 million compared to EGP
740 million in FY 2021. IDH’s effective tax rate stood
at 38% in FY 2022 versus 33% in FY 2021. There is
no tax payable for IDH’s two companies at the hold-
ing level, while tax was paid on profits generated
by its operating subsidiaries (Egypt 22.5%, Jordan
21%, Nigeria 30%, and Sudan 30%). The increase
in effective tax rate is mainly due to the increase in
non-deductible expenses within the Group.
FY 2021
FY 2022
Change
704.8
54.0
-20.0
1.0
274.3
21.8
30.6
0.4
-61%
-59%
N/A
-60%
Total Tax Expenses
739.8
327.1
-56%
Net Profit
IDH’s consolidated net profit for the year booked EGP
527 million, a 65% year-on-year decrease. The Com-
pany’s net profit margin on revenue stood at 15% versus
29% in the previous year. Net profit margin on net sales
also stood at 15% compared to 30% in FY 2021. It should
be highlighted that EGP 22.3 million were recorded as
transaction costs related to the Pakistan deal.
losses related to
Meanwhile, excluding FVTPL
securing the US$ balance required for dividend
obligations and the one-off item related to Pakistan
transaction fees, IDH would have recorded a net
profit of EGP 692 million for FY 2022, down 54%
year-on-year and with a margin on revenue of 19%
and on net sales of 20%.
Balance Sheet Analysis
Assets
Property, Plant, and Equipment
IDH recorded gross property, plant, and equipment
(PPE) of EGP 2,219 million as at year-end 2022, up
from the EGP 1,659 held as at year-end 2021. The rise
in CAPEX as a share of net sales during 2022 is partially
attributable to the EGP 138 million spent on new radi-
ology branches in Egypt, as well as the EGP 190 mil-
lion translation effect (associated with Jordan, Sudan,
and Nigeria) that resulted from the EGP devaluation
throughout the past 12 months.
2022 Annual Report IDH 77
Performance | Financial & Operational Review
Total CAPEX Addition Breakdown
EGP MN
Leasehold Improvements/new branches
Al Borg Scan Expansion
Total CAPEX Additions Excluding Translation
FY 2022
% of Net Sales
231.0
138.5
369.5
6.5%
3.9%
10.4%
Accounts Receivable and Provisions
As at year-end 2022, IDH’s accounts receivable stood
at EGP 432 million versus EGP 371 million as at year-
end 2021. Meanwhile, receivables’ Days on Hand
(DOH) booked 124 days versus 107 days in 2021. The
increase in DOH for the year reflected a rise in col-
lection periods with corporate customers during FY
2022 due to challenging economic conditions faced
in Egypt throughout the past 12 months.
Inventory
As at 31 December 2022, IDH’s inventory balance stood at
EGP 265 million, up from the EGP 223 million balance as at
year-end 2021. Simultaneously, Days Inventory Outstand-
ing (DIO) increased to 127 days as at 31 December 2022, up
from 61 days as at year-end 2021. The increase in DIO is a
result of management decisions to proactively accumulate
inventory as part of its strategy to hedge against inflation as
a result of the ongoing devaluation of the EGP.
Provision for doubtful accounts for FY 2022 stood at
EGP 30 million, a 21% year-on-year increase from
the EGP 25 million booked during FY 2021. The rise
in provisions reflects an increase in collection peri-
ods from debtors and a higher provision rate being
applied to older balances.
Cash and Net Debt/Cash
Cash balances as at year-end 2022 decreased to EGP 816
million, a 65% drop compared to the EGP 2,350 million
recorded as at 31 December 2021. The decrease in cash
balances is due to the distribution of FY 2021 dividend
obligations to shareholders in July and August 2022.
EGP MN
T-Bills
Time Deposits
Current Accounts
Cash on Hand
Total
31 Dec 2021
31 Dec 2022
1,461
628
239
22
2,350
293
123
382
18
816
IDH’s net debt31 balance as at year-end 2022 stood at EGP 373 million, compared to a net cash balance of EGP 1,483
million as at year-end 2021. For disclosures related to credit risk, please refer to Note 5 in the Company’s Financial
Statements on page 150 of this report.
78 IDH 2022 Annual Report
EGP MN
31 Dec 2021
31 Dec 2022
Cash and Financial Assets at Amortised Cost32
Lease Liabilities Property
Total Financial Liabilities (Short-Term and Long-Term)33
Interest Bearing Debt (Medium-Term Loans)
Net Cash/(Debt) Balance
Note: Interest Bearing Debt includes accrued interest for each period.
2,350
(532)
(229)
(106)
1,483
816
(727)
(335)
(127)
(373)
Lease liabilities and financial obligations on property
increased to EGP 727 million as of 31 December 2022,
primarily due to the addition of new branches to IDH’s
networks throughout the year (+50 new branches).
Meanwhile, financial obligations related to equip-
ment increased to EGP 335 million as of year-end
2022, mainly due to the renewal of Company contracts
and equipment upgrades completed throughout the
year. Total financial obligations related to equipment
also encompasses EGP 212 million spent on Al Borg
Scan’s equipment.
Finally, interest bearing debt increased to EGP 127 as of
31 December 2022. The rise is related to additional usage
of MTL to finance Al Borg Scan’s expansions. It is worth
highlighting that interest-bearing debt for both periods
included accrued interest. It is also important to note that
IDH’s facility with the Commercial International Bank
(CIB) has been fully repaid as of April 2022.
Liabilities
Accounts Payable34
As at 31 December 2022, the Company’s accounts payable
balance stood at EGP 270 million, a decrease from the EGP
311 million recorded as at 31 December 2021. The Group’s
Days Payable Outstanding (DPO), on the other hand,
increased to 151 days as at year-end 2022 compared to 93
days as at 31 December 2021. The increase in DPO was
primarily driven by lower Covid-19-related kits demand.
Put Option
The put option current liability is related to the option
granted in 2011 to Dr. Amid, Biolab’s CEO, to sell his
stake (40%) to IDH. The put option is in the money and
exercisable since 2016 and is calculated as 7 times Bio-
lab’s LTM EBITDA minus net debt. Biolab’s put option
liability decreased following the significant decline in
the venture’s EBITDA for the period.
The put option non-current liability is related to the option
granted in 2018 to the International Finance Corporation
from Dynasty — shareholders in Echo Lab — and it is exer-
cisable in 2024. The put option is calculated based on fair
market value (FMV).
31 The net cash/(debt) balance is calculated as cash and cash equivalent balances, including 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 three months and
are therefore not treated as cash. Term deposits that cannot be accessed for over 3 months stood at EGP 60 million in FY 2022, versus EGP 148 million as at
year-end 2021. Meanwhile, treasury bills not accessible for over three months stood at EGP 107 million in FY 2022, down from EGP 1,311 million in FY 2021.
33 IDH’s interest bearing debt as at 31 December 2022 included EGP 116 million to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan
balances are excluding accrued interest for the period).
34 Accounts payable is calculated based on average payables at the end of each year.
2022 Annual Report IDH 79
Performance
TASK FORCE ON CLIMATE-
RELATED FINANCIAL DISCLOSURES
(TCFD) RESPONSE REPORT
At IDH, we embrace that operating without influencing
nature is impossible, but we strive to prevent negative
impacts and reverse previous damage whenever pos-
sible while contributing to protecting and restoring
ecosystems. A cornerstone and as part of IDH’s climate
action, this year marks the first time that IDH has sub-
mitted a report in accordance with the TCFD require-
ments. As a first-time TCFD Reporter, we are committed
to implementing the recommendations of the TCFD,
which aim to provide investors and other stakeholders
with useful information on climate-related risks and
opportunities that are relevant to our business.
Overall, we believe that the risks and opportunities
related to climate change, in the short-to-medium term
(defined as the next five years), are low due to the nature
of our business (being a services business operating in
the healthcare sector). Our main emissions relate to the
running of our 550+ centres (lighting, air conditioning,
and electricity utilised by the diagnostic equipment), and
for Scope 3, this will be the emissions associated with the
manufacture of the machinery utilised at our centres and
any emissions associated with other travel / external test-
ing in the performance of our services. In the longer term
(defined as ten years+), the main risks / opportunities
come from the impact of climate change as a whole in the
regions in which we operate (i.e. where climate change
results in certain areas becoming uninhabitable).
We set out over the next few pages more details on how
we are seeking to align with these recommendations,
recognising that this will form an iterative process as
we develop our policies, processes, and disclosures
over the coming years. We have never reported emis-
sions or similar data before, let alone scenario analysis
or the related metrics and targets attached to these as
part of the TCFD requirements. In compiling this data
and discussing this with our external experts around
validation of the accuracy and completeness of data,
we have encountered some unexpected challenges.
80 IDH 2022 Annual Report
Hence, we have reported a number of areas of non-
compliance with the TCFD requirements, as we will
only report on this data when we are comfortable of
its robustness.
In this context, we have considered our “comply or
explain” obligation under the Financial Conduct Author-
ity’s Listing Rule 9.8.6R (8) and confirm that we have made
disclosures consistent with the TCFD Recommendations
and Recommended Disclosures in this Annual Report
and Accounts, except in the following areas:
• Strategy – Describing the impact of climate-related
risks/opportunities on IDH’s business and strategy
and describing the resilience of this under different
scenarios (e.g. a 2°C or lower scenario).
• Risk management – Describing IDH’s processes for
managing climate-related risks and the process of
how these, and their identification, are integrated into
IDH’s overall risk management.
• Metrics and targets – Disclosing the metrics used by
IDH to assess climate-related risks / opportunities,
disclosing Scope 1–3 emissions and the targets used
by IDH to assess performance against these targets.
• Governance – While progress has been made, some
of the oversight and board committees have not been
established as at 31 December 2022. As such, partial
compliance has been reported in this area.
We report over the next few pages for the first time against
the 11 recommended disclosures under four thematic pil-
lars set out in the TCFD’s recommendations, and where
we are not currently fully compliant with the TCFD rec-
ommendations, we have set out our current position and
strategy and timeline for compliance. We are currently
considering the guidance included within the TCFD’s all
sector guidance. While this has not yet been factored into
our analysis or following disclosures, we will be factoring
this into our plans for further compliance during the com-
ing financial year, with an aim to improve our discourse
against these requirements in the coming years.
Recommended
Disclosures
Response Status
Governance
a) Describe the
board’s oversight
of climate-related
risks and
opportunities.
Partially
compliant
– expected
to be fully
compliant
by 31 Dec
2023
IDH is developing a Sustainability Strategy for the years 2023–2030 based on four pillars (Sound Gover-
nance, Next Economy, Flourishing Society, and Liveable Planet). The work ensures that the Group could
reaffirm and review important points, such as mission and strategy, in addition to ensuring a strategic look
at the Group’s risks, which will be periodically reported to the Executive Management Team, Audit Com-
mittee, and Board of Directors. During the year, this was performed by the Board of Directors as a whole and
as part of the normal procedures around assessing the principal risks and uncertainties of the Group and
the wider opportunities and strategic goals of the Group, given the low risk / opportunities assessed relating
to climate risk / opportunity in the short-to-medium term.
Climate Change forms one of the sub-pillars of Liveable Planet, where the following actions and targets
have been put in place: 1-Building a comprehensive impact/risk assessment mechanism and adopting a
climate scenario; 2- Developing and adopting a corporate-wide GHG data management system; 3- Devel-
oping a Decarbonization Plan with clear and feasible carbon reduction targets consistent with the climate
risk assessment results. While the pillars of this strategy have been agreed on, we are currently working on
collating and validating the data required to monitor and report against these targets (which also includes
the data required to perform meaningful scenario analysis). The ESG strategy will be disseminated to all
functions and subsidiaries in 2023 with our aim to complete integration by the end of 2024. Adoption and
implementation of the strategy is expected to start by the end of 2024 and therefore further reporting will be
made on progress of this in our 2023 Annual Report.
An ESG Committee (Sustainability Steering Committee) on the top management level is being formulated.
The committee will be appointed by the CEO and Board and will comprise of representatives from key
stakeholder groups. The members of the Steering Committee will be chosen based on their expertise,
experience, and ability to provide governance guidance and oversight on sustainability. Roles and respon-
sibilities will be clearly assigned.
The committee will oversee the Group’s approach to managing climate-related risks and opportunities. It
will provide strategic guidance and oversight on IDH’s sustainability and impact initiatives, including the
development and implementation of IDH’s sector programmes and landscape initiatives. The committee
will also review and approve IDH’s annual sustainability report, which provides an overview of the organiza-
tion’s progress on key sustainability metrics and initiatives. As previously noted this is not currently aligned
to the TCFD requirements or issued con-currently with the Annual Report. Going forward this should be
addressed for the 31 December 2023 Annual Report. Additionally, it will help to ensure that IDH’s activities
are aligned with international sustainability standards and guidelines, including the United Nations’ SDGs
and the Paris Agreement on climate change.
On the Board of Directors level, the Audit Committee will oversee and obtain regular updates from the
aforementioned management Steering Committee about climate change related issues. The main topics
of discussion will revolve around the progress made against achieving the ESG Strategy’s targets and action
plans, including an update of the climate-related risks and opportunities. ESG and climate disclosure is
currently done through the Group’s annual sustainability report and general risk assessment processes,
developed in accordance with the GRI standards and includes the progress made against the strategy’s
goals and targets for addressing climate-related issues, and covering all GRI material indicators. While a
report was issued during 2022, this was not aligned to TCFD requirements; hence, going forward, we will
reflect on this for improvement during 2023.
2022 Annual Report IDH 81
Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report
Recommended
Disclosures
Response Status
Governance b)
Describe
management’s
role in assessing
and managing
climate-related
risks and
opportunities.
Compliant
Strategy a)
Describe the
climate-related
risks and
opportunities the
organization has
identified over the
short, medium,
and long term.
Compliant
Day-to-day responsibility for the management and reporting on IDH’s sustainability-related
issues in general and climate-related issues falls within the scope of the Investment Relations (IR)
Department and are directly supervised by the Group’s IR Director. The Group CFO authorizes
the yearly sustainability budget, and decarbonization action plans and projects, including energy
efficiency projects, and fleet and energy procurement. Specific climate initiatives will be managed
by the relevant department, including the Facilities, Supply Chain, and Procurement Departments.
Management consider climate-related risks and opportunities in their future cash flow assessments;
however, given the aforementioned low risk, these have not had any material impact.
In 2021, the IR Department assigned an external ESG consulting firm for the assurance of its first
sustainability report. In 2023, another external ESG consulting firm has been assigned with a larger
scope comprising of: 1- Helping management and the Board develop the group’s ESG Strategy; 2-
Quantifying the GHG emissions for the year 2022 and assisting in developing the group’s ESG and
GHG data management system; and 3- Assurance of IDH’s second sustainability report (ESG Report
for 2022). The IR Department has assigned a main ESG focal point for the collection and monitoring
of climate-related issues. The IR focal point will be closely working with ESG (and climate) cham-
pions at the different departments. All staff involved in the management of climate-related issues
will receive a one-day comprehensive training and a capacity building workshop on climate change
fundamentals, GHG quantification and identification, and the assessment of climate-related risks
and opportunities. As previously noted, the 2022 report will not be aligned with the TCFD require-
ments, but this will be addressed for the 2023 report.
Overall assessment: Overall, the Board of Directors and management have deemed that the risks and
opportunities relating to climate change are not signifciant, specifically those arising in the short-to-
medium term. This is on the basis that IDH is a service-related business operating in the healthcare
sector. The main suppliers of our equipment are blue-chip multinational companies and our opera-
tions are spread in over 550 branches across four countries. IDH’s operations are not energy nor water
intensive, with around 2% of total cost of operations spent on energy and water consumption, making
it less susceptible to climate risks and impacts related to energy and water supply. In order to tackle
policy and reputational risks, IDH has taken actions relating to strategy development, sustainability
reporting, and GHG quantification and has put in place appropriate actions for developing practical
and feasible decarbonization plans. The aim is to have in place fully developed reporting and climate
management systems by the end of 2024. The long-term risks, such as rising sea levels in more sus-
ceptible coastal cities and a possible suspension of physical activities due to extreme precipitation
events, will necessitate appropriate mitigation action plans to be put in place.
Risks: The transition and physical risks associated with climate change have been initially identified
and qualitatively assessed. The following represent the initially identified risks on the short, medium,
and long term.
Transition Risks: The expected increase in electricity tariffs and fuel prices, and therefore the
increase in the expenses associated with energy consumption, represents the most relevant poten-
tial transition risk to IDH over the short term. The expenses associated with energy consumption
and operational costs in general are expected to increase. However, it is also expected that the tariff
increase will be gradually introduced to the Egyptian market, thus allowing sufficient time for impact
mitigation to take place. Changes in Policy were the second identified short-term transition risk.
The climate-related disclosure requirements and, accordingly, performance and progress towards
climate targets, including enhanced emissions-reporting obligations, are increasing significantly. In
this regard, IDH has started to take multiple steps, including the ESG Committee initiative, sustain-
ability reporting, GHG accounting, and decarbonization. By the end of 2024, the Group will have in
place a data management and sustainability (and climate) reporting system.
On the medium term, reputational risks will eventually arise if appropriate actions are not taken.
However, it will be mainly affected by the overall ESG performance of the Group. Since IDH has
already started to put a strategy and an action plan in place and is planning to allocate sufficient and
qualified human resources in place, this impact has also been identified as a low-significance risk.
Physical Risks: Among the medium-term identified physical risks is the effects of water scarcity
on operation processes. The long-term risks, such as rising sea levels in more susceptible coastal
cities that include Alexandria and Delta and a possible reduction / suspension of physical activi-
ties due to extreme precipitation events (storm and flooding), are of high significance and will
necessitate a mitigation action plan to be put in place.
82 IDH 2022 Annual Report
Opportunities: Resource efficiency and access to new markets have been identified as the two main
climate-related opportunities for IDH.
Partially
Compliant
– expected
to be
compliant
by 31 Dec
2024
Non-
compliant
– expected
to be
compliant
by 31 Dec
2024
Compliant
Partially
compliant
– expected
to be
compliant
by 31 Dec
2024
Partially
compliant
– expected
to be
compliant
by 31 Dec
2024
Recommended
Disclosures
Strategy
b) Describe
the impact of
climate-related
risks and
opportunities
on the organiza-
tion’s businesses,
strategy, and
financial
planning.
Strategy c)
Describe the
resilience of the
organization’s
strategy, taking
into consider-
ation different
climate-related
scenarios,
including a 2°C
or lower scenario.
Risk
Management
a)
Describe the
organization’s
processes for
identifying and
assessing climate-
related risks.
Risk
Management
b)
Describe the
organization’s
processes for
managing climate-
related risks.
Risk
Management
c)
Describe how
processes for
identifying, assess-
ing, and managing
climate-related
risks are integrated
into the organiza-
tion’s overall risk
management.
Response Status
As described above, the short term identified risks and opportunities were found to be of low signifi-
cance (with negligible residual impacts after applying the planned mitigation measures). Starting in
2024 and following the full integration of the ESG strategy, the ESG / sustainability steering commit-
tee will be routinely revisiting the initially identified climate risks and reassessing their impact on
quarterly basis, to take the appropriate mitigation actions when they become of significant impact.
The following have been identified as the main actions to be taken to eliminate the residual
impacts and to maximize the identified opportunities over the short and medium term:
• Develop a decarbonization plan focused on resource efficiency in terms of managing and
•
•
reducing the energy and water consumption
Develop a corporate wide ESG data management and monitoring system
Enhance the ESG and climate disclosures. For the latter, the Group is exploring the possibil-
ity of disclosing climate data through CDP
The mitigation actions indicated above are planned to be completed by the end of 2024
We do not expect a significant change to our strategy as a result of the initially identified transi-
tion climate risks. However, regarding the long-term risks, mostly physical ones, IDH is well
aware of the necessity to develop new strategic actions. These will be based on climate scenario
analysis, which will be done by 2025 and reported on in 2026 in order to more clearly under-
stand the impacts of climate-related physical risks on IDH’s businesses, strategies, and financial
performance. Due to the complexity of this analysis, given IDH operates in 550+ branches and
across four (soon to be five) countries, there will be significant time required to collate and
then validate this data from which our scenarios will be based. As IDH has never before been
required to collate or report this data, we have identified initial challenges in obtained reliable
data for all of our operations, and for this reason, we employed an external ESG specialist firm
in 2022 to assist management and the Board with this assessment.
During 2022, the process for identifying and assessing all risks was as described in the principal
risks and uncertainties section of our Annual Report (see pages 54 to 61). Due to the low risk,
there was not a sperate process that was applied to climate-related risks and opportunities.
During 2023, we appointed an ESG and Climate Consultant to conduct a climate impact
identification and assessment for IDH. An initial list of risks/impacts has been developed,
which covered both transition and physical risks (as presented above). The work also included
the development of an impact assessment methodology and process tailored to IDH, which
covers both physical and transitional risks and opportunities. All risks were assessed based on
the significance of the impacts and likelihood of occurrence.
Due to the low risk / opportunities arising from climate change, as noted above, there were no
separate process specifically for managing climate-related risks.
Going forward, as part of IDH’s new strategy and policy, processes are to be adopted to
manage climate-related risks will be therefore integrated into our business-as-usual processes.
These will include the below four areas:
1. Electricity
2. Policies
3. Water
4. Supply chain
The processes for identifying, assessing, and managing climate-related risks are yet to be
integrated into the organization’s overall risk management, which is expected to be completed
by the end of 2024.
2022 Annual Report IDH 83
Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report
Response Status
We have appointed a Climate consultant to quantify our GHG emissions. The exercise is expected
to be concluded in July 2023 and the relevant metrics will be identified by then. We have some
indicative data at present, which will be validated during the GHG quantification process. We
are therefore hopeful that this can be reported in the coming financial year, however given the
number of sites IDH operates from and the countries in which we operate some additional time
may be required to ensure the metrics, and the measurement and definition, is approved by
management, the board and we are able to reliably report against these metrics.
In 2023, the Group started to quantify its GHG emissions (Scope 1 and Scope 2) for the year 2022
starting with its Cairo headquarters, Mega Lab, and a representative sample of its branches.
The boundaries are to be expanded to cover all 550 branches in four countries of operation in
2024 and all main categories of Scope 3 will be accounted for by 2025. Besides finding an initial
estimate for the business’ emissions, the main aim of the 2022 emission inventory is to begin
developing the Group’s decarbonization plan and putting in place a comprehensive data collec-
tion system to enable an accurate quantification of the 2023 emissions. Carbon footprint met-
rics and targets are currently expected to be disclosed in the 31 December 2024 Annual Report.
Scope 3 will be the area of greatest challenge given a number of our suppliers are multinational
companies and, therefore, our ability to report on Scope 3 will be predicated on our suppliers’
ability to provide us with robust data.
Carbon reduction targets are expected to be set before the end of 2023, as soon as the baseline
emissions are quantified and a decarbonization plan is developed. While we are hopeful that
this can be completed by the end of the coming financial year (31 December 2023), we have set
a target for compliance with TCFD as at 31 Dec 2024 given the importance of setting appropri-
ate targets / metrics and that reporting against these targets and recommendations will require
robust data for both the current and prior year.
Recommended
Disclosures
Metrics and
Targets a)
Disclose the
metrics used by
the organization
to assess climate-
related risks and
opportunities
in line with its
strategy and risk
management
process.
Non
compliant
– expected
to be
compliant
by 31 Dec
2024
Metrics and
Targets b)
Disclose Scope
1, Scope 2, and,
if appropri-
ate, Scope 3
greenhouse gas
(GHG) emissions
and the related
risks.
Non
compliant
– expected
to be
compliant
by 31 Dec
2024
Metrics and
Targets c)
Describe the
targets used by
the organization
to manage
climate-related
risks and
opportunities
and performance
against targets.
Non
compliant
– expected
to be
compliant
by 31 Dec
2024
84 IDH 2022 Annual Report
2022 Annual Report IDH 85
Performance
Corporate Social Responsibility
IDH is committed to operating in a way that recognises
the interconnection between business growth and the
needs of the communities in which it operates. In its
home and largest market of Egypt, the Company pro-
vides medical assistance and services to individuals
unable to otherwise afford or access necessary care
through its Moamena Kamel Foundation. IDH also
provides free or discounted diagnostic services to
thousands of people annually. In parallel, it collabo-
rates with charitable organisations around the country
to provide access to medical service, nutrition, and
education to hundreds of families in need, while also
supporting the renovation and expansion of medical
facilities around the country.
The Company also carries out several initiatives in its
other markets, hosting several medical days throughout
schools, associations, and corporations with the specific
goal of raising awareness on non-communicable dis-
eases and promoting healthy lifestyles. In Jordan, Biolab
is dedicated to supporting and initiating programmes
that leave a lasting impact on the communities it serves,
launching social development programmes, medical
days, and a host of other initiatives. In Nigeria, IDH’s
subsidiary, Echo-Lab, remains dedicated to introducing
accessible healthcare to those who are unable to afford
it by waiving associated fees and encouraging healthy
lifestyle practices. Echo-Lab’s community initiatives
also include health screenings in churches, local mar-
kets, and colleges across the country. Finally, in Sudan,
Ultralab also participates in several community outreach
programmes, including free medical services for under-
served communities and post-graduate educational and
training opportunities for the country’s youth.
Egypt
Moamena Kamel Foundation
In line with the Company’s guiding principle of provid-
ing stellar medical assistance and services to its com-
munities, IDH views corporate social responsibility
(CSR) initiatives as an extension of its core operations.
The Moamena Kamel Foundation for Training and Skill
Development was established in 2006 by Dr. Moamena
Kamel, a Professor of Pathology at Cairo University,
founder of IDH subsidiary Al Mokhtabar Labs, and
mother of the CEO, Dr. Hend El Sherbini. In line with
IDH’s CSR initiatives, the Company commits up to 1%
of its net after-tax profit of its subsidiaries Al Borg and
Al Mokhtabar to fuel the Foundation’s operations. In
2022, this amounted to EGP 8.9 million (based on the
Group’s net after-tax profits for FY 2021), versus EGP
9.6 million in 2021.
The Foundation’s primary focus is on impacting the
lives of the residents of Cairo’s Al Duweiqa community,
in addition to several other villages across Egypt. This is
achieved through the implementation of an integrated
programme and vision for the communities that the
Foundation aids, which include economic, social, and
healthcare development initiatives offering several
primary services, such as:
• Women’s Empowerment
• Healthcare
• Social Development and Inclusion
• Education
• Nutrition
• Preservation of Egyptian Heritage
Women’s Empowerment
Supporting Baheya Hospital
IDH has proudly maintained an ongoing relationship
with Baheya breast cancer hospital aimed at fully sup-
porting its recovering patients. The partnership has
seen IDH sponsor more than 200 chemotherapy ses-
sions and fund the entire recovery journey of 50 breast
cancer patients.
In March 2022, Company volunteers organised a special
visit to support the hospital’s patients in celebration of
86 IDH 2022 Annual Report
International Women’s Month and held awareness ses-
sions on the importance of nutrition, healthy diets, and
active lifestyle choices. Additionally, patients from the
Baheya Hospital held an exhibition at IDH headquar-
ters where they showcased their handmade products.
The patients also organised an awareness campaign on
early detection and self-examination on the same day
to promote preventative initiatives to IDH employees.
Empowerment in “ينمطا صيحفا” – Breast
Awareness Campaign
IDH held a breast cancer awareness seminar for over
100 employees. Additionally, the Company organised
awareness seminars in Shubra El Kheima, alongside
the Baheya Foundation and Waey Foundation. The
seminar was attended by over 40 women.
In its efforts to increase awareness and healthy choices,
IDH organised several other campaigns throughout
Cairo. An awareness seminar was held in collaboration
with the Shubra Educational Administration in the
Nasser Secondary School for Girls and was attended by
over 120 students. Additionally, campaigns were held
in Al Mansoreya village, helping educate more than
60 female members of the community, and in Helwan
University, which was attended by over 80 students
and lecturers. Finally, IDH organised a campaign at its
headquarters for its employees in October 2022, which
saw the attendance of over 30 employees.
IDH Women Pioneers in Science
To celebrate International Women’s Month, the
Company shot a documentary video honouring the
contributions of women in the advancement of both
IDH and the entire scientific field. The documentary
highlighted the fact that IDH is a women-led organ-
isation, consistently promoting fair and transparent
hiring processes and
implementing equal-right
practices between its current and prospective staff
members. Through the documentary, several lead-
ing women in the diagnostic field were given the
opportunity to share their experiences and discuss
the different potential career paths in the industry
in an effort to encourage young women to consider a
career in lab analysis.
Healthcare
Supporting Kasr El Aini Hospital
With a relationship dating back to 2019, Al Kasr Al Aini
has become an integral aspect of IDH’s CSR opera-
tions, helping the Company support more than 16,000
patients to date. The Company has undertaken several
key projects in Kasr El Aini Hospital, including furnish-
ing the kidney dialysis unit with filters and medical
supplies, which are crucial in successful patient
treatment, benefitting over 6,000 patients. IDH has
also supported the Gastrointestinal and Endoscopy
Hospital by providing medicine, medical supplies, and
various aid packages. Moreover, the Group has granted
support for the intensive care unit by providing medi-
cal equipment and extra beds, fuelling the facility’s
expansion and serving more patients.
Other Healthcare Initiatives
• Renovating and repairing the endoscopy unit of
one of Egypt’s largest hospitals battling infectious
diseases, the Homyat Abbassiya Hospital, enabling it
to serve more than 3,072 patients annually.
• Assisting the Assuit University medical convoys sent
to Al Shahid school, aimed at providing lab tests to
students in rural areas to detect and diagnose diseases
relating to the abdomen and kidneys, as well as testing
for diabetes. The convoy benefitted 40 students.
Social Development and Inclusion
Supporting the Asmarat Neighborhood
Impacting the lives of over 5,000 patients, the Com-
pany supplied the Asmarat Medical Centre with a
2022 Annual Report IDH 87
Performance | Corporate Social Responsibility
haematology analyser to test for and cure anaemia.
Additionally, IDH supported the neighbourhood’s dis-
advantaged families by distributing thousands of iftar
meals during the holy month of Ramadan.
Other Social Initiatives
• IDH collaborated with Misr El Kheir Foundation in
its winter campaign to provide food supplies to over
32,000 beneficiaries who were negatively affected by
floods in Giza, Upper Egypt, and the Red Sea.
• The Company installed three kiosks along the
Mariottia Corridor to provide a sustainable source of
income for three local families.
• IDH financially sponsored over 168 families to ensure
a decent life for beneficiaries incapable of working.
Additionally, the Company sponsored more than 20
families to be able to afford healthcare needs.
• Most recently, the Group completed its Winterization
Campaign, providing children with winter clothes
during the coldest months of the year, benefitting
420 children in the Bortos village of Giza.
Education
American Society of Clinical Pathology
Certification Training
IDH is also adamant in giving back to the community
by providing training and personal development oppor-
tunities. In line with this belief, the Company has suc-
cessfully trained 84 chemists and technicians through
six training cycles with key training in the fields of hae-
matology, microbiology, and blood banking. IDH also
offers on-the-ground training inside its Al Mokhtabar
facilities. This training helped candidates receive their
American Society of Clinical Pathology certifications.
Nutrition
“Etameny” Project
Launched by IDH in collaboration with the Egyptian
Food Bank, the “Etameny” project, which translates
to “Rest Assured”, was made to support female-
headed households in Giza with 10 months’ worth
of food baskets to boost food security, stability,
and dietary diversity. In line with this project, the
Egyptian Food Bank also launched an educational
campaign to raise awareness about healthy nutrition
practices to women.
Other Nutrition Initiatives
• Collaboration with the Egyptian Food Bank start-
ing in 2020, which has seen the successful delivery
of food supplies to more than 123,000 beneficiaries
across Egypt.
• Collaboration with Misr El Kheir Foundation starting
in 2022, which entailed the provision of food supplies
to over 25,000 beneficiaries from underprivileged
families in Giza and the Red Sea.
Preservation of Egyptian Heritage
Renovation of the Museum of Prince Mohamed
Ali Palace
IDH supported the reconstruction and renovation of
the Museum of Prince Mohamed Ali Palace and partic-
ipated in the annual Al Manial Palace Classical Music
Festival as part of the Company’s efforts to support
Egyptian heritage and contribute to the revival of the
palace, which has acted as a cornerstone of Egyptian
history and culture.
“Amaly” Training Programme for Fresh
Graduates
In its pursuit of providing professional development
opportunities for Egyptian youth, the Company pro-
vides academic and practical training for students in
Cairo University.
Jordan
IDH’s subsidiary, Biolab, remains dedicated to sup-
porting and initiating programmes that leave a lasting
impact on the communities in which it operates. These
initiatives include education, medical provision, and
social development programmes.
88 IDH 2022 Annual Report
Healthcare
Education
Empowering the Youth
In partnership with several leading organisations,
including Education for Employment Jordan (EFE),
Injaz, Loyac, and Business Development Centre
(BDC), Biolab champions the development and moti-
vation of our communities’ youth to become capable
leaders of tomorrow.
The team works closely with its partners to foster the
youth’s potential by offering internships, training
programmes, and volunteer programmes to provide
practical experiences and kickstart their careers. Addi-
tionally, Biolab hosted a Science Day at the Children’s
Museum with several activities to spark the children’s
interests in the scientific field.
Donations
Biolab donated digital screens to several public schools
in underprivileged and underserved communities in
south Jordan.
Social Development and Inclusion
Biolab continually supports local NGOs by purchas-
ing clothing and books for those in need and con-
stantly seeks projects to better serve the community,
like renovating children’s playgrounds and offering
free diagnostic tests.
Medical Days & Covid-19 Prevention
Biolab hosts medical days at several schools, asso-
ciations, and corporations, centred around raising
awareness on the prevention of non-communicable
diseases, including healthy lifestyle choices. As part
of these events, Biolab also distributes medical pam-
phlets and vouchers for free or discounted diagnostic
tests to encourage preventative examination and
medical check-ups.
Additionally, during the peak of the Covid-19 outbreak,
Biolab supported governmental containment efforts
by distributing hand sanitizers to nine public schools
to help prevent the spread of the virus and raise aware-
ness on the importance of hygienic practices.
Prevention is the New Healthy
In line with Biolab’s resolve to increase community
engagement and promote healthy lifestyles, the Com-
pany launched the Prevention is the New Healthy
initiative dedicated to conducting health awareness
seminars. The initiative included workshops at several
local schools on 14 November 2022 (World Diabetes
Day) to raise awareness about lifestyle choices and
diabetes detection and prevention. Additionally, the
Company opened an awareness booth at Irbid City
Centre, the biggest mall in the Irbid governorate of Jor-
dan, where it provided free haemoglobin and glucose
tests, distributed medical pamphlets, and awarded free
vouchers to several people in attendance to market for
the newly opened Irbid branch of Biolab.
Wellness is the New Luxury
An initiative specifically targeting the younger generation,
Wellness is the New Luxury sponsors events related to
health, lifestyle, and prevention in schools and conferences
while targeting niche members of the community. For
example, Biolab was the platinum sponsor for the Amman
Academy Creativity and Innovation Fair, where Biolab
branded one of the school buses and held an experiment
and entertainment section for kids and attendees.
2022 Annual Report IDH 89
Corporate
Governance
6
Experienced
professionals on
IDH’s Board
4
Independent Board
Members
90 IDH 2022 Annual Report
03 2022 Annual Report IDH 91
Corporate Governance
Corporate Governance
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 65)
Prof. Dr. Hend El Sherbini (Age 54)
Independent Non-Executive Chairman and
Chairman of the Nomination Committee
Group Chief Executive Officer
Lord St John has been an active Crossbench member
of the House of Lords, UK Parliament, since 1978. He
serves on the boards of several listed and unlisted
companies, including Yellow Cake plc, Smithson
Investment Trust plc, Gulf Marine Services plc, Strand
Hanson Ltd, and Airport Holdings Mauritius. He also
holds mentoring advisory roles with Farrant Group
Ltd., Qredo Ltd., BetWay Ltd., Geobear Ltd, and ROC
Technologies Ltd. Lord St John has a strong interest in
the charitable sector and serves as a trustee to several
charities focused on wildlife conservation, poverty
reduction, education, and healthcare. He graduated
with BA Law and BSocSc Psychology from Cape Town
University, a BProc i from the University of South
Africa, and a Master of law 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.
Dr. Hend El Sherbini has been IDH Group’s Chief
Executive Officer since 2012, and prior to that, she
served as the CEO of Al Mokhtabar — Egypt’s oldest
diagnostic services brand — between 2004 and 2012.
She received her MBBCh and her Master’s degree in
Clinical and Chemical Pathology from Cairo University
in the early 1990s. She also holds a Master’s degree in
Public Health from Emory University in Atlanta. Dr. El
Sherbini obtained her PhD in Immunology from Cairo
University in 2000, where she is also a professor of
clinical pathology at the university’s Faculty of Medi-
cine. She sits on the Board of the American Society of
Clinical Pathology (Egypt) and consults on the interna-
tional certification process. Dr. El Sherbini completed
an Executive MBA from the London Business School in
2015 and was featured as one of Forbes’ most powerful
women between 2016 and 2023.
92 IDH 2022 Annual Report
Hussein Choucri (Age 72)
Dan Olsson (Age 57)
Independent Non-Executive Director and
Chairman of the Remuneration Committee
Independent Non-Executive Director and
Chairman of the Audit Committee
Mr. Choucri is Chairman and Managing Director of
HC Securities and Investment, which he established
in May 1996. He currently sits on the boards of EDITA
Food Industries S.A.E, Fawry Banking and Payment
Technology Services Ltd. (Fawry), and Integrated Diag-
nostic Holdings (IDH). Mr. Choucri served as a Manag-
ing Director of Morgan Stanley from 1987 to 1993 and
served as Advisory Director at Morgan Stanley from
1993 to 2007. He received his Management Diploma
from the American University in Cairo (AUC) in 1978.
Mr. Olsson has long and extensive international expe-
rience in the diagnostic and healthcare services sector,
where he has served in a range of executive positions.
Among others, he served as head of diagnostics in
the pan-European healthcare group Capio; CEO of
Unilabs, a pan-European diagnostic provider; CEO of
Helsa, a Swedish healthcare group; as well as CEO of
Team Olivia Group, a Nordic care services group. He
currently works as an independent advisor and holds
non-executive positions at Purch AB, Batten AB, and
Ambea AB (Publ). Mr. Olsson has worked in the health-
care sector since 1999. Mr. Olsson studied Economics
at the University of Lund in Sweden.
2022 Annual Report IDH 93
Corporate Governance
Richard Henry Phillips (Age 58)
Yvonne Stillhart (Age 55)
Non-Executive Director
Independent Non-Executive Director
Mr. Phillips is a founding partner of Actis LLP, the
emerging markets private equity group. As Actis LLP is
one of the Company’s major shareholders, Mr. Phillips
is not considered by the Board as being independent.
He is the Head of Private Equity for Actis and is a mem-
ber of the Actis Investment Committee. Mr. Phillips
is a director on the board of a number of companies,
including Honoris Holding Limited, Les Laboratories
Medis SA, and others. Mr. Phillips holds a degree in
Economics from the University of Exeter.
Ms. Yvonne Stillhart has over 30 years of experience
as a successful Senior Executive leader and business
founder working with growth-driven companies across
broad industries and geographical regions in Emerging
Markets, USA, Europe, and Sub-Sahara Africa. She has
been a non-Executive Director and Audit Commit-
tee member for the last 12 years, and she currently
serves as an independent non-executive member of
the board and audit and risk committee of UBS Asset
Management Switzerland AG, and as a non-executive
director and member of the audit committee of abrdn
Private Equity Opportunities Trust Plc. Ms. Stillhart is
also the Chairperson and member of the Social and
Ethics Committee of the South African listed EPE Capi-
tal Ltd. She holds a Directors Certificate from Harvard
Business School and is a Qualified Risk Director from
the DCRO Institute. She also holds the ESG Competent
Boards Certificate and is fluent in German, English,
Spanish, and French.
94 IDH 2022 Annual Report
2022 Annual Report IDH 95
Corporate Governance
Corporate Governance Report
Your Board of Directors (“the Board”) is responsible
for providing strong leadership and effective decision-
making, safeguarding in the process the interests of all
shareholders of Integrated Diagnostics Holdings (IDH).
Under my chairmanship, the Board has maintained an
unwavering commitment to providing oversight and
guidance to senior management as the Group contin-
ues to execute its regional growth strategy.
IDH is a Jersey-registered entity with a Standard List-
ing on the Main Market of the London Stock Exchange
(LSE) since May 2015 and a secondary listing on the
Egyptian Stock Exchange (EGX) since May 2021.
Given the Company’s standard listing on the LSE, it is
thus not required to comply with the requirements of
the 2018 UK Corporate Governance Code (“the Code”)
as issued by the Financial Reporting Council. During
the year to 31 December 2022, IDH did not voluntarily
comply with the Code in full; however, the Company
had put in place a framework that enables the Com-
pany to voluntarily comply with some aspects of the
Code that it considers appropriate for the size and
nature of the business.
Towards the end of 2022, the Board carried out, through a
third-party company, a detailed review of the Company’s
compliance against the Code. In November 2022, the
Board resolved to improve reporting of compliance with
the Code over the next few years. We strongly believe that
the adoption of best industry practices in governance will
assist us in building a profitable and sustainable business,
as well as in safeguarding shareholder interests.
and bodies carrying out equivalent functions; 7.2
concerns corporate governance standards that are
included in the Directors Report or, in this case, as
part of the Strategic Review (DTR 7.2.1).
To that end, we have an Audit Committee as well as
Remuneration and Nomination Committees. The Board
may establish additional committees as appropriate
going forward. This Annual Report includes reports
from both the Audit and Remuneration Committees.
Moreover, over the course of the past year, IDH has
worked on complying with EGX listing rules and dis-
closure and corporate governance requirements that
are set for foreign companies with dual listing.
The Board is committed to implementing best prac-
tices 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.
Functioning of the Board
We met seven times as a Board during the course of
2022; details of the individual Directors attendance
are shown on page 99. The Board has invested
significant time discussing and evaluating the
Group’s strategy and prospects for future growth, the
outcome of which is presented in our statement of
strategy on page 52. We are confident that we have
in place the right strategy and the right management
team to deliver shareholder returns going forward.
We are compliant with Financial Conduct Authority
Disclosure Guidance and Transparency Rules (DTR)
subchapters 7.1 and 7.2, which set out certain man-
datory disclosures: 7.1 concerns audit committees
Composition of the Board
Under its Articles of Association, the Group must
have a minimum of two Directors. While there is no
96 IDH 2022 Annual Report
maximum number of Directors, the Board presently
includes six Board members and at present has no
intention of appointing additional Board members.
Notably, Directors have no share qualification,
meaning they do not need to be shareholders of the
Group in order to serve.
I am pleased to report that since March 2022, we
have three Independent Non-Executive Directors,
excluding the Independent Non-Executive Chair-
man, with the most recent appointment being that of
Yvonne Stillhart as an Independent Non-Executive
Director on 1 March 2022, who has further enhanced
the skills and diversity on the Board. Together, the
Directors offer IDH a world standard mix of exper-
tise in areas including strategy, finance and medi-
cal diagnostics — as well as diverse experience in
Europe, the Middle East and Africa. We have relevant
commercial and technical experience to help direct
the Group as it delivers on its strategy in a very tech-
nical field and across rapidly changing geographies.
Your Board and their biographies are set out on
pages 92 to 94 of this Annual Report and are sum-
marised in the following table.
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)
Yvonne Stillhart
Independent Non-Executive Director (1 March 2022)
Leadership
We continue to operate on the basis of a clear division
of responsibilities between the role of the Chairman
and that of the Group Chief Executive. This segregation
of roles was agreed at the Board meeting held on 12
January 2015. The Board continues to believe that this
segregation of roles remains appropriate, taking into
account the size and structure of the Group.
As Chairman, I ensure the Board is effective in the execu-
tion of all aspects of its role. The Group Chief Executive
Officer, meanwhile, is responsible for managing the day-
to-day running of the business. In this, she is supported
by a senior management team. The Group Chief Execu-
tive and I have a good working relationship and discuss
matters of Group strategy and performance on a regular
basis. We also work together to ensure that Board meet-
ings cover relevant matters, including a quarterly review
of financial and operational performance (including key
performance indicators), and in partnership with the
Group Secretary ensure that all Directors:
• are kept advised of key developments;
• receive accurate, timely and clear information upon
which to call in the execution of their duties; and
• actively participate in the decision-making process.
2022 Annual Report IDH 97
Corporate Governance | Corporate Governance Report
Agendas for meetings of the Board are reviewed and
agreed in advance to ensure each Board meeting is
efficiently run, allowing all Directors to openly and
constructively challenge the proposals made by the
Group’s senior management. I am pleased to report
that throughout the year, each Director has properly
exercised those powers with which they have been
vested by the Group’s Articles of Association and
relevant laws.
The Board operates under a Schedule of Matters
Reserved, the details of which are unchanged since
our last Annual Report. Matters reserved to the Board
means any decision that may affect the overall direc-
tion, supervision and management of the Group,
including, but not limited to:
• approving annually a strategic plan and objectives
for the following year for the Group;
• approving any decision to cease to operate all or any
material part of the Group’s business or to enter into
any new business or geographic areas;
• monitoring the delivery of the Group’s strategy,
objectives, business plan and budget;
• adopting or amending the Group’s business plan or
annual budget;
• approving the Group’s annual report and accounts
and half-yearly financial statements and/or any
change in the accounting principles or tax policies of
any member of the IDH group and/or any change in
the end of the financial year of any member of the
IDH group except as contemplated by the business
plan or annual budget, as required by law or to com-
ply with a new accounting standard;
• any member of the IDH group declaring or paying
any dividend or distribution;
• approving the issue of all circulars, prospectuses,
listing particulars and general meeting notices to
shareholders of the Group;
• ensuring the Group has effective systems of internal
control and risk management in place by (i) approv-
ing the Group’s risk appetite statements and (ii)
approving policies and procedures for the detection
of fraud, the prevention of bribery and other areas
considered by the Board to be material;
98 IDH 2022 Annual Report
• undertaking an annual review of the effectiveness of
the Group’s risk management and internal control
and reporting on that review in the Group’s annual
report. The review should cover all controls, includ-
ing financial, operational and compliance controls
and risk management;
• carrying out a robust assessment of the principal
risks facing the Group, including those that threaten
its business, future performance, solvency or liquid-
ity and to report on such assessment in the Group’s
annual report;
• adopting or amending the Group’s environmental
policy and monitoring its delivery; and
• reviewing the Group’s overall corporate governance
arrangements and approving any changes thereto.
Apart from these Reserved matters, the Board delegates
specific items to its principal committees, namely the
committees on Audit, Remuneration and Nomination.
Each Committee is authorised to seek any information
it requires from senior management.
Below are brief recaps on each of these committees.
Reports from the Chairmen of the Audit and Remu-
neration Committees appear starting pages 104 and
108 of this Annual Report, respectively.
Board Meetings During 2022
The Board met seven times during the year, four of
which were held on an ad hoc basis to consider the
Group acquisitions and consideration of the dividend.
Details of our Directors’ attendance at Board and
Committee meetings are shown in the table below.
In the event that any Director is unable to attend a
meeting of the Board or Committee of which they are
a member, he or she receives the necessary papers,
including agendas, meeting outcomes and any docu-
ments presented for review or information. Further-
more, I endeavour to discuss with them in advance of
the meeting to obtain their views and decisions on the
proposals to be considered.
Table of Director Attendance at 2022 Meetings
Name
Board
Audit (a)
Remuneration (c)
Nomination
Number of Meetings
Directors:
Lord St John of Bletso
Prof. Dr. Hend El Sherbini
Hussein Choucri
Dan Olsson
Richard Henry Phillips
Yvonne Stillhart *
7
7
7
7
7
7
7
8
n/a
n/a
8
8
n/a
6*
2
n/a
n/a
2
2
n/a
1*
2
2
n/a
1
2
n/a
n/a
* Yvonne Stillhart was appointed on 1 March 2022 and has attended all meetings since her appointment.
Effectiveness
Having spent considerable time in both formal meetings
and in learning about the skills of our Directors one-on-
one — and drawing on my past experience as a Director
— I am confident that the Board has the skills, talent,
and industry knowledge it needs to effectively deliver
the Group’s agreed strategy. The Board, facilitated by
the Company Secretary, carries out regular internal
evaluations and consider the feedback from each Direc-
tor in setting the agenda and strategic direction of the
Company. In addition, training requirements for each
Director are considered, and the Board receive regular
updates from the Company Secretary or specific train-
ing from external legal counsel as deemed appropriate.
It is my considered judgement that the Board receives
from senior management sufficiently detailed budgets,
forecasts, strategy proposals, reviews of the Group’s
financial position and operating performance, and
annual and half yearly reports to ensure that it may be
effective. This enables us to effectively ask questions
of senior management and to hold discussions on
the Group’s strategy and performance. In 2022, senior
management delivered regular reports to the Board
ahead of regularly scheduled Board meetings.
Any concerns raised by Directors are clearly recorded
in the minutes of each meeting. I review Board minutes
in my capacity as Chairman before these minutes are
circulated to all Directors in attendance and then
tabled for approval at the next meeting, at which time
any necessary amendments are made.
The Group has obtained customary directors’ and offi-
cers’ indemnity insurance covering the Chairman and
the Non-Executive Directors.
The Board has delegated several areas of responsibil-
ity to its committees. The composition of the Board’s
committees was considered during the year and sub-
sequently Yvonne Stillhart became a member of the
Audit and Remuneration Committees.
Nomination Committee
The Nomination Committee assists the Board in
reviewing the structure, size and composition of the
Board. It is also responsible for reviewing succession
plans for the Directors, including the Chairman and
Chief Executive and other senior management.
I note in this instance that all members of the Nomina-
tion Committee are Non-Executive Directors. At the
date of this report the following were members of the
Nomination Committee:
2022 Annual Report IDH 99
Corporate Governance | Corporate Governance Report
Name
Position
Lord St John of Bletso
Chairman of the Committee
Hussein Choucri
Committee Member
Dan Olsson
Committee Member
Remuneration Committee
the
The Remuneration Committee recommends
Group’s policy on executive remuneration determines
the levels of remuneration for Executive Directors and
the Chairman and other senior management and pre-
pares an annual remuneration report.
The full report of the Remuneration Committee for 2022
appears starting on page 108 of this Annual Report. At
the date of this report, the following were members of
the Remuneration Committee:
Name
Position
Hussein Choucri
Chairman of the Committee
Dan Olsson
Committee Member
Yvonne Stillhart
Committee Member
Audit Committee
The Audit Committee’s role is to assist the Board with
the discharge of its responsibilities in relation to finan-
cial reporting, including: reviewing the Group’s annual
and half-year financial statements and accounting
policies and internal and external audits and controls;
reviewing and monitoring the independence and
scope of the annual audit and the extent of the non-
audit work undertaken by external auditors; advising
on the appointment of external auditors; and review-
ing the effectiveness of the internal audit, internal con-
trols, whistleblowing and fraud systems in place within
the Group. The committee also oversees the Group’s
cybersecurity strategy ensuring it is regularly updated
and systematically adhered to.
The Audit Committee will meet not less than three
times a year. The Audit Committee comprises three
Independent Non-Executive Directors who hold the
necessary competence in accounting and /or audit-
ing, recent financial experience and have competence
relevant to the sector in which the Group is operating.
The full report of the Audit Committee for 2022
appears starting on page 104 of this Annual Report. At
the date of the report, the following were members of
the Audit Committee:
Name
Dan Olsson
Hussein Choucri
Yvonne Stillhart
Position
Chairman of the Committee
Committee Member
Committee Member
100 IDH 2022 Annual Report
Given the business and geographies in which the
Group operates, I believe as Chairman that risk mitiga-
tion will be key not just to the creation and preservation
of shareholder value, but in the Group’s growth going
forward. The Company’s risk matrix, outlined on pages
54-61, is sufficiently vital that it must be owned equally
by the management team and members of the Board.
Our view as a Board is that the Group must be proactive
on risk in order to meet shareholder expectations, and
I have advised that I expect the IDH management team
to be ahead of the curve in this area. You may expect
risk and its mitigation will be a theme to which your
Board returns repeatedly in 2023, as we did in 2022.
The Board has ultimate responsibility for the Group’s
they have delegated
internal controls; however,
oversight of the Group’s system of internal controls
to the Audit Committee so as to safeguard the assets
of the Group and the interests of shareholders. The
Audit Committee thus reviews the effectiveness of the
Group’s internal controls on an ongoing basis to ensure
the keeping of proper accounting records, safeguard-
ing the assets of the Group and detecting fraud and
other irregularities. The Audit Committee reports back
to the Board with their findings and recommendations.
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
level of operating departments by the heads of those
departments; and
• regular Board level discussion of the major business
risks of the Group, together with measures being
taken to contain and mitigate those risks.
• The Group’s principal risks and uncertainties and
mitigation for them are set out on pages 54–61 of this
Annual Report.
• Your Board has furthermore put in place a control
framework at the Group level that applies to all sub-
sidiaries, including:
• Board approval of the overall Group budget and
strategic plans;
• a clear organisational structure delineating lines of
responsibility, authorities and reporting requirements;
• defined expenditure authorisation levels;
• a regular process for operational reviews at the
senior management level on a weekly, monthly and
quarterly basis covering all aspects of the business;
• a strategic planning process that defines the key
steps senior management must take to deliver on the
Group’s long-term strategy;
• a comprehensive system of financial reporting
including weekly flash reports to management,
monthly reporting to management and an annual
budget process involving both senior management
and the Board; the Board received reports on a quar-
terly basis in 2022; and
• as part of the reporting process in 2022, management
reviewed monthly and year-to-date actual results
against prior year, against budget and against forecast;
these reports were circulated to the Board; any signifi-
cant changes and adverse variances are reviewed by
the Group Chief Executive and by senior management
and remedial action is taken where appropriate.
Investor Relations
Engagement with shareholders continues to be a key
function at both the senior management and the Board
level. Our investor relations function held hundreds of
meetings with current and potential investors during
the course of the year. Management met with investors
at several investor conferences and roadshows during
2022, in addition to handling hundreds of one-on-one
call requests and queries throughout the year.
In 2022, we published three-month, half-year, nine-
month reviewed results in addition to audited full-
year results and further released a trading update on
performance at the three-month periods. We intend
to continue publishing reviewed results for the first,
second and third-quarter marks in 2023, to abide by
the Egyptian Exchange’s listing rules.
The Board communicates with shareholders through
public announcements disseminated via the London
Stock Exchange, analyst briefings, roadshows and
press interviews. Copies of public announcements and
financial results are published on the Group’s website,
2022 Annual Report IDH 101
Corporate Governance | Corporate Governance Report
Engagement with
shareholders continues
to be a key function
at both the senior
management and
the Board levels with
the company holding
hundreds of meetings
with current and
potential investors
during 2022.
to send a Notice of Meeting of an Annual General
Meeting (AGM) and related papers to shareholders at
least 20 working days prior to the meeting.
The Group will hold its seventh Annual General Meet-
ing as a listed company on 30 May 2023 in London, UK.
Details of the AGM are included in the Notice of Meet-
ing that accompanies this Annual Report and which is
available on our website.
At the AGM, all of the Group’s Directors will retire and
submit themselves for re-election.
The outcome of the voting at the AGM will be
announced by way of a London/Egypt Stock Exchange
announcements and full details will be published on
the Group’s website shortly after the AGM.
along with a number of other investor relations tools. It
is worth highlighting that the Group launched new cor-
porate and investor relations websites in 2018, offering
more comprehensive and better structured informa-
tion on the Group along with additional shareholder
tools and a richer interface.
The Board receives regular updates from the senior
management team on the views of major shareholders
and on milestones in the investor relations programme.
We will continue throughout 2023 to grow our investor
relations programme to ensure that our shareholders
and stakeholders remain informed of the Group’s strat-
egy and ongoing financial and business performance.
Limitations of this Report
As I noted earlier, the Group is not bound to adhere
to the requirements of the 2018 UK Corporate Gover-
nance Code. Nevertheless, we have endeavoured to
ensure that this Annual Report is, as a whole, fair, bal-
anced and understandable.
In formulating this Annual Report, we have called on
the Group Chief Executive and her senior management
staff to provide us with clear documentary evidence of
the Group’s performance and policies for 2022. The
Audit Committee has confirmed to us that the financial
statements as contained in the 2022 Annual Report are
true and fair and that the work of the external auditors
has been accurate and effective.
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
Lord St John of Bletso
Chairman
5 April 2023
102 IDH 2022 Annual Report
2022 Annual Report IDH 103
Corporate Governance
Audit Committee Report
During 2022, the Audit Committee met eight times.
The Committee members reviewed the integrity
and content of external financial reporting, risk
management and internal controls and reported
the findings and recommendations to the Board.
Outside of scheduled meetings, the Audit Commit-
tee also communicated regularly throughout 2022
with the Group Chief Financial Officer and Vice
President of Finance and Strategies and the external
auditors. The external auditors are invited to attend
meetings of the Committee on a regular basis. The
Group Chief Financial Officer and Vice President
of Finance and Strategies, who is not a member of
the Board, also attends the meetings by invitation,
and other members of the senior management team
attend as required; these include the Director of
Investor Relations, the Chief Internal Audit Director
and the Group Secretary.
There are also private meetings between the Audit
Committee and the external auditors outside the audit
timetable at which senior management is not present.
The Committee will continue with the practice of meet-
ing in private with the external auditors in the future.
Roles and Duties of the Audit Committee
The Audit Committee’s role is to assist the Board with
the discharge of its responsibilities in relation to finan-
cial reporting, including:
• reviewing the Group’s annual report and financial
statements;
• reviewing the Group’s accounting policies, internal
and external audits and controls;
• reviewing and monitoring the scope of the annual
audit and the extent of the non-audit work under-
taken by external auditors; and
• advising on the appointment of external auditors
and reviewing the effectiveness of the internal audit,
internal controls, whistleblowing and fraud systems
in place within the Group.
Dan Olsson
Independent Non-Executive Director
The Audit Committee is responsible for overseeing
IDH’s internal financial reporting and ensuring the
integrity of the Group’s financial statements. The Com-
mittee is also responsible for reviewing and monitor-
ing the effectiveness of the Group’s risk management
processes and internal controls, as well as for ensuring
that audit processes are robust.
At the date of this report, the Audit Committee comprises
three Non-Executive Directors, all of whom are considered
independent. In addition to myself as Chair of the Com-
mittee, Hussein Choucri and Yvonne Stillhart are also
members of the Committee. The Committee as a whole
considers it has the relevant financial experience in finan-
cial and healthcare 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 require-
ments set out for foreign companies with a dual listing.
104 IDH 2022 Annual Report
Audit Committee Meetings During 2022
During 2022 the Audit Committee had eight scheduled meetings. At each scheduled meeting, the Committee
considers the matters outlined above under the subheading “Roles and Duties of the Audit Committee.”
Committee Member
Meeting attended
Dan Olsson
Hussein Choucri
Yvonne Stillhart*
8/8
8/8
6/8
* Yvonne Stillhart became a member of the Audit Committee on 1 March 2022 and has attended all meetings since her appointment.
Significant Issues
The audit committee have held regular meetings across
the period with the external auditors. In these meetings
the external auditors have presented their audit plan and
shared their assessment of financial statement risks. Areas
of risk and focus for the audit include revenue recognition,
procedures around management override of controls,
assessments of control over our subsidiaries and valuations
of options over non-controlling interests. Detailed discus-
sions have been held around corporate governance and
steps being taken to strengthen the control environment.
Internal Auditor
The scope of internal auditor encompasses, but is not lim-
ited to, the examination and evaluation of the adequacy
and effectiveness of the Group’s governance, risk manage-
ment, and internal controls as well as the quality of perfor-
mance in carrying out assigned responsibilities to achieve
the Group’s stated goals and objectives. This includes:
• Evaluating risk exposure relating to achievement of
the Group’s strategic objectives.
• Evaluating the reliability and integrity of information
and the means used to identify, measure, classify,
and report such information.
• Evaluating the systems established to ensure com-
pliance with those policies, plans, procedures, laws,
and regulations which could have a significant
impact on the Group.
• Evaluating the means of safeguarding assets and, as
appropriate, verifying the existence of such assets.
• Evaluating the effectiveness and efficiency with
which resources are employed.
• Evaluating operations or programmes to ascertain
whether results are consistent with established
objectives and goals and whether the operations or
programmes are being carried out as planned.
• Monitoring and evaluating governance processes.
• Reporting periodically on the internal audit activity’s
purpose, authority, responsibility, and performance
relative to its plan.
• Reporting significant risk exposures and control
issues, including fraud risks, governance issues,
and other matters needed or requested by the
Board / Audit Committee.
• Monitoring, evaluating, and reporting on Group’s
environmental strategy and progress.
• Evaluating specific operations at the request of the Board
/ Audit Committee or management, as appropriate.
The Internal Auditor reports to the Audit Commit-
tee and the Committee received four reports on the
findings of the internal audit in 2022. The Commit-
tee also received a report from internal audit on
their annual review of the system of internal control
and risk management. The Committee continues to
2022 Annual Report IDH 105
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 neces-
sary for shareholders to assess the Group’s position
and performance, business model and strategy. It is
the Audit Committee’s role to assist the Board in dis-
charging its responsibilities 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 financial statements, the
Audit Committee advised the Board at its meeting on
27 March 2023 that is their opinion that the financial
statements as at 31 December 2022 provide a true and
fair view of the financial performance of the Group
and recommend that it be adopted by the Board and
recommended to shareholders for approval at the
forthcoming Annual General Meeting.
Dan Olsson
Chairman, Audit Committee
5 April 2023
Corporate Governance | Audit Committee Report
monitor and reviews the effectiveness and capabili-
ties of the internal audit during the year.
External Auditor Independence
PwC has acted as the Group’s external auditor since
their appointment in June 2021. The Auditors’ inde-
pendence was considered by the Committee during
the year and following careful consideration, it was
agreed that the Auditors remained independent.
The Audit Committee reviewed the work completed by
the external auditors. The Audit Committee confirms
that during 2022, PwC audit services amounted to
EGP 37.7 million (2021: EGP 28.8 million) The external
auditors fees include those related to the dual-listing
of IDH’s shares on both the LSE and the EGX which
necessitates the publishing of three reviewed financial
statements for 1Q, 2Q, and 3Q in addition to audited
financial statements for the full year in consolidated
and standalone forms.
Non-audit fees during 20222 totalled EGP 197,000
relating to other assurance services that were required
to be performed by the auditor relating to Corporate
Governance in Egypt.
External Auditor
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 re-appoint-
ment of PwC as Auditor to the Company. As such, the
notice of the 2023 Annual General Meeting includes a
resolution, to be approved by shareholders, that PwC
be re-appointed as Auditor.
106 IDH 2022 Annual Report
2022 Annual Report IDH 107
Corporate Governance
Remuneration Committee Report
Hussein Choucri
Independent Non-Executive Director
In this report from the Remuneration Committee,
I outline on behalf of my colleagues and myself the
basis on which Directors and select members of senior
management will be remunerated for their service in
2022. 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
2022 appears below.
During 2021, the Committee commissioned a con-
sultant to review the non-executive remuneration to
ensure these were aligned to the market. Following
this review, it was agreed to increase the fees for the
independent non-executive directors with effect from
1 September 2021. There has been no increase in fees
since this date.
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; independent
108 IDH 2022 Annual Report
Non-Executive Directors: Hussein Choucri, Dan Ols-
son, and Yvonne Stillhart have been engaged by the
Group as Independent Non-Executive Directors 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 reimbursement of rea-
sonable expenses; non-Executive Directors: Richard
Henry Phillips has been engaged by the Group as a
Non-Executive Director under letter of appointment.
He will not be entitled to receive any fee from the
Group for this role. The Non-Executive Directors are all
entitled to the reimbursement of reasonable expenses.
Remuneration of Directors in 202235
Figures in EGP36
Executive Director
Base Salary
/ Fees
2022
Base
Salary
/ fees
2021
Annual Bonus
2022^
Annual
Bonus
2021^
Total
2022
Total
2021
Dr. Hend El Sherbini37
10,398,605
8,495,102
450,000
450,000
10,848,605
8,945,102
Non-Executive Directors
Lord St John of Bletso
1,967,268
1,303,371
Hussein Choucri
1,278,726
912,358
Dan Olsson
1,381,215
912,358
Yvonne Stillhart *
1,065,605
-
-
-
-
-
-
-
1,967,268
1,303,371
1,278,726
912,358
1,381,215
912,358
1,065,605
-
*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
5 April 2023
35 There are no taxable benefits, corporate pensions or long-term incentive plans for the Company’s directors.
36 Average US$:EGP exchange rate was 19.67in 2022 and 15.64 in 2021.
37 Dr. Hend El Sherbini receives part of her annual bonus in the form of an annual award amounting to EGP 450,000.
^BOD members are not eligible for profit share distributions.
2022 Annual Report IDH 109
Corporate Governance
Directors’ Report
The statements and reviews on pages 4 to 61 comprise
the Strategic Report, which contains certain informa-
tion that is incorporated into this Directors’ Report by
reference, including indications as to the Group’s likely
future business developments.
Strategic Report (beginning page 4) and particularly
the Performance section (beginning on page 64).
Financial statements for 2022 appear in the Audited
Financial Statements (starting on page 118).
Results and Dividends
The Group’s Results for 2022 are set out in the
Audited Financial Statements starting on page
118. While IDH maintains its long-term dividend
policy that sees the Company return to sharehold-
ers the maximum amount of excess cash after tak-
ing careful account of the cash needed to support
operations and expansions, the Board of Directors
has decided to postpone the dividend decision in
light of the ongoing uncertainty and lack of foreign
currency availability in Egypt. The Board of Direc-
tors will review the situation in its upcoming Board
meeting in September and assess the Group’s cash
position and the macroeconomic situation in Egypt
at the time before a decision is made and a distribu-
tion date is set.
Principal Risks and Uncertainties
The principal risks and uncertainties that may affect
IDH’s business, as well as their potential mitigants, are
outlined on pages 54 to 61 of this Annual Report.
Share Capital
The Group has 600,000,000 ordinary shares, each with
a nominal value of US$ 0.25. There are no other shares
in issue other than ordinary shares.
Directors
The Directors who held office at 31 December 2022 and
up to the date of this report are set out on pages 92 and
94 along with their biographies. The remuneration of
the Board of Directors is set out in the Remuneration
Report on page 109.
Directors’ and Officers’ Liability Insurance and Indem-
nification of Directors.
Subject to the conditions set out in the Companies (Jer-
sey) Law 1991 (as amended), the Group has arranged
appropriate Directors’ and Officers’ liability insurance
to indemnify the Directors against liability in respect of
proceedings brought by third parties. Such provisions
remain in force at the date of this report.
Principal Activities
The Group’s principal activity is the provision of medi-
cal diagnostics services. An overview of the Group’s
principal activities is an integral component of the
Strategic Review included in this Annual Report begin-
ning on page 4.
Business Review and Future
Developments
A review of the development and performance of the
Group’s business forms an integral part of this Annual
Report in sections including the Chairman’s Message
(page 14), Chief Executive’s Report (pages 18 to 23),
110 IDH 2022 Annual Report
Substantial Share Holdings
As at 31 December 2022, the Company ascertained from its own analysis that the following held interests of 3% or
more of the voting rights of its issued share capital:
Shareholder
Hena Holdings Ltd.
Actis IDH B.V.
Number of Voting Rights
% of Voting Rights
160,250,305
126,000,000
International Finance Corporation (IFC) and IFC MENA Fund
34,755,198
T. Rowe Price International
Fidelity Investments
25,310,157
22,065,972
26.71
21.00
5.79
4.22
3.68
Note (1): The table displays the top five shareholders in
IDH across both exchanges (LSE and EGX).
Note (2): As at year-end 2022, 94.7% of IDH’s shares
were listed on the LSE, with the remaining 5.3% listed
on the EGX. The table above demonstrates the top five
shareholders across both the LSE and EGX.
The Directors certify that there are no issued securities
that carry special rights with regard to control of the
Company. There are similarly no restrictions on voting
rights. Chief Executive Officer Dr. Hend El-Sherbini
and her mother, Dr. Moamena Kamel jointly hold
the shares held by Henna holdings which include the
described voting rights.
The Company has not been informed of any changes to
the above interests between 31 December 2022 and the
date of this Report.
Committees of the Board
The Board has established Audit, Nomination
and Remuneration Committees. Details of these
including membership and
their
Committees,
activities during 2022, are contained in the Corporate
Governance section of this Annual Report and in the
Remuneration and Audit Reports.
Corporate Responsibility
The Group’s report on Corporate Responsibility is set
out starting on page 86.
Corporate Governance
The Group’s report on Corporate Governance is on
pages 92 to 115.
Articles of Association
The Company’s Articles of Association set out the
rights of shareholders including voting rights, distribu-
tion rights, attendance at general meetings, powers of
Directors, proceedings of Directors as well as borrow-
ing limits and other governance controls. A copy of
the Articles of Association can be requested from the
Group Company Secretary.
2022 Annual Report IDH 111
Corporate Governance | Directors’ Report
The Articles of Association may be amended by members
of the Company via special resolution at a General Meet-
ing of the Company, the Company is not seeking any
amendments at the forthcoming annual general meeting.
Rules on the Appointment and
Replacement of Directors
Rules on the appointment and replacement of Direc-
tors are set out in the Group’s Articles of Association,
a copy of which may be requested from the Group
Company Secretary.
Agreements Related to Change of
Control of the Group
As at 31 December 2022, there was an agreement
related to the IFC’s US$ 45 million loan agreement
whereby within 60 days of receipt of notice from IFC
that a Major Shareholder Event has occurred, IDH
should prepay the aggregate outstanding principal
amount of the loan in full together with accrued inter-
est and Increased Costs (if any) thereon and all other
amounts payable under the agreement, including the
amount payable under unwinding costs if the prepay-
ment is not made on an Interest Payment Date.
Major Shareholder Event means the aggregate economic
and voting interests (a) directly held by the Major Share-
holder and (b) indirectly held by Dr. Hend El Sherbini and
Dr. Moamena Kamel in the Parent’s share capital falling
below 12.5% (determined on a fully diluted basis).
This facility was cancelled in March 2023.
Conflicts of Interest
During the year, no Director held any beneficial inter-
est in any contract significant to the Group’s business,
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
become aware that they, or their connected parties,
have an interest in an existing or proposed transaction
with the Group, they are required to notify the Board as
soon as reasonably practicable.
Political Donations
The Group made no political donations in 2022 (2021: nil).
Financial Instruments
The Group’s principal financial instruments comprise
cash balances, balances with related parties, trade
receivables and payables and other payables and
receivables that arise in the normal course of business.
The Group’s financial instruments risk management
objectives and policies are set out in Note 3 and Note 5
to the Financial Statements.
Employees
The Group has one (1) Executive Director, namely Group
Chief Executive Dr. Hend El Sherbini, as identified in
the Corporate Governance section. Her biographical
information appears on page 92 of this Annual Report,
and her compensation is reported in the Remunera-
tion Committee Report on page 109. IDH has service
agreements with the Group Chief Executive and with
the Group Chief Financial Officer and Vice President of
Finance and Strategies, Mr. Omar Bedewy, who is not a
Company Director. Dr. Hend El Sherbini leads the Com-
pany’s Executive Committee, which also includes all
heads of departments and meets every second week to
review and discuss performance, priorities and upcom-
ing events in light of the Group’s strategic plan. In view of
the Company’s regional growth plans, IDH is committed
to building out its senior management team in prepara-
tion for a larger footprint. The Group and its subsidiaries
total an average of 6,718 employees in 2022 (2021: 6,388)
employed in Egypt, Jordan, Sudan and Nigeria.
Creditor Payment Policy
Individual subsidiaries of the Group are respon-
sible for agreeing on the terms and conditions under
which business transactions with their suppliers are
112 IDH 2022 Annual Report
conducted. It is the Group’s policy that payments to
suppliers are made in accordance with all relevant
terms and conditions.
Going Concern
The Directors have considered a number of downside sce-
narios, 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 dividends 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 downside 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.
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Annual
Report and the financial statements in accordance
with applicable law and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have prepared the group financial statements
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
Under company law, directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the group and of
the profit or loss of the group for that period. In preparing
the financial statements, the directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable IFRSs as adopted by the
European Union have been followed, subject to any
material departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates that are
reasonable and prudent;
• prepare the financial statements on the going con-
cern basis unless it is inappropriate to presume that
the group will continue in business.
The directors are responsible for safeguarding the
assets of the group and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.
The directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the group’s transactions and disclose with reasonable
accuracy at any time the financial position of the group
and enable them to ensure that the financial statements
comply with the Companies (Jersey) Law 1991.
The directors are responsible for the maintenance
and integrity of the group’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
Each of the Directors, whose names and functions are
listed in the Board of Directors section of the Annual
Report, confirm that, to the best of their knowledge:
• the Group’s financial statements, which have been
prepared in accordance with IFRSs as adopted by the
European Union, give a true and fair view of the assets,
liabilities, financial position and profit of the group; and
• the Financial and Operational Review includes a
fair review of the development and performance of
the business and the position of the group, together
with a description of the principal risks and uncer-
tainties that it faces.
In the case of each director in office at the date the
directors’ report is approved:
• so far as the director is aware, there is no relevant
audit information of which the group’s auditors are
unaware; and
2022 Annual Report IDH 113
Auditors
PwC have confirmed their willingness to act as the
Company’s external auditors, and a separate resolution
will be proposed at the forthcoming AGM concerning
their appointment and to authorise the Board to agree
their remuneration.
By order of the Board
Dr. Hend El Sherbini
Executive Director
5 April 2023
Corporate Governance | Directors’ Report
• they have taken all the steps that they ought to have
taken as a director in order to make themselves aware
of any relevant audit information and to establish that
the group’s auditors are aware of that information.
Annual General Meeting (AGM)
The Company will hold its 2023 AGM on 30 May 2023
in London, UK. The Board remains keen to encourage
engagement with Shareholders. To that end, the Direc-
tors would like to invite questions from Shareholders
in advance of and during the AGM. Should Sharehold-
ers 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 opportunity to
dial into the AGM, at which time they can also submit
questions to the Board.
Details of the AGM are included in the Notice of Meet-
ing that accompanies this Annual Report and which is
available on our website.
At the AGM, all of the Group’s Directors will retire and
submit themselves for re-election.
The outcome of the voting at the AGM will be
announced by way of a London/Egypt Stock Exchange
announcements and full details will be published on
the Group’s website shortly after the AGM.
114 IDH 2022 Annual Report
2022 Annual Report IDH 115
Financial
Statements
116 IDH 2022 Annual Report
04 2022 Annual Report IDH 117
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 group financial statements:
• give a true and fair view of the state of the group’s affairs as at 31 December 2022 and of its profit and cash flows
for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as
adopted by the European Union (EU); and
• have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated
statement of financial position as at 31 December 2022; the Consolidated income statement, Consolidated state-
ment of comprehensive income, Consolidated statement of cash flows, 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 appli-
cable 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 group in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public
interest entities, 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 Stan-
dard 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.
Our audit approach
Context
118 IDH 2022 Annual Report
Financial Statements Integrated Diagnostics Holdings plc (“IDH”) is a company incorporated in Jersey with shares listed on the Lon-
don 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 97% 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 by the Group audit team was performed on balances within subsidiaries that were not in
scope where these represented at least 5% of the consolidated balance and were above group materiality.
• Procedures over the consolidation, the Annual Report and consolidated financial statements was all performed
by the group auditor.
Key audit matters
• Accuracy of revenue recognised from customers
Materiality
• Overall materiality: EGP 44,847,000 based on 4.5% of consolidated profit before tax and fair value losses on
financing US dollar dividends.
• Performance materiality: EGP 33,635,000.
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 engage-
ment 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.
2022 Annual Report IDH 119
Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
The key audit matters below are consistent with last year.
Key audit matter
Accuracy of revenue recognised from customers
The Group reported revenue of EGP 3,605,047,000
from health diagnostics related activities, during the
year ended 31 December 2022.
There is an inherent risk around the accuracy of
revenue recorded from the services rendered, as
revenue consists of a high volume of transactions
involving different products, services, and pricing
mechanisms.
Consequently, a significant portion of our audit effort
was directed towards the accuracy of revenue.
Refer to the following notes to the consolidated
financial statements for further details:
Note 3: Significant accounting policies
Note 6: Revenue
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 judgments and esti-
mates applied by management in consideration
of the requirements of IFRS 15.
• We performed manual controls testing and
substantive procedures, to verify accuracy of
revenue. This included testing the end-to-end
reconciliations of data records extracted from the
source system 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 price lists and traced the
revenue back to that charged to customers.
• We performed a reconciliation between revenue
transactions and cash collected and selected a
sample of the revenue transactions and tested
the 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 state-
ments 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.
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. Jordan is the largest non-Egyptian operations. There are other operations in Sudan and Nigeria. All of
these operate under common systems and controls, but with separate local management and finance teams report-
ing into the Egyptian head office team.
120 IDH 2022 Annual Report
Financial Statements Components were considered to be individual legal entities within the group. There were 14 individual com-
ponents 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 97% of reported revenues and 96% of reported profits. The four com-
ponents 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.
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 territory)
throughout the audit. 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.
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 account-
ing matters or judgements.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate
risk on the group’s financial statements, and we remained alert when performing our audit procedures for any
indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate
risk on the group’s financial statements. We met with management and its external expert on climate change to
obtain support for the disclosures made within the TCFD report.
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.
2022 Annual Report IDH 121
Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall group materiality
EGP 44,847,000.
How we determined it
Rationale for benchmark applied
4.5% of consolidated profit before tax and fair value
losses on financing US dollar dividends
We believe this benchmark is the key measure used
by the shareholders in assessing the performance
of the group. It is widely accepted to use a profit
based benchmark when assessing materiality for
listed groups.There was a significant one-off loss
incurred in obtaining US dollars to satisfy dividend
obligations.
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 EGP 36,900,000 to EGP 17,600,000. Certain
components were audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncor-
rected 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 75% of
overall materiality, amounting to EGP 33,635,000 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 in the at
the upper 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 EGP 2,242,000 as well as misstatements below that amount that, in our view, warranted reporting for quali-
tative reasons.
122 IDH 2022 Annual Report
Financial Statements
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 2022, the bud-
gets for 2023 and beyond and the performance in the 2023 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 forecasts profits and cashflows to the latest approved budgets and considered actual results
achieved in the year to date and sought evidence for any unexpected trends. We considered the level of under-
performance required prior to their being insufficient facilities. We considered the competency of management
to prepare accurate forecasts by reviewing past levels of budget accuracy;
• We validated management’s assessment of available cash and debt facilities to bank confirmations and com-
mitted debt facilities, including recalculating covenants and considering compliance with covenants or ability
to repay borrowings if required, based on management’s forecasts;
• We considered the plausible but severe downsides included in management’s model for reasonableness based
upon our understanding of the group and known commitments such as any remaining amounts related to prior
acquisitions including the likelihood of options being exercised;
• Testing the accuracy of the model containing management’s forecasted future financial performance and cash-
flows; 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
any form of assurance thereon.
2022 Annual Report IDH 123
Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
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 mate-
rial 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
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the prepa-
ration 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 influ-
ence 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.
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 healthcare and 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 taxa-
tion law and legislation, the Listing Rules, and the Companies (Jersey) Law 1991. We evaluated management’s
124 IDH 2022 Annual Report
Financial Statements incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of over-
ride 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
accounting estimates or inappropriate recording of significant or unusual transactions/events. The group engage-
ment 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 jurisdiction regarding the impact (if any) on the
financial position of the group. We have confirmed matters directly with 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 dis-
closures 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 disclosures 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.
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.
2022 Annual Report IDH 125
Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
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 members on 2 July 2021 to
audit the financial statements for the year ended 31 December 2021 and subsequent financial periods. The period
of total uninterrupted engagement is 2 years, covering the years ended 31 December 2021 to 31 December 2022.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule
4.1.14R, these financial statements will form part of the ESEF-prepared annual financial report filed on the
National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Techni-
cal Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report
will be prepared using the single electronic format specified in the ESEF RTS.
David Teager
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Recognized Auditor
East Midlands
5 April 2023
126 IDH 2022 Annual Report
Financial Statements Consolidated statement of
financial position
As at 31 December 2022
Notes
2022
EGP’000
2021
EGP’000
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
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
1,326,262
1,703,636
622,975
18,064
3,670,937
265,459
543,887
167,404
648,512
1,625,262
5,296,199
1,072,500
1,027,706
(314,310)
51,641
(490,695)
24,173
783,081
2,154,096
292,885
2,446,981
3,519
93,751
914,191
51,000
321,732
1,384,193
701,095
148,705
439,695
22,675
152,855
1,465,025
2,849,218
5,296,199
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
The accompanying notes on pages 132-182 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 05 April 2023 by:
Dr. Hend El Sherbini
Hussein Choucri
Chief Executive Officer
Independent Non-Executive Director
2022 Annual Report IDH 127
Consolidated income statement
For the year ended 31 December 2022
Revenue
Cost of sales
Gross profit
Marketing and advertising expenses
Administrative expenses
Impairment loss on trade and other receivable
Other Income
Operating profit
Net fair value losses on financial assets at fair value
through profit or loss
Finance costs
Finance income
Net finance income /(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
8.8
8.6
8.6
8.6
9
10
2022
EGP’000
3,605,047
(2,142,984)
1,462,063
(213,151)
(398,533)
(29,914)
11,726
832,191
(142,950)
(135,586)
299,992
164,406
853,647
(327,064)
526,583
541,110
(14,527)
526,583
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
0.90
2.35
The accompanying notes on pages 132-182 form an integral part of these consolidated financial statements.
128 IDH 2022 Annual Report
Financial Statements Consolidated statement of
comprehensive income
For the year ended 31 December 2022
Net profit for the year
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Owners of the Company
Non-controlling interests
2022
EGP’000
526,583
2021
EGP’000
1,492,506
69,081
69,081
595,664
7,808
7,808
1,500,314
414,553
181,111
595,664
1,417,722
82,592
1,500,314
The accompanying notes on pages 132-182 form an integral part of these consolidated financial statements.
2022 Annual Report IDH 129
Consolidated statement of cash
flows
For the year ended 31 December 2022
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
FV Through P&L
Finance income
Finance Expense
Loss/(gain) on disposal of PPE
Impairment in trade and other receivables
Impairment in goodwill
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
Payments for the purchase of financial assets at amortised cost
Proceeds from the sale of financial assets at amortized cost
Payment for purchase of global depository receipts (short-term
investment)
Proceeds from sale of global depository receipts (short-term
investments)
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds loan received from related party
Repayment loan paid to related party
Payments of lease liabilities
Payment of financial obligations
Dividends paid
Interest paid
Bank charge paid
Cash injection by owner of non-controlling interest
Net cash flows used in financing activities
Net (decrease) 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
Note
2022
EGP’000
2021
EGP’000
11
26
12
8.6
8.6
8.6
16
21
8.8
8.8
28
28
27
27
28
28
28
17
853,647
206,993
103,099
7,251
(188,442)
142,950
(95,371)
135,586
200
29,914
1,755
(7,594)
305
(16,179)
(569)
(30,159)
(53,445)
(166,130)
923,811
(715,082)
208,729
10,212
95,897
(299,762)
(9,076)
(267,819)
1,603,611
(1,011,376)
868,426
990,113
40,081
(21,721)
17,025
(17,025)
(71,635)
(29,206)
(1,411,752)
(119,308)
(12,909)
8,763
(1,617,687)
(418,845)
891,451
175,906
648,512
2,232,321
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
Non-cash investing and financing activities disclosed in other notes are:
• acquisition of right-of-use assets – note 26
• Put option liability – note 23 and 25
The accompanying notes on pages 132-182 form an integral part of these consolidated financial statements.
130 IDH 2022 Annual Report
Financial Statements l
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2022 Annual Report IDH 131
Notes to the Consolidated
Financial Statements
For the year ended 31 December 2022
(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 2022 were authorised for issue in accordance with a resolution of
the directors on 05 April 2023. Integrated Diagnostics Holdings plc “IDH” or “the company” is a public company
incorporated in Jersey. 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 differ-
ent 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.
132 IDH 2022 Annual Report
Financial Statements Group information
2.
Information about subsidiaries
The consolidated financial statements of the Group include:
Al Borg Laboratory Company
(“Al-Borg”)
Al Mokhtabar Company for
Medical Labs (“Al Mokhtabar”)
Medical Genetic Center
Al Makhbariyoun Al Arab
Group
Golden Care for Medical
Services
Integrated Medical Analysis
Company (S.A.E)
SAMA Medical Laboratories
Co. (“Ultralab medical labora-
tory “)
AL-Mokhtabar Sudanese
Egyptian Co.
Integrated Diagnostics Hold-
ings Limited
Dynasty Group Holdings
Limited
Eagle Eye-Echo Scan Limited
Echo-Scan*
WAYAK Pharma
Principal activities
Medical diagnostics
service
Medical diagnostics
service
Medical diagnostics
service
Medical diagnostics
service
Holding company of
SAMA
Medical diagnostics
service
Medical diagnostics
service
Medical diagnostics
service
Intermediary holding
company
Intermediary holding
company
Intermediary holding
company
Medical diagnostics
service
Medical services
Country of
Incorpo-
ration
% Equity
interest
Non-Controlling
interest
2022
2021
2022
2021
Egypt
99.3%
99.3%
0.7%
0.7%
Egypt
99.9%
99.9%
0.1%
0.1%
Egypt
55.0%
55.0%
45.0%
45.0%
Jordan
60.0%
60.0%
40.0%
40.0%
Egypt
100.0% 100.0% 0.0%
0.0%
Egypt
99.6%
99.6%
0.4%
0.4%
Sudan
80.0%
80.0%
20.0%
20.0%
Sudan
65.0%
65.0%
35.0%
35.0%
Caymans
Island
England
and Wales
100.0% 100.0% 0.0%
0.0%
51.0%
51.0%
49.0%
49.0%
Mauritius
77.18% 76.5%
22.82% 23.5%
Nigeria
100.0% 100.0% 0.0%
0.0%
Egypt
99.99% 99.99% 0.01%
0.01%
* The group consolidate “Echoscan” a subsidiary based in Nigeria despite of 39.4% indirect ownership.
for more details refer to note 4.1.
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
2022
45.0%
40.0%
20.0%
0.7%
49%
2021
45.0%
40.0%
20.0%
0.7%
49%
22.82%
23.53%
2022 Annual Report IDH 133
The summarised financial information of these subsidiaries is provided below. This information is based on
amounts before inter-company eliminations.
Al Makh-
bariyoun Al
Arab Group
(Hashemite
Kingdom of
Jordan
Other
individually
immaterial
subsidiar-
ies
Alborg
Laboratory
Company
Medical
Genetic
Center
Dynasty
Group
EGP’000
Total
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
383
(10,339)
611,840
57,917
1,210,716
266,201
2,348,371
470,492
78,864
(54,602)
4,250,174
729,669
134,909
(3,796)
248,726
379,839
(10,339)
192,826
266,201
466,696
194,124 1,109,508
(4,655)
23,167
1,884
555
(11,913)
9,038
-
53,964
-
(876)
140,041
193,129
670
1,909
(27)
(15,409)
367,404
247,636
(164,478)
(189,371)
710,836
428,668
(516,784)
(244,970)
775,581
1,212,429
(351,111)
(449,373)
121,770
14,130
(11,286)
(33,181)
1,976,261
1,904,772
(1,043,686)
(932,304)
(12,857)
261,191
377,750 1,187,526
91,433 1,905,043
(5,788)
104,476
2,674
(993)
16,608
116,977
Summarised statement of profit or
loss for 2022:
Revenue
(loss)/Profit
Other comprehensive (expense)/
income
Total comprehensive (expense)/
income
(loss)/Profit allocated to non-
controlling interest
Other comprehensive income/
(expense) allocated to non-control-
ling interest
Summarised statement of financial
position as at 31 December 2022:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net (liabilities)/assets
Net (liabilities)/assets attributable
to non-controlling interest
134 IDH 2022 Annual Report
Financial Statements Medical
Genetic
Center
Al Makh-
bariyoun Al
Arab Group
Alborg
Laboratory
Company
Other
subsidiar-
ies with
immaterial
NCI
Dynasty
Group
Total
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
3,092
(2,627)
1,046,107
214,588
1,594,275
401,401
3,821,004
1,162,009
-
(56)
-
10,935
53,604
(8,795)
(4,733)
6,518,082
1,766,576
6,146
(2,627)
214,532
401,401
1,172,944
(13,528)
1,772,722
(1,193)
86,747
2,841
(3,261)
(5,237)
79,897
-
64
-
5,667
(3,036)
2,695
682
3,975
(27)
(7,148)
(2,518)
211,430
432,149
(76,599)
(237,206)
329,774
541,782
598,084
(361,520)
(266,796)
707,847
2,017,197
(303,142)
(701,516)
90,509
24,356
20,743
28,313
1,552,250
3,075,761
(720,545)
(1,184,353)
511,550
1,720,386
163,921
2,723,113
(1,143)
133,310
3,621
(4,626)
80,351
211,513
Summarised statement
of Income for 2021:
Revenue
(loss)/Profit
Other comprehensive
(expense)/income
Total comprehensive
(expense)/income
(loss)/Profit allocated to
non-controlling interest
Other comprehensive
income/(expense) allo-
cated to non-controlling
interest
Summarised statement
of financial position as at
31 December 2021:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net (liabilities)/assets
Net (liabilities)/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.
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.
2022 Annual Report IDH 135
New standards and interpretations adopted
The Group has applied the following amendments for the first time for their annual reporting period commencing
1 January 2022:
• Property, Plant and Equipment: Proceeds before intended use – Amendments to IAS 16,
• Reference to the Conceptual Framework – Amendments to IFRS 3
• Onerous Contracts – Cost of Fulfilling a Contract Amendments to IAS 37, and
• Annual Improvements to IFRS Standards 2018–2020.
The amendments listed above did not have any impact on current and prior years 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 2022 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. On 31 December 2022,
the Group had (cash and cash equivalent balance plus treasury bills / deposits minus borrowing) amounting to
KEGP 699,490. 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 conducted
multiple sensitivity analyses to assess the impact of inflationary pressures, particularly on the line items that are
denominated in hard currency also during the going concern assessment for the next 16 months. We did not con-
sider the Biolab put option since it is improbable that the option will be exercised refer to (note 23). They have also
assessed the likelihood of any key one-off payments arising such as dividends or those in respect of merger and
acquisition ‘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 downside 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.
Basis of consolidation
3.1.
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31
December 2022. Control is achieved when the Group is exposed, or has rights, to variable returns from its involve-
ment with the investee and has the ability to affect those returns through its power over the investee.
Subsidiaries
i.
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.
136 IDH 2022 Annual Report
Financial Statements Changes in ownership interests
ii.
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 control
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 previ-
ously 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.
Significant accounting policies
3.2.
The accounting policies set out below have been consistently applied to all the years presented in these consolidated
financial statements.
Business combinations
a)
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 subsidiary 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 iden-
tifiable 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 comparable terms and conditions.
2022 Annual Report IDH 137
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.
Impairment of assets
b)
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 lev-
els 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 suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Fair value measurement
c)
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 measurement
is directly or indirectly observable.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
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 categorisation (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.
Revenue recognition
d)
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.
138 IDH 2022 Annual Report
Financial Statements 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 stipu-
late the duration, price per test and credit period.
2. Determining performance obligations are the diagnostics tests within the pathology and radiology services. The per-
formance 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 contract. 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 consid-
ered include which party is controlling the service being performed for the customer and bears the inventory 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 12 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 expira-
tion 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 or have expired.
Income Taxes
e)
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.
Current tax
i.
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.
Deferred tax
ii.
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.
2022 Annual Report IDH 139
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)
Foreign currency translation
Functional and presentation currency
i)
Each of the Group’s entities is using the currency of the primary economic environment in which the entity oper-
ates (‘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 primary eco-
nomic environment in which the Group operates.
Transactions and balances
ii)
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.
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.
Hyperinflationary Economies
g)
The financial statements of “SAMA Medical Laboratories Co. and AL-Mokhtabar Sudanese Egyptian Co.” report
their financial statements in the currency of a hyperinflationary economy. In accordance with IAS 29 financial
reporting in Hyperinflationary Economies, the financial statements of those subsidiaries were restated by apply-
ing the consumer price index at closing rates in December 2022 65,137 (2021 December, 31,423) before they were
included in the consolidated financial statements.
Property, plant and equipment
h)
All property and equipment are stated at historical cost or fair value at acquisition, less accumulated depreciation.
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 prob-
able 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.
140 IDH 2022 Annual Report
Financial Statements 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.
Intangible assets
i)
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 when-
ever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisa-
tion 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 embod-
ied 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 indi-
vidually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine
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.
2022 Annual Report IDH 141
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.
The Group brand names are considered to have indefinite useful life as the Egyptian brands have been established
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 businesses,
in addition, there is a sufficient ongoing marketing efforts to support the brands and this level of marketing 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 is 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.
142 IDH 2022 Annual Report
Financial Statements For investment is equity instrument measured at fair value, gains and losses will either be recorded in income
statement or OCI.
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 represent
solely payments of principal and interest, are measured at amortised cost. Interest income from these finan-
cial 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 for-
eign 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, interest
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.
• 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.
2022 Annual Report IDH 143
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 reclassification 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.
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.
144 IDH 2022 Annual Report
Financial Statements 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 reasonable
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 carry-
ing amounts is recognised in the statement of income.
Offsetting of financial instruments
iii.
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.
Impairment of non-financial assets
j)
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 writ-
ten 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.
2022 Annual Report IDH 145
Impairment losses of continuing operations are recognised in the statement of profit or loss in expense categories
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.
Goodwill is tested for impairment annually as at 31 October and when circumstances indicate that the carrying
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 impair-
ment 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 circumstances
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 impairments of
non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.
Inventories
k)
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.
Cash and short-term deposits
l)
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and
short-term deposits with 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.
146 IDH 2022 Annual Report
Financial Statements Borrowings
m)
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured 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.
Borrowing costs
n)
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
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.
Provisions
o)
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 obli-
gation 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.
Pensions and other post-employment benefits
p)
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.
2022 Annual Report IDH 147
Segmentation
q)
The Group has four operating segments based on geographical location rather than two operating segments based
on service provided and considered as one reportable segment due to having similar characteristics.
Leases as lessee (IFRS 16)
r)
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 component. 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 determined 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.
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.
148 IDH 2022 Annual Report
Financial Statements 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.
Key judgments and critical accounting estimates
4.
4.1. 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.
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 39.4% 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.
Estimates and assumptions
4.2.
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 liabilities within
the next financial year, are described below.
The Group based its assumptions and estimates on parameters available when the consolidated financial state-
ments 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.
2022 Annual Report IDH 149
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 assump-
tions refer to (note 13).
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 to be utilised within one year. 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 2022 the level of points accumu-
lated by customers which had not expired was equivalent to 160 MEGP. 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 historical 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 61
MEGP out of the total potential amount that could be redeemed is likely to be utilised by customers. If the points
utilised during the year were 10% more than estimated, this would result in an additional charge of 6m EGP.
Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates.
The group uses judgement in making these assumptions and selecting the inputs to the impairment calculation,
based on the group’s history and existing market conditions, as well as forward-looking estimates at the end of
each reporting period. Details of the key assumptions and inputs used are disclosed in note 16.
5.
Financial assets and financial liabilities
Cash and cash equivalents
Term deposits and treasury bills
Trade and other receivables (Note 16)
Total financial assets
Trade and other payables (Note 22)
Put option liability
Financial obligations
Loans and borrowings (Note 28)
Total other financial liabilities
Total financial instruments*
2022
EGP’000
648,512
167,404
509,806
1,325,722
2022
EGP’000
628,313
490,695
1,062,896
127,420
2,309,324
(983,602)
2021
EGP’000
891,451
1,458,724
447,080
2,797,255
2021
EGP’000
749,272
956,397
760,674
105,694
2,572,037
225,218
* The financial instruments exclude prepaid expenses, deferred revenue, and tax (current tax, payroll tax, withholding tax,…etc).
150 IDH 2022 Annual Report
Financial Statements The fair values of financial assets and liabilities are considered to be equivalent to their book value.
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 25) 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.
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 assets at
amortised cost, financial asset at fair value and cash and cash equivalents that derive directly from its operations.
The Group is exposed to market risk, credit risk and liquidity risk. The Group’s overall risk management program
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 2022 and 2021. The sen-
sitivity 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 excludes 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 2022
and 31 December 2021.
-Interest rate risk
The Group is trying to minimize its interest rate exposure, especially in Egypt region, which has seen several
interest rate rises over the year. Minimising interest rate exposure has been achieved partially by entering into
fixed-rate instruments.
2022 Annual Report IDH 151
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 follows:
Fixed-rate instruments
Financial obligations (note 26)
CIB - BANK Loans and borrowings (note 24)
Variable-rate instruments
AUB - BANK Loans and borrowings (note 24)
2022
EGP’000
1,062,896
-
2021
EGP’000
760,674
13,238
116,426
84,828
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 1,164K (2021: EGP 980K). 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.
The rapid depreciation of the Egyptian pound in 2022 resulted in an increase in expenses denominated in foreign
currencies. The total amount of these expenses in 2022 amounted to 15M EGP.
At year end, major financial assets / (liabilities) denominated in foreign currencies were as follows:
Assets
Liabilities
31-Dec-22
Cash
and cash
equiva-
lents
13,112
-
US
JOD
Other
assets
-
-
Total
assets
13,112
-
Put
option
-
(439,695)
Finance
lease
(299,128)
-
Trade
payables
(8,840)
-
Total
liability
(307,968)
(439,695)
Net
exposure
(294,856)
(439,695)
152 IDH 2022 Annual Report
Financial Statements
Assets
31-Dec-21
Liabilities
Cash
and cash
equivalents
364
-
US
JOD
Other
assets
9,481
Total
assets
9,845
Put
option
Finance
lease
Trade
payables
Total
liability
Net
exposure
-
(56,744)
(123,618)
(180,362)
(170,517)
-
-
(921,360)
-
-
(921,360)
(921,360)
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-22
19.67
20.59
24.02
27.71
5.24
0.04
0.05
31-Dec-21
15.64
18.46
21.51
22.03
4.17
0.06
0.04
Spot rate for the year ended
31-Dec-22
24.70
26.27
29.70
34.78
6.57
0.04
0.06
31-Dec-21
15.65
17.73
21.12
22.05
4.17
0.04
0.04
At 31 December 2022, if the Egyptian Pound had weakened/strengthened by 40% against the US Dollar with all
other variables held constant, total equity for the year would have increased/decreased by EGP (118m) (2021:
EGP 68m), 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 2022.
At 31 December 2022, 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 (44m)
(2021: EGP (92m)), 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 2022.
2022 Annual Report IDH 153
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 standard pay-
ment 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, 85%
with a rating of B3 and 7% is rated at least Aa3.
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. How-
ever, management also considers the factors that may influence the credit risk of its customer base, including the
default risk associated with the industry and country or region in which customers operate. Details of concentra-
tion 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, financial
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. 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 collec-
tively. The calculation is based on actual incurred historical data and expected future credit losses. The Group
does not hold collateral as security. That maximum exposure to credit risk is disclosed in note 16.
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.
154 IDH 2022 Annual Report
Financial Statements 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 2022
Financial obligations
Put option liabilities
Borrowings
Trade and other payables
31 December 2021
Financial obligations
Put option liabilities
Borrowings
Trade and other payables
1 year or less
285,962
439,695
41,681
628,313
1 to 5 years
1,030,750
51,000
119,673
-
more than 5
years
227,715
-
-
-
Total
1,544,427
490,695
161,354
628,313
1,395,651
1,201,423
227,715
2,824,789
1 year or less
211,242
921,360
31,107
749,272
1,912,981
1 to 5 years
701,084
35,037
94,490
-
830,611
more than 5
years
191,229
-
-
-
191,229
Total
1,103,555
956,397
125,597
749,272
2,934,821
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.
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 per-
formance 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 man-
agement 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 management
reports and KPIs of each geography. The CODM does not separately review assets and liabilities of the group by
reportable segment.
2022 Annual Report IDH 155
The Group operates in four geographic areas, Egypt, Sudan, Jordan, and Nigeria. As a provider of medical diagnos-
tic services, IDH’s operations in Sudan are not subject to sanctions. The revenue split adjusted 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.
Revenue by geographic location
For the year
ended
31-Dec-22
31-Dec-21
Egypt region
2,894,042
4,108,357
Sudan region
20,301
16,644
Jordan
region
611,840
1,046,107
Nigeria
region
78,864
53,604
Total
3,605,047
5,224,712
Adjusted EBITDA by geographic location
For the year ended
31-Dec-22
31-Dec-21
Egypt
region
1,030,622
2,177,160
Sudan
region
(196)
(500)
Jordan
region
136,195
331,042
Nigeria
region
(17,087)
(6,998)
Nonre-
curring
items
22,259
29,033
Total
1,171,793
2,529,737
Impairment loss /(reversed of impairment) on trade receivables by geographic location
For the year
ended
31-Dec-22
31-Dec-21
Egypt region
27,734
21,537
Sudan
region
3
-
Jordan
region
(628)
1,412
Nigeria
region
2,805
1,707
Total
29,914
24,656
For the year
ended
31-Dec-22
31-Dec-21
Egypt region
514,353
1,309,247
Net profit and loss by geographic location
Sudan
region
16,978
(22,533)
Jordan
region
53,065
214,588
Nigeria
region
(57,813)
(8,796)
The operating segment profit measure reported to the CODM is adjusted EBITDA, as follows:
Profit from operations
Property, plant and equipment and right of use depreciation
Amortization of Intangible assets
EBITDA
Nonrecurring items
Adjusted EBITDA
2022
EGP’000
832,191
310,092
7,251
1,149,534
22,259
1,171,793
Total
526,583
1,492,506
2021
EGP’000
2,262,060
231,443
7,201
2,500,704
29,033
2,529 ,737
156 IDH 2022 Annual Report
Financial Statements The non- current assets reported to CODM is in accordance with IFRS are as follows:
Non-current assets by geographic location
For the year
ended
31-Dec-22
31-Dec-21
Egypt region
3,039,930
2,803,954
Sudan region
14,993
7,234
Jordan
region
494,244
291,880
Nigeria
region
121,770
90,509
Total
3,670,937
3,193 ,577
Capital management
7.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue in order to provide
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 authori-
ties. 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 (note 28)
Less: Financial assets at amortised cost (note 18)
Less: Cash and cash equivalents (Note 17)
Net debt / (cash)
Total Equity
Net debt / (cash) to equity ratio
2022
EGP’000
1,062,896
127,420
(167,404)
(648,512)
374,400
2,446,981
15.3%
2021
EGP’000
760,674
105,694
(1,458,724)
(891,451)
(1,483,807)
2,794,359
(53.1%)
No changes were made in the objectives, Policies, or processes for managing capital during the years ended 31
December 2022 and 31 December 2021.
2022 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
2022
EGP’000
703,693
30,756
613,495
284,740
510,300
2021
EGP’000
962,748
24,086
635,407
213,919
584,487
Total
2,142,984
2,420,647
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
Transactions fees related to aborted Pakistan acquisition
Other expenses
Total
2022
EGP’000
123,442
54,750
739
34,220
213,151
2022
EGP’000
142,689
31,864
22,259
201,721
398,533
2021
EGP’000
96,745
44,739
518
21,161
163,163
2021
EGP’000
146,929
24,207
-
198,878
370,014
158 IDH 2022 Annual Report
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
Transactions fees related to aborted Pakistan acquisition
Utilities
License Expenses
Other expenses
2022
EGP’000
703,693
810,934
317,343
123,442
30,756
87,490
74,290
32,976
14,357
142,012
22,259
49,453
30,492
315,171
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
Total
2,754,668
2,953,824
Auditors’ remuneration
8.5
The group paid or accrued the following amounts to its auditor for the financial year ended 31 December 2022
and 2021 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
Assurance services
2022
EGP’000
28,919
9,443
197
38,559
2021
EGP’000
21,759
6,998
302
29,059
2022 Annual Report IDH 159
8.6
Net finance income/(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
Net foreign exchange Gain
Total finance income
Net finance income / (cost)
2022
EGP’000
-
(122,677)
-
(12,909)
(135,586)
95,371
16,179
188,442
299,992
164,406
2021
EGP’000
(6,976)
(98,003)
(17,912)
(20,026)
(142,917)
113,178
-
-
113,178
(29,739)
Employee numbers and costs
8.7
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:
2022
Admin-
istra-
tion and
market
Medical
2021
Admin-
istra-
tion and
market
Total
Medical
Average number of
employees
5,428
1,290
6,718
5,364
1,024
2022
EGP’000
Admin-
istration
and
market
185,628
8,925
2,886
Medical
566,385
36,053
11,057
2021
EGP’000
Admin-
istration
and
market
183,611
6,003
2,054
Total
752,013
44,978
13,943
Medical
600,527
26,735
8,145
613,495
197,439
810,934
635,407
191,668
827,075
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 Remuneration
Report, the Remuneration Committee Report on note 27.
Fair value losses on financial assets at fair value through profit or loss
8.8
During the third quarter of 2022, ALmokhtabar and Alborg companies invested in Global Depositary Receipt
(GDR) tradable in stock exchanges, where the companies purchased 27,304 million shares, EGP 1,011.4 M from
the Egyptian Stock Exchange and sold them during the same period on the London Stock exchange at USD 45.8
M excluding the transaction cost.
160 IDH 2022 Annual Report
Total
6,388
Total
784,138
32,738
1 0,199
Financial Statements listed equity securities
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
Number of
shares’000
Shares bought
Shares sale
27,304
27,304
2022
EGP’000
(1,011,376)
868,426
(142,950)
2022
EGP’000
(210,477)
(122,731)
(333,208)
46,554
(40,410)
6,144
(327,064)
2021
EGP’000
(579,262)
(68,737)
(647,999)
(106,767)
14,951
(91,816)
(739,815)
The company is considered to be a UK tax resident, and subject to UK taxation. Dividend income into the
company 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. Board meetings are chaired in London and are now largely taking place physically in
London with the expectation of one physical board meeting a year in Cairo.
Profit before tax
Profit before tax multiplied by rate of corporation tax in Egypt of 22.5%
(2021: 22.5%)
Effect of tax rate in UK of 19% (2021: UK 19%)
Effect of tax rates in Jordan, Sudan, and Nigeria of 21%, 30% and 30%
respectively (2021: 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
2022
EGP’000
853,647
2021
EGP’000
2,232,321
192,071
502,272
1,871
3,445
(3,317)
(6,676)
-
19,960
76,177
16,653
23,649
327,064
(24,435)
28,132
175,504
39,419
22,154
739,815
2022 Annual Report IDH 161
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)
2022
2021
Assets
EGP’000
61
61
Liabilities
EGP’000
(35,804)
(109,118)
(176,871)
(321,793)
(321,732)
Assets
EGP’000
-
-
-
25,559
25,559
Liabilities
EGP’000
(28,925)
(105,358)
(223,425)
-
(357,708)
(332,149)
All deferred tax amounts are expected to be recovered or settled more than twelve months after the reporting period.
The difference between net deferred tax balances recorded on the income statement is as follows:
Deferred tax
recognized
in profit or
loss
Effect of
translation
to presenta-
tion currency
Deferred tax
recognised
in profit or
loss
Effect of
translation
to presenta-
tion currency
2022
Property, plant
and equipment
Intangible assets
Undistributed
dividend
from group
subsidiaries
Tax losses
2021
Property, plant
and equipment
Intangible assets
Undistributed
dividend
from group
subsidiaries
Tax losses
Net Balance
1 January
(28,925)
(105,358)
(6,315)
(3,760)
(223,425)
(76,177)
25,559
(332,149)
(30,335)
(116,587)
Net balance
at 1 January
(18,333)
(106,702)
(10,592)
1,344
(116,658)
(175,504)
1,360
24,199
(240,333)
(160,553)
WHT tax paid
-
-
Net Bal-
ance 31
December
(35,804)
(109,118)
122,731
(176,871)
-
61
122,731
(321,732)
WHT tax paid
-
-
Net bal-
ance 31
December
(28,925)
(105,358)
68,737
(223,425)
-
68,737
25,559
(332,149)
(564)
-
-
4,837
4,273
-
-
-
-
-
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 2022 for the
country the liabilities and assets has arisen. The enacted tax rate in Egypt is 22.5% (2021: 22.5%), Jordan 21% (2021:
21%), Sudan 30% (2021: 30%) and Nigeria 30% (2021: 30%).
162 IDH 2022 Annual Report
Financial Statements
* 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
2022
EGP’000
44,640
31,035
83,277
17,919
176,871
2021
EGP’000
85,546
38,545
75,841
23,493
223,425
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
2022
Gross
Amount
EGP’000
136,981
8,604
3,519
382,999
532,103
2022
Tax Effect
EGP’000
30,821
1,936
792
93,768
127,317
127,317
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
2022 Annual Report IDH 163
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 follows:
Company
Integrated
Diagnostics
Holdings plc
Dynasty Group
Holdings Limited
Eagle Eye-Echo
Scan Limited
WAYAK Pharma
Medical Genetic
Center
Golden care
Country
Jersey
England and
Wales
Mauritius
Egypt
Egypt
Egypt
2022
Gross
Amount
EGP’000
2022
Tax Effect
EGP’000
2021
Gross
Amount
EGP’000
2021
Tax Effect
EGP’000
325,155
81,289
271,689
67,922
11,359
1,839
20,564
15,156
8,926
382,999
2,158
276
4,627
3,410
2,008
93,768
13,446
3,556
16,269
6,421
9,010
2,555
533
3,660
1,445
2,027
320,391
78,142
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
EGP’000
Weighted average number of ordinary shares for basic and dilutive EPS’000
Basic and dilutive earnings per share EGP’000
2022
541,110
600,000
0.90
2021
1,412,609
600,000
2.35
Earnings per diluted share are calculated by adjusting the weighted average number of shares by the effects result-
ing from all the ordinary potential shares that causes this dilution.
The Company has no potentially dilutive shares as of the 31 December 2022 and 31 December 2021, therefore; the
earnings per diluted share are equivalent to basic earnings per share.
164 IDH 2022 Annual Report
Financial Statements
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2022 Annual Report IDH 165
12.
Intangible assets and goodwill
Goodwill
EGP’000
Brand Name
EGP’000
Software
EGP’000
Cost
At 1 January 2021
Additions
Effect of movements in exchange rates
At 31 December 2021
Additions
Effect of movements in exchange rates
At 31 December 2022
Amortisation and impairment
At 1 January 2021
Impairment*
Amortisation
Effect of movements in exchange
rates
At 31 December 2021
Impairment*
Amortisation
Effect of movements in exchange rates
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
1,261,808
-
(843)
1,260,965
-
30,858
1,291,823
1,849
341
-
2,362
4,552
1,755
-
66
6,373
383,922
-
(13)
383,909
-
11,642
395,551
-
47
-
325
372
-
-
9
381
1,285,450
1,256,413
395,170
383,537
67,157
10,354
(117)
77,394
9,076
6,366
92,836
51,283
-
7,201
(7)
58,477
-
7,251
4,092
69,820
23,016
18,917
Total
EGP’000
1,712,887
10,354
(973)
1,722,268
9,076
48,866
1,780,210
53,132
388
7,201
2,680
63,401
1,755
7,251
4,167
76,574
1,703,636
1,658,867
* The Group sees there is an impairment indicator on the goodwill related to Medical Genetics Center company due to the negative free cash flow and EBITDA of
the company.
166 IDH 2022 Annual Report
Financial Statements 13. Goodwill and intangible assets with indefinite lives (note 3.2-h)
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
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
2022
EGP’000
2021
EGP’000
-
-
72,783
31,785
104,568
497,275
142,066
639,341
699,102
221,319
920,421
1,755
1,755
46,145
20,152
66,297
497,275
142,066
639,341
699,102
221,319
920,421
16,290
16,290
1,680,620
12,136
12,136
1,639,950
The Group performed its annual impairment test in October 2022. 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.
2022 Annual Report IDH 167
These plans have been prepared based on criteria set out below:
Bio Lab
Al-Mokhtabar
Al-Borg
Echo-Scan
Year 2022
Average annual patient growth rate
from 2023 -2029
Average annual price per test growth
rate from 2023 -2029
Annual revenue growth rate from
2023 -2029
Average gross margin from 2023
-2029
Terminal value growth rate from 1
January 2029
Discount rate
5%
0%
3%
46%
3%
19%
8%
6%
13%
51%
5%
25%
8%
7%
13%
45%
5%
25%
21%
5%
33%
81%
4%
28%
Ultra Lab
Bio Lab
Year 2021
Al-Mokh-
tabar
4%
0.2%
-0.1%
49%
56%
35%
3%
-7%
-5%
38%
3%
-2%
0.4%
52%
5%
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
Al-Borg
Echo-Scan
2%
3%
6%
48%
5%
26%
7%
40%
39%
3%
Discount rate
40.6%
14.8%
20.19%
20.4%
21.7%
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 assump-
tions noted above the value in use was noted to be higher than the fair value less costs of disposal.
During year 2022, 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 2024- 2029 have been based on
detailed forecasts prepared by management for each CGU and a terminal value thereafter. Management have
used experience and historical 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.
The Group performed a distinct sensitivity analysis for the December 31, 2022 balances related to the Goodwill
recorded for Echo-Scan due to the challenges faced by the business given the Nigerian market situation. The
analysis is demonstrated as follows:
168 IDH 2022 Annual Report
Financial Statements Scenario
Pathology number of patients growth was decreased
starting FY25, with an average of -4% from FY25-29
The total number of patients growth was decreased
starting FY25, with an average of -4% from FY25-29
Senstising Revenues by -20% across all years
Year 2022
Enterprise
Value
CGU carrying
Value
EGP’000
145,480
133,774
97,341
EGP’000
35,253
35,253
35,253
Headroom
EGP’000
110,227
98,521
62,088
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 did not result
in an impairment under any of the CGUs.
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, currency
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
EGP’000
3,757,764
2,459,724
513,395
159,299
EGP’000
1,421,626
1,458,547
295,185
35,253
Headroom
EGP ‘000
2,336,138
1,001,177
218,210
124,046
2022 Annual Report IDH 169
14.
Financial asset at fair value through profit and loss
Equity investment*
Balance at 31 December
2022
EGP’000
18,064
18,064
2021
EGP’000
10,470
10,470
*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, 2022, 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 imme-
diately after the expiration of five(5) year period from the signing date, which allows BioLab 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 Management 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 the additional 12 months period of the CHG shall have a call option (the Accreditation Call
option), exercisable 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
2022
EGP’000
265,459
265,459
2021
EGP’000
222,612
222,612
During 2022, EGP 703,693K (2021: EGP 962,748k) was recognised as an expense for inventories, this was recognised
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 127 days at 31 Dec 2022. There has been no impairment of inventory during 2022 (2021: EGP nil).
170 IDH 2022 Annual Report
Financial Statements 16.
Trade and other receivables
Trade receivables – net
Prepayments
Due from related parties note (27)
Other receivables
Accrued revenue
2022
EGP’000
395,220
34,081
5,930
106,363
2,293
543,887
2021
EGP’000
371,051
22,647
5,237
67,974
2,818
469,727
As at 31 December 2022, the expected credit loss related to trade and other receivables was EGP 145,586K (2021:
EGP 109,768k). 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
2022
EGP’000
109,768
29,914
-
-
5,904
145,586
2021
EGP’000
86,237
24,656
-
(32)
(1,093)
109,768
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 judge-
ment. 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.
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. On a quarterly basis, IDH revises its forward-looking estimates
and the general economic conditions to assess the expected credit loss.
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 impairment
of trade receivables was EGP 136,981K (31 December 2021: EGP 101,183K)
2022 Annual Report IDH 171
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 5,241K. This analysis assumes that all other variables
remain constant.
The following table provides information about the exposure to expected credit loss (ECL) for trade receivables
from individual customers for the nine segments at:
31-Dec-22
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
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 -365 days past due
Weighted
average loss
rate
Gross carry-
ing amount
Loss
allowance
EGP’000
EGP’000
EGP’000
1.11%
4.06%
4.55%
13.61%
18.12%
27.81%
88.00%
174,249
85,072
65,470
32,563
25,868
19,275
(1,927)
(3,451)
(2,982)
(4,433)
(4,688)
(5,360)
129,704
(114,140)
Weighted
average loss
rate
EGP’000
0.00%
1.79%
5.25%
5.89%
9.06%
18.45%
87.89%
Gross carry-
ing amount
EGP’000
151,592
85,764
74,505
31,028
17,469
8,576
103,300
Loss
allowance
EGP’000
-
(1,532)
(3,911)
(1,828)
(1,582)
(1,582)
(90,748)
As at 31 December, the ageing analysis of trade receivables is as follows:
2022
2021
Total
395,220
371,051
< 30 days
253,943
235,824
30-60 days
62,488
70,594
61-90 days
28,130
29,200
> 90 days
50,659
35,433
172 IDH 2022 Annual Report
Financial Statements
17.
Cash and cash equivalents
Cash at banks and on hand
Treasury bills (less than 3 months)
Term deposits (less than 3 months)
2022
399,957
185,513
63,042
648,512
2021
261,430
150,431
479,590
891,451
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 6.56%
(2021: 7.75%) and Treasury bills 13.30% (2021: 12.44%) per annum.
18.
Financial assets at amortised cost
Term deposits (more than 3 months)
Treasury bills (more than 3 months)
2022
EGP’000
60,200
107,204
167,404
2021
EGP’000
148,136
1,310,588
1,458,724
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 12.92% (2021: 12.44%) and deposits is 5.34% (2021: 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
shares
31-Dec-22
600,000,000
Ordinary
shares
31-Dec-21
600,000,000
600,000,000
600,000 ,000
The table below shows the number of shares held by Hena Holdings Limited and Actis IDH BV as well as how
many shares are then held which are floating and not held by companies that do not have individuals on the board
of the Group.
Ordinary share capital Name
Hena Holdings Limited
Actis IDH B V
Free floating
Number of
shares
160,250,305
126,000,000
313,749,695
600,000,000
% of
contribution
26.71%
21%
52.29%
Par value
40,062,576
31,500,000
78,437,424
100%
150,000,000
2022 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$ 0.116 per qualifying ordinary share (2021: US$ 0.0485)
After the balance sheet date, the following dividends were proposed by the
directors (the dividends have not been provided for):
Nil per share (2021: EGP 2.17) per share
2022
EGP’000
1,304,805
1,304,805
-
-
2021
EGP’000
455,182
455,182
1,300,000
1,300,000
21.
Provisions
At 1 January 2022
Provision made during the year
Provision used during the year
Provision reversed during the year
At 31 December 2022
Current
Non- Current
174 IDH 2022 Annual Report
Provision for
legal claims
EGP’000
4,088
3,950
(3,997)
(522)
3,519
-
3,519
Financial Statements 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
Provision for
legal claims
EGP’000
3,217
2,146
(993)
(282)
4,088
-
4,088
Legal claims provision
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 2022.
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
2022
EGP’000
269,782
241,060
25,058
98,204
60,948
6,043
701,095
2021
EGP’000
311,321
325,677
13,234
99,040
24,603
3,479
777,354
2022
EGP’000
439,695
439,695
2021
EGP’000
921,360
921,360
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 historical 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.
2022 Annual Report IDH 175
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 2022. 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 21 months. The option has no expiry date.
24. Borrowings
The terms and conditions of outstanding loans are as follows:
A) CIB - BANK
Currency
EGP
Nominal interest rate
Secured rate 9.5%
B) AUB - BANK
EGP
CBE corridor rate*+1%
Maturity
5 April 2022
26 January
2027
Amount held as:
Current liability
Non- current
liability
31 Dec 22
-
31 Dec 21
13,238
116,426
116,426
22,675
93,751
116,426
84,828
98,066
21,721
76,345
98,066
A)
In April 2017 AL-Mokhtabar for medical lab, one of IDH subsidiaries, was granted a medium term loan
amounting 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, It is also important to note that the Company’s facility with the Commercial International Bank (CIB)
was fully repaid as of April 2022.
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 2022 only EGP 125 M had been drawn down from the total facility available with 9m had been
repaid. Loan withdrawal availability period was extended till July 2023 and the loan will be fully repaid by January 2027.
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 equivalents) 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 2022 corridor rate 17.25% (2021: 9.25%)
176 IDH 2022 Annual Report
Financial Statements AL- Borg company didn’t breach any covenants for MTL agreements.
During 2021 the group signed two agreements of debt facilities. The debt package includes the US$ 45.0 million
facilities secured an 8-year period starting from International Finance Corporation (IFC), and an additional
US$ 15.0 million IFC syndicated facility from Mashreq Bank in Dec 2022 debt has not been withdrawn by IDH.
The company incurred 12.5 M EGP for the year ended 31 December 2022, and 20.3M EGP for the year ended 31
December 2021. as commitment Fees and supervisory fees related to this agreement.
25. Non-current put option liability
Put option liability*
2022
EGP’000
51,000
51,000
2021
EGP’000
35,037
35,037
*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.
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 51 million was calculated as the valuation as at 31 December 2022 (2021; EGP 35m). In line with applicable
accounting standards 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 36% from 2023 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
periods 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.
2022 Annual Report IDH 177
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
2022
EGP’000
462,432
214,846
(103,099)
(13,564)
62,360
622,975
2021
EGP’000
354,688
198,402
(79,617)
(7,643)
(3,398)
462,432
Other Financial obligations
b)
Future minimum financial obligation payments under leases and sales purchase contracts, together with the pres-
ent value of the net minimum lease payments are, as follows:
2022
EGP’000
335,470
727,426
1,062,896
Interest
2022
EGP’000
137,257
314,656
29,618
481,531
2021
EGP’000
228,870
531,804
760,674
Principal
2022
EGP’000
148,705
716,094
198,097
1,062,896
Interest
Principal
2021
EGP’000
95,764
227,314
19,803
342,881
2021
EGP’000
115,478
473,770
171,426
760,674
*Financial liability– laboratory equipment
*Lease liabilities building
*The financial obligation liabilities for the laboratory equipment and building are payable as follows:
Minimum
payments
2022
EGP’000
285,962
1,030,750
227,715
1,544,427
Minimum
payments
2021
EGP’000
211,242
701,084
191,229
1,103,555
At 31 December 2022
Less than one year
Between one and five years
More than 5 years
At 31 December 2021
Less than one year
Between one and five years
More than 5 years
178 IDH 2022 Annual Report
Financial Statements
c)
Amounts other financial obligations recognised in consolidated income statement
Interest on lease liabilities
Expenses related to short-term lease
2022
EGP’000
73,393
87,962
2021
EGP’000
68,352
18,875
Related party transactions disclosures
27.
The significant transactions with related parties, their nature volumes and balance during the period 31 December
2022 and 2021 are as follows:
Related Party
Nature of
transaction
Nature of
relationship
ALborg Scan (S.A.E)*
International Fertility (IVF)**
Expenses paid on
behalf
Expenses paid on
behalf
Affiliate**
Affiliate***
H.C Security
Provide service
Life Health Care
Provided service
Dr. Amid Abd Elnour
Put option liability
International Finance corporation
(IFC)
International Finance corporation
(IFC)
Integrated Treatment for Kidney
Diseases (S.A.E)
Dr. Hend El Sherbini***
HENA HOLDINGS LTD
ACTIS IDH LIMITED
Current account
Put option liability
Current account
Rental income
Medical Test analysis
Loan arrangement
shareholders'
dividends deferral
agreement
shareholders’
dividends deferral
agreement
Entity owned by
Company’s board
member
Entity owned by
Company’s CEO
Bio. Lab C.E.O and
shareholder
Bio. Lab C.E.O and
shareholder
Echo-Scan
shareholder
Echo-Scan
shareholder
Entity owned by
Company’s CEO
CEO**
2022
Transaction
amount of
the year
Amount
due from /
(to)
EGP’000
EGP’000
-
4
220
424
351
1,771
(99)
2,518
481,665
(439,695)
(20,008)
(20,008)
(15,963)
(51,000)
12,292
116
381
17,025
(623)
1,290
-
shareholder
(2,373)
(2,373)
shareholder
(1,955)
(1,955)
(509,823)
2022 Annual Report IDH 179
Related Party
Nature of
transaction
Nature of
relationship
ALborg Scan (S.A.E)*
International Fertility (IVF)**
Life Health Care
Expenses paid on
behalf
Expenses paid on
behalf
Provide service
Life Health Care
Provide service
International Finance corporation
(IFC)
Put option liability
International Finance corporation
(IFC)
Put option liability
Integrated Treatment for Kidney
Diseases (S.A.E)
Rental income
Medical Test analysis
Total
Affiliate
Affiliate
Entity owned by
Company’s CEO
Entity owned by
Company’s CEO
Eagle Eye – Echo
Scan limited
shareholder
Eagle Eye – Echo
Scan limited
shareholder
Entity owned by
Company’s CEO
2021
Transaction
amount of
the year
Amount
due from
/to
EGP’000
EGP’000
1
-
(11,232)
(11,232)
351
1,767
2,094
2,094
(3,247)
(35,037)
(3,247)
(35,037)
(298)
530
1,025
(964,394)
* 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).
*** During the year 2022, Dr. Hend (C.E.O) granted a loan to IDH Cayman amounting to USD 750K. and the loan was settled by Al Mokhtabar on behalf of IDH
Cayman for EGP 17m at the prevailing exchange rate of US$/EGP 22.70 . The loan was not interest bearing.
Chief Executive Officer Dr. Hend El-Sherbini and her mother, Dr. Moamena Kamel jointly hold the 26.7% of
shares held by Hena Holdings Limited, Hena Holdings Limited is a related party and received dividends of USD
17,745,953 in year 2022 and USD 7,419,644 received in year 2021.
During the year payments relating to lease obligations of Biolab were made to entities considered to be related
parties due to the interest in them held by Dr Amid Abd Elnour. Payments made during 2022 were JOD 241,038
(EGP 6,679,163) and during 2021 were JOD 665,461 (EGP 14,660,106).
Terms and conditions of transactions with related parties
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 2022, the Group has not recorded any impairment of receivables relating to amounts owed by related
parties (2021: 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 founda-
tion deploys an integrated program and vision for the communities it helps that include economic, social, and
healthcare development initiatives. In 2022 EGP 8,934 K (2021: EGP 9,578K) was paid to the foundation by the IDH
Group in relation to profits earned for companies Al Borg and Al Mokhtabar in the prior year.
180 IDH 2022 Annual Report
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
2022
EGP’000
48,078
48,078
2021
EGP’000
55,082
55,082
Reconciliation of movements of liabilities to cash flows arising from
28.
financing activities
EGP’000
Balance at 1 January 2022
Proceeds from loans and borrowings
Repayment of borrowings
Payment of liabilities
Interest paid
Exchange differences
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 2022
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 as at 31 December 2021
Other
loans and
borrowings
105,694
40,081
(21,721)
-
(24,513)
-
(6,153)
-
-
27,879
27,879
127,420
Other
loans and
borrowings
96,455
30,450
(25,416)
-
(25,446)
(20,412)
-
-
29,651
29,651
105,694
Other
financial
obligation
760,674
-
-
(100,841)
(94,795)
122,376
(73,260)
293,946
(13,259)
94,795
375,482
1,062,896
Other
financial
obligation
459,043
-
-
(59,610)
(68,354)
(127,964)
367,534
(6,292)
68,353
429,595
760,674
2022 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
2022
EGP’000
(26,166)
162,773
7,719
8,529
152,855
2021
EGP’000
(34,166)
521,929
17,922
7,319
513,004
30.
Post Balance Sheet Events
• Subsequent to the year end-the Company completed the incorporation of medical health development a lim-
ited liability company located in the kingdom of Saudi Arabia with a total stake of 51% directly or indirectly. The
new company will be operated in the same field as the group proclitic health care diagnostics service.
• IDH management has decided to irrevocably terminate the IFC loan agreement as the intended purpose of the
loan, which was to finance an acquisition in Pakistan, was not realized.
• The Group has effectively reduced its exposure to foreign currency risk by coming to an agreement with General
Electric (GE) for the early repayment of its contractual obligation of USD 5.7 million. As of March 28, 2023,
the remaining obligation balance stood at USD 5.0 million, with USD 0.7 million having been repaid since the
contract was initiated in 2020. The Group and GE have agreed to settle this balance early for USD 3.55 million,
payable in EGP, equivalent to EGP 110 million.
To finance the settlement, The Group will utilize a bridge loan facility, with half of the amount being funded
internally and the other half provided by a loan from Ahly United Bank - Egypt. The management anticipates
fully repaying the loan before the end of the second quarter of 2023.
Contingent liabilities
31.
As required by article 134 of the labour law on Vocational Guidance and Training issued by the Egyptian Govern-
ment 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, Al Mokh-
tabar Company for Medical Labs and Integrated medical analysis 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 , Al Mokhtabar Company for Medical Labs and Integrated
medical analysis 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, Al Mokhtabar Company
for Medical Labs and Integrated medical analysis, an to up to 46m EGP could become payable, however this is not
considered probable.
182 IDH 2022 Annual Report
Financial Statements