MD Medical Group
Annual Report 2022
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Contents
STRATEGIC REPORT ............................................................................................................................................. 4
MD Medical Group overview ................................................................................................................................. 4
Statement from the CEO ....................................................................................................................................... 5
Key events ............................................................................................................................................................ 5
Strategic goals ...................................................................................................................................................... 7
Business model ..................................................................................................................................................... 8
Nationwide healthcare network .............................................................................................................................. 9
Financial overview for 2022 ................................................................................................................................. 11
Hospitals in Moscow ............................................................................................................................................ 14
Out-patient clinics in Moscow and Moscow region ............................................................................................... 16
Hospitals in regions ............................................................................................................................................. 17
Out-patient clinics in regions ............................................................................................................................... 19
CORPORATE GOVERNANCE ............................................................................................................................... 20
Board of Directors overview ................................................................................................................................ 20
Report of the Board of Directors .......................................................................................................................... 22
Corporate Governance Report ............................................................................................................................ 22
Risk management ............................................................................................................................................... 24
Management Board ............................................................................................................................................. 26
Shareholder and Dividend Report ....................................................................................................................... 28
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS ............................................................................... 30
Management report ............................................................................................................................................. 31
Directors' responsibility statement ....................................................................................................................... 36
Consolidated statement of profit or loss and other comprehensive income.......................................................... 37
Consolidated statement of financial position ........................................................................................................ 41
Consolidated statement of changes in equity ...................................................................................................... 42
Consolidated statement of cash flows ................................................................................................................. 43
Notes to the consolidated financial statements .................................................................................................... 46
REPORT AND FINANCIAL STATEMENTS ............................................................................................................ 75
Management report ............................................................................................................................................. 76
Directors' responsibility statement ....................................................................................................................... 81
Statement of profit or loss and other comprehensive income ......................................................................................... 82
Statement of financial position ............................................................................................................................................. 86
Statement of changes in equity ........................................................................................................................... 86
Statement of cash flows ...................................................................................................................................... 88
Notes to the financial statements ......................................................................................................................... 88
CORPORATE SOCIAL RESPONSIBILITY ........................................................................................................... 107
Our Mission ....................................................................................................................................................... 107
Our People ........................................................................................................................................................ 107
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Our Profession .................................................................................................................................................. 107
Our Technology ................................................................................................................................................. 107
Our Communities .............................................................................................................................................. 107
Key CSR activities in 2022 ................................................................................................................................ 107
SUSTAINABLE DEVELOPMENT ......................................................................................................................... 108
Identifying material topics .................................................................................................................................. 108
Interaction with stakeholders ............................................................................................................................. 108
Our patients ....................................................................................................................................................... 109
Our people ........................................................................................................................................................ 111
Occupational health and safety ......................................................................................................................... 116
Supply chain development ................................................................................................................................ 118
Sustainable development risk management ...................................................................................................... 120
Environmental management .............................................................................................................................. 124
Annexes ............................................................................................................................................................ 127
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STRATEGIC REPORT
MD Medical Group overview
MD Medical Group Investments PLC is a leading provider in the Russian private healthcare service market by cities of
presence and number of employees.
As of publication date, MD Medical Group manages 53* modern healthcare facilities, including 10 multifunctional hospitals and
43 out-patient clinics in 28 cities of the Russian Federation. We provide a wide range of high quality medical services – the
number of medical specializations is 77. MD Medical Group has a high level of out-of-pocket payments compared to the private
medical services market in Russia, which amounted to 76%.
The Company has vertically integrated business model supported by technological and educational initiatives. MD Medical
Group operates in diversified format both in terms of the range of services offered to clients and price policy, including
multidisciplinary clinical hospitals, consultative and diagnostic centres, out-patient clinics in Moscow and regions and MD LAB
laboratory network. We also support our work process with educational base which represented by MGIMO-Med Medical
University.
The Company’s shares trade on the Moscow Exchange and on the London Stock Exchange1 in the form of global depositary
receipts (LSE and MOEX: ticker MDMG). One GDR represents one ordinary share.
Our investment case
Best-in-class network across Russia
Comprehensive knowledge of the Russian market of private healthcare services
Projects led by highly qualified doctors and managers with extensive experience in building and launching
multifunctional hospitals
A well-known brand with largest regional medical network, including 28 cities and 26 regions
Successful service diversification strategy in terms of range of services offered to clients and price policy
The Company's ability to operate well in unusual situations was proven by its highly effective performance during the
pandemic COVID-19
Clear and balanced growth strategy
Proven regional expansion strategy with well-defined objectives and a track record of successful investments
Since its inception, the Group has continuously extended its medical products to satisfy market demand and evolved
into a vertically integrated company that meets all human health needs from birth to old age
Balanced strategy: combining large greenfield hospital projects with a wide network of clinics that provide core services
and benefit from an economy of scale
Ready-to-use blueprint for further expansion based on competences and available resources
Attractive market fundamentals in Russia
Consolidation and saturation are at a low level, especially in the regions
Still a developing market with significant growth potential
Government support for private healthcare companies is provided by a favourable regulatory framework, which
includes a zero income tax rate, a perpetual medical licence, and participation in the Mandatory Health Insurance
programme
High entry barriers
* As of publication date
1 Due to recent sanctions related to events in Ukraine as well as the current market environment, the London Stock Exchange
has suspended the listing of the Company’s GDRs in order to maintain market stability.
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Statement from the CEO
Mark Kurtser, CEO at MDMG, said:
“In 2022, the Group delivered solid operating and financial performance, adapting to the new business environment, with
revenue flat year-on-year despite the last year’s strong base.
I am pleased to note that effective cost control enabled us to maintain a strong EBITDA margin of 31% in the reporting period.
We continue to capitalise on our diversification strategy in terms of pricing, service range and geography. We strengthened our
market position in Moscow and the Moscow Region by opening two new medical centres with a focus on antenatal care in
Butovo and Mytishchi. In 2022, the Group continued to diversify its geographical footprint: during the year, we launched two
clinical hospitals, in St. Petersburg and Tyumen, and also tapped into the Sverdlovsk Region, opening our first out-patient clinic
with a focus on IVF in Yekaterinburg.
During the reporting period, we saw an increase in demand in segments not related to women’s and children’s healthcare,
including traumatology, cardiology and oncology. As an example, in just two years after launch, our Lapino-2 surgical unit with
a focus on oncology generated as much as RUB 2,182 mln in revenue and achieved a 50% utilisation rate while maintaining
potential for further growth. Based on expected demand and expertise we have built in oncology, we will continue to expand
the Lapino medical cluster in 2023 and are now commencing the construction of an 13,175-sq.m. Lapino-3 nuclear medical
centre, which will support a full cycle of medical care in oncology.
In addition, we are at the planning and design stage for our upcoming Domodedovo hospital, which we plan to open in 2025,
thus strengthening our leading position in Moscow and the Moscow Region.
Thanks to effective steps taken to ensure sufficient liquidity, our financial standing remained stable. It was for the first time in
the Company’s history that we posted negative net debt.
Throughout the Group's history, we have been focusing on providing high-quality and efficient medical services to our patients
while safeguarding the interests of our shareholders. To this end, we have been paying steady dividends. Despite the
persistent external headwinds, we distributed more than 50% of our net profit in dividends for H1 2022.
In conclusion, I would like to thank the entire MD Medical Group team for their contribution to our results and the Group's ability
to provide top-notch medical care and deliver stable performance.”
Key events
Corporate Governance
Board of Directors changes
In March 2022, Sergey Kalugin was appointed as an independent non-executive director of the Board of Directors. Mr Kalugin
brings to the Company his 31 years of experience in economics, finance, telecommunications and digital transformation.
In March 2022, Kirill Dmitriev and Simon Rowlands decided to step down as members of the Company's Board of Directors.
Strategic development
MD Group Lakhta hospital
In January 2022, MD Medical Group opened the new multi-disciplinary hospital MD Group Lakhta in St. Petersburg. The total
area of the centre is 9,000 sq.m. Total investments in the project amounted to approximately RUB 2 bln.
On 16 March 2022, due to the easing of the COVID-19 pandemic, the MD Group Lakhta hospital, which had been converted
into a temporary COVID treatment facility, began operating in its main area of specialisation – healthcare for women and
children, with a focus on childbirth and gynaecological surgery. The hospital plans to perform up to 3,000 deliveries per year.
Tyumen-2 hospital
In February 2022, MD Medical Group launched the clinical hospital Tyumen-2. The total area of the centre is 4,750 sq.m. Total
investments in the project amounted to approximately RUB 1 bln.
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The Tyumen-2 hospital is already the second for the Group in Tyumen and initially was focused on providing medical care for
patients with infectious diseases, including coronavirus.
Due to the COVID-19 slowdown, the Tyumen-2 hospital had been converted into a multifunctional hospital with focus on
oncology and therapy with the possibility of providing intensive care.
Renovation of the reproductive medicine centre in Novosibirsk
In June 2022, MD Medical Group completed the renovation of its medical centre in Novosibirsk, increasing its capacity to 1,000
IVF cycles per year. Total investments in the project amounted to some RUB 23 mln.
Mother & Child Butovo
In June 2022, MD Medical Group opened an out-patient medical centre, Mother & Child Butovo, with a capacity of 30,000 visits
per year. The total area of the centre is 195 sq.m. Total investments in the project amounted to circa RUB 16 mln.
The medical centre offers a wide range of services for women and men, including preparation for pregnancy and childbirth, as
well as functional and ultrasound diagnostics.
Mother & Child Yekaterinburg
In November 2022, the Company opened the first out-patient clinic in Yekaterinburg with a focus on IVF. The total area of the
centre is 434 sq.m. The Group’s total investment in the project amounted to about RUB 74 mln.
The clinic has an annual capacity for up to 400 gynaecological operations, up to 800 IVF cycles and more than 30,000 out-
patient treatments.
Mother & Child Mytishchi
In January 2023, MD Medical Group opened an out-patient medical centre, Mother & Child Mytishchi, with a capacity of 24,000
visits per year. The total area of the centre is 235 sq.m. Total investments in the project amounted to circa RUB 23 mln.
The medical centre offers a wide range of pregnancy and birth preparation services for women, such as diagnosis and
treatment of infertility, as well as functional and ultrasound diagnostics.
Expansion of the MD LAB laboratory network
In December 2021, MDMG launched its own network of laboratory test collection points under the MD LAB brand in Moscow.
During 2022, the MD LAB expanded its presence in Moscow and also opened two more collection points.
The collection points provide patients with a wide range of diagnostic services. All analyses are processed in Group’s own
laboratory located in the Lapino medical cluster. The laboratory format operates in the middle price segment and facilitates
patients' access to the services of the Group's medical centres.
Education initiatives
Medical University MGIMO-Med
In September 2022, MD Medical Group in cooperation with the Moscow State Institute of International Relations (MGIMO)
opened a medical university, MGIMO-Med. The educational process will be carried out at the sites of the Lapino medical
cluster and the Odintsovo campus of MGIMO.
Financial events
Net cash position
As of 31 December 2022, the Group’s debt declined from the 31 December 2021 level by RUB 4,916 mln to RUB 597 mln. In
2022, the Company fully repaid all its existing credit facilities by settling outstanding obligations in the amount of
RUB 3,133 mln ahead of schedule. As a result, as at 31 December 2022, the Company’s Net Cash position amounted to
RUB 3,866 mln.
Dividends
On 26 October 2022, the Board of Directors approved an interim dividend of RUB 642 mln or RUB 8.55 per ordinary share /
GDR for the six months of 2022. On 29 November 2022, MD Medical Group made dividend payment on its GDRs following the
6M 2022 results.
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Strategic goals
Strategic goal
Our progress in 2022
To provide the highest quality of care to patients and achieve a high level of customer satisfaction
We are strongly committed to maintaining the highest
possible quality of our services and not only meeting but
also exceeding our patients’ expectations. We focus on
ensuring that all of our facilities – both existing and new
ones – adhere to MD Medical Group’s customary high
standards of medical care.
In 2022, despite macroeconomic woes, we continued to
operate as usual and delivered strong results while working
hard to improve our services and adapting to the new
business environment. We optimised the logistics process
associated with the supply of medicines and medical
equipment. In this regard, we deeply analysed market and
started to procure medicines of appropriate quality through
alternative suppliers. In addition, we created stocks of
vaccines and medicines, taking into account their expiration
date and turnover.
To recruit and retain the best and the most qualified personnel
As one of the largest employers in the sector, we pay
specific attention to ensure optimal working conditions and
incentives for our personnel. We are constantly improving
the professionalism of our specialists. We will continue to
employ the best professionals in the market by offering
competitive salaries as well as exciting opportunities for
career advancement.
To deliver value to our stakeholders
Ultimately, we want to ensure that all our actions and
decisions will benefit all our stakeholders. As the first public
healthcare company in Russia, we strive to deliver the best
performance and achieve strong results which translate into
high long-term value for our investors. This is impossible
without providing the best possible service to our patients,
creating the best conditions for our employees and
maintaining our high business reputation in interaction with
our corporate counterparties and the state.
To roll out our proven business model
With the largest regional medical network in Russia
comprised of 53 facilities in 28 cities2, we have a deep
understanding of the Russian market and a strong track
record. We continue to open new facilities in the regions to
expand the range of services offered.
In 2022, we continued to hire, retain and train new members
of our staff. In addition to the existing facilities, our new
Tyumen-2 and MD Group Lakhta hospitals became major
employers of medical staff in the region, recruiting both local
professionals and current MDMG employees relocated from
Moscow and other regional hospitals. Throughout the year,
we continued to improve the recruitment process, as well as
working conditions and communication within the Group. In
2022, the MGIMO-Med medical university, created jointly with
MGIMO, was launched as the future personnel base of the
Group.
We believe that our consistent investment into the business
supports the creation of long-term value for our shareholders.
In the reporting year, we continued to share the results of our
success with shareholders by paying dividends. Despite the
persistent external headwinds, we distributed more than 50%
of our net profit in dividends for H1 2022.
We strengthened our market position in Moscow and the
Moscow Region by opening two new medical centres with a
focus on antenatal care in Butovo and Mytishchi. The Group
continues to diversify its geographical footprint: during the
year, we launched two clinical hospitals in St. Petersburg and
Tyumen, and also tapped into the Sverdlovsk Region by
opening an out-patient clinic in Yekaterinburg with a focus on
IVF cycles.
To provide balanced services structure including core and other medical services
While we initially focused solely on women and children's
healthcare, once we were 100% confident that we were
able to maintain our high level of service, we began to add
In 2022, we continue to capitalise on our diversification
strategy in terms of pricing, service range and geography.
During this year, we saw an increase in demand in segments
2 As of publication date
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Strategic goal
Our progress in 2022
other medical services to our offering to cover all family
members. Today MD Medical Group is a diversified
healthcare organisation that provides a full range of
services for the entire family, including children and seniors.
not related to women’s and children’s healthcare, including
traumatology, cardiology and oncology. In just two years after
its launch, our Lapino-2 surgical unit with a focus on oncology
achieved a 50% utilisation rate while maintaining potential for
further growth.
As a result, 2022 revenue from medical services not related
to women’s and children’s health accounted for 48% of total
revenue.
Business model
MD Medical Group’s mission is to provide our patients with best-in-class medical services and to cover all of their
healthcare needs from birth to old age.
Vertically integrated healthcare delivery system
Surface: 15,000 – 40,000 m2
Type of service:
Out-patient visits
Diagnostics
Surgery operations
In-patient care
Post-hospital rehabilitation
Surface: 1,500 – 3,000 m2
Type of service:
Out-patient visits – general practice
Diagnostics
Medical manipulations
Surface: 150 – 300 m2
Type of service:
Out-patient visits
3. Clinical
hospitals
2. Consultative and
diagnostic centres
1. Out-patient clinics “close to home”
MD Medical Group is a leading private healthcare provider in Russia. We started by providing specialised healthcare for
women and children and soon earned a reputation as a sector leader in deliveries and IVF cycles. To respond to an increasing
demand for additional medical services outside OBGYN and paediatrics, we started gradually introducing new services, while
making sure that we could deliver in line with our high standards.
Today, we have facilities all over Russia that offer a full range of healthcare services for our patients, covering their full life
cycle. The Group’s offering for patients includes a wide range of services outside of reproductive care, such as surgeries and
cancer treatment. Our key objective is to provide for the patients’ comfort and offer a premium level of service.
We have a vertically integrated healthcare delivery system. MD Medical Group operates in diversified format both in terms of
the range of services offered to clients and price policy, including multidisciplinary clinical hospitals, consultative and diagnostic
centre and out-patient clinics and MD LAB laboratory network. Depending on the complexity of the treatment, we can refer our
clients from out-patient clinics in a “close to home” format to our clinical hospitals with a full range of services.
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Business processes supported by technological and educational initiatives
Education
Medical
University
MGIMO-Med
Science
Participation
in clinical
research
Healthcare service
Lapino as a medical
cluster
Out-patient
network
We continue to develop vertically integrated business processes, integrating technological and educational initiatives into them.
We are developing Lapino as a medical cluster, which now includes the state-of-the-art oncology centre Lapino-2, the Lapino-4
COVID-centre and our flagship hospital Lapino-1. Based on the expected demand and accumulated experience in oncology,
we will continue to expand the Lapino medical cluster in 2023 and begin construction of 13,175-sq.m. Nuclear Medicine Centre
Lapino-3, which will provide a full cycle of medical care in oncology.
The Company's strategy is closely related to attracting the best personnel to our medical facilities. In that regard, in 2022,
MD Medical Group jointly with the Moscow State Institute of International Relations (MGIMO) opened MGIMO-Med, a medical
university. In cooperation with MGIMO, we have developed a modern educational programme that meets the current needs of
the industry. The educational process is carried out at the sites of the Lapino medical cluster, the Odintsovo campus of
MGIMO, as well as at sites of our programme partners such as Pirogov Research Medical University, the Research Institute of
Human Morphology, the Gamaleya Research Institute of Epidemiology and Microbiology. The current programme includes the
General Medicine training of specialists. In the future, the project also will cover other levels of training, in particular, residency
and additional professional education.
Given the scope of our activities and the accumulated experience, MGIMO-Med offers students the unique individual medical
education, as well as excellent opportunities for further career and professional development in MD Medical Group.
To increase patient engagement, we are also using Digital Medical Operations (Doctis) telemedicine consultation platform.
As of publication date, more than 1,500 doctors were connected to Doctis. The online format has become especially popular
during the COVID-19 pandemic, allowing patients to stay in touch with their doctors. The introduction of telemedicine
consultations, among other things, made it possible to provide some medical services remotely, e.g., to patients planning IVF
cycles.
Nationwide healthcare network
MD Medical Group operates one of the largest regional private network of healthcare facilities in the country. Today patients
from 26 Russian regions have access to medical care at the clinical hospitals and out-patient clinics.
In 2022, the Company continued actively implementing its development strategy across Russia. By the end of the year, we
were managing 53 modern healthcare facilities, including 10 hospitals and 43 out-patient clinics. The development of
MD Medical Group in 2022 were marked by the opening of MD Group Lakhta multifunctional hospital in St. Petersburg with a
focus on childbirth and gynaecological surgery, which during the pandemic was temporarily focused on providing medical care
to patients with infections, including coronavirus. We also expanded our regional presence by launching Tyumen-2 infectious
disease hospital as part of further development of our medical cluster in Tyumen. This is the continuation of our dedication to
the Company’s strategy aimed at diversification of medical services in our portfolio and geographical expansion into the
regions of Russia. We are continuously strengthening our market position in Moscow and the Moscow Region by opening two
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new medical centres with a focus on antenatal care in Butovo and Mytishchi. The Group continues to diversify its geographical
footprint: in 2022, we also tapped into the Sverdlovsk Region by opening our first out-patient clinic with a focus on IVF in
Yekaterinburg.
Medical facilities
Moscow and Moscow Region
District
Locality
Facility
Focus
Launch
date
Area, m2
Property
type
MD Group
Lapino-1
Lapino-2
Lapino-4
M&C
Khodynskoe Pole
M&C Lefortovo
M&C Yugo-
Zapad
M&C Novaya
riga
Oncological Care
Centre
M&C Odintsovo
M&C
Novogereevo
M&C Kuntsevo
M&C
Savelovskaya
M&C Butovo
M&C Mytishchi
MD LAB
(3 points)
Regions
M&C Barnaul
M&C Vladivostok
M&C Irkutsk
M&C
Krasnoyarsk-1
M&C
Krasnoyarsk-2
M&C
Novokuznetsk
Centre for
Reproductive
medicine
Novosibirsk
M&C Avicenna
(2 clinics)
M&C Omck
M&C Vladimir
M&C Volgograd
Central
Central
Central
Central
Moscow
Moscow Region
Moscow Region
Moscow Region
Central
Moscow
hospital multifunctional
hospital multifunctional
oncology
hospital
infectious
hospital
disease
IVF cycles
clinic
Central
Central
Moscow
Moscow
clinic
clinic
IVF cycles
IVF cycles
2011
2012
2020
2021
2016
2018
2011
Central
Moscow Region
clinic
pediatrics
2020
Central
Moscow Region
clinic
oncology
2021
Central
Central
Moscow Region
Moscow
clinic
clinic
Central
Central
Central
Central
Central
Moscow
Moscow
clinic
clinic
Moscow
Moscow Region
Moscow
clinic
clinic
test
collection
point
gynecology
gynecology,
pediatrics and
dentistry
IVF cycles
IVF cycles
gynecology
gynecology
laboratory
Siberian
Far Eastern
Siberian
Siberian
Barnaul
Vladivostok
Irkutsk
Krasnoyarsk
clinic
clinic
clinic
clinic
IVF cycles
IVF cycles
IVF cycles
IVF cycles
2016
2011
2011
2011
2022
2023
2021-
2022
2016
2019
2013
2016
Siberian
Krasnoyarsk
clinic
IVF cycles
2016
Siberian
Novokuznetsk
clinic
IVF cycles
2015
27,600
42,000
18,500
4,200
465
392
801
117
450
142
397
770
2,048
195
235
240
559
358
600
712
160
800
owned
owned
owned
owned
rented
rented
owned /
rented
rented
rented
rented
owned
owned
owned
rented
rented
rented
rented
rented
rented
rented
rented
owned
Siberian
Novosibirsk
clinic
IVF cycles
2016
1,234
rented
Siberian
Siberian
Siberian
Central
Southern
Novosibirsk
Novosibirsk
hospital multifunctional
clinics multifunctional
Omsk
Vladimir
Volgograd
clinic
clinic
clinic
IVF cycles
IVF cycles
IVF cycles
2014
2014
2016
2017
2018
10,260
5,256
376
354
380
owned
owned /
rented
rented
rented
rented
Страница 10 из 132
District
Locality
Facility
Focus
Central
Central
Southern
Voronezh
Kostroma
Krasnodar
Volga Nizhny Novgorod
clinic
clinic
clinic
clinic
IVF cycles
IVF cycles
IVF cycles
IVF cycles
Launch
date
2017
2016
2019
2018
Southern
Rostov-on-Don
clinic
IVF cycles
2020
Central
Northwestern
Ryazan
St. Petersburg
clinic
clinic
IVF cycles
IVF cycles
Northwestern
Central
Central
Volga
Volga
Volga
Volga
St. Petersburg
Tula
Yaroslavl
Kazan
Perm
Ufa
Tolyatti
clinic
clinic
clinic
clinic
hospital multifunctional
IVF cycles
IVF cycles
IVF cycles
IVF cycles
hospital multifunctional
IVF cycles
clinic
Volga
Samara
Volga Novokuibyshevsk
clinic multifunctional
clinic multifunctional
Volga
Volga
Volga
Ural
Ural
Samara
Samara
hospital multifunctional
pediatrics
clinic
Samara
Tyumen
Tyumen
clinic
test collection
point
hospital multifunctional
oncology and
hospital
therapy
IVF cycles
clinic
Area, m2
343
209
360
600
422
1,400
893
9,000
541
822
677
800
33,000
473
2,734
237
15,000
416
Property
type
rented
rented
rented
rented
rented
rented
owned
owned
rented
rented
rented
owned
owned
rented
owned
owned
owned
rented
50
owned
15,000
4,750
owned
owned
2015
2011
2022
2018
2014
2018
2012
2014
2013
2013
2013
2018
2013
2013
2019
2022
M&C Voronezh
M&C Kostroma
M&C Krasnodar
M&C Nizhny
Novgorod
M&C Rostov-on-
Don
M&C Ryazan
M&C St.
Petersburg
St. Petersburg
M&C Tula
M&C Yaroslavl
M&C Kazan
M&C Perm
Ufa
M&C Tolyatti
M&A Samara
M&C
Novokuibyshevsk
IDK hospital
Сhildren's clinic
M&C Samara
Diagnostic centre
Tyumen-1
Tyumen-2
M&C
Yekaterinburg
Total
Ural
Yekaterinburg
2022
434
rented
53
207,761
2022
25,222
7,924
31.4%
4,969
6,005
2021
25,220
8,276
32.8%
6,622
6,098
Change
0.0%
(4.3%)
(1.4p.p.)
(25.0%)
(1.5%)
Financial overview for 2022
RUB mln
Revenue
EBITDA
EBITDA margin
EBIT
Adj. net profit
Revenue
Total revenue in 2022 remained flat y-o-y at RUB 25,222 mln. Due to a drop in COVID-19 diagnosis and treatment services
brought on by the pandemic slowdown, revenue of the Group's hospitals in Moscow fell by 7.1% year over year. This decline
was completely offset by an increase in revenue at regional hospitals and out-patient clinics. The key drivers behind this growth
were a stable demand for IVF in Moscow and the Moscow Region (the Group’s revenue from IVF up 9.9% y-o-y), on-target
capacity utilisation rates at regional hospitals (revenue up 12.1% y-o-y) amid a post-COVID recovery in demand for medical
services, and strong performance of new projects – MD Group Lakhta and the medical cluster in Tyumen.
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Revenue from medical services not related to women’s and children’s health accounted for 47.9% of total revenue, down from
51.2% in 2021.
2022 Key Operating Expenses
RUB mln
Payroll and social
contributions
as % of total revenue
Material expenses
as % of total revenue
Medical services expenses
as % of total revenue
Functional expenses
as % of total revenue
Gross profit
2022
10,132
40.2%
5,133
20.3%
308
1.2%
336
1.3%
2021
9,526
37.8%
5,568
22.1%
335
1.3%
265
1.1%
Change
6.4%
2.4p.p.
(7.8%)
(1.8p.p.)
(8.0%)
(0.1p.p.)
26.9%
0.2p.p.
Gross profit in 2022 declined by 1.9% y-o-y to RUB 9,793 mln. Gross profit margin decreased by 0.8 p.p. y-o-y to 38.8%
primarily due to a rise in personnel costs because of business expansion associated with the launch of MD Group Lakhta and
Tyumen-2.
Impact of key expenses
In the reporting period, the Company's key expenses remained tightly controlled and slightly increased by 1.4 p.p. y-o-y as a
percentage of revenue (to 63.1%) amid the growth of personnel costs and functional expenses.
The share of personnel costs grew by 2.4 p.p. y-o-y as a percentage of revenue (to 40.2%) mainly due to a decline in COVID-
19 diagnostic and treatment services (resulting from a higher share of fixed costs) and the opening of new facilities (MD Group
Lakhta and Tyumen-2) and their gradual ramp-up to design capacity.
The share of materials expenses decreased by 1.8 p.p. y-o-y as a percentage of revenue (to 20.3%) on the back of a reduction
in material-intensive services in the Company's portfolio, including therapy related to COVID-19.
The share of medical services expenses declined by 0.1 p.p. y-o-y as a percentage of revenue (to 1.2%) due to the gradual
vertical integration of business processes, including the opening of the Company’s own laboratory and data processing centre.
The share of functional expenses increased by 0.2 p.p. y-o-y as a percentage of revenue (to 1.3%), driven by the growth in
marketing expenses amid the Group’s business expansion.
EBITDA
EBITDA declined by 4.3% y-o-y and amounted to RUB 7,924 mln in 2022. EBITDA margin decreased by 1.4 p.p. y-o-y to
31.4% due to a decline in COVID-19 diagnostic and treatment services.
Operating profit
Following impairment testing in 2022, the Company recognised impairment of investments made in the previous periods,
including a one-off RUB 1,000 mln impairment loss on fixed assets of the Ufa clinical hospital (opened in 2014) and a one-off
RUB 201 mln impairment loss on goodwill of the Novokuznetsk out-patient clinic (acquired in 2015) on the back of an
unfavourable macro environment. In addition, in the reporting period, the Group recognised a RUB 85 mln impairment of
previously acquired construction documents due to the change in plans to build a clinic in St. Petersburg. Total impairment
recognised in 2022 was RUB 1,287 mln. As a result, operating profit dropped by 25.0% y-o-y to RUB 4,969 mln in 2022, with
an operating profit margin of 19.7%.
Adjusted net profit
In 2022, FX loss amounted to RUB 105 mln, with its growth attributable to a 5.3% rouble appreciation against the US dollar as
compared to the beginning of the year.
As a result, the Company's adjusted net profit decreased by 1.5% y-o-y to RUB 6,005 mln in 2022. Adjusted net profit margin
slightly declined by 0.4 p.p. y-o-y to 23.8%.
Страница 12 из 132
Cash flow statement
RUB mln
Operating cash flow before working
capital changes
Changes in working capital
Taxes
Cash from operating activities
Cash used in investing activities
Cash used in financing activities
Effect of movements in exchange
rates on cash held
Cash and cash equivalents increase
2022
7,902
(155)
(13)
7,734
(848)
(5,904)
(109)
873
2021
8,346
158
(5)
8,499
(2,912)
(5,031)
(96)
461
Change,%
(5.3)
n/a
172.4
(9.0)
(70.9)
17.4
13.2
89.4
In 2022, operating cash flow before changes in working capital decreased by 5.3% y-o-y to RUB 7,902 mln as a result of the
decline in EBITDA.
Working capital
RUB mln
Inventories
Accounts receivable
Accounts payable
Contract liabilities
Working capital
31 December 2022
1,212
1,147
(2,447)
(1,972)
(2,060)
31 December 2021
1,165
1,112
(2,537)
(1,990)
(2,250)
The Company has historically maintained negative working capital as a source of additional financing. In 2022, working capital
remained negative at RUB (2,060) mln and amounted to 8.2% of revenue.
In 2022, operating cash flow decreased by 9.0% y-o-y to RUB 7,734 mln, primarily due to the changes in working capital
caused by the update of medicine and consumable supply terms as suppliers switched from deferred payment by instalments
to advance payment.
Cash used for investing activities, mainly consisting of capital expenditures and and interest income on deposits, amounted to
RUB 848 mln.
CAPEX
Capital expenditure for the full year of 2022 declined by 69.2% y-o-y and stood at RUB 1,169 mln. The significant drop in
CAPEX in the reporting period was due to macroeconomic uncertainty. The Group’s investment programme has now been
resumed.
We will continue to expand the Lapino medical cluster in 2023 and commenced the construction of an 13,175-sq.m Lapino-3
nuclear medical centre, which will support a full cycle of medical care in oncology. The launch of Lapino-3 will allow for the
treatment of oncological diseases using PET CT, radiation therapy and theranostics equipment. We are planning to launch
Lapino-3 in 2025, and we currently estimate the CAPEX of this project to be RUB 4 bln.
We also plan to open a multifunctional hospital in Domodedovo. The clinical hospital will be built according to the project of
already launched hospitals in Samara and Tyumen. This hospital will accommodate 164 beds, and our investments will
approximate RUB 4.5 bln.
In addition, in Q4 2023, a multifunctional out-patient clinic in the Moscow Citi Business Centre will be put into operation with a
planned cost of RUB 236 mln. Moreover, at the end of 2023, we plan to launch a multifunctional out-patient clinic in the ZILART
residential complex with an extimated CAPEX of RUB 78 mln.
Страница 13 из 132
In 2022, cash outflows related to financing activities amounted to RUB 5,904 mln vs RUB 5,031 mln in 2021. The 17.4% y-o-y
increase was due to the distribution of interim dividends to shareholders for H1 2022 in the amount of RUB 642 mln, as well as
the early repayment of RUB 3,133 mln to the lender.
Dividends
On 26 October 2022, the Board of Directors of MD Medical Group approved to pay interim dividends in the amount of
RUB 642,318,835.50, or RUB 8.55 per ordinary share / GDR for the 6 months 2022. On 29 November 2022, MD Medical
Group made dividend payment on its GDRs following the results of the 6 months of 2022. The payout ratio is equal to 58.1%
based on net income according to IFRS.
As at 31 December 2022, net cash increased by RUB 873 million to RUB 4,463 mln.
Debt portfolio
RUB mln
Total debt
Short-term debt
Long-term debt
Cash and cash equivalents
Net debt / (Net cash position)
Net debt/(Net cash position) / EBITDA
31 December 2022
5973
106
489
4,463
(3,866)
(0.5х)
31 December 2021
5,5134
1,786
3,727
3,590
1,924
0.2х
The Group's debt decreased by 89.2% y-o-y to RUB 597 mln as at the end of 2022 mainly due to the early repayment of
RUB 3,133 mln towards the outstanding principal. Cash balance grew by 24.3% y-o-y to RUB 4,463 mln as at 31 December
2022 vs RUB 3,590 mln as at 31 December 2021.
As at 31 December 2022, the Company’s net cash position amounted to RUB 3,866 mln. The Company's debt is fully
denominated in roubles. The net cash position to EBITDA ratio as at the end of 2022 was at 0.5x.
Hospitals in Moscow
Multifunctional hospitals for the whole family offering full cycle medical care on a high level
Beds
Area, m2
Focus
MD Group hospital
261
27,600
Multifunctional hospital Multifunctional
Lapino-1
191
42,000
Medical cluster Lapino
Lapino-2
120
18,500
Oncology centre
In-patient days
Out-patient visits
IVF cycles
Deliveries
34,000
355,000
3,000
3,500
hospital
28,500
640,000
1,000
3,000
40,000
180,000
-
-
Lapino-4
100
4,200
Infectious diseases
hospital
36,500
-
-
-
Moscow hospitals include two business units — the Lapino medical cluster and MD Group hospital. In the reporting period,
Moscow hospitals account for 51.6% of the Group's total revenue. In 2022, despite macroeconomic shocks, Moscow hospitals
performed solidly with a slight decrease in revenue by 7.1% to RUB 13,013 mln. In the reporting period, we observed a
decrease in the number of deliveries in Moscow by 9.5% amid overall downward trend in Russia’s birth rate, which was
partially offset by a gradual recovery in patient flow and deferred demand for IVF after the COVID-19 pandemic – the number
of IVF cycles in Moscow hospitals increased by 12.4%.
The expected decline in the utilisation rate of the Lapino-4 amid the fading pandemic was offset by robust demand for
treatment unrelated to women’s and children’s healthcare. In particular, we see stable demand in non-core segments, such as
3 Including RUB 106 mln of short-term lease and RUB 489 mln of long-term lease.
4 Including RUB 97 mln of short-term lease and RUB 597 mln of long-term lease.
Страница 14 из 132
trauma care and cardiology. In accordance with our portfolio diversification strategy, in just two years after launch, Lapino-2
surgical unit with a focus on oncology generated as much as RUB 2,182 mln in revenue and achieved a 50% utilisation rate
while maintaining potential for further growth.
Operational and Financial Overview
Revenue, RUB mln
Out-patient visits
In-patient days
IVF cycles
Deliveries
Other revenue
Operating indicators
Out-patient visits
In-patient days
IVF cycles
Deliveries
2022
13,013
2,695
6,130
764
2,064
1,360
549,256
66,194
2,741
4,275
2021
14,013
2,496
6,839
614
2,258
1,806
594,344
82,517
2,438
4,722
Change,%
(7.1)
8.0
(10.4)
24.4
(8.6)
(24.7)
(7.6)
(19.8)
12.4
(9.5)
The Lapino-1 and MD Medical Group multifunctional hospitals are capable of providing 4,000 IVF cycles and 6,500 deliveries
per year. In 2022, demand for deliveries (-9.5% y-o-y) dropped in Moscow due to the overall downward trend in Russia’s birth
rate (-8.2% y-o-y5). This decrease in revenue was partially offset by a 24.4% y-o-y spike in revenue from IVF thanks to the
post-pandemic demand recovery (+12.4% IVF cycles y-o-y). At the same time, we saw growing demand in areas not related to
healthcare for women and children, such traumatology and cardiology (the number of in-patient days in traumatology and
cardiology was up 63.7% and 11.1% y-o-y respectively). This confirms our effective portfolio diversification strategy, which
enables us to offer an increasingly varied array of medical services to our customers.
Lapino-2 oncology centre, launched in September 2020, in the reporting period reached revenue of RUB 2,182 mln and
utilisation rate of 50%, while the facility continues to have significant potential for future growth. For example, in the reporting
period, we saw increase in demand for oncological surgery (the number of in-patient days was up 59.4%) and
oncomammology (the number of in-patient days was up 95.4%). In addition, the opening of Lapino-3 with an estimated launch
date of 2025 will further increase the number of patients in Lapino-2.
The launch of Lapino-4 in 2021 was dictated by the realities that the COVID-19 pandemic has placed us in. The Group saw
strong demand for coronavirus treatment and decided to set aside the site for a new hospital. The hospital is able to provide a
full range of medical services due to its location on the territory of the Lapino medical cluster. For patients with COVID-19, we
provide high-quality emergency care and delivery in specially designated “red zones”, as well as complex cardiac and
oncological surgeries. Since 2022, in the context of a slowdown in the pace of the COVID-19 pandemic, the Lapino-4 has
expanded the range of its services and functions as an infectious diseases hospital, focusing on providing medical care to
patients with infectious diseases, including severe forms of influenza and coronavirus.
Investment strategy
Based on expected demand and expertise we have built in oncology, we will continue to expand the Lapino medical cluster in
2023 and commenced the construction of a 13,175-sq.m. Lapino-3 nuclear medical centre, which will support a full cycle of
medical care in oncology. The launch of Lapino-3 will allow for the treatment of oncological diseases using PET CT, radiation
therapy and theranostics equipment. We are planning to launch Lapino-3 in 2025 and currently estimate the CAPEX of this
project to be RUB 4 bln.
We also plan to open a multifunctional hospital in Domodedovo. The clinical hospital will be built according to the project of
already launched hospitals in Samara and Tyumen. This hospital will accommodate 164 beds, and our investments will
approximate RUB 4.5 bln.
5 Source: The Federal State Statistics Service
Страница 15 из 132
Key events in 2022
As we plan to expand our operations over the next few years, we will need to attract the best people to our healthcare facilities.
In this regard, in September 2022, the Group jointly with the Moscow State Institute of International Relations (MGIMO) opened
MGIMO-Med, a medical university. The MGIMO-Med University was established on the initiative of the governor of the Moscow
Region, MGIMO and the MD Medical Group in 2021. The educational process is carried out at the sites of the Lapino medical
cluster, the Odintsovo campus of MGIMO, as well as at sites of our programme partners such as Pirogov Research Medical
University, the Research Institute of Human Morphology, and the Gamaleya Research Institute of Epidemiology and
Microbiology. The 2022 programme includes the General Medicine training of specialists. In the future, the project also will
cover other levels of training, in particular, residency and additional professional education.
We believe that we will prepare students on our own base in accordance with the high standards of medical care adopted by
the MD Medical Group. In cooperation with MGIMO, we have developed a modern educational programme that meets the
modern needs of the industry. In addition to gaining medical skills, young doctors will already be familiar with our corporate
culture and the high level of competencies we demand from all of our doctors and nurses.
Out-patient clinics in Moscow and Moscow region
High-end medical services for checks and treatments in a "close to home" format
Number of clinics
Total area, m2
Average size of clinic, m2
Out-patient visits
IVF cycles
Moscow and Moscow region
11
6,012
547
510,000
5,600
Out-patient clinics in Moscow and the Moscow region include seven clinics in Moscow, four medical facilities in the Moscow
region and MD LAB laboratory network. In 2022, clinics account for 10.4% of the Group's total revenue. Throughout the year,
we saw a gradual recovery of patient flows and deferred demand for IVF after the COVID-19 pandemic. In the reporting period,
there was a slight decrease (-0.7% y-o-y) in the number of out-patient visits due to a reduction in COVID-19 diagnostic and
treatment services. As a result, revenue from out-patient clinics in Moscow and the Moscow Region rose by 8.8% y-o-y to
RUB 2,630 mln.
Operational and Financial Overview
Revenue, RUB mln
Out-patient visits
IVF cycles
Other revenue
Operating indicators
Out-patient visits
IVF cycles
2022
2,630
1,230
1,105
295
175,039
4,079
2021
2,418
1,196
972
250
176,270
3,868
Change,%
8.8
2.8
13.7
18.0
(0.7)
5.5
In 2022, revenues from out-patient clinics in Moscow and the Moscow Region rose by 8.8% y-o- to RUB 2,630 mln. The key
driver behind revenue pickup was a 5.5% increase in IVF cycles thanks to the post-pandemic recovery of demand. The
average IVF ticket increased by 7.8%, primarily on the back of indexed prices and an increase in the number of IVF services
provided using new treatment standards (EmbryoScope).
A slight 0.7% drop in the number of out-patient visits was caused by reduction in COVID-19 diagnostic and treatment services
driven by the pandemic slowdown. This was offset by an increase in the average ticket by 3.6% y-o-y mainly due to indexed
prices.
Investment strategy
In 2023, we continue to expand our presence in Moscow and will start building a multifunctional clinic in Moscow Citi business
complex. The clinic with an approximate area of 1,480 sq.m. will offer a wide range of medical services for women and men,
Страница 16 из 132
such as IVF, functional and ultrasound diagnostics. Services provided to patients will also include medical care for all family
members, including therapy, genetics, urology, endocrinology, neurology, etc. We currently estimate the CAPEX of this project
to be RUB 236 mln.
The clinic will have an estimated annual capacity for up to 800 IVF cycles and more than 74,000 out-patient treatments. Centre
with an IVF department is designed to serve clients working in Moscow City or living nearby.
Moreover, at the end of 2023, we plan to launch a multifunctional out-patient clinic in the ZILART residential complex with an
extimated CAPEX of RUB 78 mln. The clinic with an approximate area of 480 sq.m. will offer a wide range of medical services
for women and men, including functional and ultrasound diagnostics. The clinic will have an estimated annual capacity for more
than 48,000 out-patient treatments.
Key events in 2022 and after reporting date
We strengthened our market position in Moscow and the Moscow region by opening two new medical centres with a focus on
antenatal care in Butovo and Mytishchi.
In June 2022, MD Medical Group opened an out-patient medical centre, Mother & Child Butovo, with a capacity of 30,000 visits
per year. The total area of the centre is 195 sq.m. Total investments in the project amounted to circa RUB 16 mln.
In January 2023, the Company opened an out-patient medical centre, Mother & Child Mytishchi, with a capacity of 24,000 visits
per year. The total area of the centre is 235 sq.m. Total investments in the project amounted to circa RUB 23 mln.
Both medical facilities offer a wide range of pregnancy and birth preparation services for women, such as diagnosis and
treatment of infertility, as well as functional and ultrasound diagnostics. In addition, services provided to patients will also
include medical care for men, including ultrasound, endocrinology and therapy.
The medical centres were implemented in accordance with the successful business model of the out-patient centre
"Mother&Child Odintsovo" launched in 2016. The new centres will allow to further increase the number of patients in the
Group's existing medical facilities by referring clients to the Company's clinics and hospitals.
In December 2021, MDMG launched its own network of laboratory test collection points under the MD LAB brand in Moscow.
During 2022, the MD LAB expanded its presence in Moscow and also opened two more collection points.
Hospitals in regions
Wide range of first class medical services in regions
Name
Beds
Area, m2
Focus
Novosibirsk
Avicenna
hospital
93
10,260
Multifunctional
hospital
Samara
IDK hospital Ufa hospital
Ufa
164
15,000
Multifunction
al hospital
185
33,000
Multifunctional
hospital
St. Petersburg Medical cluster in Tyumen
Tyumen-1
MD Group
hospital
Lakhta
164
150
15,000
9,000
Multifunctional
Clinical hospital
hospital
with a focus on
childbirth and
gynaecological
surgery
10,220
64,800
Tyumen-2
hospital
100
4,750
Oncology and
therapy
32,000
220,000
29,200
-
Patient-days
Out-patient
treatments
IVF cycles
Deliveries
22,630
582,900
1,800
1,000
30,000
220,000
30,295
290,800
1,200
2,500
1,100
2,000
-
3,000
1,200
2,500
-
-
Regional segment include six clinical hospitals located in Novosibirsk, Samara, Ufa, St. Petersburg and Tyumen. In the
reporting period, hospitals in regions account for 25.8% (+2.8 p.p. y-o-y) of the Group's total revenue. In 2022, regional medical
facilities demonstrated strong operating performance across the whole network in Russia – revenue of the Group’s regional
hospitals increased by 12.1% y-o-y to RUB 6,506 mln. The Group continues to diversify its geographical footprint: during the
year, we launched two clinical hospitals in St. Petersburg and Tyumen.
Страница 17 из 132
In the reporting period, our results in women's and children's healthcare in regions continue to improve, with a significant
increase of 28.5% in the revenue from deliveries in 2022. In addition, clinical hospitals in Samara and Novosibirsk are on track
to reach their respective design capacities as expected. As a result, total in-patient treatments in regions increased by 16.0% y-
o-y to 79,960.
Operational and financial overview
Revenue, RUB mln
Out-patient visits
In-patient days
IVF cycles
Deliveries
Other revenue
Operating indicators
Out-patient visits
In-patient days
IVF cycles
Deliveries
2022
6,506
1,539
2,788
747
779
653
689,141
79,960
2,902
4,301
2021
5,803
1,429
2,404
680
606
684
678,577
68,951
2,796
3,675
Change,%
12.1
7.7
16.0
9.9
28.5
(4.5)
1.6
16.0
3.8
17.0
In 2022, regional hospitals’ revenue was up 12.1% y-o-y and reached RUB 6,506 mln, driven mainly by a 17.0% y-o-y surge in
deliveries, with revenue from this business line up 28.5% y-o-y. A considerable increase in the number of deliveries came on
the back of Tyumen-1 and Samara-based IDK hospital, gradually progressing towards target capacity (with utilisation rates
going up 4.4 p.p. y-o-y to 26.8% and 3.8 p.p. y-o-y to 40.6%, respectively) as well as strong results of the new MD Group
Lakhta hospital in St. Petersburg, which achieved a 18.3% utilisation rate in the reporting period.
Revenue growth was also significantly fuelled by an increase in the number of in-patient days (up 16.0% y-o-y), with revenue
rising by 16.0% y-o-y in this segment. The strongest growth in in-patient utilisation rates was seen at clinical hospitals in
Tyumen and Samara: the IDK multidisciplinary hospital in Samara reached a utilisation rate of 71.8%, while Avicenna hospital
in Novosibirsk hit a 67.2% utilisation rate. Meanwhile, our Tyumen medical cluster, which includes the Tyumen-1
multidisciplinary hospital and Tyumen-2 facility with focus on oncology and therapy (launched in February 2022), achieved a
34.9% utilisation rate in 2022, still having a significant potential to support the Group’s future growth.
Investment strategy
We continue to capitalise on our diversification strategy in terms of pricing, service range and geography: during the year, we
launched two clinical hospital in St. Petersburg MD Group Lakhta and multifunctional hospital Tyumen-2.
On 16 March 2022, due to the easing of the COVID-19 pandemic, the MD Medical Lakhta clinical hospital, which had been
converted into a temporary COVID treatment facility, began operating in its main area of specialisation: healthcare for women
and children, with a focus on childbirth and gynaecological surgery. The hospital plans to perform up to 3,000 deliveries per
year.
Less than a year in operation after MD Group Lakhta was converted back into a clinical hospital with a focus on childbirth and
gynaecological surgery, the facility achieved an 18.3% utilisation rate in terms of number of deliveries, and we continue to
increase patient flows.
The medical cluster in Tyumen includes two multifunctional hospitals: Tyumen-1 and Tyumen-2. The Tyumen-2 hospital was
initially focused on providing medical care for patients with infectious diseases, including coronavirus. Due to the COVID-19
slowdown, the Tyumen-2 hospital currently had been converted into a multifunctional hospital specializing in oncology and
therapy. In addition, the clinical hospital is occupied by infectious boxes that serve as red zones, where we provide intensive
care to our patients.The Tyumen medical cluster is currently in ramp-up stage and still having a significant potential to support
the Group’s future growth.
Страница 18 из 132
Key events in 2022
We are continuing to expand our medical network in St. Petersburg, the second largest healthcare market in Russia. In
January 2022, Group launched a new multidisciplinary clinical hospital MD Group Lakhta in St. Petersburg. The centre
provides the following high quality medical services – obstetrics and gynecology, pediatrics, surgery, therapy, X-ray and
laboratory diagnostics. The total area of the centre is 9,000 sq.m. The in-patient facility has 150 beds. Total investment in the
project amounts to RUB 2 bln. Patient treatment will be treated under the VHI programme, as well as MHI.
During the pandemic, MD Group Lakhta was temporarily focused on providing medical care to patients with infections,
including coronavirus. On 16 March 2022, due to the easing of the COVID-19 pandemic, the MD Group Lakhta clinical hospital
began operating in its main area of specialisation: healthcare for women and children, with a focus on childbirth and
gynaecological surgery.
Since 2019, the Tyumen-1 multifunctional clinical hospital has been successfully operating in Tyumen. In that regard, in
February 2022 we opened the second wing with the focus on providing medical care in oncology and therapy. The total area of
the centre is 4,750 sq.m. It will have 100 beds, including 12 in the emergency room. Total investments in the project amounted
to RUB 1 bln. Patient treatment will be carried out under the VHI programme, as well as MHI.
Out-patient clinics in regions
High-end medical services for checks and treatments in a "close to home" format
Number of clinics
Cities of presence
Total area, m2
Average size of clinic, m2
Out-patient visits
In-patient days
IVF cycles
Regions
29
24
22,200
765
890,300
3,700
19,200
Out-patient clinics in regions include 29 clinics in 24 cities of the Russian Federation. In 2022, clinics account for 12.1% of the
Group's total revenue. In the reporting period, revenue of the Group’s regional clinics increased by 2.9% y-o-y to
RUB 3,057 mln. Growth in revenue was mainly due to higher utilisation rate, partly because of the gradual recovery in demand
for elective medical services after the COVID-19 pandemic. In 2022, the Group continues to diversify its geographical footprint:
we entered into the Sverdlovsk Region by opening our first out-patient clinic with focus on IVF in Yekaterinburg.
Operational and Financial Overview
Revenue, RUB mln
Out-patient visits
In-patient days
IVF cycles
Other revenue
Operating indicators
Out-patient visits
In-patient days
IVF cycles
2022
3,057
974
71
1,715
297
413,119
2,621
7,140
2021
2,972
901
49
1,674
348
409,442
1,837
7,424
Change,%
2.9
8.1
44.9
2.5
(14.7)
0.9
42.7
(3.8)
In 2022, revenues from out-patient clinics in regions increased by 2.9% y-o-y to RUB 3,057 mln. Revenue growth in the
reporting period was mainly attributable to a 0.9% y-o-y increase in number of out-patient visits thanks to the post-pandemic
recovery of demand and increase of the respective average check by 7.1%, primarily on the back of indexed prices.
In 2022, IVF cycles dropped by 3.8% y-o-y mainly due to the suspension of the Novosibirsk Centre for Reproductive Medicine,
which was closed for renovation. The renovated centre with an annual capacity of 1,000 IVF cycles opened its doors on
Страница 19 из 132
16 June 2022. This slight decrease was partially offset by an increase in the average ticket by 6.6% y-o-y mainly due to
indexed prices and an growth in the number of IVF services provided using new treatment standards (EmbryoScope).
On top of that, revenue was positively influenced by a 42.7% y-o-y hike in the number of in-patient days due to the allocation of
quotas under the MHI programme.
Key events in 2022
In June 2022, the Company completed the renovation of the Novosibirsk Centre for Reproductive medicine, acquired under a
deal with ARTMedGroup in 2016. As part of the reconstruction project, the centre's capacity was increased, medical
equipment, including embryological equipment, was modernized, and new treatment protocols were introduced. After the
renovation, the total capacity of the facility has increased to 1,000 IVF cycles per year. The total investment in the project was
around RUB 23 mln, of which RUB 21.6 mln were allocated for the maintenance and modernisation of the premises, and RUB
1.3 mln were invested in new modern technical equipment.
In November 2022, MD Medical Group continued to expand its presence and entered a new location – the Sverdlovsk Region,
the largest and most dynamically developing region of the Ural Federal District. The new clinic in Yekaterinburg with a total
area of 434 sq.m. provides a wide range of medical services to all family members, with special attention to the health of
women and men. The clinic has an annual capacity for up to 400 gynaecological operations, up to 800 IVF cycles, including
under the MHI programme, and more than 30,000 out-patient treatments.
CORPORATE GOVERNANCE
Board of Directors overview
Our strong and experienced Board of Directors is focused on ensuring the long-term successful development of MD Medical
Group and sustained returns for our shareholders.
Vladimir Mekler
Chairman of the Board of Directors, Independent Member of the Board of Directors
Vladimir Mekler was appointed as the Non-Executive Director in February 2015 and became the Chairman of the Board of
Directors in June 2016.
Mr Mekler is the senior and managing partner of Mekler & Partners. Vladimir specialises in corporate law, including support
and structuring complex and international transactions, development and optimisation of corporate governance and legal
systems in companies, legal support of M&A transactions, settlement of corporate disputes, as well as the organisation and
coordination of legal representation and defence in complex economic and property crimes.
Vladimir Mekler has been a member of the Moscow City Bar since 1980. From 2003 to 2010, he was also the Vice Chairman of
the Presidium of the Moscow City Bar Association. Vladimir graduated from Lomonosov Moscow State University.
Mark Kurtser
Member of Russian Academy of Sciences, CEO and Member of the Board of Directors
Mark Kurtser is the founder of MD Medical Group, CEO and a member of the Board of Directors.
Mr Kurtser began his career at the Department of Obstetrics and Gynecology of Pirogov Russian National Research Medical
University, where he went from assistant to associate professor of the Department. From 1994 to 2012, he headed the Centre
for Family Planning and Reproduction, the largest state hospital with focus on OBGNY in Moscow. From 2003 to 2013, Mark
Kurtser was the Chief Obstetrician-Gynecologist of the Moscow Healthcare Department.
Mark Kurtser continues to be actively involved in the activities of the Group as the company CEO and practicing physician.
Vitaly Ustimenko
Independent Member of the Board of Directors
Vitaly Ustimenko was elected to the Board of Directors in February 2015.
From 2012 to 2016, Vitaly Ustimenko was the Chief Financial Officer of the Group. Vitaly has 20 years of experience in the
field of finance and investment, including eight years as a CFO. He worked in such companies as Inventure Partners fund,
Страница 20 из 132
Solnechnye Producty, Russian Helicopters and Deloitte. Vitaly is currently the CFO of Skillbox, an online education company in
Russia.
Mr Ustimenko holds a bachelor’s degree from the Financial University under the Government of the Russian Federation and a
PhD in Finance from the State University of Management.
Tatiana Lukina
Independent Member of the Board of Directors
Tatiana Lukina was appointed as an independent non-executive director in December 2019, bringing to the Group 19 years of
experience in finance, business restructuring and project management across a wide range of industries.
Tatiana's career began at KPMG, where she spent 10 years participating and leading projects in the areas of audit, capital
market transactions (IPO, SPO, and Eurobonds), debt restructuring of the largest Russian companies, and M&A services in
different countries. After that, Tatiana worked in the Portfolio Asset Management Department at ALFA Group, representing
shareholders’ interests on boards and committees of ALFA bank (Russia, Ukraine, and Kazakhstan) and Rosvodokanal. In
2015–2016, Tatiana, as a co-leader of financial function, took part in the preparation for the IPO at OZON.ru, the leading online
retailer in Russia. From 2016 to 2020, Ms Lukina worked as the CFO at GAME INSIGHT, a global developer of mobile games.
From 2020–2022 Tatiana worked as the CFO of Dyninno, a group of companies providing products and services in the travel,
finance, entertainment, and technology sectors in 50 countries. Since November 2022, Ms Lukina has been working as the
CEO of a multi-Family office in the Middle East.
Ms Lukina graduated with honours from the Financial University under the Government of the Russian Federation with a
degree in Finance, Business Valuation and Reorganisation Management and then obtained a PhD degree there. Since 2006,
Tatiana has been a member of the Association of Certified Chartered Accountants (ACCA) in the UK, and successfully passed
exams for obtaining the Russian Audit Licence.
Sergey Kalugin
Independent Member of the Board of Directors
Sergey Kalugin was appointed as an independent director in March 2022.
Mr Kalugin has extensive experience in organising the digital transformation of companies. From 2017 to 2018, he was the
Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation, where he oversaw areas
related to Smart City and Digital Health. From 2013 to 2017, he was the President of PJSC Rostelecom, where he upgraded
the infrastructure, improved the quality of customer service and adopted a new strategy that launched the company's digital
transformation.
Sergey Kalugin graduated from Lomonosov Moscow State University with a degree in Economics.
Simon Rowlands
Ex. Senior Independent Member of the Board of Directors
Simon Rowlands was appointed as an independent non-executive director in 2012. In March 2022, Mr Rowlands decided to
step down as a member of the Company's Board of Directors.
Kirill Dmitriev
Ex. Member of the Board of Directors
Kirill Dmitriev was elected to the Board of Directors in October 2012. In March 2022, Mr Dmitriev decided to step down as a
member of the Company's Board of Directors.
Страница 21 из 132
Report of the Board of Directors
27 agenda items were discussed in 2022
11 Board meetings held in 2022
Participation of the Directors in the Board meetings during 2022
Board Member
Vladimir Mekler
Mark Kurtser
Vitaly Ustimenko
Tatyana Lukina
Sergey Kalugin
Kirill Dmitriev
Simon Rowlands
Number of Board meetings attended
via phone
1
Number of Board meetings attended
in person
4
1
-
1
-
1
1
10
4
3
4
-
-
Remuneration paid to Members of the Board in 2022
Board Member total amount paid
Sergey Kalugin
Vitaly Ustimenko
Tatyana Lukina
Board Member total amount paid (before taxes)
RUB 4,000,000
RUB 944,000
RUB 944,000
Corporate Governance Report
At MD Medical Group, we clearly understand that there is a direct link between best corporate governance practices and
successful performance of a company. The Board of Directors aims to maintain the highest standards in its engagement with
all stakeholders.
Corporate governance and control structure
General Meeting of Shareholders
Board of Directors
CEO
Board Committees
Audit
Nomination
Remuneration
Internal auditor reports to Audit Committee
Since the IPO in London, the Company has fully complied with the UK Corporate Governance Code. It established a
Remuneration Committee, an Audit Committee and a Nomination Committee with formally delegated duties and responsibilities
and written terms of reference.
All Committees perform their duties on behalf of the Board of Directors, which is responsible for constituting, assigning, co-
opting and setting the terms of service for the Committee members.
Страница 22 из 132
Composition of Board Committees
Name
Vladimir Mekler
Mark Kurtser
Vitaly Ustimenko
Tatiana Lukina
Sergey Kalugin
Audit Committee
Status
Independent
Executive Director
Non-Executive
Independent
Independent
Non-Executive
Independent
Non-Executive
Non-Executive
Audit Committee
Nomination
Committee
Chairman
■
Remuneration
Committee
■
■
■
Chairman
■
■
Chairman
The Audit Committee comprises three independent non-executive directors. The Audit Committee is chaired by Tatyana
Lukina, an independent non-executive director, with Vitaly Ustimenko and Sergey Kalugin as other members.
The Audit Committee meets at least four times a year and is responsible for considering:
Reliability and appropriateness of disclosures in the financial statements and external financial communication
Maintenance of an effective system of internal controls including financial, operational and compliance controls and
risk management system
Preparation of recommendations to the shareholders for approval in general meetings in relation to the appointment,
reappointment and removal of the external auditors
Approval of the remuneration and terms of engagement of the external auditors in respect of audit services provided
Audit process, including the monitoring and the review of the external auditors’ performance, independence and
objectivity
Development and implementation of a policy on non-audit services provided by external auditors
Monitoring compliance with laws and regulations and standard of corporate governance
The Audit Committee assists the Board of Directors in overseeing and directing the work of internal audit. Where the Audit
Committee identifies problems or opportunities for improvement through monitoring and performance reviews, it shall make
recommendation to the Board of Directors the actions needed to address the problems or make improvements.
Nomination Committee
The Nomination Committee comprises one executive and two non-executive directors, one of whom is independent. The
Nomination Committee is chaired by a non-executive director, Vladimir Mekler. The other members of the Nomination
Committee are a non-executive director, Sergey Kalugin6, and an executive director, Mark Kurtser.
The Nomination Committee meets at least once a year and is responsible for assisting the Board of Directors in fulfilling its
corporate governance responsibilities in relation to the appointment of all executive and non-executive directors, as well as the
Chief Operating Officer (CEO), First Deputy CEO and Chief Financial Officer of the Company.
The main objective of the Nomination Committee is to manage the process of appointing members of theBoard of Directors
and presenting respective recommendations to the Board of Directors, ensuring a balanced composition of the Board of
Directors and the necessary qualifications of its members.
The Nomination Committee also considers the composition of the Audit and Remuneration Committees.
Remuneration Committee
The Remuneration Committee comprises two non-executive directors and one executive director. The Remuneration
Committee is chaired by an independent non-executive director, Sergey Kalugin. The two other members are Mark Kurtser and
Vladimir Mekler.
6 In March 2022, Sergey Kalugin was elected to the Nomination Committee.
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The Remuneration Committee meets at least once a year and is responsible for assisting the Board of Directors in fulfilling its
corporate governance responsibilities in relation to remuneration of all executive directors and the Chairman of the Board of
Directors.
The main objective of the Remuneration Committee is to determine the framework and policy of the remuneration of the
executive directors, the Chairman of the Board of Directors and senior executives, and the specific remuneration of each
executive director and the Chairman of the Board of Directors and any compensation payments.
Internal Auditor
The Audit Committee is responsible for monitoring and reviewing the effectiveness of the Company’s internal audit service. In
this respect, the Audit Committee may require or on behalf of the Head of Internal Audit to conduct investigations into any
activities of the Group that may be of interest or concern to the Audit Committee.
The Company’s internal auditor is responsible for recommending an audit plan to the Audit Committee. The internal auditor
carries out auditing assignments in accordance with this plan and oversees the Company’s compliance with the plan
recommendations. The internal auditor files a quarterly report to the Audit Committee on its findings.
Risk management
The Board of Directors of MD Medical Group carefully identifies and manages key potential risks to ensure the long-term
sustainable development of the business. We are continuously improving our risk management systems, which enables us to
quickly identify potential risks to our operations and find the most efficient ways to mitigate them.
Risk overview
Reputation risk
Risk management
Key results in 2022
Risks of dissemination in the
Monitoring information about the
media of information
discrediting the image of the
Group, disclosure of
confidential business
information
Risks of dissemination in the
mass media of information
concerning personal data of
patients
Likelihood: Moderate
Impact: Moderate
Risks related to government regulation
Introduction of new
requirements, including
licences and permits
Possible changes in the
regulation of the Mandatory
Health Insurance (MHI)
programme
Likelihood: Low
Impact: Low
Group in the media
Updating information sources
Launching new system controls
Improving personal information
protection methods on a
continuous basis
Maintaining constructive
relations with the government at
both the federal and regional
level
Participating in a variety of
public committees on relevant
health issues
Supporting the authorities and
providing expert advice on
relevant laws
Monitoring changes in
requirements of state regulators
regarding the accounting
treatment for medical equipment
and medicine turnover
We have improved the personal
data protection system by
increasing the share of internal
electronic document
management, with external
contractors, patients and
government regulators
We have strengthened the work
of the call centre by optimising
its headcount, providing
continuous training and
establishing key performance
indicators for our staff
We have introduced unified
electronic forms of information
on the treatment of patients
We have strengthened the
control over the registration of
narcotic and psychotropic drugs
We have ensured the safety of
patients' personal data by
encrypting the information in
accordance with the law
We have equipped our medical
facilities and server storages
with equipment that protects
against network attacks in
accordance with the law
Страница 24 из 132
Risk overview
Risks associated with the quality of services
Risk management
Key results in 2022
Inconsistency of the quality
of services offered to our
patients with the established
requirements and standards
Likelihood: Low
Impact: Moderate
Running the system for
We have optimised the
selecting the most modern and
advanced equipment, medicines
and medical supplies
Holding seminars and scientific
conferences for doctors
Assessing the performance of
medical personnel
methodology for recording
laboratory tests, which has
significantly increased the
accuracy and speed of data
processing
We have established a full-
fledged exchange of information
about patients obtained through
telemedicine
We have improved our system
of work with patients, including
conducting mass surveys and
questionnaires
Macroeconomic risk
Deterioration of
macroeconomic factors
Decrease in the overall
standard of living with a
corresponding change in the
behaviour of customers
Likelihood: Moderate
Impact: Moderate
Investment project execution risk
Long payback period and low
level of return on investment
of new facilities due to a
certain lack of reliable
information about the
potential number of patients
in a particular region
Likelihood: Moderate
Impact: Moderate
Recruitment risk
Inability to attract or retain
highly qualified personnel in
the Group
Lack of IT specialists in the
market
Likelihood: Low
Impact: Low
Adjusting the Group's strategy
We have monitored trends in the
and financial model
Revising investment plans
Prioritising regions where we
already have presence and/or
the largest regions of Russia,
where we can have a higher
degree of certainty about the
local market
Exercising budget control of
implementation expenses;
Conducting tender procedures
Conducting post-investment
analysis
Making indexation of wages
Conducting on-the-job training
for employees in Moscow for
new employees in the regions
Cooperating with heads of
departments of leading
universities in the search of
talented personnel
Russian economy with an
assessment of the potential
impact on the business. Our
strategy is designed to enable
us to adapt to changes in the
general economic environment
as necessary
We have successfully opened
new hospitals and clinics,
expanding our presence
We have increased the number
of patients receiving treatment
under the government-funding
programme
We have increased the number
of contracts with insurance
companies
We have improved the quality of
the recruitment process, as well
as working conditions and
communication within the Group
We have opened MGIMO-Med
as the future base of our
personnel
Страница 25 из 132
Risk overview
Control and efficiency risk
Risk management
Key results in 2022
Risk is closely related to the
Constantly developing
size of the business, which
was increased in 2022
Likelihood: Moderate
Impact: Moderate
mechanisms for improving the
effectiveness of control over all
processes (budgeting, financial
control, treasury, accounting,
procurement, legal support,
personnel management,
security and IT, HR) in medical
facilities
Risks associated with lack of medicines and equipment
Shortage of medicines,
vaccines, specific equipment,
and spare parts
Inability to repair or support
network equipment, including
servers, network medical
equipment, etc.
Searching for alternative
suppliers of medicines
Creating stocks of vaccines and
medicines
Implementing information
systems for data processing and
storage on the Group’s servers
Likelihood: Moderate
Impact: Moderate
We have implemented ERP
system, thanks to which we
have increased the efficiency of
data collection and optimised
business processes
We have analysed market and
procured medicines of
appropriate quality through
alternative suppliers
We have created stocks of
vaccines and medicines taking
into account their expiration date
and turnover
We have started to implement
information systems for
processing and storing the
results of X-ray examinations
(CT, MRI) on our servers
Management Board
Changes in Group’s Management Board in 2022
In 2022, Chief Operating Officer Elena Balashova and Chief Financial Officer Iya Lukyanova were added to the Management
Board. First Deputy CEO Alexander Kotov and Head of clinical hospitals Natalia Butkevich joined the Management Board,
replacing respectively Andrey Khoperskiy (step down as a member of the Company's Management Board) and Georgy
Shebaev (left the Group).
Composition of the Management Board7
Name
Mark Kurtser
Alexander Kotov
Iya Lukyanova
Elena Balashova
Position
CEO and Member of the Board of Directors
First Deputy CEO
Chief Financial Officer
Chief Operating Officer
Medical Director for Organisational and Scientific-
educational work
Sergey Arabadzhyan Medical Director for Technology Innovation
Medical Director, Head of clinical hospitals
Natalia Butkevich
Medical Director, Head of out-patient clinics
Natalia Yakunina
General Director of Lapino Medical Cluster
Boris Konoplev
Yulia Kutakova
Joined
Founder
2022
2015
2019
2012
2010
2018
2011
2010
Background
Medicine
Government relations
Finance
Procurement management
Medicine
Medicine
Medicine
Medicine
Medicine
Dr Mark Kurtser
Member of the Russian Academy of Sciences, CEO and member of the Board of Directors
Dr Mark Kurtser is the founder of MD Medical Group, CEO, and a member of the Board of Directors. Dr Kurtser began his
career as a graduate assistant to the associate professor at the Obstetrics and Gynaecology Department of Pirogov Medical
7 As of publication date.
Страница 26 из 132
University. From 1994 to 2012, he was the Head of the Centre for Family Planning and Reproduction, the largest public
obstetrics hospital in Moscow.
From 2003 to 2013, Dr Kurtser was the Chief Obstetrician and Gynaecologist of the City of Moscow. He holds a degree in
Medicine from Pirogov Medical University in addition to a postdoctoral degree in Medicine. Dr Kurtser remains actively involved
in the Group’s healthcare practice and day-to-day operations.
Alexander Kotov
First Deputy CEO
Alexander Kotov joined the Group in 2022 as the First Deputy CEO, where he is responsible for personnel management, legal
issues and interaction with government authorities, as well as ensuring the security of MD Medical Group operations. Prior to
joining the Group, Alexander held senior positions in government bodies.
Alexander graduated from Kutafin Moscow State Law University with a degree in Jurisprudence, and was also qualified as an
adviser in social management and personnel work at the Russian Presidential Academy of National Economy and Public
Administration. Alexander also holds a PhD in Pedagogy.
Iya Lukyanova
Chief Financial Officer
Iya Lukyanova joined the Group in 2015 as the Chief Accountant, where she oversaw the financial issues and projects on
automation and digital transformation. In 2019, Iya appointed Deputy CFO, where she oversaw the financial direction and
projects on automation and digital transformation of the Company. Since 2022, she has been holding the position of Chief
Financial Officer, where she is responsible for financial, corporate, legal and IR areas of MD Medical Group. Prior to joining the
Group, Iya worked as a financial manager at SG Records Management.
Iya Lukyanova graduated from Saratov Socio-Economic Institute with a degree in Finance and Credit, a member of self-
regulatory organisation of auditors Non-Profit Partnership “Auditor Association Sodruzhestvo”.
Elena Balashova
Chief Operating Officer
Elena Balashova joined the Group in 2019 as the Director of Procurement. Since 2022, she has been holding the position of
Chief Operating Officer, where she is responsible for procurement, information technology, marketing and advertising, design
and construction of medical facilities, as well as the operation of medical and engineering equipment and other systems.
Before joining the Group, Elena worked in senior positions at ERKAFARM, EVRAZ, BTK Group, as well as Head of the
Department for ensuring medical organisations of the Moscow Healthcare Department.
Elena Balashova graduated from Ryazan State Radio Engineering University with a degree in Computer-Aided Design
Systems. In 2015, she received an MBA degree from Moscow International Higher Business School (MIRBIS).
Dr Yulia Kutakova
PhD – Medical Director for Organisational and Scientific-Educational Work
Dr Yulia Kutakova joined the Group in 2012. She has over 11 years of practice experience in obstetrics and gynaecology.
Before joining the Group, Dr Kutakova was the Chief of Maternity in the Organisational and Tutorial Department of Public
Healthcare of the City of Moscow.
Dr Kutakova holds a degree in medicine from Pirogov Medical University, a degree in management from the Moscow Institute
of Management and a PhD in medical science.
Dr Sergey Arabadzhyan
PhD, Assoc. Prof. – Medical Director for Technology Innovation
Dr Arabadzhyan joined the Group in 2010. Until 2012 – a doctor of the Pregnancy Pathology Department at MD Group
hospital. From 2012 to 2014, Dr Arabadzhyan worked as the Commercial Director and from 2012 to 2018 was the Head of the
Obstetric Physiological Department of the Lapino-1 clinical hospital. From 2018 to 2020, he held the position of Chief Physician
of the IDK Mother and Child Hospital in Samara. He was appointed to the position of Medical Director for Innovative
Technologies of MD Medical Group in 2020.
Mr Arabadzhyan graduated from Pirogov Russian National Research Medical University. A practicing physician, he holds a
PhD in Medicine, is an Assoc. Prof. at the Department of Reproductive Medicine, Clinical Embryology and Genetics of Samara
State Medical University.
Страница 27 из 132
Dr Natalia Butkevich
PhD – Medical Director, Head of clinical hospitals
Dr Natalia Butkevich joined the Group in 2018 as the Head of the Department of Medical Prevention for Adults. From 2018 to
2022, she was the Head of the Out-patient Treatment Department, as well as the Deputy Director of clinical hospitals of
MD Medical Group. In 2022, she was appointed the Medical Director and the Head of clinical hospitals of MD Medical Group.
Dr Butkevich graduated from Pirogov Russian National Research Medical University. Practicing physician, she holds a PhD in
Medicine, Honoured Doctor of the Russian Federation. Natalia Butkevich has more than 40 years of experience in medicine.
Dr Natalia Yakunina
PhD, Medical Director, Head of out-patient clinics, General Director of clinical hospital in Ufa
Natalia joined the Group in 2011 as the Chief Doctor of MD Yugo-Zapad clinic in Moscow. From 2012 to 2014, Dr Yakunina
was the Head of the OBGYN Out-patient Department at MD Group hospital. From 2014 to 2016, she worked as the Chief
Doctor and CEO of MD Savelovskaya clinic in Moscow. Since 2016, she has been holding the position of the Head of out-
patient clinics in the Group. In 2021, she was also appointed General Director of clinical hospital in Ufa.
Before joining the Group, Dr Yakunina was the Chief Obstetrician and Gynaecologist of the Central District of Moscow.
Dr Yakunina has more than 30 years of experience in medicine. She graduated from Turkmen State Medical University with a
degree in General Medicine and also holds a PhD degree.
Dr Boris Konoplev
Medical Director, General Director of Lapino Medical Cluster
Dr Boris Konoplev joined the Group in 2010 as an obstetrician-gynecologist at MD Group hospital. From 2012 to 2014, he was
the Head of the Obstetrics Department of Lapino hospital. From 2014 to 2017, Boris was the Chief Doctor of clinical hospital in
Ufa. In 2017, he was appointed as the Deputy Chief Doctor of MD Group Hospital and the Head of clinical hospitals in the
Group. Since 2021, he has been CEO of Lapino Medical Cluster.
Dr Konoplev graduated from the Pediatric Faculty of Pirogov Medical University. Boris is a practicing obstetrician-gynecologist
and has received extensive training in leading European clinics.
Shareholder and Dividend Report
Structure of shareholders’ equity
MD Medical Group has 75,125,010 ordinary shares with a nominal value of RUB 2.4 each. As of 31 December 2022,
the authorised capital of MD Medical Group Plc amounted to RUB 180,585,000.
Since October 2012, MD Medical Group’s shares have been listed on the London Stock Exchange8 (LSE) under the ticker
MDMG in the form of Global Depositary Receipts (GDRs). Each GDR represents an interest in one ordinary share of the
Company. Currently, the LSE has suspended the admission to trading of the Company's GDRs listed in the London Stock
Exchange.
Since November 2020, the Company's GDRs have also been traded on the Moscow Exchange (MOEX) in the first listing level.
The quotation is done in Russian roubles. As at the end of 2022, Group’s market capitalisation was RUB 31,845 mln on the
MOEX.
MD Medical Group has a free float of approximately 32.1%, with the remaining 67.9% owned by MD Medical Holding Limited,
which is beneficially owned by Mark Kurtser. The investor portfolio is represented by a number of global institutional investors.
8 Due to recent sanctions related to events in Ukraine as well as the current market environment, the London Stock Exchange
has suspended the listing of the Company’s GDRs in order to maintain market stability.
Страница 28 из 132
Top 7 Institutional Holders
Name
Number of
shares as of
31.12.2022
Percentage of
shares
outstanding, %
Number of
shares as of
31.12.2021
Percentage of
shares
outstanding, %
Russia Partners Advisors
Norges Bank Investment Management
East Сapital Financial Services AB
Prosperity Capital Management Ltd.
(Russia)
JP Morgan Asset Management (UK) ltd.
Holberg Fondsforvaltning AS
Handelsbanken Fonder AB
3,235,000
2,737,843
1,350,479
1,002,565
798,394
240,000
163,393
4.3
3.6
1.8
1.3
1.1
0.3
0.2
3,235,000
3,037,606
1,338,479
995,809
798,394
240,000
163,393
4.3
4.0
1.8
1.3
1.1
0.3
0.2
Dividends and Dividend taxation
MD Medical Group has been adhering to its unofficial dividend policy to pay out at least 50% of a year’s net profit as dividends.
On 26 October 2022, the Board of Directors approved the payment of an interim dividend in the amount of RUB 8.5 on the
ordinary share / GDR of MD Medical Group which corresponds to the total payment of RUB 642 mln, based on the results
of six months of 2022. On 29 November 2022, MD Medical Group made dividend payment on its GDRs following the results of
six months of 2022.
MD Medical Group’s dividend history
Dividend
approval
Record date
Payout date
Total
dividends, RUB
Dividends per
‘000
GDR, RUB
2018
2019
H1 2020
2020
H1 2021
H1 2022
23.04.2019
03.09.2020
04.09.2020
22.04.2021
06.09.2021
26.10.2022
24.05.2019
25.06.2019
800,081
10.65
16.09.2020
13.10.2020
1,389,813
18.5
18.09.2020
20.10.2020
736,225
9.8
05.05.2021
25.05.2021
1,427,375
19
24.09.2021
26.10.2021
1,352,250
18
07.11.2022
29.11.2022
642,319
8.55
Since 1 January 2015, all Group`s companies have been a Russian tax resident and pays dividends in line with the Russian
Tax Code, according to which dividends paid by Russian companies are generally subject to a tax rate of 15%. A reduced rate
may be applied in the case of Russian tax residents and residents of foreign jurisdictions whose Governments have signed a
double taxation treaty (DTT) with the Government of Russia. MD Medical Group acts as a tax agent and withholds tax in order
to transfer it to the Russian tax authorities when paying dividends.
Investor relations
MD Medical Group regards investor relations as an important priority and have focused on maintaining a continued active
dialogue with the investment community since its successful listing on the London Stock Exchange9 in 2012.
MD Medical Group rigorously adheres to best practices in terms of openness and transparency of its activities for investors and
analysts. The Company uses various formats of interaction with investment community, including publication press releases on
operational and financial results, conference calls, organisation of road shows and site visits, and participation in investment
conferences and other events.
9 Due to recent sanctions related to events in Ukraine as well as the current market environment, the London Stock Exchange
has suspended the listing of the Company’s GDRs in order to maintain market stability.
Страница 29 из 132
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
MD MEDICAL GROUP INVESTMENTS PLC
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2022
OFFICERS, PROFESSIONAL ADVISORS AND REGISTERED OFFICE
Board of Directors
Vladimir Mekler – Chairman
Mark Kurtser
Vitaly Ustimenko
Tatiana Lukina
Sergey Kalugin (appointed on 2 March 2022)
Secretary
Menustrust Limited
Secretary assistant
Darya Aleksandrova
Independent Auditors
JSC “Kept”
Registered Office
15 Dimitriou Karatasou street, Anastasio Building,
6th floor, office 601, Strovolos,
2024, Nicosia, Cyprus
The Board of Directors of MD Medical Group Investments Plc (the “Company”) presents to the members its Annual Report
together with the audited consolidated financial statements of the Company and its subsidiary companies (the Company and its
subsidiaries together referred to as the “Group”) for the year ended 31 December 2022.
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Management report
Incorporation
MD Medical Group Investments Plc was incorporated in Cyprus on 5 August 2010 as a private limited liability company. On 22
August 2012 following special resolution passed by the shareholder, the name of the Company was changed from “MD
Medical Group Investments Ltd” to “MD Medical Group Investments Plc” and the Company was converted into a public limited
liability company.
Principal activity
The principal activity of the Company is that of an investment holding company and, for that purpose, to acquire and hold
controlling and other interests in the share or loan capital of any company or companies of any nature, but primarily in the
healthcare industry. Note 4 to these consolidated financial statements gives more detailed information about the service
provided by the Group`s medical centres.
Financial results
The Group’s results of operations are affected by a number of factors, including acquisitions, regulatory conditions, demand for
private healthcare services, patient capacity and utilisation rate, pricing and volume, staff costs, capital expenditure
programmes and currency exchange fluctuations.
The Group's financial results for the year ended 31 December 2022 and its financial position at that date are set out in the
consolidated statement of profit or loss and other comprehensive income on page 40-41 and in the consolidated statement of
financial position on page 41 of these consolidated financial statements.
Profit for the year ended 31 December 2022 amounted to RUB 4,718,800 thousand (for the year ended 31 December 2021:
RUB 6,143,026 thousand). The total assets of the Group as at 31 December 2022 were RUB 33,162,389 thousand
(31 December 2021: RUB 34,282,277 thousand) and the net assets were RUB 26,963,262 thousand (31 December 2021:
RUB 23,097,192 thousand).
Dividends
In accordance with the Company’s Articles of Association dividends may be paid out of its profits. To the extent that the
Company declares and pays dividends, owners of GDRs on the relevant record date will be entitled to receive dividends in
respect of ordinary shares underlying the GDRs.
The Company is a holding company and thus its ability to pay dividends depends on the ability of its subsidiaries to pay
dividends to the Company in accordance with relevant legislation in the country of their incorporation and any contractual
restrictions. The payment of such dividends by its subsidiaries is contingent upon the sufficiency of their earnings, cash flows
and distributable reserves.
On 26 October 2022 the Board of Directors recommended the payment of RUB 642,319 thousand as interim dividends which
corresponds to RUB 8.55 per share. The dividends were paid on 29 November 2022.
On 3 September 2021 the Board of Directors recommended the payment of RUB 1,352,249 thousand as interim dividends
which corresponds to RUB 18 per share. The dividends were paid on 26 October 2021.
On 19 March 2021 Board of Directors recommended the payment of RUB 1,427,375 thousand as final dividends for the year
2020 which corresponds to RUB 19 per share. The dividends were paid on 25 May 2021.
Examination of the development, position and performance of the activities of the group
The current financial position and performance of the Group as presented in these consolidated financial statements is
considered satisfactory.
The Group has developed its growth strategy to meet the increasing demand for high-quality private healthcare services in
Russia. The Group has grown significantly through strategic acquisitions and expansion through the construction of new
facilities.
The Group has one of the largest nationwide private healthcare regional networks for its core services and is expanding into
new services. It has significant experience in the provision of full-service private maternity healthcare services. The Group has
secured leading positions in the Russian private healthcare market across a range of services including obstetrics and
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gynaecology, fertility and IVF treatments, and paediatrics. It has also been diversifying its offering by adding other medical
services for all family members, such as surgery, urology, traumatology, cardiology, and oncology, etc. The recently opened
facilities have been multidisciplinary from the very beginning.
The Group’s principal objective is to use its strong existing platform and experience in the regions to create a scalable concept
of establishing new regional hospitals and other medical facilities, utilising rigorous investment decision-making process and
targeting the most attractive regions and ensuring seamless execution.
The Group believes the experience, depth and diversity of its management team to be a distinct competitive advantage in the
complex and rapidly growing healthcare industry in which it operates.
Principal risks and uncertainties
The Group operates in a highly regulated industry and is a subject to supervision by federal and local authorities. As a result,
the Group would be significantly affected by material changes to the existing, or implementation of additional government
regulations in Russia.
The Board of Directors has the overall responsibility for the establishment and supervision of the Company's risk management
framework.
Details in relation to principal risks and uncertainties and steps taken to manage these risks and uncertainties are presented in
Notes 23 and 25 of these consolidated financial statements.
The reputation, expertise and professionalism of the Group’s medical personnel are instrumental to the Group’s ability to attract
new and repeat patients. The Group’s operating success depends on its medical personnel providing high-quality healthcare
services throughout the Group’s medical network.
Directors' interest
The direct and indirect interests of the members of the Board in titles of the Company as at 31 December 2022, 31 December
2021 and as at the date of signing these consolidated financial statements are as follows:
Name
Mark Kurtser
Kirill Dmitriev (resigned on 5 March 2022)
Simon Rowlands (resigned on 9 March 2022)
Vitaly Ustimenko
Type of interest
Indirect ownership of shares
Indirect interest in shares
Direct ownership of shares
Direct ownership of shares
Effective interest %
67.90
5.55
0.33
0.005
Indirect interest in shares by Kirill Dmitriev arises through his capacity as key management personnel of indirect shareholder.
Member of the Board of Directors Vitaly Ustimenko acquired GDRs on 27 May 2022 and 29 June 2022, as a result the share of
his ownership increased from 0.0053% to 0.0054% of the Сompany's share capital.
The calculation of effective interest is based on the total amount of issued and fully paid shares, including treasury shares
acquired by the Company.
Future developments
The Group’s goal is to continually diversify its medical services by expanding its range of services, maintaining its leading
position in the field of high-quality women’s health and paediatrics, as well as addressing the increasing demand for private
healthcare services in Russia and beyond.
As the Group will be growing it intends to expand its portfolio of hospital and outpatient facilities, broaden its service offerings
by providing patients with the most up-to-date treatment procedures and medical technology available on the market, expand
its services in Moscow and other regions, exploit the value of its integrated healthcare network by making effective use of
services across its facilities, optimising the benefits for patients and the Group as a whole.
Share capital
There were no changes in the share capital of the Company during the year.
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Board of Directors
The Board of Directors leads the process in making new Board member appointments and makes recommendations on
appointments to shareholders. In accordance with the Appointment Policy for the Board of Directors and Committees, all
directors are subject to appointment or approval of appointment by shareholders at the first Annual General Meeting after their
appointment, and to re-appointment at intervals of no more than three years. Any term beyond six years (e.g. two three-year
terms) for a non-executive director is subject to particularly rigorous review, and takes into account the need for progressive
refreshing of the Board of Directors.
Sergey Kalugin was appointed as an independent director in March 2022.
Kirill Dmitriev and Africa Platforms Capital LLP (represented by Simon Rowlands) stepped down as members of the Board of
Directors on 5 March 2022 and 9 March 2022 respectively.
The members of the Board of Directors who served as at the date of signing of these consolidated financial statements, are
presented on page 30.
Refer to Note 22 of these consolidated financial statements for the remuneration of the directors and other key management
personnel.
The Board committees
Since September 2012, the Board of Directors established the operation of the following three committees: the Audit
Committee, the Nomination Committee and the Remuneration Committee.
Audit Committee
The Audit Committee comprises of three non-executive directors, two of whom are independent. The Audit Committee has
been chaired by independent non-executive director Tatiana Lukina since 6 December 2019, Mr. Kirill Dmitriev and Mr. Simon
Rowlands were the other members.
Following the resignation of Mr. Simon Rowlands and Mr. Kirill Dmitriev on 5 March 2022 and 9 March 2022, respectively,
Mr. Vitaly Ustimenko and Mr. Sergey Kalugin were appointed as other members of the audit committee on 14 March 2022.
The Audit Committee meets at least four times each year and is responsible for considering:
the reliability and appropriateness of disclosures in the financial statements and external financial communication;
the maintenance of an effective system of internal controls including financial, operational and compliance controls and
risk management system;
preparation of recommendations to the shareholders for approval in General Meetings in relation to the appointment,
reappointment and removal of the external auditors;
approval of the remuneration and terms of engagement of the external auditors in respect of audit services provided;
the audit process, including monitoring and review of the external auditors' performance, independence and objectivity;
development and implementation of the policy on non-audit services provided by the external auditors;
monitoring compliance with laws and regulations and standard of corporate governance.
The Audit Committee assists the Board of Directors in its oversight of the performance and leadership of the internal audit
activity.
Where the Audit Committee’s monitoring and review activities reveal cause for concern or scope for improvement, it shall make
recommendation to the Board of Directors on actions needed to address the issues or to make improvements.
Internal audit
The Audit Committee is responsible for monitoring and review the effectiveness of the Company’s internal audit function. In this
respect, the Audit Committee may require investigations by, or under the authority of, the head of Internal Audit into any
activities of the Group which may be of interest or concern to the Audit Committee.
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The Company`s internal auditor is responsible for the recommendation of an audit plan to the Audit Committee. The internal
auditor carries out auditing assignments in accordance with such plan and oversees the Company`s compliance with the plan`s
recommendations. The internal auditor files a quarterly report with his findings to the Audit Committee.
Nomination Committee
The Nomination Committee comprises of one executive and two non-executive directors, one of whom is independent. The
Nomination Committee is chaired by non-executive director Mr. Vladimir Mekler (since June 2016). Mr. Mark Kurtser and
Mr. Simon Rowlands were the other members. Following the resignation of Mr. Simon Rowlands on 9 March 2022, Mr. Sergey
Kalugin was appointed as other member of the audit committee on 14 March 2022.
The Nomination Committee meets at least once a year and is responsible for assisting the Board of Directors in discharging its
corporate governance responsibilities in relation to appointment of all executive and non-executive directors, as well as the
CEO and CFO of the Company. The main objective of the Nomination Committee is to lead the process for the Board of
Directors’ appointments and make respective recommendation to the Board of Directors, ensuring proper balance of the Board
of Directors and qualification of its members. The Nomination Committee also considers the composition of the Audit and
Remuneration Committees.
Remuneration Committee
The Remuneration Committee comprises of two non-executive directors and one executive director. The Remuneration
Committee was chaired by an independent non-executive director Mr. Simon Rowlands, who stepped down on 5 March 2022.
Mr. Sergey Kalugin was appointed as the chairman of the Remuneration Committee on 14 March 2022. The two other
members are Dr. Mark Kurtser and Mr. Vladimir Mekler.
The Remuneration Committee meets at least once a year and is responsible for assisting the Board of Directors in discharging
its corporate governance responsibilities in relation to remuneration of all executive directors and the chairman of the Board of
Directors. The main objective of the Remuneration Committee is to determine the framework and policy for the remuneration of
the executive directors, the chairman of the Board of Directors and senior executives, and the specific remuneration of each
executive director and the chairman of the Board of Directors and any compensation payments.
Corporate Governance
Since 2012, the Company has maintained full compliance with the UK Corporate Governance Code. The Company is
committed to the highest standards of corporate governance and transparency. The Board of Directors recognises that good
governance is a strategic asset that helps it to deliver consistent long term value to its shareholders. By running the Company
in an open way, the Board of Directors enables shareholders to understand how it has been able to deliver consistently strong
results. The Board of Directors believes that corporate responsibility is an essential part of good governance and makes sound
business sense, as well as being crucial to the appropriate management of risk within the Company.
Improving its corporate governance structure in accordance with the internationally recognised best practices the Company
adopted important policies and procedures.
The Company’s corporate governance policies and practices are designed to ensure that the Company is focused on
upholding its responsibilities to the shareholders.
The Company’s corporate governance policies and practices include, inter alia:
Appointment policy for the Board of Directors and Committees
Terms of reference of the Audit Committee, Nomination Committee and Remuneration Committee
Code of Ethics and Conduct
Business Continuity Policy
Disclosure Policy
Regulations on Insider Information
Risk Management Policy, and
Anti-Fraud Policy
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Internal control in relation to the financial reporting process
The Group has set formal policies and written term of reference in relation to the financial reporting process that include:
Corporate Accounting policy Guidelines
Methodology for the Transformation of Financial Statements from RAS to IFRS
Methodology for the Consolidation of IFRS Financial Statements
Financial Reporting Preparation Procedure
and The Group’s structure
The objective of this policу is to establish uniform procedures and to implement requirements for the preparation of the
consolidated financial statements of the Group. The procedure should be reviewed for compliance with International Financial
Reporting Standards as well as current conditions and planned changes in the Group’s business activities at least once a year.
When necessary, amendments and additions to this Procedure should be adopted.
Meetings of shareholders
The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that
year. An annual general meeting and any other shareholders’ meeting called to pass a special resolution can be convened by
the Board of Directors by a notice, specifying the matters to be discussed, issued at least 21 days before the meeting. Any
other meetings shall be convened by the Board of Directors by a notice, specifying the matters to be discussed, issued at least
14 days before the meeting. If the notice period is less than 21 days or 14 days as applicable, the meeting will be deemed to
have been duly called if it is so agreed:
in the case of a meeting called as the annual general meeting, by all the shareholders entitled to attend and vote; and
in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the
meeting, being a majority together holding not less than 95 per cent in nominal value of the shares giving that right.
A notice convening a general meeting must be sent to each of the shareholders.
All shareholders are entitled to attend the general meeting or be represented by a proxy authorised in writing. In the general
meeting, on a poll, every share gives the holder the right to cast one vote, whereas, on a show of hands, each member has
one vote. A corporate member may, by resolution of its directors or other governing body, authorise a person to act as its
representative at any meeting of the Company.
Branches
MD Medical Group Investments Plc has a branch in Moscow.
Treasury shares
During the year ended 31 December 2022 the Company did not acquire any treasury shares.
Events after the reporting period
The events after the reporting date are disclosed in Note 29 to the consolidated financial statements.
Independent auditors
The independent auditors of the Company Messrs. JSC “Kept” (formerly KPMG Limited) have expressed their willingness to
continue in office. A resolution giving authority to the Board of Directors to fix their remuneration will be submitted to the Annual
General Meeting.
By order of the Board of Directors,
Vladimir Mekler
Chairman of the Board of Directors
Mark Kurtser
Managing Director, member of the Board of Directors
Moscow, 31 March 2023
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Directors' responsibility statement
The Company's Board of Directors is responsible for the preparation of consolidated financial statements that give a true and
fair view in accordance with International Financial Reporting Standards as adopted by the European Union, and for such
internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
This responsibility includes selecting appropriate accounting policies and applying them consistently; and making accounting
estimates and judgements that are reasonable in the circumstances.
In preparing the consolidated financial statements, the Board of Directors is also 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
The Board of Directors’ confirmations
The Board of Directors confirms that, to the best of its knowledge:
a)
the consolidated financial statements, which are presented on pages 40 to 74, which have been prepared in
accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair
view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the
consolidation taken as a whole, and
b)
the management report includes a fair review of the development and performance of the business and the position of
the Company and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that it faces/they face
Further, the Board of Directors confirms that, to the best of its knowledge:
i
adequate accounting records have been maintained which disclose with reasonable accuracy the financial position of
the Group and explain its transactions
ii all information of which it is aware that is relevant to the preparation of the consolidated financial statements, such as
accounting records and all other relevant records and documentation, has been made available to the Company’s
auditors
By order of the Board of Directors,
Vladimir Mekler
Chairman of the Board of Directors
Mark Kurtser
Managing Director, member of the Board of Directors
Moscow, 31 March 2023
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Independent Auditors’ Report
To the Shareholders of MD MEDICAL GROUP INVESTMENTS PLC
Opinion
We have audited the consolidated financial statements of MD MEDICAL GROUP INVESTMENTS PLC (the “Company”) and its
subsidiaries (the “Group”), which comprise the consolidated statement of financial position as at 31 December 2022, the
consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then
ended, and notes, comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Group as at 31 December 2022, and its consolidated financial performance and its consolidated cash
flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European
Union (IFRS-EU).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section
of our report. We are independent of the Group in accordance with the independence requirements that are relevant to our
audit of the consolidated financial statements in the Russian Federation and with the International Ethics Standards Board for
Accountants International Code of Ethics for Professional Accountants (including International Independence Standards)
(IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the requirements in the Russian
Federation and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Impairment of goodwill and property, plant and equipment
the year,
the Group
Please refer to the Note 13 and 14 in the consolidated financial statements.
The key audit matter
During
recognized an
impairment of the property, plant and equipment of
one of its cash generating units (the “CGUs”) in the
amount of RUB 1,000,015 thousand as well as an
impairment of goodwill relating to another CGU in
the amount of RUB 201,034 thousand.
-
-
How the matter was addressed in our audit
Our audit procedures included:
assessment of whether the CGUs were appropriately
determined and evaluation of the methodology applied by
management in impairment testing
assessment of appropriateness of key inputs used and
assumptions applied in forming the discounted cash flows’
models, such as estimated revenue and profitability growth,
by comparing them to historical results and critically
challenging the forecasted amounts
We consider the issue as a key audit matter due to
inherent estimation uncertainty in forecasting future
cash flows which form the basis for the assessment
of recoverability and significant management
judgement involved in determination of the
recoverable amount.
We involved our own valuation specialists to assist us in evaluating
the appropriateness of the weighted-average cost of capital (discount
rate), CAPEX in post-projection period, long-term growth rate, length
of the projection period.
We also assessed the completeness and consistency of the
disclosures in the consolidated financial statements in relation to this
matter.
Revenue recognition
Please refer to the Note 4 in the consolidated financial statements.
The key audit matter
Revenue is a material amount consisting of a high
volume of individually low value transactions. The
How the matter was addressed in our audit
Our audit procedures in this area included, among others, the
following ones.
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Group uses special Medialog system to calculate
revenue, where revenue data is automatically
transferred therefrom to the accounting system.
Thus, the Group relies on results of operations
of these systems.
The most significant risks of revenue misstatement
arise due to potential incorrect data on volume and
value of the services provided.
We tested general IT controls and application-level controls relevant
to revenue recognition. We involved our Information risk
management specialists, who assisted us in performing the following
procedures:
-
-
-
to test users’ and administrators’ access rights and
password setting controls in Medialog
to test Medialog’s automatic links of tickets issued for the
provision of services to invoices and payments, including the
function to link tickets to a particular service contract
to test that revenue data is accurately transferred from
Medialog to the accounting system
We reconciled Medialog data to accounting ledgers. Further we
reconciled the recognized revenue adjusted for the balances of
settlements with customers at the beginning and the end of the
reporting period, with the amounts of payments recorded in the
accounting system; and reconciled the amounts of payments
received from customers with external bank confirmations. We also
obtained confirmation letters from debtors (legal entities) on a
sample basis to confirm balances and turnover.
In addition, we analyzed the revenue structure, its’ key trends and
correlations.
Other Information
Management is responsible for the other information. The other information comprises the Management Report, the Directors’
Responsibility Statement and the Annual Report, but does not include the consolidated financial statements and our auditors’
report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
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 in this regard.
Responsibilities of Management and Those Charged with Governance for the consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with IFRS-EU, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is 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 management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
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As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
internal control
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a
going concern
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditors’ report is:
Koliadko E.G.
Principal registration number of the entry in the Register of Auditors and Audit organizations No. 22006023423, acts on behalf
of the audit organization based on the power of attorney No. 3/23 as of 17 February 2023
JSC “Kept”
Principal registration number of the entry in the Register of Auditors and Audit Organizations No. 12006020351
Moscow, Russia
31 March 2023
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Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2022
Note
4
5
8
6
13, 14
8
9
9
9
9
10
Revenue
Cost of sales
Gross profit
Other income
Selling, general and administrative expenses
Impairment loss
Other expenses
Operating profit
Finance income
Finance expenses
Net foreign exchange transactions loss
Net finance expenses
Profit before tax
Income tax expense
Profit for the year
Total comprehensive income for the year
Profit for the year attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income for the year
attributable to:
Owners of the Company
Non-controlling interests
Earnings per share (RUB)
11
2022
RUB'000
25,222,056
(15,428,617)
9,793,439
36,141
(3,513,145)
(1,286,574)
(60,510)
4,969,351
355,825
(494,039)
(104,751)
(242,965)
4,726,386
(7,586)
4,718,800
4,718,800
4,560,217
158,583
4,718,800
4,560,217
158,583
4,718,800
60.70
The Notes on pages 46 to 74 are an integral part of these consolidated financial statements.
2021
RUB'000
25,219,683
(15,231,775)
9,987,908
104,424
(3,402,362)
-
(68,007)
6,621,963
93,683
(549,361)
(8,017)
(463,695)
6,158,268
(15,242)
6,143,026
6,143,026
6,003,486
139,540
6,143,026
6,003,486
139,540
6,143,026
79.91
Страница 40 из 132
Consolidated statement of financial position
As at 31 December 2022
Note
31 December 2022
RUB'000
31 December 2021
RUB'000
ASSETS
Property, plant and equipment
Intangible assets
Trade, other receivables and deferred expenses
Deferred tax assets
Total non-current assets
Inventories
Trade, other receivables and deferred expenses
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Share capital
Share premium
Reserves
Retained earnings
Total equity attributable to the owners of the Company
Non-controlling interests
Total equity
LIABILITIES
Loans and borrowings
Trade and other payables
Deferred tax liabilities
Contract liabilities
Total non-current liabilities
Loans and borrowings
Trade and other payables
Contract liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
13
14
15
15
16
17
18
18
18
26
19
21
20
19
21
20
24,527,917
1,959,819
87,928
-
26,575,664
1,212,154
911,831
4,462,740
6,586,725
33,162,389
180,585
5,243,319
(655,352)
21,982,033
26,750,585
212,677
26,963,262
489,200
729,173
-
468,505
1,686,878
106,426
2,822,399
1,583,424
4,512,249
6,199,127
33,162,389
26,070,398
2,141,945
339,909
4,300
28,556,552
1,164,761
971,341
3,589,623
5,725,725
34,282,277
180,585
5,243,319
(655,352)
18,064,135
22,832,687
264,505
23,097,192
3,726,707
624,808
6,234
460,420
4,818,169
1,786,326
3,010,232
1,570,358
6,366,916
11,185,085
34,282,277
The Notes on pages 46 to 74 are an integral part of these consolidated financial statements.
On 31 March 2023 the Board of Directors of MD Medical Group Investments Plc approved and authorised these consolidated
financial statements for issue.
Vladimir Mekler
Chairman of the Board of Directors Managing Director
Mark Kurtser
Страница 41 из 132
Consolidated statement of changes in equity
For the year ended 31 December 2022
Attributable to the owners of the Company
Share
capital
Note RUB'000
180,585
Share
premium
RUB'000
5,243,319
Reserves
RUB'000
(655,352)
Retained
earnings
RUB'000
18,064,135
Total
Non-
controlling
interests
Total
equity
RUB'000
22,832,687
RUB'000
RUB'000
264,505 23,097,192
-
-
-
-
-
-
12
-
4,560,217
4,560,217
158,583
4,718,800
-
-
(642,319)
(642,319)
(210,411)
(852,730)
(642,319)
(642,319)
(210,411)
(852,730)
180,585
5,243,319
(655,352)
21,982,083
26,750,585
212,677 26,963,262
Balance at
1 January 2022
Profit and total
comprehensive
income for the
year
Contributions
and
distributions
Dividends
declared
Total
contributions
and
distributions
Balance at 31
December
2022
Share premium is not available for distribution.
The Notes on pages 46 to 74 are an integral part of these consolidated financial statements.
Страница 42 из 132
Consolidated statement of changes in equity
For the year ended 31 December 2021
Attributable to the owners of the Company
Share
capital
Note RUB'000
180,585
Share
premium
RUB'000
5,243,319
Reserves
RUB'000
(655,352)
Retained
earnings
RUB'000
14,840,273
Total
Non-
controlling
interests
Total
equity
RUB'000
19,608,825
RUB'000
RUB'000
343,756 19,952,581
-
-
-
-
-
-
-
-
12
-
6,003,486
6,003,486
139,540
6,143,026
-
-
-
(2,779,624)
(2,779,624)
(219,222)
(2,998,846)
-
(2,779,624)
-
(2,779,624)
431
(218,791)
431
(2,998,415)
180,585
5,243,319
(655,352)
18,064,135
22,832,687
264,505 23,097,192
Balance at 1
January 2021
Profit and total
comprehensive
income for the
year
Contributions
and
distributions
Dividends
declared
Other changes
Total
contributions
and
distributions
Balance at 31
December
2021
Share premium is not available for distribution.
The Notes on pages 46 to 74 are an integral part of these consolidated financial statements.
Страница 43 из 132
Consolidated statement of cash flows
For the year ended 31 December 2022
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation
Amortisation
Gain from the sale of property, plant and
equipment
Write-off of property, plant and equipment
Impairment loss
Finance income
Finance expenses (excluding impairment)
Impairment of trade and other receivables
Net foreign exchange transactions loss
Income tax expense
Increase in inventories
Increase in trade and other receivables
(Decrease) / increase in trade and other
payables
(Decrease) / increase in contract liabilities
Cash flows from operations
Tax paid
Net cash flows from operating
activities
Cash flows from investing activities
Acquisition/construction of property, plant
and equipment
Proceeds from sale of property, plant and
equipment
Acquisition of intangible assets
Placing short-term bank deposits
Proceeds from short-term bank deposits
return
Bank interest received
Net cash flows used in investing
activities
Note
13
14
13,14
9
9
9
9
10
14
9
2022
RUB'000
4,718,800
1,616,547
51,109
(22,317)
815
1,286,574
(355,825)
400,207
93,832
104,751
7,586
7,902,079
(47,393)
(35,292)
(55,420)
(17,632)
7,746,342
(12,624)
7,733,718
2021
RUB'000
6,143,026
1,577,042
122,176
(2,162)
27,189
-
(93,683)
517,714
31,647
8,017
15,242
8,346,208
(190,884)
(7,912)
(276,341)
80,278
8,504,031
(4,635)
8,499,396
(1,098,983)
(3,734,757)
62,796
(70,017)
-
-
257,760
(848,444)
2,724
(55,466)
(866,831)
1 648 623
93,683
(2,912,024)
The Notes on pages 46 to 74 are an integral part of these consolidated financial statements.
Страница 44 из 132
Consolidated statement of cash flows (continued)
For the year ended 31 December 2022
Cash flows from financing activities
Repayment of loans and borrowings
Payments of lease liabilities
Finance expenses paid
Proceeds from reimbursed VAT
Repayment of reimbursed VAT
Dividends paid to the owners of the
Company
Dividends paid to non-controlling interests
Net cash flows used in financing
activities
Net increase in cash and cash
equivalents
Cash and cash equivalents as at the
beginning of the year
Effect of movements in exchange rates
on cash held
Cash and cash equivalents as at the
end of the year
Note
19
19
16
16
2022
RUB'000
(4,805,599)
(150,743)
(262,088)
342,717
(166,634)
(636,794)
(224,807)
(5,903,948)
981,326
3,589,623
(108,209)
4,462,740
2021
RUB'000
(1,490,806)
(152,470)
(363,727)
33,138
(152,123)
(2,726,685)
(178,177)
(5,030,850)
556,522
3,128,718
(95,617)
3,589,623
The Notes on pages 46 to 74 are an integral part of these consolidated financial statements.
Страница 45 из 132
Notes to the consolidated financial statements
For the year ended 31 December 2022
Incorporation and principal activities
1.
MD Medical Group Investments Plc (the “Company”) was incorporated in Cyprus on 5 August 2010 as a private limited liability
company. In August 2012, following the special resolution passed by the shareholder, the Company was converted into a
public limited liability company. Its Registered Office is at Dimitriou Karatasou 15, Anastasio Building, 6th floor, office 601,
Strovolos, 2024, Nicosia, Cyprus.
The principal activity of the Company is that of an investment holding company and, for that purpose, to acquire and hold
controlling and other interests in the share or loan capital of any company or companies of any nature (the Company and its
subsidiaries together referred to as the “Group”), but primarily in the healthcare industry. Refer to Note 4 for more detailed
information about the services provided by the Group’s medical centres.
The details of the directly and indirectly owned subsidiaries are as follows:
Name
JSC MD PROJECT
2000
LLC Khaven
LLC Velum
LLC Capital Group
LLC Clinic Mother and
Child
LLC Clinica Zdorovia
LLC Ivamed
LLC Dilamed
LLC Mother and Child
Perm
LLC Mother and Child
(Ufa)
LLC Mother and Child
Saint-Petersburg
LLC MD PROJECT
2010
LLC Mother and Child
Ugo-Zapad
LLC MD Service
LLC Mother and Child
Nizhny Novgorod
LLC Mother and Child
Yekaterinburg
LLC Mother and Child
Tyumen
JSC MK IDK
LLC Apteka IDK
LLC CSR
LLC MD Assistance
LLC Mother and Child
Yaroslavl
LLC Mother and Child
Kostroma
LLC Mother and Child
Vladimir
LLC Mother and Child
Ryazan
Country of
incorporation
Russian Federation
Activities
Medical services
31 December 2022
Effective holding, %
95
31 December 2021
Effective holding, %
95
Medical services
Russian Federation
Medical services
Russian Federation
Russian Federation
Assistance services
Russian Federation Holding of trademarks
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Medical services
Medical services
Medical services
Medical services
Russian Federation
Dormant company
Russian Federation
Medical services
Russian Federation
Medical services
Russian Federation
Medical services
Russian Federation
Russian Federation
Pharmaceutics retail
Medical services
Russian Federation
Medical services
Russian Federation
Medical services
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Medical services
Pharmaceutics retail
Dormant company
Assistance services
Medical services
Russian Federation
Medical services
Russian Federation
Medical services
Russian Federation
Medical services
100
90
95
100
80
100
-
95
95
85
100
90
95
100
100
100
100
100
100
100
80
80
80
100
100
90
95
100
80
100
100
95
95
85
100
90
95
100
100
100
100
100
100
100
80
80
80
100
Страница 46 из 132
Name
LLC Mother and Child
Kazan
JSC MC Avicenna
LLC H&C Medical
Group
LLC Centre of
Reproductive
Medicine
LLC Medica-2
LLC Krasnoyarskii
center of Reproductive
Medicine
LLC Novosibirskii
center of Reproductive
Medicine
LLC Omskii center of
Reproductive
Medicine
LLC Barnaulskii center
of Reproductive
Medicine
LLC Mother and Child
Vladivostok
LLC Mother and Child
Volga
LLC MD Finance
LLC Mother and Child
Krasnodar
LLC Mother and Child
Rostov-on-Don
LLC MD Group
Krasnogorsk
LLC MD Belgorod
LLC MD Lipetsk
NFP MGIMO-MED
LLC MD Group
Holding
JSC MD Medical
Group
LLC Siberia service
company
LLC TechMedCom
LLC Service Hospital
Company
LLC Elleprof
LLC
Medtechnoservice
Country of
incorporation
Russian Federation
Activities
Medical services
31 December 2022
Effective holding, %
100
31 December 2021
Effective holding, %
100
Russian Federation
Russian Federation
Medical services
Pharmaceutics retail
Russian Federation
Medical services
Russian Federation
Russian Federation
Medical services
Medical services
Russian Federation
Medical services
Russian Federation
Medical services
Russian Federation
Medical services
Russian Federation
Medical services
Russian Federation
Russian Federation
Russian Federation
Management
company
Management
company
Medical services
Russian Federation
Medical services
Russian Federation
Dormant
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Medical services
Medical services
Medical university
Management
company
Management
company
Service company
Russian Federation
Russian Federation
Service company
Service company
Russian Federation
Russian Federation
Service company
Service company
100
100
100
100
100
100
100
100
100
100
100
100
100
90
-
-
67
100
100
-
-
-
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
90
100
100
67
-
-
-
-
-
-
-
Страница 47 из 132
As at 31 December 2022, 67.9% of the Company’s share capital is owned by MD Medical Holding Limited, a company
beneficially owned by Dr. Mark Kurtser. The 32.1% of the Company’s share capital is owned by Guarantee Nominee Limited,
which holds the shares on behalf of the GDR holders.
2. Basis of preparation
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
as adopted by the European Union (IFRS-EU).
These consolidated financial statements were approved by the Board of Directors and were authorised for issue on
31 March 2023.
(b) Basis of measurement
These consolidated financial statements have been prepared under the historical cost convention.
(c) Functional and presentation currency
All of the operational Group entities are located in the Russian Federation. The Company and all its operating subsidiaries
have RUB as their functional currency.
These consolidated financial statements of the Group are presented in RUB, all amounts have been rounded to the nearest
thousand, unless otherwise indicated.
(d) Use of estimates and judgements
Preparing these consolidated financial statements in accordance with IFRSs requires management to exercise their judgement
to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and
liabilities, income and expenses.
The estimates and underlying assumptions are based on historical experience and various other factors that are deemed
reasonable based on knowledge available at that time. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed and where necessary revised on an ongoing basis.
Revisions to estimates are recognised prospectively.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies
that have the most significant effect on the amount recognised in the consolidated financial statements are described below:
Impairment of intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are initially recorded at acquisition cost and are amortised on a straight
line basis over their useful economic life. Intangible assets and property, plant and equipment that are acquired through a
business combination are initially recorded at fair value at the date of acquisition.
Intangible assets with indefinite useful life are reviewed for impairment at least annually.
The impairment test is performed using the discounted cash flows expected to be generated through the use of the intangible
assets and property, plant and equipment, using a discount rate that reflects the current market estimations and the risks
associated with the asset. When it is impractical to estimate the recoverable amount of an asset, the Group estimates the
recoverable amount of the cash generating unit to which the asset belongs.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units of the Group
to which the goodwill has been allocated.
Other
Information about judgements, assumptions and estimation uncertainties regarding revenue recognition, deferred taxes assets,
provisions, leases and ECL allowance for trade receivables and contract assets as at 31 December 2022 is described in
Note 3.
The significant judgements made by the management in applying the Group accounting policies and the key sources of
estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended
31 December 2021 except for those reflected in Notes 13, 14.
Страница 48 из 132
3. Significant accounting policies
The accounting policies applied in these consolidated financial statements are consistent with those followed in the Group’s
consolidated financial statements as at 31 December 2021 and for the year then ended.
New standards and amendments applied for the first time in 2022 did not impact these consolidated financial statements of the
Group.
Basis of consolidation
These consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries). The Group controls an entity when it 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 over the entity. The financial statements
of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date
on which control ceases.
The financial statements of all the Group companies are prepared using uniform accounting policies.
Business combinations
Acquisitions of businesses are accounted for using the acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any
goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss
immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement
is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and
subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
Acquisitions from entities under common control
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls
the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or,
if later, at the date that common control was established or, if later, at the date the Company was incorporated. The assets and
liabilities acquired are recognised at their book values. Any difference between the consideration paid and the book values is
recognised directly in equity.
Non-controlling interests
Non-controlling interests are measured at their proportionate share of the acquirer’s identifiable net assets at the date of
acquisition.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Loss of control
When the Group losses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related
non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured at fair value when control is lost.
Transactions eliminated on consolidation
Intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are
eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
Revenue
The Group has two main types of revenue: rendering of services and sales of goods.
Revenue is recognised in the moment when the service is provided to the customer. Determining the timing of the services
rendering – at a point in time or over time – requires judgement. The details are described below.
Страница 49 из 132
Type of product/service
Rendering of services (except storage of stem cells and long
term contracts described below)
Sales of goods
Storage of stem cells
Rendering of services (long-term contracts)
Nature, timing of satisfaction of performance
obligations, significant payment terms
Sales of services are recognised at point in time in which the
services are rendered by reference to completion of the
actual service provided. Payments from patients for
agreements are usually fully prepaid, one-off services are
paid right after the service is rendered. Mandatory Health
Insurance (MHI), insurance and other companies usually
pay in up to two months after the services are provided.
Sales of goods are recognised when control over the goods
has been transferred to the customer, which is usually when
the Group has sold or delivered goods to the customer, the
customer has accepted the goods and collectability of the
related receivable is reasonably assured. The payments are
usually made at the moment of sale.
Nature of service is long-term safekeeping of biological
materials comprising stem cells concentrate. Standard terms
of contract include predetermined period of contract from 1
to 30 years paid in advance by the customer in full amount.
Revenue from contract consists of two parts – revenue from
blood collection and stem cells isolation (charged and
recognised at the moment of the appropriate services
rendered) and revenue from storage of stem cells. Revenue
from storage is accrued monthly during the whole period of
contract.
Long-term contracts for offering medical services that last
from 1 to 5 years with performance obligations satisfied via
passage of time. Payments from legal entities are usually
fully prepaid. Revenue is accrued monthly during the whole
period of contract.
Finance income
Finance income includes:
interest income which is recognised as it accrues in profit or loss using the effective interest method
income from initial recognition of other payables to tax authorities at a market interest rate
Finance expenses
Finance expenses include interest expense and other borrowing costs and are recognised in profit or loss using the effective
interest method.
The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected
life of the financial instrument to:
the gross carrying amount of the financial asset, or
the amortised cost of the financial liability
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset
(when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become
credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the
amortised cost of the financial asset. If the asset is no longer creditimpaired, then the calculation of interest income reverts to
the gross basis.
Страница 50 из 132
Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in profit or loss
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or
substantively enacted at the reporting date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial
position method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset
realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to
other comprehensive income or equity, in which case the deferred tax is also dealt with in other comprehensive income or
equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Dividends declared
Dividend distribution to the Company's shareholders is recognised in the Group's financial statements when the shareholders’
right to receive the dividends is established, either through Board resolution (for interim dividends) or by the Group’s
shareholders in the Annual General Meeting (for final dividends).
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is deducted in reporting from the related
expense. When the grant relates to an asset, it reduces the carrying amount of the asset. The grant is then recognised in profit
or loss over the useful life of the depreciable asset by way of a reduced depreciation charge.
Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet determined,
are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing
costs capitalised in accordance with the Group's accounting policy. Depreciation of these assets, on the same basis as other
property assets, commences when the assets are ready for their intended use.
Depreciation is recognised in profit or loss on the straight line method over the useful lives of each part of an item of property,
plant and equipment.
Страница 51 из 132
The annual depreciation rates for the current and comparative periods are based on the following estimations of useful lives:
Freehold buildings
Leasehold improvements
Plant and equipment
No depreciation is provided on land.
Years
50
10-20
5-10
Assets under construction are not depreciated until they are completed and available for use. At that moment they are
reclassified in the relevant class of property, plant and equipment and depreciated accordingly.
Depreciation methods, useful lives and residual values are reassessed at the reporting date.
Where the carrying amount of an asset is greater than its estimated recoverable amount, the asset is impaired immediately to
its recoverable amount.
Expenditure for repairs and maintenance of property, plant and equipment is charged to profit or loss for the year in which it is
incurred. The cost of major renovations and other subsequent expenditure is included in the carrying amount of the asset when
it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset
will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant
and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is
recognised in profit or loss.
Intangible assets
(i) Goodwill
Goodwill represents the difference between the cost of an acquisition and the fair value of the Group's share of the net
identifiable assets of the acquired undertaking at the date of acquisition. Positive goodwill on acquisition of subsidiaries is
included in intangible assets.
The excess of the Group’s interest in the fair value of the new subsidiaries’ net assets over the consideration paid for their
acquisition (a bargain purchase gain) is recognised in profit or loss in the year of acquisition of the relevant subsidiary. Positive
goodwill is tested annually for impairment and is carried at cost less accumulated impairment losses. Gains and losses on the
disposal of an undertaking include the carrying amount of goodwill relating to the undertaking sold. For the purpose of
impairment testing goodwill is allocated to cash generating units that are expected to benefit from the synergies of the
combinations.
(ii) Patents and trademarks
Patents and trademarks are measured initially at purchase cost and are amortised on a straight line basis over their estimated
useful lives. Their estimated useful life is from five to seven years.
(iii) Software and web site costs
External costs that are directly associated with web site controlled by the Group and that will probably generate economic
benefits exceeding costs beyond one year are recognised as intangible assets. Subsequently web site costs are carried at cost
less any accumulated amortisation and any accumulated impairment losses. Web site costs are amortised using the straight
line method over their useful lives, not exceeding a period of five years. Amortisation commences when the site is available for
use and is included within administrative expenses.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use. Gains or losses
arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the
carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
Inventories
Inventories include medicines and medical material and are stated at the lower of cost and net realisable value. The cost is
determined using the weighted average method. Net realisable value is the estimated selling price in the ordinary course of
business, less the costs to completion and selling expenses.
Страница 52 из 132
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be
made. Where the Group expects 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.
Financial instruments
Recognition
The Group recognises financial assets and financial liabilities when, and only when, it becomes a party of the contractual
provisions of the financial instrument. Trade receivables and debt securities issued are initially recognised when they are
originated.
Classification
The Group classifies financial assets on the basis of both: the Group`s business model for managing financial assets, as well
as the contractual cash flow characteristics of the financial assets.
The Group’s financial assets comprise of trade and other receivables, as well as cash and cash equivalents. All of the Group
financial assets are measured at amortised cost. They are classified as current assets unless the Group has an unconditional
responsibility to accept deferral of receipt for at least twelve months after the balance sheet date, in which case they are
classified as non-current assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets – Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level
because this best reflects the way the business is managed and information is provided to management. The information
considered includes:
the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether
management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile,
matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or
realising cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Group’s management;
the risks that affect the performance of the business model (and the financial assets held within that business model)
and how those risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets
managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this
purpose, consistent with the Group’s continuing recognition of the assets.
Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’
is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well
as a profit margin.
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In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment,
the Group considers:
contingent events that would change the amount or timing of cash flows
terms that may adjust the contractual coupon rate, including variable‑rate features
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets (e.g. non‑recourse features)
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include
reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or
premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially
represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable
compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is
insignificant at initial recognition.
The Group’s financial liabilities comprise of trade and other payables and borrowings. They are classified as current liabilities
unless there is an unconditional right to defer settlement for at least twelve months after the balance sheet date, in which case
they are classified as long-term liabilities.
Initial measurement
Financial assets and financial liabilities are initially measured at fair value plus or minus correspondingly of any directly
attributable transaction costs.
Subsequent Measurement
Financial assets at amortised cost:
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced
by impairment losses. Interest income, foreign exchange gain and losses and impairment are recognised in profit or loss. Any
gain or loss on derecognition is recognised in profit or loss.
Trade and other receivables are amounts due from customers for services performed in the ordinary course of business and
are stated after deducting the appropriate allowances for any impairment.
For the purpose of the statement of cash flows, cash and cash equivalents include cash in hand, cash at bank and short-term
highly liquid investments with maturity of three months or less from the acquisition date that are subject to an insignificant risk
of changes in their fair value and are used by the Group in the management of its short term investments.
Financial liabilities at amortised cost:
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense
and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in
profit or loss.
Impairment of non-derivative financial assets
At each balance sheet date the Group recognises a loss allowance for expected credit losses on financial assets measured at
amortised cost.
The loss allowance for financial assets at amortised cost is recognised in profit or loss in respondence with a balance sheet
account reducing the carrying amount of the financial asset. Expected credit losses for counterparties, including banks, are
determined based on historical data of relevant probability of default and loss given default. Impairment on cash and cash
equivalents is measured on a 12‑month expected loss basis and reflects the short maturities of the exposures. The Group
considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics. The Group measures loss allowances at an
amount equal to lifetime ECLs.
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When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical
experience and informed credit assessment, that includes forward‑looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.
The Group considers a financial asset to be in default when the debtor is unlikely to pay its credit obligations to the Group in
full, without recourse by the Group to actions such as realising security (if any is held).
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit‑impaired. A financial
asset is ‘credit‑impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Evidence that a financial asset is credit‑impaired includes the following observable data:
significant financial difficulty of the debtor;
it is probable that the debtor will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for a security because of financial difficulties.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof. For individual customers, the Group has a policy of writing off the gross
carrying amount when the financial asset is 3 years without movements past due based on Russian legislation. For corporate
customers, the Group individually makes an assessment with respect to the timing and amount of write‑off based on whether
there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However,
financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s
procedures for recovery of amounts due.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost the reversal is recognised in profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised
when:
the rights to receive cash flows from the asset have expired;
the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full
without material delay to a third party under a “pass through” arrangement; or
the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all
the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.
Any interest in such derecognised financial assets that is created or retained by the Group, is recognised as a separate asset
or liability.
Derecognition of financial liabilities
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 a derecognition of the original
liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or
loss.
Changes in cash flows on existing financial liabilities are not considered as modification, if they result from existing contractual
terms, e.g. changes in fixed interest rates initiated by banks due to changes in the CBR key rate, if the loan contract entitles
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banks to do so and the Group have an option to either accept the revised rate or redeem the loan at par without penalty. The
Group treats the modification of an interest rate to a current market rate using the guidance on floating-rate financial
instruments. This means that the effective interest rate is adjusted prospectively.
Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial
position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master
netting agreements, and the related assets and liabilities are presented gross in the consolidated statement of financial
position.
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to depreciation or amortisation are reviewed 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 to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units).
Share capital
Proceeds from the issue of ordinary shares are classified as equity. The difference between the issue price of the shares and
their nominal value is taken to the share premium account.
Incremental costs directly attributable to the issue of new shares are recognised as a deduction from share premium net of any
tax effect.
Earnings per share
The Group presents earnings per share (“EPS”) data for its ordinary shares. EPS is calculated by dividing the profit or loss
attributable to the owners of the Company by the weighted average number of ordinary shares in issue during the period,
adjusted for own shares held.
Capitalised interest
Interest expense on borrowed funds used for capital construction projects and the acquisition of property, plant and equipment
is capitalised provided that the interest expense could have been avoided if the Group had not made capital investments.
Interest is capitalised only during the period when construction activities are actually in progress and until the resulting
properties are put into operation.
Leases
At 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.
Leases in which the Group is a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in
the contract to each lease component on the basis of its relative stand‑alone prices. However, for the leases of property 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 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
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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 commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental
borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and
makes certain adjustments to reflect the terms of the lease and type of the asset leased.
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, if 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 assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised in‑substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right‑of‑use asset, or is recorded in profit or loss if the carrying amount of the right‑of‑use asset has been reduced to zero.
The Group presents right‑of‑use assets that do not meet the definition of investment property in ‘property, plant and equipment’
and lease liabilities in ‘loans and borrowings’ in the consolidated statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term
leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
COVID-19-related rent concessions
The Group has applied COVID-19-Related Rent Concessions - Amendment to IFRS 16. The Group applies the practical
expedient allowing it not to assess whether eligible rent concessions that are a direct consequence of the COVID-19 pandemic
are lease modifications. The Group applies the practical expedient consistently to contracts with similar characteristics and in
similar circumstances. For rent concessions in leases to which the Group chooses not to apply the practical expedient, or that
do not qualify for the practical expedient, the Group assesses whether there is a lease modification.
Leases in which the Group is a lessor
The Group does not have significant contracts where it is a lessor.
Standards issued but not yet effective:
The following new and amended standards are not expected to have a significant impact on the Group’s consolidated financial
statements.
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
Definition of Accounting Estimates (Amendments to IAS 8)
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4. Revenue
Therapy, surgery and other in-patient
medical services
In vitro fertilisation (IVF)
Deliveries
Oncology
Obstetrics and gynaecology out-patient
treatments
Diagnostic centre and other out-patient
medical services
Laboratory examinations and other
medical services
Paediatrics out-patient treatments
Obstetrics and gynaecology in-patient
treatments
Paediatrics in-patient treatments
Sales of goods
Storage of stem cells
Other income
Total revenue from contracts with
customers
2022
RUB'000
4,643,136
4,331,930
2,843,344
2,480,842
2,399,259
2,321,624
1,983,791
1,637,982
1,224,345
714,102
280,706
170,442
190,553
25,222,056
2021
RUB'000
5,486,629
3,939,363
2,863,685
2,131,922
2,217,946
2,180,239
2,493,346
1,588,170
1,031,978
676,330
251,654
162,643
195,778
25,219,683
Disaggregation of revenue
The Group renders the services on the territory of the Russian Federation. The Group’s operations and main revenue streams
are those described in the table above.
The majority of the Group's customers are physical persons (76% of total revenue); some services are rendered through the
governmental and non-governmental insurance companies and legal entities. All the contracts are fixed-price and short-term
except for the contracts for the storage of stem cells and the contract for offering medical services to a significant corporate
client, such contracts are fully prepaid.
All the Group's revenue except for the revenue from the storage of stem cells and long-term contracts is recognised at the point
of time when the services are provided; the revenue from the storage of stem cells and long-term contracts is recognised over
the time of the contract.
The contract liabilities primarily relate to the advance consideration received from patients. The amount of RUB 808,532
thousand was recognised in short-term contract liabilities at the beginning of the year was recognised as revenue during the
year ended 31 December 2022 (31 December 2021: RUB 717,705 thousand). The amount of RUB 60,529 thousand was
returned to the patients and the amount of RUB 197,295 thousand was transferred to the other contracts during the year ended
31 December 2022 (31 December 2021: RUB 67,932 thousand and RUB 271,001 thousand respectively).
5. Cost of sales
Payroll and related social taxes
Materials and supplies used
Depreciation
Medicl services
Energy and utilities
Property tax
Repair and maintenance
Other expenses
Total cost of sales
2022
RUB'000
8,104,750
5,031,519
1,402,538
308,087
282,059
176,071
96,973
26,620
15,428,617
2021
RUB'000
7,517,576
5,477,791
1,367,565
334,712
269,316
148,058
88,513
28,244
15,231,775
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6. Selling, general and administrative expenses
Payroll and related social taxes
Utilities and materials
Depreciation
Advertising
Other professional services
Acquiring and encashment
Commission fees
IT support
Amortisation
Communication costs
Independent auditors' remuneration
Learning and development
Other expenses
Total selling, general and
administrative expenses
7. Staff costs
Wages and salaries
Social insurance contributions and
other taxes
Total staff costs
2022
RUB'000
2,036,089
305,540
214,009
211,196
174,443
159,461
118,270
77,933
51,109
45,631
19,924
17,582
81,958
3,513,145
2022
RUB'000
8,050,193
2,090,646
10,140,839
2021
RUB'000
2,022,217
270,838
209,477
161,968
134,770
172,536
90,232
20,913
122,176
39,630
22,964
23,433
111,208
3,402,362
2021
RUB'000
7,592,490
1,947,303
9,539,793
The number of employees as at 31 December 2022 was 8,466 (31 December 2021: 8,461).
During the year ended 31 December 2022 the Group did not receive any government grants to cover the additional payroll
costs paid to doctors and other medical staff as a result of COVID-19 (for the year ended 31 December 2021: RUB 4,526
thousand, which reduced the staff costs accordingly).
8. Other income and expenses
During the year ended 31 December 2022 the Group received other income of RUB 36,141 thousand including income from
fixed assets sale amounted to RUB 21,103 thousand. (During the year ended 31 December 2021 the Group received other
income of RUB 104,424 thousand including a property tax refund amounted to RUB 44,966 thousand by MD Project 2010).
The Group incurred other expenses amounted to RUB 60,510 thousand in the reporting year. (During 2021 the Group incurred
other expenses amounted to RUB 68,007 thousand, including write-off of fixed assets amounted to RUB 26,753 thousand).
9. Net finance expenses
Note
Finance income
Bank interest received
Initial recognition of other
payables to tax authorities at
market rate
Finance income
Finance expenses
Interest on bank loans
Unwinding of discount on other
payables to tax authorities
2022
RUB'000
257,760
98,065
355,825
(228,607)
(60,177)
2021
RUB'000
93,683
-
93,683
(339,240)
(63,950)
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Interest on leases
Other interest expenses
Other finance expenses
Impairment of trade and other
receivables
Bank charges
Other impairment provision
Finance expenses
Net foreign exchange
transactions loss
Net finance expenses
10. Income tax
Note
15
2022
RUB'000
(51,881)
(38,783)
(93,832)
(20,759)
-
(494,039)
(104,751)
(242,965)
Reconciliation between profit before tax and income tax expense:
Profit before tax
Less profit before tax of non-taxable
subsidiaries
Loss before tax excluding not-
taxable subsidiaries
Tax using the Group’s domestic tax
rate
Effect of subsidiaries taxable at lower
tax rates
Non-deductible expenses
Current-year losses for which no
deferred tax asset is recognised
Total income tax expense
2022
RUB'000
4,726,386
(5,048,713)
(322,327)
64,465
586
(10,138)
(62,500)
(7,586)
2021
RUB'000
(49,033)
(41,259)
(31,647)
(23,650)
(582)
(549,361)
(8,017)
(463,695)
2021
RUB'000
6,158,268
(6,447,365)
(289,097)
57,819
99
(20,086)
(53,074)
(15,242)
All Group companies, that are offering medical services and are operating in the Russian Federation and meet the conditions
specified in the Federal law 395-N, apply 0% corporate income tax rate. Other companies apply standard income tax rate of
20% or 15%.
As at 31 December 2022 deferred tax assets relating to tax losses carried forward in the amount of RUB 396,256 thousand
(31 December 2021: RUB 333,285 thousand) have not been recognised. Deferred tax assets have not been recognised in
respect of these tax losses because it is not probable that future taxable profit will be available for utilisation against the
benefits therefrom.
As at 31 December 2022, there were temporary differences (before calculating tax effect) of RUB 11,486,136 thousand
(31 December 2021: RUB 9,965,811 thousand) related to investments in subsidiaries. Deferred tax liabilities related to these
temporary differences were not recognised because the Group controls the dividend policy of its subsidiaries and, therefore,
controls the timing of reversal of the related taxable temporary differences and management is satisfied that they will not
reverse in the foreseeable future.
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11. Earnings per share
Basic and fully diluted earnings
attributable to the owners of the
Company (RUB'000)
Weighted average number of ordinary
shares in issue during the year
Basic and fully diluted earnings per
share (RUB)
2022
4,560,217
75,125,010
60.70
2021
6,003,486
75,125,010
79.91
12. Dividends
On 26 October 2022 the Board of Directors recommended the payment of RUB 642,319 thousand as interim dividends which
corresponds to RUB 8.55 per share. The dividends were paid on 29 November 2022.
On 3 September 2021 the Board of Directors recommended the payment of 1,352,249 thousand as interim dividends which
corresponds to RUB 18 per share. The dividends were paid on 26 October 2021.
On 19 March 2021 Board of Directors recommended the payment of RUB 1,427,375 thousand as final dividends for the year
2020 which corresponds to RUB 19 per share. The dividends were paid on 25 May 2021.
13. Property, plant and equipment
Property under
construction
Freehold land
and buildings
Plant and
equipment
RUB'000
RUB'000
RUB'000
Right-of-use of
freehold land,
buildings and
plant and
equipment
RUB'000
Total
RUB'000
Initial cost
Balance as at
1 January 2021
Additions
Disposals
Transfer from
construction in
progress
Balance as at 31
December 2021
Additions
Disposals
Impairment loss
Transfer from
construction in
progress
Balance as at 31
December 2022
Depreciation
Balance as at
1 January 2021
Depreciation
during the year
Accumulated
depreciation on
disposals
Balance as at 31
December 2021
Depreciation
21,283,540
158,752
9,158,576
723,077
31,323,945
53,044
(10,390)
749,169
3,696,801
(436)
(1,398,872)
327,992
(159,485)
649,703
331,199
(53,168)
-
4,409,036
(223,479)
-
22,075,363
2,456,245
9,976,786
1,001,108
35,509,502
49,429
(33,911)
(1,000,015)
2,517,195
981,538
(815)
(85,525)
(3,192,038)
151,059
(83,205)
-
664,843
65,758
(54,705)
-
-
1,247,784
(172,636)
(1,085,540)
-
23,618,061
159,405
10,709,483
1,012,161
35,499,110
(2,231,515)
(461,155)
5,133
(2,687,537)
(502,409)
-
-
-
-
-
(5,562,862)
(233,030)
(8,027,407)
(991,882)
(124,005)
(1,577,042)
137,427
22,785
165,345
(6,417,317)
(334,250)
(9,439,104)
(978,440)
(135,698)
(1,616,547)
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Freehold land
and buildings
Property under
construction
Plant and
equipment
RUB'000
RUB'000
RUB'000
Right-of-use of
freehold land,
buildings and
plant and
equipment
RUB'000
Total
RUB'000
7,381
(3,182,565)
-
-
69,256
7,821
84,458
(7,326,501)
(462,127)
(10,971,193)
19,052,025
158,752
3,595,714
490,047
23,296,538
19,387,826
2,456,245
3,559,469
666,858
26,070,398
20,435,496
159,405
3,382,982
550,034
24,527,917
during the year
Accumulated
depreciation on
disposals
Balance as at 31
December 2022
Carrying
amounts
Balance as at 1
January 2021
Balance as at 31
December 2021
Balance as at 31
December 2022
Impairment loss of Ufa hospital’s property, plant and equipment
As at 30 June 2022, due to macroeconomic conditions, such as a deterioration in general economic situation, and excessive
capacity, the Group performed an impairment test with respect to property, plant and equipment of the regional hospital of LLC
MD PROJECT 2010 located in Ufa, representing a separate CGU.
The recoverable amount of this CGU was based on its value in use, determined by discounting the future cash flows to be
generated from the continuing use of the CGU. The carrying amount of the CGU (RUB 2,936,892 thousand) exceeded its
recoverable amount (RUB 1,936,877 thousand) and an impairment loss of RUB 1,000,015 thousand was (the year ended
31 December 2021: nil). The impairment loss was allocated to property, plant and equipment.
The recoverable amount was estimated based on the value in use, which was determined using a pre-tax discount rate of
17.5% and a terminal growth rate of 4% applied after the 5.5-year projection period.
The discount rate was based on the rate of 10-year bonds issued by the Russian government, adjusted for a risk premium to
reflect both the increased risk of investing in equities generally and the systematic risk of the specific CGU.
The long-term growth rate into perpetuity has been determined as the lower of the nominal gross domestic product (GDP) rates
for Russia, where the CGU operates, and the long-term compound annual EBITDA growth rate estimated by management.
Estimated EBITDA was based on expectations of future outcomes taking into account past experience, whereas the EBITDA
margin amounted to 20.4%-23.2% further adjusted for anticipated annual revenue growth of 4%-6.8%. Revenue growth was
projected taking into account the estimated utilization and price growth for the next five years.
Once the impairment loss was recognised, the recoverable amount equaled the carrying amount. Therefore, any adverse
movement in a key assumption would lead to further impairment.
As at 31 December 2022 the Group considered whether there were indicators of additional impairment or reversal thereof and
concluded that there were none.
Impairment loss of construction documentation in Saint-Petersburg
During the reporting period the Group recognized an impairment of previously acquired construction documentation in the
amount of RUB 85,525 thousand as the Group revised its plans on construction of a clinic in Saint-Petersburg that made the
documentation no longer usable (During the year ended 31 December 2021: nil). The impairment loss was allocated to
construction in progress.
Impairment testing of other CGUs
On 30 June 2022 the Group performed impairment tests for all CGUs with a goodwill (see Note 14), as well as considered
whether the changes in the economic environment represents impairment indicators for other CGUs. The testing was
Страница 62 из 132
performed for a number of CGUs. No additional impairment loss was identified. No reasonably possible change in key
assumptions will cause an impairment.
As a result the Group did not recignise any additional impairment other than mentioned above.
Construction in progress includes machinery and equipment, X-ray equipment, tomographs and other items of property, plant
and equipment not yet available for use and predominantly relates to the buildings construction through the use of sub-
contractors.
As at 31 December 2022 construction in progress mainly includes construction costs of Lapino hospital (LLC Khaven)
amounting to RUB 91,148 thousand and MD Group hospital (JSC MD PROJECT 2000) amounting to RUB 26,746 thousand
(31 December 2021: MD Lakhta hospital (LLC Khaven) – RUB 1,825,075 thousand and Tyumen-2 hospital (LLC Mother and
Child Tyumen) – RUB 564,720 thousand).
14. Intangible assets
Initial cost
Balance as at 1
January 2021
Additions
Balance as at 31
December 2021
Additions
Impairment loss
Balance as at 31
December 2022
Amortisation
Balance as at 1
January 2021
Amortisation during
the year
Balance as at 31
December 2021
Amortisation during
the year
Balance as at 31
December 2022
Carrying amounts
Balance as at 1
January 2021
Balance as at 31
December 2021
Balance as at 31
December 2022
Goodwill
RUB'000
2,032,320
-
2,032,320
-
(201,034)
1,831,286
-
-
-
-
-
Patents and
trademarks
RUB'000
Software and
website
RUB'000
564,812
-
564,812
-
-
564,812
253,072
58,466
311,538
70,017
-
381,555
Total
RUB'000
2,850,204
58,466
2,908,670
70,017
(201,034)
2,777,653
(511,384)
(133,165)
(644,549)
(53,426)
(68,750)
(122,176)
(564,810)
(201,915)
(766,725)
(2)
(51,107)
(51,109)
(564,812)
(253,022)
(817,834)
2,032,320
2,032,320
1,831,286
53,428
2
-
119,907
109,623
128,533
2,205,655
2,141,945
1,959,819
Goodwill is allocated to each cash-generating unit (CGU), which is defined as each individual subsidiary or group of
subsidiaries acquired operating as one business in one particular location.
JSC MC Avicenna
ARTMed Group (Centres of
Reproductive Medicine, located in
Krasnoyarsk, Omsk, Novosibirsk and
Barnaul)
31 December 2022
RUB'000
1,055,593
360,154
31 December 2021
RUB'000
1,055,593
360,154
Страница 63 из 132
LLC Medica-2
CJSC MK IDK
LLC Centre of Reproductive Medicine
Subsidiaries acquired in 2011
47,216
211,303
142,193
14,827
1,831,286
248,250
211,303
142,193
14,827
2,032,320
Impairment loss of Medica-2
The Group performed an impairment test with respect to goodwill in regional clinic LLC Medica-2 as at 30 June 2022.
The recoverable amount of this CGU was based on its value in use, determined by discounting the future cash flows to be
generated from the continuing use of the CGU. The carrying amount of the CGU (RUB 323,112 thousand) was determined to
be higher than its recoverable amount (RUB 122,078 thousand) and an impairment loss of RUB 201,034 thousand was
recognised during the year ended 31 December 2022 (the year ended 31 December 2021: nil). The impairment loss was
allocated to goodwill.
The discount rate and terminal growth rate were as specified above in the Note 13. The EBITDA margin was assessed as
15.8%-18% and the revenue growth rate was 4%-6.1% for the 5.5 years projection period.
Impairment test of other subsidiaries
The Group performed an impairment test with respect to goodwill in other subsidiaries as at 30 June 2022.
The discount rate and terminal growth rate were as specified above in the Note 13. The revenue growth rate was 4%-9% and
EBITDA margin for JSC MC Avicenna, ARTMed Group (Centres of Reproductive Medicine, located in Krasnoyarsk, Omsk,
Novosibirsk and Barnaul), JSC MK IDK and other was 30.2%-30.9%, 40.5%-42.1% and 27.5%-33.4% respectively for the 5.5
years projection period.
No impairment loss was identified. No reasonably possible change in key assumptions will cause an impairment.
As a result the Group did not recignise any additional impairment other than mentioned above.
15. Trade, other receivables and deferred expenses
Trade receivables net of impairment
provision
Advances paid to suppliers
CAPEX prepayments
Deferred expenses
Property tax to be reimbursed
Other receivables
Non-current portion
Current portion
Ageing analysis of trade receivables:
31 December 2022
RUB'000
734,938
31 December 2021
RUB'000
751,604
113,013
87,928
7,884
83
55,913
999,759
87,928
911,831
999,759
119,336
339,909
4,866
59,735
35,800
1,311,250
339,909
971,341
1,311,250
Not past due
Past due
Gross amount
31 December 2022
RUB'000
594,321
375,662
969,983
Impairment
31 December 2022
RUB'000
(1,028)
(234,017)
(235,045)
Gross amount
31 December 2021
RUB'000
572,052
320,647
892,699
Impairment
31 December 2021
RUB'000
(9,434)
(131,661)
(141,095)
In addition to the bad debt provision accrued as at 31 December 2022 the accounts receivable in the amount of RUB 118
thousand were written-off during the year ended 31 December 2022 (year ended 31 December 2021: RUB 2,023 thousand).
Страница 64 из 132
The Group performed the calculation of ECL rates separately for patients, legal entities and insurance companies, meanwhile
ECL rates for the insurance companies were calculated based on their ratings.
The following table provides information about the exposure to credit risk and ECLs for trade receivables for patients as at
31 December 2022.
Ageing
Status
Weighted-
average loss
rate 2022
0-30 days
31-60 days
61-90 days
more than 91
days
TOTAL
past due
past due
past due
past due
18%
33%
44%
74%
Gross
carrying
amount 2022
RUB'000
46,081
7,986
7,115
243,736
Loss
allowance
2022
RUB'000
(8,436)
(2,633)
(3,159)
(180,321)
Gross
carrying
amount 2021
RUB'000
48,317
17,740
19,251
187,059
Loss
allowance
2021
RUB'000
(7,685)
(4,757)
(5,840)
(83,542)
304,918
(194,549)
272,367
(101,824)
The following table provides information about the exposure to credit risk and ECLs for trade and other receivables for legal
entities except insurance companies and amounts receivable from related parties as at 31 December 2022.
Ageing
Status
Weighted-
average loss
rate 2022
0-30 days
31-60 days
61-90 days
more than 91
days
TOTAL
not past due
past due
past due
past due
13%
20%
28%
58%
Gross
carrying
amount 2022
RUB'000
7,636
5,993
3,142
61,609
Loss
allowance
2022
RUB'000
(1,028)
(1,188)
(875)
(36,031)
Gross
carrying
amount 2021
RUB'000
37,383
17,187
1,553
29,540
Loss
allowance
2021
RUB'000
(9,434)
(5,001)
(630)
(22,833)
78 380
(39,122)
85,663
(37,898)
Based on the analysis of the historical data for accounts receivable from related parties amounted to RUB 67,875 thousand no
provision is accrued. For accounts receivable from insurance companies amounted to RUB 518,810 thousand provision is
accrued only for those which licences had been revoked (as the most part relates to accounts receivable for MHI services
provided which payments are guaranteed by the government). Such provision of RUB 1,373 thousand was accrued as at
31 December 2022 (31 December 2021: RUB 1,373 thousand).
The exposure of the Group to credit and currency risk in relation to trade, other receivables and deferred expenses is reported
in Note 23 of these consolidated financial statements.
16. Cash and cash equivalents and short-term deposits
Current bank accounts and cash in
hand
Bank deposits with maturity less than 3
months
Total cash and cash equivalents
Currency:
RUB
USD
31 December 2022
RUB'000
901,000
3,561,740
4,462,740
31 December 2022
RUB'000
4,399,794
62,946
4,462,740
31 December 2021
RUB'000
1,536,457
2,053,166
3,589,623
31 December 2021
RUB'000
2,869,105
720,518
3,589,623
Страница 65 из 132
The exposure of the Group to credit risk and currency risk in relation to cash and cash equivalents is reported in Note 23 of
these consolidated financial statements.
17. Share capital
Number of shares
125,250,000
75,125,010
Nominal value
USD
0.08
0.08
Share capital
RUB'000
-
180,585
Share capital
USD'000
10,020
6,010
Authorised
Issued and fully paid
ordinary shares
1 January /
31 December
18. Share premium, reserves and retained earnings
Share premium
Share premium includes the total amount received in excess of the total nominal value of the new share capital issued.
Incremental costs directly attributable to the issue of new shares are recognised as a deduction from equity (share premium)
net of any tax effect.
Retained earnings
Retained earnings include accumulated profits and losses incurred by the Group.
Reserves
Reserves include negative common control transactions reserve in the amount of RUB 682,873 thousand and positive capital
contribution reserve in the amount of RUB 27,521 thousand.
Common control transactions reserve includes differences between the carrying amount of net assets acquired through
purchases of subsidiaries from parties under common control and the consideration paid for their acquisition.
There were no changes during 2022.
19. Loans and borrowings
Long-term liabilities
Bank loans
Lease liabilities
Short-term liabilities
Bank loans
Lease liabilities
Total loans and borrowings
Maturity of loans and borrowings:
Within one year
Between one and five years
More than 5 years
31 December 2022
RUB'000
31 December 2021
RUB'000
-
489,200
-
106,426
595,626
31 December 2022
RUB'000
106,426
379,761
109,439
595,626
3,129,443
597,264
1,688,878
97,448
5,513,033
31 December 2021
RUB'000
1,786,326
3,515,922
210,785
5,513,033
In the reporting period, the Group fully repaid all its existing credit facilities by settling outstanding obligations ahead of
schedule.
No property, plant and equipment is held as collateral for the bank loans as at 31 December 2021.
Страница 66 из 132
More information is disclosed in Note 13.
The terms and debt repayment schedule of loans and lease liabilities are as follows:
Currency
Maturity
RUB
RUB
RUB
RUB
RUB
2023
2024
2022
2026
2023
Face value
RUB'000
-
31 December 2022
Carrying
amount
RUB'000
-
Face value
RUB'000
1,012,859
31 December 2021
Carrying
amount
RUB'000
1,012,859
-
-
-
-
-
-
1,128,830
1,128,830
210,247
210,247
2,466,385
2,466,385
106,426
106,426
97,448
97,448
RUB
2024-2032
489,200
489,200
597,264
597,264
595,626
595,626
5,513,033
5,513,033
Unsecured
bank loan
Unsecured
bank loan
Unsecured
bank loan
Unsecured
bank loan
Current
lease
liabilities
Non-current
lease
liabilities
The contractual cash flows and the exposure of the Group to liquidity risk in relation to loans and borrowings is reported in Note
23 of these consolidated financial statements.
Reconciliation of movements of financial liabilities to cash flows arising from financing activities
Bank loans
31 December 2022
Lease liabilities
31 December 2021
Bank loans Lease liabilities
RUB'000
4,818,321
(4,805,599)
-
-
(241,329)
RUB'000
694,712
-
(98,862)
(51,881)
-
RUB'000
6,309,964
(1,490,806)
-
-
(340,077)
RUB'000
508,034
-
(152,470)
-
-
(5,046,928)
(150,743)
(1,830,883)
(152,470)
-
-
228,607
228,607
-
65,758
(65,982)
51,881
51,657
595,626
-
-
339,240
339,240
4,818,321
331,199
(41,084)
49,033
339,148
694,712
Balance at 1 January
Changes in cash flows
Repayment of loans and borrowings
Payments of lease liabilities
Interest under lease agreements paid
Interest paid included in financing cash
flows
Total changes in cash flows
Liability-related changes
Additions of lease liabilities
Leases terminated
Interest accrued during the period
Total liability-related other changes
Balance at 31 December
20. Contract liabilities
Patient advances
including:
Contract liabilities after more than one year
Contract liabilities within one year
31 December 2022
RUB'000
2,051,929
468,505
1,583,424
31 December 2021
RUB'000
2,030,778
460,420
1,570,358
Страница 67 из 132
Contract liabilities that relate to long term client advances represent money received from patients on stem cells storage
contracts lasting from 1 to 30 years and long-term contracts for offering medical services lasting from 1 to 5 years. Contract
liabilities that relate to short term client advances represent money received from patients on stem cells storage contracts,
childbirth management contracts lasting from 1 to 9 months, and other contracts valid up to 1 year.
21. Trade and other payables
Other payables to tax authorities
Taxes payable
Accruals
Trade payables
Payables to employees
CAPEX payables
Other payables
Income tax liability
Non-current portion
Current portion
31 December 2022
RUB'000
923,279
814,083
702,537
517,270
462,884
66,575
61,802
3,142
3,551,572
729,173
2,822,399
3,551,572
31 December 2021
RUB'000
785,084
278,294
686,820
1,080,420
462,495
268,879
71,235
1,813
3,635,040
624,808
3,010,232
3,635,040
The group received the right to postpone social insurance payments (included in taxes payable) for 2 years due to
Governmental Decree #776 on 29 April 2022. However, the Group plans to settle these liabilities fully in 2023.
The contractual cash flows (except for income tax liability) and the exposure of the Group to liquidity risk in relation to trade and
other payables is reported in Note 23 of these consolidated financial statements.
22. Related party transactions
The following transactions were carried out with related parties:
22.1. Balances and transactions with related parties
The remuneration of the members of the key management personnel and non-executive directors for the year ended
31 December 2022 was RUB 122,164 thousand (for the year ended 31 December 2021: RUB 142,277 thousand).
The remuneration of the members of the key management personnel which remained unpaid as at 31 December 2022 was
RUB 24,977 thousand (31 December 2021: RUB 25,338 thousand).
The Group provided medical informational services to related parties amounted to RUB 395,949 thousand for the year ended
31 December 2022 (for the year ended 31 December 2021: RUB 310,438 thousand) and received commission services from
related parties amounted to RUB 59,138 thousand for the year ended 31 December 2022 (for the year ended 31 December
2021: RUB 41,620 thousand).
The receivables from medical informational services which remained unpaid as at 31 December 2022 was RUB 67,479
thousand (31 December 2021: RUB 36,795 thousand).
The Group purchased medical materials from related parties amounted to RUB 189,954 thousand for year ended
31 December 2022 (for the year ended 31 December 2021: RUB 140,721 thousand).
The payables for medical materials as at 31 December 2022 were RUB 15,719 thousand (the payables as at
31 December 2021: RUB 10,768 thousand).
The Group received medical services from related parties amounted to RUB 51,383 thousand for the year ended
31 December 2022 (for the year ended 31 December 2021: RUB 71,819 thousand).
The payables from medical services which remained unpaid as at 31 December 2022 was RUB 6,759 thousand
(31 December 2021: RUB 17,769 thousand).
Страница 68 из 132
The Group provided services to the key management personnel under non-exclusive commercial concession agreement for
the year ended 31 December 2022 amounted to RUB 1,671 thousand (for the year ended 31 December 2021: RUB 1,527
thousand).
The receivables services under non-exclusive commercial concession agreements which remained unpaid as at
31 December 2022 was RUB 396 thousand (as at 31 December 2021: RUB 548 thousand).
The Group purchased intangible assets from related parties amounted to RUB 14,173 thousand for the year ended
31 December 2022 (for the year ended 31 December 2021: RUB 5,010 thousand).
22.2. Directors' interests
The direct and indirect interests of the members of the Board in titles of the Company as at 31 December 2022,
31 December 2021 and as at the date of signing these consolidated financial statements are as follows:
Name
Mark Kurtser
Kirill Dmitriev (resigned on 5 March 2022)
Simon Rowlands (resigned on 9 March 2022)
Vitaly Ustimenko
Type of interest
Indirect ownership of shares
Indirect interest in shares
Direct ownership of shares
Direct ownership of shares
Effective interest %
67.90
5.55
0.33
0.005
Indirect interest in shares by Kirill Dmitriev arises through his capacity as key management personnel of indirect shareholder.
Member of the Board of Directors Vitaly Ustimenko acquired GDRs on 27 May 2022 and 29 June 2022, as a result the share of
his ownership increased from 0.0053% to 0.0054% of the Сompany's share capital.
The calculation of effective interest is based on the total amount of issued and fully paid shares, including treasury shares
acquired by the Company.
22.3. Dividends declared to related parties
Dividends declared to the parent company MD Medical Holding Limited amounted to RUB 436,250 thousand for the year
ended 31 December 2022 (31 December 2021: RUB 1,887,866 thousand).
23. Financial risk management
Financial risk factors
The Group is exposed to the following risks from its use of financial instruments:
Credit risk
Liquidity risk
Market risk
The Board of Directors has the overall responsibility for the establishment and supervision of the Company's risk management
framework.
The Group's risk management policies are established to identify and analyse the risks faced by the Group to set appropriate
risk limits and controls and monitor risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and in the Group's activities.
(i) Credit risk
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows
from financial assets on hand at the reporting date. The Group has no significant concentration of credit risk. The Group has
policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and
monitors on a continuous basis the ageing profile of its receivables.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
Страница 69 из 132
Trade and other receivables
Cash and cash equivalents excluding
cash in hand
Trade and other receivables
31 December 2022
RUB'000
792,817
4,451,895
31 December 2021
RUB'000
846,706
3,578,216
5,244,712
4,424,922
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group has no
significant concentration of credit risk regarding trade and other receivables. This fact significantly reduces possible delays and
other negative consequences that may potentially affect matching the maturity of assets with liabilities. Furthermore, according
to the internal policy, clients usually pay in advance except for some particular cases.
Cash and cash equivalents and short-term bank deposits
The Group held cash and cash equivalents excluding cash in hand of RUB 4,451,895 thousand as at 31 December 2022
(31 December 2021: RUB 3,578,216 thousand) which represents its maximum credit exposure on these assets. The Group
maintains the majority of cash with the bank that is subject to sanctions. No rating from international rating agencies was
available as at 31 December 2022. In accordance with the Russian rating agency AKRA the rating was ААА(RU).
2022
Number of banks
3
2
Total
External credit rating
ruAAA
other
The carrying amounts as of 31 Dcember 2021 and external ratings of 2021 were as follows:
2021
Number of banks
2
1
2
Total
External credit rating
Baa3
A2
A1
Carrying amount
4,376,840
75,055
4,451,895
Carrying amount
2,883,927
394,682
299,607
3,578,216
The cash and cash equivalents and short-term bank deposits were mostly held with bank and financial institution
counterparties, which were rated Baa3-A1, based on rating agency Moody’s Investors Service ratings
(ii) Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially
enhances profitability, but can also increase the risk of losses. The Group has procedures to minimise such losses including
maintaining sufficient cash and other highly liquid current assets.
The following are the contractual maturities of financial liabilities including estimated interest payments:
31
December
2022
Lease
liabilities
CAPEX
payables
Trade
payables
Other
Note
Carrying
amounts
Contractual
cash flows
2 months
or less
Between
2-12
months
Between
1-2 years
Between
2-5 years
More than
5 years
RUB'000
595,626
RUB'000
735,399
RUB'000
27,429
RUB'000
135,392
RUB'000
144,233
RUB'000
292,381
RUB'000
135,964
66,575
66,575
14,094
52,481
517,270
517,270
517,270
-
-
-
-
-
-
-
19
21
21
21
2,964,585
3,283,014
1,018,786
1,217,162
195,521
429,877
421,668
Страница 70 из 132
payables
and
accrued
expenses
31
December
2021
Bank loans
Lease
liabilities
CAPEX
payables
Trade
payables
Other
payables
and
accrued
expenses
4,414,056
4,602,258
1,577,579
1,405,035
339,754
722,258
557,632
Note
Carrying
amounts
Contractual
cash flows
2 months
or less
Between
2-12
months
Between
1-2 years
Between
2-5 years
More than
5 years
19
19
21
RUB'000
4,818,321
694,712
RUB'000
5,327,905
886,444
RUB'000
333,966
24,670
RUB'000
1,580,779
120,691
RUB'000
1,548,275
143,298
RUB'000
1,864,885
361,691
RUB'000
-
236,094
268,879
268,879
123,820
145,059
21
1,080,420
1,080,420
1,080,420
-
-
-
-
-
-
-
21
2,283,928
2,560,592
1,020,010
637,417
161,843
379,765
361,557
9,146,260
10,124,240
2,582,886
2,483,946
1,853,416
2,606,341
597,651
(iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, may affect the Group's
income or the value of its holdings of financial instruments.
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates.
Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose
the Group to fair value interest rate risk. The Group's management monitors the interest rate fluctuations on an ongoing basis
and acts accordingly.
As at the reporting date the interest rate profile of interest bearing financial instruments was as follows:
Fixed rate instruments
Financial assets
Financial liabilities
31 December 2022
RUB'000
31 December 2021
RUB'000
3,561,740
(595,626)
2,966,114
2,053,166
(5,513,033)
(3,459,867)
The Group does not account for any fixed interest rate instruments at fair value through profit or loss and does not have any
derivative financial instruments, therefore a change in interest rates at the reporting date would not affect profit or loss or
equity.
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency
risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not
the Group's functional currency. The Group is exposed to foreign exchange risk arising from various currency exposures
primarily with respect to the United States Dollar and the Euro. The Group's management monitors the exchange rate
fluctuations on an ongoing basis and acts accordingly.
Страница 71 из 132
The Group's exposure to foreign currency risk was as follows:
Assets
Cash at bank
Trade and other
receivables
Liabilities
CAPEX payables
Trade and other
payables and accruals
Net exposure
USD
62,946
-
(23,515)
(3,491)
35,940
31 December 2022
EUR
-
-
(2,207)
(48)
(2,255)
USD
720,518
464
(59,813)
-
661,169
31 December 2021
EUR
-
-
(22,227)
(40)
(22,267)
The following significant exchange rates applied during the year:
USD
EUR
GBP
Sensitivity analysis
2022
68.5494
72.5259
85.5708
Average rate
2021
73.6541
87.1877
101.3437
Reporting date spot rate
2021
74.2926
84.0695
100.0573
2022
70.3375
75.6553
84.7919
A 10% weakening of the Russian Ruble against the above currencies will result in the increase in profit and equity of RUB
3,369 thousand as at 31 December 2022 (31 December 2021: RUB 63,890 thousand). A 10% strengthening of the Russian
Ruble would have an opposite impact.
Capital management
The Group's objectives in managing capital are to safeguard the Group's ability to continue as a going concern in order to
provide returns to owners 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 shareholders, return
capital to owners or issue of new shares.
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 total loans and borrowings less cash and cash equivalents. Total equity is calculated as
“equity” shown in the consolidated statement of financial position.
Financial liabilities
Less: cash and cash
equivalents
Net debt
Total equity
Net debt to equity ratio
Note
19
16
31 December 2022
RUB'000
595,626
(4,462,740)
(3,867,114)
26,963,262
(14.34%)
31 December2021
RUB'000
5,513,033
(3,589,623)
1,923,410
23,097,192
8.33%
24. Fair values
As at 31 December 2022 and 31 December 2021 the Group had no significant financial assets or liabilities measured at fair
value.
The financial assets of the Group include cash and cash equivalents and trade and other receivables. The financial liabilities of
the Group include loans and borrowings and trade and other payables. The fair value of these financial instruments is classified
as Level 3 of fair value class hierarchy and is estimated only for disclosure purposes using discounted cash flows taking
interest rates adequate to the relevant risk. The fair values of the Group's financial assets and liabilities approximate their
carrying amounts at the reporting date.
Страница 72 из 132
25. Operating environment
(a) Insurance
As per current legislation in Russian Federation medical clinics are not required to insure their activities. There is a draft Law
regarding obligatory insurance of medical clinics as from 2013. The Law has not yet been enacted. At present the Group does
not insure its operational activities but has obtained insurance cover for some property, plant and equipment. Until the Group
obtains adequate insurance coverage there is a risk of material adverse effect on operations and statement of financial
position.
(b) Russian business environment
The Group’s operations are primarily located in the Russian Federation. Consequently, the Group is exposed to the economic
and financial markets of the Russian Federation, which display the characteristics of an emerging market. The legal, tax and
regulatory frameworks continue development, but are subject to varying interpretations and frequent changes which contribute
together with other legal and fiscal impediments to the challenges faced by entities operating in the Russian Federation.
Starting in 2014, the United States of America, the European Union and some other countries have imposed and gradually
expanded economic sanctions against a number of Russian individuals and legal entities. Since February 2022, after the
recognition of the self-proclaimed Donetsk and Lugansk People's Republics and the start of a special military operation in
Ukraine by the Russian Federation, the above countries have imposed additional tough sanctions against the Government of
the Russian Federation, as well as large financial institutions, legal entities and individuals in Russia. In addition, restrictions
were imposed on the supply of various goods and services to Russian enterprises. Also, in the context of the imposed
sanctions, a number of large international companies from the United States, the European Union and other countries
discontinued, significantly reduced or suspended their own activities in the Russian Federation, as well as doing business with
Russian citizens and legal entities.
Further to the sanctions the London Stock Exchange has suspended the admission to trading of the Group`s instruments on
3 March 2022.
In September 2022, partial mobilization was announced in the Russian Federation. Referendums were held in the recognized
republics of Donetsk and Lugansk, as well as in the Zaporozhye and Kherson regions of Ukraine, which resulted in
incorporation of the territories into the Russian Federation. As a result of these events further sanctions were imposed and
there is a risk of increasing pressure on the Russian economy. In response to the above , the Government of the Russian
Federation has introduced a set of measures, which are countersanctions, currency control measures, a number of key interest
rate decisions and other special economic measures to ensure the security and maintain the stability of the Russian economy.
The imposition and subsequent strengthening of sanctions and the partial mobilization resulted in elevated economic
uncertainty, including reduced liquidity and high volatility in the capital markets, volatility of the Rouble exchange rate and the
key interest rate, a decrease in foreign and domestic direct investments, difficulties in making payments for Russian Eurobond
issuers, and also a significant reduction in the availability of sources of debt financing.
In addition, Russian companies have virtually no access to the international stock market, the debt capital market and other
development opportunities, which may lead to their increased dependence on the governmental support. The Russian
economy is in the process of adaptation associated with the replacement of retiring export markets, a change in supply
markets and technologies, as well as changes in logistics, supply and production chains.
It is difficult to assess the consequences of the imposed and possible additional sanctions as well as partial mobilization, in the
long term, however, these events can have a significant negative impact on the Russian economy.
The wave-like nature of the spread of COVID-19 coronavirus infection continues to create additional uncertainty in the
business environment.
The Group primarily operates in Russian healthcare system which is subject to a specific regulatory regime and has its own
peculiarities. A part of the Group’s operations are covered by the Mandatory Health Insurance that require compliance with
certain requirements.
Due to the business specifics purchases of medical equipment, medicines and medical consumables are generally not
sanctioned at the current moment. Therefore the above situation does not negatively influence the business of the Group. The
Management monitors the situation on the constant basis.
The consolidated financial statements reflect management’s assessment of the impact of the Russian business environment
on the operations and the financial position of the Group. The future business environment may differ from management’s
assessment.
Страница 73 из 132
(c) Russian tax environment
The taxation system in the Russian Federation continues to evolve and is characterised by frequent changes in legislation,
official pronouncements and court decisions, which are sometimes contradictory and subject to varying interpretation by
different tax authorities. The tax authorities have the power to impose fines and penalties for tax arrears. A tax year is generally
open for review by the tax authorities during three subsequent calendar years. Currently the tax authorities are taking a more
assertive and substance-based approach to their interpretation and enforcement of tax legislation.
26. Non-controlling interests
The only material non-controlling interest in the Group is related to JSC MD PROJECT 2000. The information about the
subsidiary before any intra-group eliminations is presented below.
Most of the turnovers are cash based.
Revenue
Profit and total comprehensive income
Profit and other comprehensive
income allocated to non-controlling
interests
Dividends paid to non-controlling
interests
Non-controlling interests percentage
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Carrying amount of non-controlling
interests
Other non-controlling interests
2022
RUB'000
3,740,660
1,413,073
70,654
102,500
5%
31 December 2022
RUB'000
2,963,704
657,396
(346,889)
(739,146)
2,535,065
126,753
85,924
212,677
2021
RUB'000
3,569,840
1,310,622
65,531
129,150
5%
31 December 2021
RUB'000
3,613,194
1,022,314
(269,557)
(1,193,958)
3,171,993
158,600
105,905
264,505
27. Capital commitments
Capital commitments mostly comprise of the obligations under construction and equipment purchase contracts in the amount
of RUB 681,311 thousand as at 31 December 2022 (31 December 2021: RUB 1,037,548 thousand).
28. Segment reporting
The Group operates in Russian Federation and has one primary reporting segment: provision of medical services. The Group
evaluates the performance and makes investments and strategic decisions based upon a review of profitability for the Group
as a whole and does not group subsidiaries by geography and service lines during the analysis of their performance.
29. Events after the reporting period
The out-patient medical centre "Mother&Child Mytishchi" with a focus on preparation for pregnancy and childbirth was opened
on 13 January 2023.
No other significant events occurred after the reporting period.
Страница 74 из 132
REPORT AND FINANCIAL STATEMENTS
MD MEDICAL GROUP INVESTMENTS PLC
REPORT AND FINANCIAL STATEMENTS
For the year ended 31 December 2022
OFFICERS, PROFESSIONAL ADVISORS AND REGISTERED OFFICE
Board of Directors
Vladimir Mekler – Chairman
Mark Kurtser
Vitaly Ustimenko
Tatiana Lukina
Sergey Kalugin (appointed on 2 March 2022)
Secretary
Menustrust Limited
Assistant Secretary
Darya Aleksandrova
Independent Auditors
GAC Auditors Ltd
Registered Office
15 Dimitriou Karatasou street, Anastasio Building,
6th floor, office 601, Strovolos,
2024, Nicosia, Cyprus
Страница 75 из 132
Management report
The Board of Directors of MD Medical Group Investments Plc (the “Company”) presents to the members its Annual Report
together with the audited separate financial statements of the Company for the year ended 31 December 2022.
Incorporation
MD Medical Group Investments Plc was incorporated in Cyprus on 5 August 2010 as a private limited liability company under
the provisions of the Cyprus Companies Law, Cap. 113. On 22 August 2012 following special resolution passed by the
shareholder, the name of the Company was changed from “MD Medical Group Investments Ltd” to “MD Medical Group
Investments Plc” and the Company was converted into a public limited liability company in accordance with the provisions of
the Cyprus Companies Law, Cap. 113.
Principal activity
The principal activity of the Company is that of an investment holding company and, for that purpose, to acquire and hold
controlling and other interests in the share or loan capital of any company or companies of any nature, but primarily in the
healthcare industry.
Financial results
The Company's financial results for the year ended 31 December 2022 and its financial position as at that date are set out in
the statement of profit or loss and other comprehensive income on page 85 and in the statement of financial position on page
86 of these financial statements.
Profit for the year ended 31 December 2022 amounted to RUB 2,558,425 thousand (2021: RUB 3,703,469 thousand). The
total assets of the Company as at 31 December 2022 were RUB 14,511,922 thousand (31 December 2021: RUB 12,599,310
thousand) and the net assets were RUB 14,444,752 thousand (31 December 2021: RUB 12,528,646 thousand).
Dividends
In accordance with the Company’s Articles of Association dividends may be paid out of its profits. To the extent that the
Company declares and pays dividends, owners of GDRs on the relevant record date will be entitled to receive dividends in
respect of ordinary shares underlying the GDRs.
The Company is a holding company and thus its ability to pay dividends depends on the ability of its subsidiaries to pay
dividends to the Company in accordance with relevant legislation in the country of their incorporation and any contractual
restrictions. The payment of such dividends by its subsidiaries is contingent upon the sufficiency of their earnings, cash flows
and distributable reserves.
On 26 October 2022 the Board of Directors recommended the payment of RUB 642,319 thousand as interim dividends which
corresponds to RUB 8.55 per share. The dividends were paid on 29 November 2022.
On 3 September 2021 the Board of Directors recommended the payment of RUB 1,352,249 thousand as interim dividends
which corresponds to RUB 18 per share. The dividends were paid on 26 October 2021.
On 19 March 2021 Board of Directors recommended the payment of RUB 1,427,375 thousand as final dividends for the year
2020 which corresponds to RUB 19 per share. The dividends were paid on 25 May 2021.
Examination of the development, position and performance of the
activities of the company
The current financial position and performance of the Company as presented in these financial statements is considered
satisfactory.
The Company through its subsidiaries has one of the largest nationwide private healthcare regional networks for its core
services and is expanding into new services. It has significant experience in the provision of fullservice private maternity
healthcare services. The Company has secured leading positions in the Russian private healthcare market across a range of
services including obstetrics and gynaecology, fertility and IVF treatments, and paediatrics. It has also been diversifying its
offering by adding other medical services for all family members, such as surgery, urology, traumatology, cardiology, and
oncology, etc. The recently opened facilities have been multi-disciplinary from the very beginning.
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Principal risks and uncertainties
Details in relation to principal risks and uncertainties and steps taken to manage these risks and uncertainties are presented in
Note 17.
The Board of Directors has the overall responsibility for the establishment and supervision of the Company's risk management
framework.
Directors' interest
The direct and indirect interests of the members of the Board in titles of the Company as at 31 December 2022,
31 December 2021 and as at the date of signing these financial statements are as follows:
Name
Mark Kurtser
Kirill Dmitriev (resigned on 5 March
2022)
Simon Rowlands (resigned on 9 March
2022)
Vitaly Ustimenko
Type of interest
Indirect ownership of shares
Indirect interest in shares
Direct ownership of shares
Direct ownership of shares
Effective interest %
67.90
5.55
0.33
0.005
Indirect interest in shares by Kirill Dmitriev arises through his capacity as key management personnel of indirect shareholder.
The Director Vitaly Ustimenko acquired GDRs on 27 May 2022 and 29 June 2022, and as a result the share of his ownership
increased from 0.0053% to 0.0054% of the Сompany's share capital.
The calculation of effective interest is based on the total amount of issued and fully paid shares, including treasury shares
acquired by the Company.
Future developments
The Company’s goal is to continually diversify its medical services through its subsidiaries by expanding its range of services,
maintaining its leading position in the field of high-quality women’s health and paediatrics, as well as addressing the increasing
demand for private healthcare services in Russia and beyond.
The Company intends through its subsidiaries to expand its portfolio of hospital and outpatient facilities, broaden its service
offerings by providing patients with the most up-to-date treatment procedures and medical technology available on the market,
expand its services in Moscow and other regions, exploit the value of its integrated healthcare network by making effective use
of services across its facilities, optimizing the benefits for patients and its subsidiaries as a whole.
Share capital
There were no changes in the share capital of the Company during the year.
Board of Directors
The Board of Directors leads the process in making new Board member appointments and makes recommendations on
appointments to shareholders. In accordance with the Appointment Policy for the Board of Directors and Committees, all
directors are subject to appointment or approval of appointment by shareholders at the first Annual General Meeting after their
appointment, and to re-appointment at intervals of no more than three years. Any term beyond six years (e.g. two three-year
terms) for a non-executive director is subject to particularly rigorous review, and takes into account the need for progressive
refreshing of the Board of Directors.
Sergey Kalugin was appointed as an independent director on 2 March 2022.
Kirill Dmitriev and Africa Platforms Capital LLP (represented by Simon Rowlands) stepped down as a member of the Board of
Directors on 5 March 2022 and 9 March 2022 respectively.
The members of the Board of Directors who served as at the date of signing of these financial statements, are presented on
page 76.
Refer to Note 16.1. of these financial statements for the remuneration of the directors and other key management personnel.
Страница 77 из 132
The Board committees
Since September 2012, the Board of Directors established the operation of the following three committees: the Audit
Committee, the Nomination Committee and the Remuneration Committee.
Audit Committee
The Audit Committee comprises of three non-executive directors, two of whom are independent. The Audit Committee has
been chaired by the independent non-executive director Tatiana Lukina since 6 December 2019, Mr. Kirill Dmitriev and Mr.
Simon Rowlands were the other members.
Following the resignation of Mr. Simon Rowlands and Mr. Kirill Dmitriev on 5 March 2022 and 9 March 2022, respectively,
Vitaly Ustimenko and Sergey Kalugin were appointed as the other members of the audit committee on 14 March 2022.
The Audit Committee meets at least four times each year and is responsible for considering:
the reliability and appropriateness of disclosures in the financial statements and external financial communication
the maintenance of an effective system of internal controls including financial, operational and compliance controls and
risk management system
the preparation of recommendations to the shareholders for approval in General Meetings in relation to the
appointment, reappointment and removal of the external auditors
the approval of the remuneration and terms of engagement of the external auditors in respect of audit services
provided
the audit process, including monitoring and review of the external auditors' performance, independence and objectivity
the development and implementation of the policy on non-audit services provided by the external auditors
the monitoring of compliance with laws and regulations and standard of corporate governance
The Audit Committee assists the Board of Directors in its oversight of the performance and leadership of the internal audit
activity.
Where the Audit Committee’s monitoring and review activities reveal cause for concern or scope for improvement, it shall make
recommendation to the Board of Directors on actions needed to address the issues or to make improvements.
Internal audit
The Audit Committee is responsible for monitoring and reviewing the effectiveness of the Company’s internal audit function. In
this respect, the Audit Committee may require investigations by, or under the authority of, the head of Internal Audit into any
activities of the Company which may be of interest or concern to the Audit Committee.
The Company`s internal auditor is responsible for the recommendation of an audit plan to the Audit Committee. The internal
auditor carries out auditing assignments in accordance with such plan and oversees the Company`s compliance with the plan`s
recommendations. The internal auditor files a quarterly report with his findings to the Audit Committee.
Nomination Committee
The Nomination Committee comprises of one executive and two non-executive directors, one of whom is independent. The
Nomination Committee is chaired by the non-executive director Mr. Vladimir Mekler (since June 2016). Mr. Mark Kurtser and
Mr. Simon Rowlands were the other members. Following the resignation of Mr. Simon Rowlands on 9 March 2022, Mr. Sergey
Kalugin was appointed as the other member of the audit committee on 14 March 2022.
The Nomination Committee meets at least once a year and is responsible for assisting the Board of Directors in discharging its
corporate governance responsibilities in relation to appointment of all executive and non-executive directors, as well as the
CEO and CFO of the Company. The main objective of the Nomination Committee is to lead the process for the Board of
Directors’ appointments and make respective recommendation to the Board of Directors, ensuring proper balance of the Board
of Directors and qualification of its members. The Nomination Committee also considers the composition of the Audit and
Remuneration Committees.
Remuneration Committee
The Remuneration Committee comprises of two non-executive directors and one executive director. The Remuneration
Committee was chaired by an independent non-executive director Mr. Simon Rowlands, who stepped down on 5 March 2022.
Страница 78 из 132
Mr. Sergey Kalugin was appointed as the chairman of the Remuneration Committee on 14 March 2022. The two other
members are Dr. Mark Kurtser and Mr. Vladimir Mekler.
The Remuneration Committee meets at least once a year and is responsible for assisting the Board of Directors in discharging
its corporate governance responsibilities in relation to remuneration of all executive directors and the chairman of the Board of
Directors.
The main objective of the Remuneration Committee is to determine the framework and policy for the remuneration of the
executive directors, the chairman of the Board of Directors and senior executives, and the specific remuneration of each
executive director and the chairman of the Board of Directors and any compensation payments.
Corporate governance
Since 2012, the Company has maintained full compliance with the UK Corporate Governance Code. The Company is
committed to the highest standards of corporate governance and transparency. The Board of Directors recognises that good
governance is a strategic asset that helps it to deliver consistent long-term value to its shareholders. By running the Company
in an open way, the Board of Directors enables shareholders to understand how it has been able to deliver consistently strong
results. The Board of Directors believes that corporate responsibility is an essential part of good governance and makes sound
business sense, as well as being crucial to the appropriate management of risk within the Company.
In order to improve its corporate governance structure in accordance with the internationally recognised best practices, the
Company adopted important policies and procedures.
The Company’s corporate governance policies and practices are designed to ensure that the Company is focused on
upholding its responsibilities to the shareholders.
The Company’s corporate governance policies and practices include, inter alia:
Appointment policy for the Board of Directors and Committees
Terms of reference of the Audit Committee, Nomination Committee and Remuneration Committee
Code of Ethics and Conduct
Business Continuity Policy
Disclosure Policy
Regulations on Insider Information
Risk Management Policy; and
Anti-Fraud Policy
Internal control in relation to the financial reporting process
The Company has set formal policies and written terms of reference in relation to the financial reporting process that include:
Corporate Accounting policy Guidelines
Methodology for the Transformation of Financial Statements from RAS to IFRS
Financial Reporting Preparation Procedure; and
The Group’s structure
The objective of this policу is to establish uniform procedures and to implement requirements for the preparation of the financial
statements of the Company. The procedure should be reviewed for compliance with International Financial Reporting
Standards as well as current conditions and planned changes in the Company’s business activities annually. When necessary,
amendments and additions to this Procedure should be adopted.
Meetings of shareholders
The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that
year. An annual general meeting and any other shareholders’ meeting called to pass a special resolution can be convened by
the Board of Directors by a notice, specifying the matters to be discussed, issued at least 21 days before the meeting. Any
Страница 79 из 132
other meetings shall be convened by the Board of Directors by a notice, specifying the matters to be discussed, issued at least
14 days before the meeting. If the notice period is less than 21 days or 14 days as applicable, the meeting will be deemed to
have been duly called if it is so agreed:
in the case of a meeting called as the annual general meeting, by all the shareholders entitled to attend and vote, and
in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the
meeting, being a majority together holding not less than 95 per cent in nominal value of the shares giving that right
A notice convening a general meeting must be sent to each of the shareholders.
All shareholders are entitled to attend the general meeting or be represented by a proxy authorised in writing. In the general
meeting, on a poll, every share gives the holder the right to cast one vote, whereas, on a show of hands, each member has
one vote. A corporate member may, by resolution of its directors or other governing body, authorise a person to act as its
representative at any meeting of the Company.
Branches
MD Medical Group Investments Plc has a branch in Moscow.
Treasury shares
During the year ended 31 December 2022 the Company did not acquire any treasury shares.
Events after the reporting period
The events after the reporting date are disclosed in Note 20 to these financial statements.
Independent auditors
The independent auditors, GAC Auditors Ltd, were appointed in replacement of the previous auditors KPMG Limited and have
expressed their willingness to continue in office and a resolution giving authority to the Board of Directors to fix their
remuneration will be proposed at the Annual General Meeting.
By order of the Board of Directors,
Vladimir Mekler
Chairman of the Board of Directors
Mark Kurtser
Managing Director, member of the Board of Directors
Moscow, 31 March 2023
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Directors' responsibility statement
The Company's Board of Directors is responsible for the preparation of separate financial statements that give a true and fair
view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements
of the Cyprus Companies Law, Cap.113, and for such internal control as the Board of Directors determines is necessary to
enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error.
This responsibility includes selecting appropriate accounting policies and applying them consistently; and making accounting
estimates and judgements that are reasonable in the circumstances.
In preparing the separate financial statements, the Board of Directors is also responsible for assessing the Company’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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
The Board of Directors’ confirmations
The Board of Directors confirms that, to the best of its knowledge:
(a) the financial statements, which are presented on pages 85 to 106, which have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus
Companies Law, Cap.113, give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Company; and
(b) the management report includes a fair review of the development and performance of the business and the position of
the Company, together with a description of the principal risks and uncertainties that it faces
Further, the Board of Directors confirms that, to the best of its knowledge:
i
adequate accounting records have been maintained which disclose with reasonable accuracy the financial position of
the Company and explain its transactions
ii all information of which it is aware that is relevant to the preparation of the financial statements, such as accounting
records and all other relevant records and documentation, has been made available to the Company’s auditors
iii
iv
v
the financial statements disclose the information required by the Cyprus Companies Law, Cap.113 in the manner so
required
the Management Report has been prepared in accordance with the requirements of the Cyprus Companies Law,
Cap.113, and the information given therein is consistent with the financial statements
the information included in the corporate governance statement in accordance with the requirements of subparagraphs
(iv) and (v) of paragraph 2(a) of Article 151 of the Cyprus Companies Law, Cap. 113, and which is included as a
specific section of the Management Report, have been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap, 113, and is consistent with the financial statements; and
vi
the corporate governance statement includes all information referred to in subparagraphs (i), (ii), (iii), and (vii) of
paragraph 2(a) of Article 151 of the Cyprus Companies Law, Cap. 113
By order of the Board of Directors,
Vladimir Mekler
Chairman of the Board of Directors
Mark Kurtser
Managing Director, member of the Board of Directors
Moscow, 31 March 2023
Страница 81 из 132
Independent Auditor's Report
To the Members of MD Medical Group Investments PLC
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying separate financial statements of the parent company MD Medical Group Investments PLC
(the ''Company''), which comprise the statement of financial position as at 31 December 2022, and the statements of profit or
loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the parent company
MD Medical Group Investments PLC as at 31 December 2022, and of its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the
requirements of the Cyprus Companies Law, Cap. 113.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the ''Auditor's Responsibilities for the Audit of the Financial Statements'' section of our
report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants'
International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code)
together with the ethical requirements that are relevant to our audit of the financial statements in Cyprus, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note 19 to the financial statements, which describes the operating environment and the impact of conflict
between Russia and Ukraine. Our opinion is not modified in respect of this matter.
Key Audit Matters
In addition to the matter described on Emphasis of Matter paragraph above, we have determined the matters described below
to be the key audit matters to be communicated in our report.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters 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.
Investments in subsidiaries
Refer to 8 of the separate financial statements (RUB12,860,242 thousand)
Key audit matter
The carrying value of the investments in
subsidiaries amounts for RUB 12,860,242 thousand
and accounts for more than 89% of the company's
total assets as at 31 December 2022.
How the matter was addressed in our audit
Our audit procedures included among others the following:
a) Made inquiries of management regarding the indicators they
assess as possible indicators of impairment for relevant
assets/CGUs
Significant judgement is required by the
management of the Company in determining
whether there are any indicators for impairment
and, where such indications exist, in assessing the
recoverable amount of the investments.
We focus on this area because of the significance
of the carrying amount of the investments in the
separate financial statements and because inherent
uncertainty and subjectively is involved in
forecasting and sicounting future cash flows, which
are the basis of the assessment of the recoverable
amount of the investments and hemce thir carrying
b)
Inspected management's assessment and consider whether
further indicators should have been assessed based on our
knowledge of the business, its operating environment,
industry knowledge, current market conditions and other
information obtained during the audit
c) Verified the accuracy of management's calculations for those
assets/CGUs subject to impairment testing and consider
whether the assets/CGUs tested are completed
d) Evaluated the valuation techniques, assumptions and data
used by management to make their accounting estimates
used for value in use/fair values less costs of disposalse
e) Evaluated the completness, accuracy and relevance of
Страница 82 из 132
amount recorded in the separate financial
statements.
disclosres required by IAS 36, including disclosures
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in the
Management Report, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
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, 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 in this regard.
Responsibilities of the Board of Directors for the Financial Statements
The Board of Directors is responsible for the preparation of financial statements that give a true and fair view in accordance
with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus
Companies Law, Cap. 113, and for such internal control as the Board of Directors determines 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 Board of Directors is responsible for assessing the Company'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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.
The Board of Directors is responsible for overseeing the Company's financial reporting process.
Auditor's 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 auditor's 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 will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Board of Directors
Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to
continue as a going concern
Страница 83 из 132
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves a true
and fair view.We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Report on Other Legal Requirements
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
In our opinion, the Management Report has been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap 113, and the information given is consistent with the financial statements
In our opinion, and in the light of the knowledge and understanding of the Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the Management Report
Other Matters
This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with
Section 69 of the Auditors Law of 2017 and for no other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whose knowledge this report may come to.
We have reported separately on the consolidated financial statements of the Company and its subsidiaries for the year ended
31 December 2022.
Comparative figures
The financial statements of the Company for the year ended 31 December 2021 were audited by another auditor who
expressed an unmodified opinion on those financial statements on 25 March 2022.
Michalis Lambrianides
Certified Public Accountant and Registered Auditor
for and on behalf of
GAC Auditors Ltd
Certified Public Accountants and Registered Auditors
48, Inomenon Ethnon Street Guricon House, 1st floor 6042
Larnaca, ................... 2023
Страница 84 из 132
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2022
Dividend income
Revenue from recharging of
expenses
Revenue from advertising
Total revenue
Other income
Other expenses
Selling, general and
administrative expenses
Operating profit
Finance income
Finance expenses
Net foreign exchange
transactions loss
Net finance expenses
Profit before tax
Income tax
Profit for the year
Total comprehensive
income for the year
Note
16.2
16.3
4
5
5
5
5
6
2022
RUB'000
2,969,952
102,667
9,841
3,082,460
2,136
(71,749)
(411,531)
2,601,316
62,455
(1,825)
(103,521)
(42,891)
2,558,425
-
2,558,425
2,558,425
2021
RUB'000
3,993,512
98,886
16,199
4,108,597
8,126
(5,503)
(405,752)
3,705,468
5,949
(1,022)
(6,926)
(1,999)
3,703,469
-
3,703,469
3,703,469
The Notes on pages 89 to 106 are an integral part of these reports and financial statements.
Страница 85 из 132
Statement of financial position
As at 31 December 2022
Note
31 December 2022
RUB'000
31 December 2021
RUB'000
ASSETS
Property, plant and
equipment
Intangible assets
Investments in subsidiaries
Total non-current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Share capital
Share premium
Other reserves
Retained earnings
Total equity
LIABILITIES
Trade and other payables
Total non-current liabilities
Trade and other payables
Total current liabilities
Total equity and liabilities
9
10
8
11
12
13
14
14
14
15
15
12,398
31,599
12,860,242
12,904,239
1,911
203,699
4,919
1,397,154
1,607,683
14,511,922
180,585
5,243,319
328,510
8,692,338
14,444,752
5,793
5,793
61,377
61,377
14,511,922
7,592
15,130
11,245,257
11,267,979
3,396
563,400
4,919
759,616
1,331,331
12,599,310
180,585
5,243,319
328,510
6,776,232
12,528,646
-
-
70,664
70,664
12,599,310
On 31 March 2023 the Board of Directors of MD Medical Group Investments Plc approved and authorised these reports and
financial statements for issue.
Vladimir Mekler
Chairman of the Board of Directors
Mark Kurtser
Managing Director
The Notes on pages 89 to 106 are an integral part of these reports and financial statements.
Страница 86 из 132
Statement of changes in equity
For the year ended 31 December 2022
Note
Share
capital
RUB'000
180,585
Share
premium
RUB'000
5,243,319
Other
reserves
RUB'000
328,510
Retained
earnings
RUB'000
6,776,232
Total
RUB'000
12,528,646
-
-
-
-
7
-
2,558,425
2,558,425
-
(642,319)
(642,319)
180,585
5,243,319
328,510
8,692,338
14,444,752
Balance as at
1 January 2022
Total
comprehensive
income
Profit and other
comprehensive
income for the year
Contributions by
and distributions to
owners
Dividends declared
and paid
Balance as at
31 December 2022
Share premium is not available for distribution.
The Notes on pages 89 to 106 are an integral part of these reports and financial statements.
Statement of changes in equity
For the year ended 31 December 2021
Note
Share
capital
RUB'000
180,585
Share
premium
RUB'000
5,243,319
Other
reserves
RUB'000
328,510
Retained
earnings
RUB'000
5,852,387
Total
RUB'000
11,604,801
-
-
-
3,703,469
3,703,469
7
(2,779,624)
(2,779,624)
180,585
5,243,319
328,510
6,776,232
12,528,646
Balance as at
1 January 2021
Total
comprehensive
income
Profit and other
comprehensive
income for the year
Contributions by
and distributions to
owners
Dividends declared
and paid
Balance as at
31 December 2021
Share premium is not available for distribution.
The Notes on pages 89 to 106 are an integral part of these reports and financial statements.
Страница 87 из 132
Statement of cash flows
For the year ended 31 December 2022
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation
Amortisation
Dividend income
Finance expenses
Finance income
Net foreign exchange loss
Disposal of investments in subsidiaries
due to liquidation
Impairment of investments in subsidiaries
Cash flows used in operations before
working capital changes
(Increase) / decrease in trade and other
receivables
Decrease / (increase) in inventories
Decrease in trade and other payables
Cash flows used in operations
Dividends received
Net cash flows from operating
activities
Cash flows from investing activities
Capital contributions to subsidiaries
Acquisition of property, plant and
equipment
Acquisition of intangible assets
Placing short-term bank deposits
Proceeds from short-term bank deposits
return
Interest received
Net cash flows (used in) / from
investing activities
Cash flows used in financing activities
Finance expenses paid
Payments of lease liabilities
Dividends paid to owners of the Company
Net cash flows used in financing
activities
Net increase in cash and cash
equivalents
Cash and cash equivalents at the
beginning of the year
Effect of movements in exchange rates
on cash held
Cash and cash equivalents as at the
end of the year
Note
4
4
5
5
5
8
8
16.2
8
10
5
12
2022
RUB'000
2,558,425
5,024
5,845
(2,969,952)
1,825
(62,455)
103,521
155
70,000
(287,612)
(263,605)
1,485
(161)
(549,893)
3,654,657
3,104,764
(1,685,140)
(9,830)
(22,314)
-
-
-
(1,717,284)
(769)
(3,576)
(636,794)
(641,139)
746,341
759,616
(108,803)
1,397,154
The Notes on pages 89 to 106 are an integral part of these reports and financial statements.
2021
RUB'000
3,703,469
5,710
5,351
(3,993,512)
1,022
(5,949)
6,926
-
3,920
(273,063)
50,277
(1,917)
(29,762)
(254,465)
3,449,830
3,195,365
(768,460)
(496)
(13,458)
(866,831)
1,648,623
5,769
5,147
(908)
(2,940)
(2,726,685)
(2,730,533)
469,979
385,254
(95,617)
759,616
Страница 88 из 132
Notes to the financial statements
For the year ended 31 December 2022
Incorporation and principal activities
1.
MD Medical Group Investments Plc (the “Company”) was incorporated in Cyprus on 5 August 2010 as a private limited liability
company under the provisions of the Cyprus Companies Law, Cap. 113. The Company is domiciled in Russia. In August 2012,
following the special resolution passed by the shareholder, the Company was converted into a public limited liability company
in accordance with the provisions of the Cyprus Companies Law, Cap. 113. Its Registered Office is at Dimitriou Karatasou 15,
Anastasio Building, 6th floor, office 601, Strovolos, 2024, Nicosia, Cyprus.
The principal activity of the Company is that of an investment holding company and, for that purpose, to acquire and hold
controlling and other interests in the share or loan capital of any company or companies of any nature, but primarily in the
healthcare industry.
2. Basis of preparation
(a) Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by
the European Union (IFRS-EU) and the requirements of the Cyprus Companies Law, Cap.113.
These are the separate financial statements of the Company. The Company has also prepared consolidated financial
statements in accordance with IFRS as adopted by the EU for the Company and its subsidiaries (“the Group”). The
consolidated financial statements are available at 15 Dimitriou Karatasou street, Anastasio Building, 6th floor, office 601,
Strovolos, 2024 Nicosia, Cyprus.
Users of these parent's separate financial statements should read them together with the Group's consolidated financial
statements as at and for the year ended 31 December 2022 in order to obtain a proper understanding of the financial position
the financial performance and the cash flows of the Company and the Group.
(b) Basis of measurement
These reports and financial statements have been prepared under the historical cost convention.
(c) Functional and presentation currency
These reports and financial statements are presented in Russian Rubles (RUB'000) which is the functional currency of the
Company. Financial information presented in Russian Rubles has been rounded to the nearest thousand except where
otherwise indicated.
(d) Use of estimates and judgements
Preparing these financial statements in accordance with IFRSs requires management to exercise their judgement to make
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities,
income and expenses.
The estimates and underlying assumptions are based on historical experience and various other factors that are deemed
reasonable based on knowledge available at that time. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed and where necessary revised on an ongoing basis. Revisions to
estimates are recognised prospectively.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies
that have the most significant effect on the amount recognised in the financial statements are described below:
Impairment of investments in subsidiaries
The Company periodically evaluates the recoverability of investments in subsidiaries whenever indicators of impairment are
present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse
changes in the economic or political stability of a particular country, which may indicate that the carrying amount of an asset is
not recoverable. If facts and circumstances indicate that investments in subsidiaries may be impaired, the estimated future
discounted cash flows associated with these subsidiaries would be compared to their carrying amounts to determine if a write
down to fair value is necessary. As at the reporting date, there were no indicators of impairment.
Measurement of fair values
A number of the Company's accounting policies and disclosures require the measurement of fair values, for both financial and
non financial assets and liabilities.
Страница 89 из 132
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair
values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as
follows:
Level–1 quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level–2 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
Level–3 inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the
fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement.
3. Significant accounting policies
The accounting policies applied in these financial statements are consistent with those followed in the Company’s financial
statements as at 31 December 2021 and for the year then ended.
New standards and amendments applied for the first time in 2022 did not impact these financial statements of the Company.
Subsidiary companies
Subsidiaries are entities controlled by the Company. Control exists where the Company is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an
expense in the period in which the impairment is identified.
Dividend income
Dividend income is recognised in the statement of profit or loss and other comprehensive income when the right to receive
payment is established.
Revenue
Revenue represents the amount of consideration to which the Company expects to be entitled in exchange for transferring the
promised services to the customer excluding amounts collected on behalf of third parties (for example, value added tax). The
Company transfers control over its services at a point in time.
The Company recharges to subsidiaries IT, advertising, call center and other expenses, relating to services that are provided
by third parties for the benefit of a number of subsidiaries. Recharging is made over time as the services are transferred by
third parties to subsidiaries on the basis of a cost plus margin arrangement.
Finance income
Finance income includes interest income which is recognised as it accrues in profit or loss using the effective interest method.
Finance expenses
Finance expenses include bank charges and interest expense. Bank charges are recognised as expenses in the period in
which they fall due and interest expense is recognised as it accrues in profit or loss using the effective interest method.
The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected
life of the financial instrument to:
the gross carrying amount of the financial asset; or
the amortised cost of the financial liability
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset
(when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become
credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the
amortised cost of the financial asset. If the asset is no longer creditimpaired, then the calculation of interest income reverts to
the gross basis.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
Страница 90 из 132
year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss
under the category finance income or finance expenses.
Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in profit or loss
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or
substantively enacted at the reporting date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial
position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where
the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset
realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to
other comprehensive income or equity, in which case the deferred tax is also dealt with in other comprehensive income or
equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its
current tax assets and liabilities on a net basis.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company
expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Dividends declared
Interim dividend distributions to the Company's shareholders are recognised as a liability when it is both appropriately
authorised and no longer at the Company’s discretion (i.e. when the Company has an obligation to pay). Final dividend
distributions to the Company's shareholders are recognised in the Company's financial statements in the year in which they are
approved by the Company's shareholder.
Financial instruments
Recognition
The Company recognises financial assets and financial liabilities when, and only when, it becomes a party of the contractual
provisions of the financial instrument. Trade receivables and debt securities issued are initially recognised when they are
originated.
Classification
The Company classifies financial assets on the basis of both: the Company`s business model for managing financial assets, as
well as the contractual cash flow characteristics of the financial assets.
The Company’s financial assets comprise of trade and other receivables and cash and cash equivalents. They are non-
derivative financial assets with fixed or determinable payments that are not quoted in an active market and for which there is no
intention of trading the receivable. All of the Company's financial assets are measured at amortised cost. They are classified as
current assets unless the Company has an unconditional responsibility to accept deferral of receipt for at least twelve months
after the balance sheet date, in which case they are classified as non-current assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
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Financial assets – Business model assessment
The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level
because this best reflects the way the business is managed and information is provided to management. The information
considered includes:
the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether
management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile,
matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or
realising cash flows through the sale of the assets
how the performance of the portfolio is evaluated and reported to the Company’s management
the risks that affect the performance of the business model (and the financial assets held within that business model)
and how those risks are managed
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets
managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
expectations about future sales activity
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this
purpose, consistent with the Company’s continuing recognition of the assets.
Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’
is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well
as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment,
the Company considers:
contingent events that would change the amount or timing of cash flows
terms that may adjust the contractual coupon rate, including variable-rate features
prepayment and extension features; and
terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features)
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include
reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or
premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially
represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable
compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is
insignificant at initial recognition.
The Company’s financial liabilities comprise of trade and other payables. They are classified as current liabilities unless there is
an unconditional right to defer settlement for at least twelve months after the balance sheet date, in which case they are
classified as long-term liabilities.
Initial measurement
Financial assets and financial liabilities are initially measured at fair value plus any directly attributable transaction costs.
Subsequent measurement
Financial assets at amortised cost:
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced
by impairment losses. Interest income, foreign exchange gain and losses and impairment are recognised in profit or loss. Any
gain or loss on derecognition is recognised in profit or loss.
Страница 92 из 132
Trade and other receivables are amounts due from customers for services performed in the ordinary course of business and
are stated after deducting the appropriate allowances for any impairment.
For the purpose of the statement of cash flows, cash and cash equivalents include cash in hand, cash at bank and short term
highly liquid investments with maturity of three months or less from the acquisition date that are subject to an insignificant risk
of changes in their fair value and are used by the Company in the management of its short-term investments.
Financial liabilities at amortised cost:
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense
and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in
profit or loss.
Impairment of non-derivative financial assets
At each balance sheet date the Company recognises a loss allowance for expected credit losses on financial assets measured
at amortised cost.
The loss allowance for financial assets at amortised cost is recognised in profit or loss in respondence with a balance sheet
account reducing the carrying amount of the financial asset. Expected credit losses for counterparties, including banks, are
determined based on historical data of relevant probability of default and loss given default. Impairment on cash and cash
equivalents is measured on a 12-month expected loss basis and reflects the short maturities of the exposures. The Company
considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics. The Company measures loss allowances at an
amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical
experience and informed credit assessment, that includes forward-looking information.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when the debtor is unlikely to pay its credit obligations to the
Company in full, without recourse by the Company to actions such as realising security (if any is held).
Credit-impaired financial assets
At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A
financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
significant financial difficulty of the debtor
it is probable that the debtor will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for a security because of financial difficulties
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost the reversal is recognised in profit or loss.
Based on the analysis of the historical data the accounts receivable mainly represents by receivable from related parties and
no provision is accrued.
Derecognition of financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised
when:
the rights to receive cash flows from the asset have expired;
the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full
without material delay to a third party under a “pass through” arrangement; or
Страница 93 из 132
the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially
all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards
of the asset, but has transferred control of the asset.
Any interest in such derecognised financial assets that is created or retained by the Company, is recognised as a separate
asset or liability.
Derecognition of financial liabilities
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 a derecognition of the original
liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or
loss.
Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only
if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis,
or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and
the related assets and liabilities are presented gross in the statement of financial position.
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to depreciation or amortisation are reviewed 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 to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units).
Share capital
Proceeds from the issue of ordinary shares are classified as equity. The difference between the issue price of the shares and
their nominal value is taken to the share premium account.
Incremental costs directly attributable to the issue of new shares are recognised as a deduction from share premium net of any
tax effect.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be
made. Where the Company expects a provision to be reimbursed, for example an insurance contract, the reimbursement is
recognised as a separate asset but only when the reimbursement is virtually certain.
Comparatives
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current period.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid
investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value. Bank overdrafts are included in liabilities.
Leases
At inception of a contract, the Company 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.
Leases in which the Company is a lessee
At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration
in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the
Company has elected not to separate non-lease components and account for the lease and non-lease components as a single
lease component.
The Company 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
Страница 94 из 132
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 Company by the end of the lease term or
the cost of the right-of-use asset reflects that the Company 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 commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental
borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources
and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
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 Company is reasonably certain to exercise, lease payments in an
optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early
termination of a lease unless the Company 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, if there is a change in the Company’s estimate of the amount
expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Company presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and
equipment’ and lease liabilities in ‘trade and other payables’ in the statement of financial position.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases, including IT equipment. The Company recognises the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
COVID-19-related rent concessions
The Company has applied COVID-19-Related Rent Concessions - Amendment to IFRS 16. The Company applies the practical
expedient allowing it not to assess whether eligible rent concessions that are a direct consequence of the COVID-19 pandemic
are lease modifications. The Company applies the practical expedient consistently to contracts with similar characteristics and
in similar circumstances. For rent concessions in leases to which the Company chooses not to apply the practical expedient, or
that do not qualify for the practical expedient, the Company assesses whether there is a lease modification.
Leases in which the Company is a lessor
The Company does not have significant contracts where it is a lessor.
Standards issued but not yet effective:
The following new and amended standards are not expected to have a significant impact on the Company’s financial
statements.
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
Страница 95 из 132
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
Definition of Accounting Estimates (Amendments to IAS 8)
4. Selling, general and administrative expenses
Payroll and related social taxes
Advertising
Legal and professional expenses
Independent auditors' remuneration
IT support
Depreciation
Amortisation
Call center services
Other expenses
Total selling, general and
administrative expenses
Note
9
10
2022
RUB'000
233,742
82,370
39,872
14,610
11,364
5,024
5,845
-
18,704
411,531
2021
RUB'000
229,267
71,186
37,205
20,129
8,873
5,710
5,351
3,660
24,371
405,752
During the year ended 31 December 2022 the remuneration of the independent auditors included an amount of RUB 14,512
thousand regarding audit services and an amount of RUB 98 thousand regarding tax services (the year ended
31 December 2021: RUB 19,359 thousand and RUB 770 thousand respectively).
The number of employees as at 31 December 2022 was 65 (31 December 2021: 113).
5. Net finance (expenses) / income
Finance income
Bank interest received
Finance expenses
Bank charges
Interest on leases
Impairment of trade and other
receivables
Net foreign exchange transactions loss
Net finance expenses
6.
Income tax
Current tax
Deferred tax
Charge for the year
2022
RUB'000
62,455
(769)
(195)
(861)
(103,521)
(42,891)
2022
RUB'000
-
-
-
Reconciliation between profit before taxation and income tax expense:
Accounting profit before tax
Tax calculated at the applicable tax
rates
2022
RUB'000
2,558,425
(511,685)
2021
RUB'000
5,949
(908)
(114)
-
(6,926)
(1,999)
2021
RUB'000
-
-
-
2021
RUB'000
3,703,469
(740,694)
Страница 96 из 132
Tax effect of allowances and income
not subject to tax
Current-year losses for which no
deferred tax asset is recognised
Tax as per statement of
comprehensive income - charge
The corporation tax rate is 20% (2021: 20%).
2022
RUB'000
573,735
(62,050)
-
2021
RUB'000
791,269
(50,575)
-
In 2015, the Company changed its tax residency from Cyprus to Russian and opened a branch in Moscow.
As a result the Company is taxable under Russian Tax Code which impose corporation tax at the rate of 20%.
As at 31 December 2022 deferred tax asset relating to tax losses carried forward in the amount of RUB 349,186 thousand
(31 December 2021: RUB 287,136 thousand) has not been recognised in the financial statements since it is expected that no
sufficient taxable profits will be available to allow it to be recovered.
7. Dividends
On 26 October 2022 the Board of Directors recommended the payment of RUB 642,319 thousand as interim dividends which
corresponds to RUB 8.55 per share. The dividends were paid on 29 November 2022.
On 3 September 2021 the Board of Directors recommended the payment of RUB 1,352,249 thousand as interim dividends
which corresponds to RUB 18 per share. The dividends were paid on 26 October 2021.
On 19 March 2021 Board of Directors recommended the payment of RUB 1,427,375 thousand as final dividends for the year
2020 which corresponds to RUB 19 per share. The dividends were paid on 25 May 2021.
8.
Investments in subsidiaries
Balance at 1 January
Capital contributions
Disposal on investments in subsidiaries
due to liquidation
Impairment of investments in
subsidiaries
Decrease of investment
Balance at 31 December
31 December 2022
RUB'000
11,245,257
1,685,140
(155)
(70,000)
-
12,860,242
The details of the subsidiaries are as follows:
Name
Country of
incorporation
Activities
JSC MD PROJECT 2000 Russian Federation
Russian Federation
LLC Khaven
Russian Federation
LLC Velum
Russian Federation
LLC Capital Group
Russian Federation
LLC Clinic Mother and
Child
LLC Clinica Zdorovia
LLC Ivamed
LLC Dilamed
LLC Mother and Child
Perm
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Medical services
Medical services
Medical services
Assistance services
Holding of trademarks
Medical services
Medical services
Medical services
Medical services
31 December 2022
Effective holding,
%
95
100
90
95
100
80
100
-
95
31 December 2021
RUB'000
10,497,717
763,920
-
(3,920)
(12,460)
11,245,257
31 December 2021
Effective holding, %
95
100
90
95
100
80
100
100
95
Страница 97 из 132
Name
Country of
incorporation
Activities
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
LLC Mother and Child
(Ufa)
LLC Mother and Child
Saint-Petersburg
LLC MD PROJECT 2010 Russian Federation
Russian Federation
LLC Mother and Child
Ugo-Zapad
LLC MD Service
LLC Mother and Child
Nizhny Novgorod
LLC Mother and Child
Yekaterinburg
LLC Mother and Child
Tyumen
JSC MK IDK
LLC Apteka IDK
LLC CSR
LLC MD Assistance
LLC Mother and Child
Yaroslavl
LLC Mother and Child
Kostroma
LLC Mother and Child
Vladimir
LLC Mother and Child
Ryazan
LLC Mother and Child
Kazan
JSC MC Avicenna
Russian Federation
LLC H&C Medical Group Russian Federation
Russian Federation
LLC Centre of
Reproductive Medicine
LLC Medica-2
LLC Krasnoyarskii center
of Reproductive Medicine
LLC Novosibirskii center
of Reproductive Medicine
LLC Omskii center of
Reproductive Medicine
LLC Barnaulskii center of
Reproductive Medicine
LLC Mother and Child
Vladivostok
LLC Mother and Child
Volga
LLC MD Finance
LLC Mother and Child
Krasnodar
LLC Mother and Child
Rostov-on-Don
LLC MD Group
Krasnogorsk
LLC MD Belgorod
LLC MD Lipetsk
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Dormant company
Medical services
Medical services
Medical services
Pharmaceutics retail
Medical services
Medical services
Medical services
Medical services
Pharmaceutics retail
Dormant company
Assistance services
Medical services
Medical services
Medical services
Medical services
Medical services
Medical services
Pharmaceutics retail
Medical services
Medical services
Medical services
Medical services
Medical services
Medical services
Medical services
Management company
Management company
Medical services
Medical services
Dormant company
Medical services
Medical services
31 December 2022
Effective holding,
%
95
85
100
90
95
100
100
100
100
100
100
100
80
80
80
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
-
-
31 December 2021
Effective holding, %
95
85
100
90
95
100
100
100
100
100
100
100
80
80
80
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
100
100
Страница 98 из 132
Name
Country of
incorporation
Activities
NFP MGIMO-MED
LLC MD Group Holding
JSC MD Medical Group
LLC Siberia service
company
LLC TechMedCom
LLC Service Hospital
Company
LLC Elleprof
LLC Medtechnoservice
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Medical university
Management company
Management company
Service company
Russian Federation
Russian Federation
Service company
Service company
Russian Federation
Russian Federation
Service company
Service company
31 December 2022
Effective holding,
%
67
100
100
-
-
-
-
-
31 December 2021
Effective holding, %
67
-
-
-
-
-
-
-
The Company made additional capital contributions to its subsidiary LLC Khaven totalling of RUB 900,000 thousand in July
2022 and RUB 665,000 thousand in August 2022. The Company made the capital contribution to its subsidiary CJSC MK IDK
in the amount of RUB 20,000 thousand in April 2022 and RUB 30,000 thousand in May 2022.
The capital contribution made in subsidiary LLC Mother and Child Yekaterinburg in the amount of RUB 70,000 thousand made
during the year ended 31 December 2022 was impaired. The impairment is recognised in other expenses.
The Company also made capital contributions in LLC MD Group Holding and LLC MD Assistance in the total amount of RUB
140,000 thousand made during the year ended 31 December 2022.
The Company made additional capital contribution to its subsidiary LLC Khaven in the amount of RUB 650,000 thousand in
September 2021. The Company made the capital contributions to its subsidiary CJSC MK IDK in the amount of RUB 50,000
thousand in January 2021 and RUB 60,000 thousand in May 2021.
The capital contributions in LLC Dilamed in the amount of RUB 2,885 thousand, in LLC Mother and Child Yekaterinburg in the
amount of RUB 1,000 thousand and in LLC FimedLab in the amount of RUB 35 thousand made during the year ended
31 December 2021 were impaired. The impairment is recognised in other expenses.
The Company decreased capital contribution of it subsidiary LLC Mother and Child Kazan in the amount of RUB 12,460
thousand in March 2021.
9. Property, plant and equipment
Note Plant and equipment
RUB'000
Right-of-use of
freehold buildings
RUB'000
Initial cost
Balance as at 1 January 2021
Additions
Disposals
Balance as at 31 December 2021
Additions
Disposals
Balance as at 31 December 2022
Depreciation
Balance as at 1 January 2021
Depreciation during the year
Accumulated depreciation on
disposals
Balance as at 31 December 2021
Depreciation during the year
Accumulated depreciation on
disposals
Balance as at 31 December 2022
4
4
12,573
936
(1,299)
12,210
359
(223)
12,346
(5,734)
(2,331)
859
(7,206)
(2,171)
132
(9,245)
17,721
3,104
-
20,825
9,562
-
30,387
(14,858)
(3,379)
-
(18,237)
(2,853)
-
(21,090)
Total
RUB'000
30,294
4,040
(1,299)
33,035
9,921
(223)
42,733
(20,592)
(5,710)
859
(25,443)
(5,024)
132
(30,335)
Страница 99 из 132
Carrying amounts
Balance as at 1 January 2021
Balance as at 31 December 2021
Balance as at 31 December 2022
10. Intangible assets
Initial cost
Balance as at 1 January 2021
Additions
Balance as at 31 December 2021
Additions
Balance as at 31 December 2022
Amortisation
Balance as at 1 January 2021
Amortisation during the year
Balance as at 31 December 2021
Amortisation during the year
Balance as at 31 December 2022
Carrying amounts
Balance as at 1 January 2021
Balance as at 31 December 2021
Balance as at 31 December 2022
Note Plant and equipment
RUB'000
6,839
5,004
3,101
Right-of-use of
freehold buildings
RUB'000
2,863
2,588
9,297
Note
Software and website
RUB'000
4
4
25,834
13,458
39,292
22,314
61,606
(18,811)
(5,351)
(24,162)
(5,845)
(30,007)
7,023
15,130
31,599
Total
RUB'000
9,702
7,592
12,398
Total
RUB'000
25,834
13,458
39,292
22,314
61,606
(18,811)
(5,351)
(24,162)
(5,845)
(30,007)
7,023
15,130
31,599
11. Trade and other receivables
Receivables from subsidiary
companies
Other receivables
Note
16.4
31 December 2022
197,623
31 December 2021
559,206
6,076
203,699
4,194
563,400
The fair value of trade and other receivables due within one year approximates to their carrying amount as presented above.
The exposure of the Company to credit risk, currency risk and impairment losses in relation to trade and other receivables is
reported in Note 17 of the financial statement.
12. Cash and cash equivalents and short-term deposits
Current bank accounts
Bank deposits with maturity less than 3
months
Total cash and cash equivalents
31 December 2022
RUB'000
72,154
1,325,000
31 December 2021
RUB'000
730,616
29,000
1,397,154
759,616
Страница 100 из 132
Currency:
USD
RUB
EUR
31 December 2022
RUB'000
62,940
1,334,214
-
1,397,154
31 December 2021
RUB'000
720,532
39,104
(20)
759,616
The exposure of the Company to credit risk, currency risk and impairment losses in relation to cash and cash equivalents is
reported in Note 17 of the financial statements.
13. Share capital
Number of shares
125,250,000
Nominal value
USD
0.08
Share capital
RUB'000
-
31 December 2021
RUB'000
10,020
75,125,010
0.08
180,585
6,010
Authorised
1 January / 31
December
Issued and fully paid
ordinary shares
1 January / 31
December
14. Share premium, reserves and retained earnings
Share premium
Share premium includes the total amount received in excess of the total nominal value of the new share capital issued.
Incremental costs directly attributable to the issue of new shares are recognised as a deduction from equity (share premium)
net of any tax effect.
Retained earnings
Retained earnings include accumulated profits and losses incurred by the Company.
Other reserves
Exchange differences relating to the translation of the net assets of the Company from its functional currency to the
presentation currency before changing the functional currency from the United States Dollar to the Russian Ruble were
recognised directly in other comprehensive income and accumulated in the other reserves.
Other reserves also include the results of common control transactions recognised in equity and the ‘gains/loss’ from mergers.
15. Trade and other payables
Accruals
Lease payables
Trade and other payables
Non-current portion
Current portion
31 December 2022
RUB'000
8,591
8,329
50,250
67,170
5,793
61,377
67,170
31 December 2021
RUB'000
22,507
2,724
45,433
70,664
-
70,664
70,664
The exposure of the Company to liquidity risk in relation to trade and other payables is reported in Note 17 of the financial
statements.
Страница 101 из 132
16. Related party transactions
As at 31 December 2022, 67.9% of the Company’s issued share capital is owned by MD Medical Holding Limited, a company
beneficially owned by the Director Dr. Mark Kurtser. The remaining 32.1% of the Company’s issued share capital is owned by
Guarantee Nominee Limited, which holds the shares on behalf of the GDR holders.
The following transactions were carried out with related parties:
16.1. Operations with key management personnel
The remuneration of the members of the key management personnel and non-executive directors for the year ended
31 December 2022 was RUB 51,500 thousand (for the year ended 31 December 2021: RUB 52,163 thousand).
The remuneration of the members of the key management personnel which remained unpaid as at 31 December 2022 was
RUB 14,700 thousand (31 December 2021: RUB 7,550 thousand).
16.2. Transactions with subsidiary companies
Dividend income
2022
RUB'000
2,969,952
2,969,952
2021
RUB'000
3,993,512
3,993,512
16.3. Revenue from subsidiaries for branch operations
During the year the Company received revenue from recharging of expenses amounted to RUB 102,667 thousand (2021:
RUB 98,886 thousand) which relates to licences, advertising, IT support and call center expenses recharged to its subsidiaries.
The relevant expenses are presented in Note 4.
16.4. Receivables from / (Payables to) subsidiary companies
Receivables from subsidiary companies - Dividend
receivable
Receivables from subsidiary companies - Trade
receivables
Payables to subsidiary companies - Other payables
Note
11
11
2022
RUB'000
164,305
33,318
(14)
2021
RUB'000
543,682
15,524
(186)
Receivables from and (payables to) related parties are unsecured, interest-free and receivable / (repayable) on demand.
16.5. Directors' interests
The direct and indirect interests of the members of the Board in titles of the Company as at 31 December 2022,
31 December 2021 and as at the date of signing these financial statements are as follows:
Name
Mark Kurtser
Kirill Dmitriev (resigned on 5 March
2022)
Simon Rowlands (resigned on 9 March
2022)
Vitaly Ustimenko
Type of interest
Indirect ownership of shares
Indirect interest in shares
Direct ownership of shares
Direct ownership of shares
Effective interest %
67.90
5.55
0.33
0.005
Indirect interest in shares by Kirill Dmitriev arises through his capacity as key management personnel of indirect shareholder.
The calculation of effective interest is based on the total amount of issued and fully paid shares, including treasury shares
acquired by the Company.
Member of the Board of Directors Vitaly Ustimenko acquired GDRs on 27 May 2022 and 29 June 2022, as a result the share of
his ownership increased from 0.0053% to 0.0054% of the Сompany's share capital.
Страница 102 из 132
16.6. Dividends declared to related parties
Dividends declared to the parent company MD Medical Holding Limited amounted to RUB 436,250 thousand for the year
ended 31 December 2022 (31 December 2021: RUB 1,887,866 thousand).
17. Financial risk management
Financial risk factor
The Company is exposed to the following risks from its use of financial instruments:
Credit risk
Liquidity risk
Market risk
The Board of Directors has the overall responsibility for the establishment and supervision of the Company's risk management
framework.
The Company's risk management policies are established to identify and analyse the risks faced by the Company to set
appropriate risk limits and controls and monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and in the Company's activities.
(i) Credit risk
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows
from financial assets on hand at the reporting date. Cash balances are held with various financial institutions.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
Trade and other receivables
Cash and cash equivalents
31 December 2022
RUB'000
201,445
1,397,154
1,598,599
31 December 2021
RUB'000
560,898
759,616
1,320,514
The Company held cash and cash equivalents excluding cash in hand of RUB 1,397,154 thousand at 31 December 2022
(31 December 2021: RUB 759,616 thousand) which represents its maximum credit exposure on these assets. The Company
maintains the majority of cash with the bank that is subject to sanctions. No rating from international rating agencies was
available as at 31 December 2022. In accordance with the Russian rating agency AKRA the rating was ААА(RU).
Number of banks
2
Total
External credit rating
ruAAA
The carrying amounts as of 31 December 2021 and external ratings of 2021 were as follows:
Number of banks
1
1
1
Total
External credit rating
Baa3
A2
A1
Carrying amount
1,397,154
1,397,154
Carrying amount
70,292
390,970
298,354
759,616
(ii) Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially
enhances profitability, but can also increase the risk of losses. The Company has procedures to minimise such losses including
maintaining sufficient cash and other highly liquid current assets. The following are the contractual maturities of financial
liabilities including estimated interest payments:
Страница 103 из 132
31
December
2022
Lease
liabilities
Trade and
other
payables
31
December
2021
Lease
liabilities
Trade and
other
payables
Note
Carrying
amounts
Contractual
cash flows
2 months
or less
RUB'000
8,329
RUB'000
9,656
RUB'000
568
Between
2-12
months
RUB'000
2,840
Between
1-2 years
Between
2-5 years
More than
5 years
RUB'000
3,408
RUB'000
2,840
RUB'000
-
58,841
58,841
50,427
8,414
-
-
-
15
15
Note
Carrying
amounts
Contractual
cash flows
2 months
or less
Between
2-12
months
Between
1-2 years
Between
2-5 years
More than
5 years
RUB'000
RUB'000
RUB'000
RUB'000
RUB'000
RUB'000
RUB'000
15
2,724
2,800
560
2,240
15
67,940
67,940
59,525
8,414
-
-
-
-
-
-
(iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices may
affect the Company's income or the value of its holdings of financial instruments.
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates.
Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings issued at fixed rates
expose the Company to fair value interest rate risk. The Company's management monitors the interest rate fluctuations on an
ongoing basis and acts accordingly.
As at the reporting date the interest rate profile of interest bearing financial instruments was as follows:
Fixed rate instruments
Financial assets
Financial liabilities
Note
12
15
2022
RUB'000
1,325,000
(8,329)
1,316,671
2021
RUB'000
29,000
(2,724)
26,276
The Company does not account for any fixed rate instruments at fair value through profit or loss and does not have any
derivative financial instruments, therefore a change in interest rates at the reporting date would not affect profit or loss or
equity.
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency
risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not
the Company's functional currency. The Company is exposed to foreign exchange risk arising from various currency exposures
primarily with respect to the United States Dollar.
The Company's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
Страница 104 из 132
The Company's exposure to foreign currency risk was as follows:
31 December 2022
31 December 2021
Assets
Cash at bank
Liabilities
Trade and other
payables and
accruals
Net exposure
USD
62,940
-
62,940
EUR
-
(48)
(48)
USD
720,532
-
720,532
EUR
(20)
-
(20)
The following significant exchange rates applied during the year:
Average rate
2022
68.5494
72.5259
85.5708
2021
73.6541
87.1877
101.3437
Reporting date spot rate
2022
70.3375
75.6553
84.7919
2021
74.2926
84.0695
100.0573
USD
EUR
GBP
Sensitivity analysis
A 10% stengthening of the Russian Ruble against the above currencies will result in the increase in profit and equity of
RUB 6,289 thousand as at 31 December 2022 (31 December 2021: RUB 72,051 thousand).
A 10% weakening of the Russian Ruble would have an opposite impact.
Capital management
The Company's objectives in managing capital are to safeguard the Company's ability to continue as a going concern in order
to provide returns to owners and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure the Company may adjust the amount of dividends paid to shareholders,
return capital to owners or issue of new shares.
18. Fair values
As at 31 December 2022 and 31 December 2021 the Company had no financial assets or liabilities measured at fair value.
The fair values of the Company's financial assets and liabilities approximate their carrying amounts at the reporting date.
19. Operating environment
(a) Russian business environment
The operations of the Company`s subsidiaries are primarily located in the Russian Federation. Consequently, the Company is
exposed to the economic and financial markets of the Russian Federation, which display the characteristics of an emerging
market. The legal, tax and regulatory frameworks continue development, but are subject to varying interpretations and frequent
changes which contribute together with other legal and fiscal impediments to the challenges faced by entities operating in the
Russian Federation.
Starting in 2014, the United States of America, the European Union and some other countries have imposed and gradually
expanded economic sanctions against a number of Russian individuals and legal entities. Since February 2022, after the
recognition of the self-proclaimed Donetsk and Lugansk People's Republics and the start of a special military operation in
Ukraine by the Russian Federation, the above countries have imposed additional tough sanctions against the Government of
the Russian Federation, as well as large financial institutions, legal entities and individuals in Russia. In addition, restrictions
were imposed on the supply of various goods and services to Russian enterprises. Also, in the context of the imposed
sanctions, a number of large international companies from the United States, the European Union and other countries
discontinued, significantly reduced or suspended their own activities in the Russian Federation, as well as doing business with
Russian citizens and legal entities.
Страница 105 из 132
Further to the sanctions the London Stock Exchange has suspended the admission to trading of the Company's instruments on
3 March 2022.
In September 2022, partial mobilization was announced in the Russian Federation. Referendums were held in the recognized
republics of Donetsk and Lugansk, as well as in the Zaporozhye and Kherson regions of Ukraine, which resulted in
incorporation of the territories into the Russian Federation. As a result of these events further sanctions were imposed and
there is a risk of increasing pressure on the Russian economy. In response to the above , the Government of the Russian
Federation has introduced a set of measures, which are countersanctions, currency control measures, a number of key interest
rate decisions and other special economic measures to ensure the security and maintain the stability of the Russian economy.
The imposition and subsequent strengthening of sanctions and the partial mobilization resulted in elevated economic
uncertainty, including reduced liquidity and high volatility in the capital markets, volatility of the Rouble exchange rate and the
key interest rate, a decrease in foreign and domestic direct investments, difficulties in making payments for Russian Eurobond
issuers, and also a significant reduction in the availability of sources of debt financing.
In addition, Russian companies have virtually no access to the international stock market, the debt capital market and other
development opportunities, which may lead to their increased dependence on the governmental support. The Russian
economy is in the process of adaptation associated with the replacement of retiring export markets, a change in supply
markets and technologies, as well as changes in logistics, supply and production chains.
It is difficult to assess the consequences of the imposed and possible additional sanctions as well as partial mobilization, in the
long term, however, these events can have a significant negative impact on the Russian economy.
The wave-like nature of the spread of COVID-19 coronavirus infection continues to create additional uncertainty in the
business environment.
The financial statements reflect management’s assessment of the impact of the Russian business environment on the
operations and the financial position of the Company. The future business environment may differ from management’s
assessment.
(b) Russian tax environment
The taxation system in the Russian Federation continues to evolve and is characterised by frequent changes in legislation,
official pronouncements and court decisions, which are sometimes contradictory and subject to varying interpretation by
different tax authorities. The tax authorities have the power to impose fines and penalties for tax arrears. A tax year is generally
open for review by the tax authorities during three subsequent calendar years. Currently the tax authorities are taking a more
assertive and substance-based approach to their interpretation and enforcement of tax legislation.
20. Events after the reporting period
No significant events occurred after the reporting period.
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CORPORATE SOCIAL RESPONSIBILITY
Our focus on caring expands far beyond the daily business operations of our clinics and hospitals. As a responsible corporate
citizen, the Group aims to regularly contribute to the communities of medical professionals, local patients and people in need,
by utilising its resources, time and expertise.
Our Mission
Our deep commitment to CSR is not just a requirement for a major listed company and employer. Rather, it reflects our strong
belief that creating value for our stakeholders is critical for the long-term sustainable growth of MD Medical Group.
Our People
We invest heavily in training and educating our staff, creating opportunities for them to learn from the best medical practitioners
in the world. Many of them have worked with the Group since its creation, and we recognise and reward this dedication
by creating an environment that encourages professional and personal growth.
Our Profession
Above all, we recognise that one of the most important roles we can play as a leading healthcare company in Russia
is to contribute our resources, time, expertise and know-how to raise the overall standard of the healthcare profession
in Russia. We regularly hold open-access webinars for doctors and patients across the country where we address key issues
in women’s and children’s health, thereby helping to raise the quality of medical services provided to patients all
over the country.
Our Technology
We aim to maximise efficiency and minimise patient stress by constantly updating our technology and using the most
innovative procedures. For example, several years ago the Company started performing foetal surgery to correct spina bifida
during pregnancy while the baby is inside the womb. We also use endovascular methods to correct congenital heart defects
of newborns.
Our Communities
As we continuously expand our network throughout Russia and often bring unique services to new regions, we not only provide
people with high-quality and easily accessible healthcare but also encourage every employee to contribute to their own
communities.
Key CSR activities in 2022
Educational events
Multiple conferences and master classes for held for our employees in 2022. These were held at the MDMG hospitals
and other locations. Among others, such conferences were held in Lapino, Ufa, Samara and Volgograd. Fertility doctors,
gynecologists and regional specialists came together to exchange knowledge and experience, further building on the expertise
of our staff.
Charity events
We constantly support various organisations that help children with special needs. The Samara hospital regularly provides
financial help to the Samara hospice and the local association of doctors. In 2022, in particular, the clinical hospital
‘AVICENNA’ continued its diverse charitable work in the Novosibirsk Region. This work included benefactor work with the
Novosibirsk City Public Organisation for families with children with disabilities ‘Ray of Light’. In addition, ‘AVICENNA’ has been
an important partner for a concert series for pregnant women, ‘Waiting for a Miracle’of the Novosibirsk State Philharmonic. This
event is aimed at popularising the topic of motherhood and the importance of musical culture in the upbringing of the younger
generation.
Annual Christmas and New Year events
Traditionally, on the eve of the New Year and Christmas, we organise various events for children. Last year was no exception,
with a Christmas tree and sweet gifts waiting for our little patients. Additionally, we usually organise a Wish Tree, in which
the Group and its employees collect gifts for children with disabilities across various regions. This year, the clinical hospital
“AVICENNA” provided donations for the purchasing of New Year’s gifts for struggling families in the villages of Beloborodovo
Страница 107 из 132
and Vakhrushevo in the Novosibirsk Regions. On 28 December, a New Year's performance was held, where Santa Claus and
Snow Maiden gave gifts to the children.
Donor’s Day in Ufa
Donor’s Day in March 2022 in the MDMG Ufa. Together with the blood service of the Republic of Bashkortostan, an action
was held in the hospital. More than 100 people volunteered and donated blood.
Sustainable development
Sustainable development at MD Medical Group goes beyond individual activities.
It is an organisation-wide culture that reflects the fundamental identity of MD Medical Group as both innovative and socially
responsible.
Since 2017, sustainable development has had its own section of the Annual Report and is prepared in accordance
with the GRI Standards 2021 (Core option) and the 2014/95/EU directive. Here we outline key benchmarks and activity results
of our hospitals and clinics in sustainable development, with a focus on their social and environmental performance.
The key indicators we track each year are electricity use, heating, and water consumption. The information provided in this
section covers the period 1 January to 31 December 2022.
The clinics and hospitals that contributed information to this sustainability report did so according to the IFRS 10 requirements
unless stated otherwise.
Identifying material topics
Material topics were identified for the previous year’s annual report in a robust, coherent manner, and the same approach
was taken with regards to the MD Medical Group’s Annual Report 2022. Benchmarking against major companies
in the industry has upheld this approach. As a result, the matrix of material topics utilised in 2021 was continued in 2022.
The material topics that feature in this graph are disclosed in the sustainable development section and are referred
to elsewhere within the Annual Report 2022. The sustainable development section discloses one material topic, Quality
of Service Provision, that is not covered by the GRI Standards but is considered essential at MD Medical Group. Both internal
and external stakeholders identified this topic as highly important since it reflects the level of customer satisfaction.
Ensuring patients receive the highest quality of care is a key priority for MD Medical Group. Therefore, the report discloses
several indicators that MD Medical Group included in its previous Annual Reports, including Development and extension
of the list of services (MD1), Annual capacity of the hospitals (MD2), Development of hi-tech medical care (MD3), Highly-
qualified personnel (MD4), Dialogue with patients (MD5).
Interaction with stakeholders
All MD Medical Group business functions were analysed to identify key stakeholders for this Annual Report. Medical health
care practices were benchmarked, and the Company’s internal and external impacts were evaluated. The following stakeholder
list, as defined in previous annual reports, continues to apply:
Patients and their families
Employees
Suppliers
Shareholders and investors
Government authorities
In addition, MD Medical Group adds the following category of stakeholder, whose interests are broadly aligned with those of
the other two stakeholder groups – patients and authorities:
Insurers.
MD Medical Group regularly interacts with all stakeholders to improve the effectiveness of its business activities and to ensure
the quality of provided services is under constant scrutiny.
Страница 108 из 132
Stakeholder needs analysis for MD Medical Group
Main communication channels
Our patients
The Company adheres to the highest standards of service to provide our patients with state-of-the-art treatment.
Patient service
Patients are at the heart of everything that MD Medical Group does. We are committed to continuously improving the service
we provide to patients: from the quality of medical care they receive to the user experience on the website, and the ease
of confirming, changing, booking, or cancelling appointments.
Страница 109 из 132
We pay special attention to increasing the accessibility of clinics. All of our new facilities are being built as a barrier-free
environment. There are no steps or other obstacles that hinder movement. Older facilities, which were not originally built
with these principles in mind, have been upgraded to provide easier access for people with reduced mobility. In addition, all
the clinics and hospitals of MD Medical Group are equipped with Braille signs.
To increase the financial availability of our services, we work both on a commercial basis and under the programme
of Mandatory Health Insurance (MHI). Medical assistance under the MHI programme is provided in 44 clinics, including 9 in-
patient clinical hospitals providing high-tech medical care.
In 2022, 167,428 patients were treated under the MHI programme. Infertility is also treated with the help of assisted
reproductive technologies (IVF) under the MHI programme. In 2022, 12,994 patients underwent IVF cycles within this
framework.
In 2022, our oncological clinics received additional support from the MHI Fund. In total, 13,226 patients received treatment
for cancer under the MHI programmes.
We constantly update our equipment and improve the skills of our personnel so that our patients receive the best treatment.
In 2022, we achieved this through several different means. Firstly, we optimised the methodology used for recording laboratory
tests, resulting in significantly increased accuracy and speed of data processing. In addition, we are always looking to improve
the expertise of our staff. More detailed information on this can be found in the section on ‘Our People’. Today, as all of our
hospitals are developed as large multifunctional centres, we continue to introduce advanced treatments for patients of all ages
in various fields of medicine.
Patient engagement
To increase patient engagement, we are using Digital Medical Operations (Doctis) telemedicine consultation platform.
As of January 2023, more than 1,500 doctors were connected to Doctis. The online format has stayed popular even after
changes to consultations during the COVID-19 pandemic, allowing patients to stay in touch with their doctors. The introduction
of telemedicine consultations, among other things, made it possible to provide some medical services remotely, e.g.,
to patients planning IVF cycles.
As a medical provider, we understand that patient engagement plays a critical role in improving health outcomes and
enhancing the overall patient experience. We believe that patient engagement is a key driver of quality healthcare, and we are
committed to promoting it across all aspects of our organisation. In 2022, we managed to improve our systems of patient
engagement though:
Establishing a full-fledged exchange of information about patients obtained through telemedicine
Improving our system of work with patients, including conducting mass surveys and questionnaires
Strengthening the work of the call centre by optimising its headcount, providing ongoing training and establishing key
performance indicators to be used by staff
MD Medical Group continues to take a data-driven approach to its
website, constantly reviewing it for changes that can be made
and improvements that can positively impact user experience.
A comprehensive approach is taken to assessing and responding
to patient feedback, ensuring all internal parties are involved.
Feedback mechanisms that monitor patients’ perception
of the quality of service provided by MD Medical Group have been
in place since 2017. Central to this is the customer satisfaction
score (CSAT) for consultations over the telephone and hotline
performance, which seeks customer input on:
Speed and convenience of a consultation
Completeness and comprehensiveness
Politeness of an employee during a consultation
These indicators are recorded and analysed regularly, as a patient
might leave their feedback at any stage of a consultation process.
Страница 110 из 132
Patients can also use the hotline to share their feedback on services received at MD Medical Group, by filling out a form
on the website, sending an email to quality@mcclinics.ru or via the contact centre.
In 2020, MD Medical Group rolled out the strategy that underpins our robust and responsive feedback and enquiry processing
system. The successful achievement of key strategy goals has been maintained from previous year, with patient
communication improving year-to-year.
Our people
Employee engagement
MD Medical Group’s market-leading status relies on the outstanding professionals who make up our staff. We invest in our
employees and offer diverse opportunities for professional development for all members of staff, whatever their role within
the Company.
Our people are essential in driving our ongoing success. MD Medical Group’s employees are highly qualified and talented in all
fields: from medically qualified healthcare professionals to management and administrative support teams. They work hard
to ensure the long-term success of our business. In return, we provide our staff with a comfortable and supportive working
environment, competitive wages and social packages, as well as broad possibilities for further professional growth.
Our HR Policy focuses on:
Retaining existing staff and searching for new highly skilled employees
Developing our personnel management system
Selecting talented students and inviting them to study with residence at our facilities
Creating opportunities for personal and career growth
Constantly monitoring and adopting the best available technologies
Regularly updating our equipment so it remains state-of-the-art
Ensuring our best employees are in key positions to maximise potential and stimulate internal growth
Providing better working conditions to ensure low staff turnover
Providing incentive programmes for employees
Offering training programmes in a range of fields, as part of our corporate education system
As an employer, MD Medical Group prioritises further professional development for all its employees. Key company values,
such as transparency, innovation and adherence to best practices, in the real world mean that we carry out regular training
sessions for employees in clinics across the country. These training sessions help ensure that at each MD Medical Group
location patients and staff can expect the same high-quality level of operation.
MD Medical Group’s HR management structure reflects features of the industry, specific aspects of key business functions,
type of facilities and geographic location of hospitals and clinics. The Company’s corporate culture and business goals are also
reflected in the HR management structure, presented in the chart below.
HR Management structure
Страница 111 из 132
Personnel management at MD Medical Group focuses on:
Attracting high-qualified, talented, and motivated professionals into the workforce
Developing a talent pool of qualified medical professionals and managers
Offering them a supportive, inclusive environment in which they can further develop their skills
Incentivising and motivating staff to grow their skills and achieve more
Adopting lean management practices and processes across the Group
Providing continuous access to further professional education for staff in all areas at MD Medical Group
Ensuring all members of staff are valued equally and have equal opportunities to speak up about issues that affect
them in their workplace
Motivating members of the team to perform at their best at all times while with MD Medical Group is an essential feature
of the Group’s HR management landscape. MD Medical Group has a bonus system in place, including:
Monthly performance bonus (70/30 system)
Bonus for achieving KPIs
Awards for individual achievements
Incentive payments for the qualification category
State and medical community awards and diplomas
MD Medical Group’s corporate culture is based on positive engagement and encouragement. The compulsion of any kind
is not permitted. Key principles of our corporate culture are set out in the MD Medical Group Code of Corporate Ethics
and Employee Conduct.
Any employee who has suspicions of potentially illegal or unethical activities may report to their immediate supervisor, the head
of department, or the head of the Internal Audit Department. The most complex cases are reported to the CEO, the Chairman
of the Audit Committee, or the Chairman of the Board of Directors.
Страница 112 из 132
Personnel figures (as of 31 December 2022)
Figures for hires, turnover and parental leave do not represent external staff
1. Total number of employees
Headcount
Full-time equivalent (FTE)
2. Employees by employment type
Total
Women
Men
3. Employees by gender
Women
Men
4. Personnel structure
Doctors
Other medical staff
Professors
Administrative staff
5. Employees by age
younger than 30
from 30 to 50
older than 50
6. Payroll structure
Doctors
Other medical staff
Other staff
7. Staff hires by gender
Men
Women
8. Staff turnover by gender
Men
Women
9. Staff hires by age group
younger than 30
from 30 to 50
older than 50
10. Staff turnover by age group
2022
8,466
7,713
Full-time
6,465
5,593
872
2022
83%
17%
2022
3,193
2,863
8
2,402
2022
1,194
5,028
2,244
2022
51%
26%
23%
2022
208
1,304
2022
309
1,270
2022
436
778
298
2022
2021
8,461
7,756
2022
Part-time
2,001
1,393
608
2021
81%
19%
2021
3,093
2,817
2
2,549
2021
1,269
5,068
2,124
2021
50%
24%
26%
2021
261
1,400
2021
224
1,202
2021
527
844
290
2021
Страница 113 из 132
younger than 30
from 30 to 50
older than 50
11. Staff on maternity and/or
parental leave at year end
Men
Women
12. Total number of doctors
Doctors, total
Doctors, presented as full-time
equivalent (FTE)
13. Doctors by speciality (FTE, as
of 31 December 2022)
Obstetrician
Reproductologist
Pediatrician
Oncologist
Surgeon
Cardiologist
Other speciality
14. Doctor's qualifications (as of
31 December 2022)
PhD
Professors
Professional development
346
848
385
2022
2
428
2022
3,193
2,305
2022
360
255
259
51
111
42
1,226
2022
544
70
360
756
310
2021
-
434
2021
3,093
2,286
2021
347
245
259
50
67
42
1,277
2021
583
61
As an employer, MD Medical Group prioritises further professional development for all its employees. Key company values
such as transparency, innovation and adherence to best practices in the real world mean that we carry out regular training
sessions for employees in clinics across the country. These training sessions help ensure that at each MD Medical Group
location, patients and staff can expect the same high-quality level of operation.
We are always striving to improve an already exceptional level of knowledge that our doctors and other staff have. All
the training and courses are fully paid for by the Company.
Over the last ten years, our physicians have completed residency training in OBGYN, neonatology and oncology. Competition
for residency training is widely announced each year, resulting in more than 100 applications from participants across all
country regions. The competition takes place in several stages; the finalists are carefully selected and trained at the clinical
facilities of the Lapino Central Hospital and the MD Medical Group Central Hospital.
In 2022, nine participants won the competition and entered the programme, and five participants graduated. Upon completion
of their residency, doctors are employed by the Group’s clinics and hospitals, including those in the regions. In this way,
by training doctors from their student benches, we maintain continuity in the level of qualification and quality of medical care
inherent in the Group.
Continuous training and professional development of doctors and nursing staff take place both offline and online. On a regular
basis throughout the year, leading specialists give lectures to doctors, share their experience and highlight current trends
in medicine.
At MD Medical Group, staff are encouraged to learn from each other. In 2022, among our training programmes we have
provided staff with:
Страница 114 из 132
7 lectures for nurses with more than 250 participants each, on the topics of professional errors and responsibilities of
the nursing staff, conducting sterilisation work according to new sanitary regulations, early rehabilitation of patients,
observation and monitoring of patients with arterial hypertension, amongst others
2 offline conferences for nurses on the hospital grounds in Novosibirsk
45 lectures for doctors on OBGYN, reproductive medicine, surgery, oncology and other areas
Online conference for all Group clinics and hospitals with the participation of Michel Oden, on the topic of ‘Careful
Health’
2 offline conferences in the Lapino Clinical Hospital, a conference of the Moscow Society of Geneticists and a
conference on ‘Laboratory trends in reproduction. The art of choosing the best’
Ffull-time training course with master classes (14 days) on ultrasound diagnostics in obstetrics, in the MD Medical
Group Clinical Hospital
11 offline conferences on current issues in reproductive medicine at the Ufa Clinical Hospitals
Several international scientific and practical conferences on OBGYN, urology, paediatrics, including the international
annual scientific-practical conference ‘Controversial issues of Reproductive Medicine: Polycystic ovary syndrome
(PCOS)’
Masterclasses in hospitals on OBGYN, reproductive medicine and surgery, including topics like laparoscopic treatment
of diastasis recti and surgical tactics during cesarean sections
Several All-Russian scientific-practical conferences held at the Samara sites on diverse topics, including: legal and
clinical aspects of pregnancy management, working with patients in the embryological laboratory and more
4 offline conferences at the St. Petersburg hospital grounds on placenta accreta in the scar on the uterus after
cesarean section, integration conference of perinatal specialists ‘Natural childbirth’ and more
In addition, MD Medical Group provided:
Career development courses
Short-term advanced thematic training
Interaction between healthcare professionals in Moscow and those in other regions to ensure a consistently high
quality of care at all MD Medical Group facilities
Participation in international forums, conferences, exhibitions, where possible, and training centre support for improving
soft skills and knowledge acquisition across different areas and competencies
Human resource changes
MD Medical Group is always looking to ensure that its HR policies and processes are kept up to date with best practices, and
are improved year-to-year. The Company maintains several targets related to the topic of human resources; these include:
Ensuring the enterprise has personnel considering the prospects for further development
Formation and development of a reserve of top doctors (personnel potential)
Development and implementation of proprietary personnel training programmes to improve their qualifications (training
for medical and administrative personnel)
Regulation of working conditions in accordance with market needs, optimising staff motivation and ensuring retention
of professionals
Development and maintenance of effective communication systems between management and other employees,
departments and divisions
Several changes to the personnel management structure were implemented during the reporting period. One of these
consisted of the creation of four deputies within the management structure, allocated based on scope of activity. Such deputies
were assigned to the Medical Director, the Operations Director, the Financial Director and to the CEO.
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The client service area of personnel management was transitioned towards a medical department structure, allowing the Group
to expand this area and to provide more comprehensive support. Alongside this transition, MD Medical Group has begun to
shift IT services to outsourcing, freeing up resources and gaining exposure to IT talent.
Building on targets set in the previous reporting year, we have managed to successfully improve our HR processes. This was
done alongside the Group hospital additions in Lakhta and Tyumen-2, as well as clinics in Butovo, Mytishchi and
Yekaterinburg.
In 2022, we increased the number of areas in our residency programme, including OBGYN, oncology, anaesthesiology,
surgery and therapy. Additionally, the Group successfully centralised its distance learning programmes in nurse training
and OBGYN.
The Continuous Medical Education (CME) programme includes the centralisation of programmes and educational institutions
for distance learning in the following areas: obstetrics, pediatrics, ultrasound diagnosis, neonatology, general medical practice,
therapy, allergology and immunology, dermatology and venereology and endocrinology. These topic areas are being
developed with the participation of employees of the MD Medical Group.
MD Medical Group is constantly seeking to continue offering various opportunities for professional development and acquisition
of relevant knowledge and qualifications. We are aiming to provide:
More than 14 lectures for doctors for 60 minutes each
More than 30 lectures for nursing staff for 60 minutes each
More than 12 lectures for junior medical staff for 120 minutes each
Comprehensive training of all medical personnel in the ISMP programmes
MD Medical Group assigns particular focus to ensuring that our staff are continuously up-to-date on their qualifications and
expertise. In 2022, we continued to maintain that all employees, whose work requires professional training, have undergone
the necessary preparation. This includes training on labour protection and industrial safety programmes.
Occupational health and safety
MD Medical Group is committed to providing a safe and healthy working environment for all its employees. The organisation's
system of occupational safety is based on a comprehensive approach that involves various measures; these include:
Legal measures for occupational safety involve creating a system of legal norms establishing standards for safe and
healthy working conditions and legal means to ensure compliance. This system of legal norms is based on the Russian
Constitution and includes laws, sub-legal normative acts, as well as local normative acts in force in the organisation.
Social-economic measures for occupational safety include government incentives for employers to improve labour
protection, establishment of compensation and benefits for work in hazardous working conditions, mandatory social
insurance and compensation payouts for work-related illnesses and injuries.
Organisational-technical measures for occupational safety include implementing a system for occupational safety
management (SOSM10) – a unified complex of interrelated and interacting elements that establish the policy and goals in
the area of labour safety within the organisation and procedures for achieving those goals.
Sanitary-hygienic measures for occupational safety are carried out with the aim to reduce the impact on workers of
harmful and dangerous production factors, with the aim of providing favourable working conditions and preventing
occupational illnesses.
Medical preventive measures for occupational safety include organising preliminary and periodic medical exams,
mandatory psychiatric evaluations of employees and the provision of milk.
Rehabilitation measures for occupational safety include implementing a set of interventions aimed at restoring the health
and working ability of employees who have suffered from an accident at work or occupational illness.
As a medical healthcare provider, we understand the importance of creating a safe and healthy working environment for our
employees. Occupational safety principles provide the framework for creating and maintaining this environment. By
10 System for Occupation Safety Management
Страница 116 из 132
establishing and adhering to these principles, we ensure that our employees are protected from harm and that our organisation
is in compliance with applicable laws and regulations.
Principles for occupational safety help us to identify and mitigate potential hazards, implement effective safety training and
protocols, and provide the necessary resources to support our employees' physical and mental well-being. Ultimately, having
strong principles for occupational safety not only protects our employees but also contributes to our organisation's overall
success by minimising the risks of accidents, injuries and work-related illnesses.
The main governing occupational safety principles of MD Medical Group include the following:
Ensuring the preservation of life, health and working capacity of workers in the course of work activity
Guaranteeing workers' rights to safe and healthy working conditions in accordance with standards established by the
organisation through the assessment of the system for occupational safety management (SOSM)
Determining and paying compensation for work in hazardous working conditions, providing milk to employees working in
hazardous conditions, according to SOSM
Providing social insurance for workers from workplace accidents and occupational diseases
Offering medical, social and professional rehabilitation of workers affected by workplace accidents and occupational
diseases, if necessary
Occupational safety management system
At MD Medical Group, we recognise the importance of implementing a system for occupational safety management (SOSM).
The benefits of having a SOSM are numerous and include creating a comprehensive approach to occupational safety,
establishing clear policies and procedures, identifying and mitigating potential hazard and more. By implementing such a
system, we are better equipped to protect our employees, reduce the risk of accidents and work-related illnesses, and ensure
our long-term success.
More specifically, the SOSM is utilised in order to solve the following tasks:
1. Selection of professionals with documented and confirmed qualifications
2. Training of personnel in innovative working methods
3. Training of employees in management positions at occupational health and safety training centres,
4. with the issuance of occupational health and safety certificates;
5. Systematic briefings on occupational health and safety (introductory, primary on the job, targeted, unscheduled)
6. Safe use of equipment, inventory, and auxiliary elements, as well as their disposal according to regulatory documents
7. Creation of safe technological processes and operating conditions for buildings and structures on the enterprise
property
8. Creation of sanitary and epidemiological conditions in accordance with rules and regulations
9. Ensurance ofan optimal work and rest regime
10. Provision of personnel with personal protective equipment (PPE)
11. Organisation and conduct of professional risk assessment in production
Ensuring workplace safety
By prioritising the safety of our employees, we not only create a healthy work environment, but we also reduce the risk of
workplace accidents and injuries. We believe that by taking preventative actions, we can create a safer and healthier work
environment for our employees, which ultimately benefits everyone involved. Some of the key activities taken by the Group on
workplace safety include:
Carrying out regular briefings and safety training for all employees (at least once every six months, and quarterly for
employees working in hazardous conditions)
Страница 117 из 132
Holding pre-shift, pre-employment and periodic medical examinations, with verification of final reports by authorised
organisations (Rospotrebnadzor), as per Order of the Ministry of Health of Russia No. 29 dated 28 January 2021
Developing safe routes for movement on the organisation’s property, with separate personnel and patient movement, and
provision of transportation for employees
Installing and labelling safety signs throughout the organisation’s property, in accordance with GOST 12.4.026-2015
Providing individual and collective protective equipment for employees working in hazardous working conditions;
procurement, issuance, storage and accounting of PPE, according to Order of the Ministry of Health and Social
Development of the Russian Federation No. 777 from 1 September 2010.
Testing the equipment implemented in production processes and medical activities in the context of commissioning, for
compliance with safety requirements
Carrying out high-risk work, fire hazard work and work at heights is carried out through the permit-admission system. Work
by ‘external’ entities in the organisation is also carried out through the permit-admission system and with the necessary
training
Staff training
Providing our staff with the most up-to-date, comprehensive training on health and safety is a top priority for MD Medical
Group. Medical and non-medical employees at MD Medical Group are offered courses in occupational safety and related areas
as specified under Article 225 of the Russian Federation Labour Code. Every three years each employee must pass
the relevant occupational safety test, and each year non-medical staff members must complete first-aid courses.
To guarantee that MD Medical Group facilities are safe for patients, staff and third parties, the following training is also
provided on-site: fire-safety, heating and energy supply systems, servicing high-pressure equipment, safe lift usage
and maintenance, gas and water heating system safety.
In 2022, training was provided to 456 technical service personnel as part of MD Medical Group, in such areas as:
Occupational health and safety for managers and specialists within the organisation
Fundamentals of industrial safety
Operation of dangerous production facilities using steam pipelines and hot water
Operation of dangerous production facilities using vessels under excess pressure
Road safety
Boiler operator
General issues of occupational health and safety and the function of the SOSM
Fire safety and many more
Moving forward, we will continue to prioritise occupational health and safety training for all our staff to ensure the highest level
of workplace safety.
Supply chain development
Effective supply chain management is essential to patient safety and the economic stability of MD Medical Group’s operations.
The Group benefits from a robust and resilient supply chain. At its core is the analysis of material and equipment demand at all
facilities.
MD Medical Group’s core values of good faith, transparency, impartiality and fairness permeate all dealings with suppliers
and other stakeholders in the supply chain. In supplier selection, particular emphasis is placed on a candidate’s experience
and the quality of the product or service they offer. Successful candidates must be able to demonstrate a significant
and successful track record in providing medical products and services, particularly for international-level private medical
facilities. They must also share the same values, principles and work ethics as MD Medical Group.
In 2022, MD Medical Group cooperated with over 1,500 supply companies, among which 210 provide medications, 1,138 are
suppliers of consumables, and 350 are suppliers of medical equipment. This year, we have managed to reduce the number of
supply companies used by the Group by more than 50%, further consolidating our supply chain. The total number
Страница 118 из 132
of companies involved in the supply chain in every area is kept to under two (as the diagram explains). The Procurement
Department seeks to reduce the number of entities in the supply chain to ensure maximum efficiency and is primarily focused
on major distributors able to meet MD Medical Group’s complex needs.
Centralisation plays an important role in supply chain management at MD Medical Group. Every year the Procurement
Department establishes a list of procurement categories that will be handled centrally. Suppliers are identified and selected
in a transparent selection process, which ensures a continuum of high-quality care between the different locations
in MD Medical Group’s structure. The working environment, conditions and equipment are therefore brought up to a shared
level across all MD Medical Group’s entities.
In addition to centralisation, supply chain management goals are:
To identify alternative materials which would deliver the same high quality at a lower price point
To conclude supply contracts directly with producers to exclude middle parties that would inflate the costs of any purchase
contract
Procurement
The purchase of medications and medical equipment is carried out under this centralised approach. The goal here is to ensure
competing producers are invited to participate in any single opportunity to supply the Group. This means MD Medical Group
actively seeks to stimulate competition for each supply opportunity and is always open to new entities. As this is a fast-growing
area, in which innovative products appear on the market regularly, it is essential to MD Medical Group’s standing
as an innovation driver in its field that it is open to adopting these innovations at its centres. Before adopting them, rigorous
performance and quality reviews are carried out. MD Medical Group also works directly with producers to gain access
to the latest unique developments which are not already on the market, but which meet specific and identified needs.
Supply chain of medications and equipment
Supply chain of medical expendables
Страница 119 из 132
In 2022, MD Medical Group collaborated with more than 1,500 suppliers. The Procurement Department aims to reduce the
number of levels in the supply chain to a maximum of two for maximum efficiency. It primarily focuses on large distributors that
can meet the complex needs of MD Medical Group.
Suppliers by category (2022), %
Consumables
67
Medications
12
Equipment
21
Total
1,698
In 2022, MD Medical Group has continued to act according to its unified procurement regulation, which was developed and
approved during the previous reporting period. This regulation defines a unified procedure for all procurement activities, the
rights and obligations of their participants, the scope of responsibility and more. The regulation goals are:
Replenishing the material and technical base necessary to ensure its functioning in a timely manner
Improving the required quality of supplies and efficiency in the use of funds
Ensuring transparency of procurement procedures and objectivity of decisions made
Ensuring the mandatory requirements of an open tender, preventing a conflict of interest among procurement participants
Following the change in intensity of the COVID-19 pandemic, MD Medical Group has been able to begin transitioning towards
a lower level of medication purchasing. During the previous reporting period, the volume of purchases was increased by 50%
compared to 2020. This decrease in volume can similarly be seen in the Groups significant reduction of total suppliers
compared to last year.
Centralised procurement procedures cover 92% of the volume. Meanwhile, 100% of purchases are made locally, which makes
it possible to significantly improve the operation of the supply chain by monitoring the fulfilment of contractual obligations. The
sum of procurement of domestic medicines and medical supplies is approximately RUB 700 mln per year, which amounts to
approximately 15% of all procurement in these categories. Direct contracts are also signed with Pfizer, Biocad, Medisorb,
Pharmasyntez. Meanwhile, 66% of consumables were purchased through centralised purchasing procedures.
Last year, MD Medical Group became one of the first companies in Russia to sign direct contracts with major manufacturers of
medical equipment and consumables, including Johnson & Johnson and Medtronic. MD Medical Group assigns particular
importance on the quality of its contracts with counterparties and suppliers, carrying forward these important relationships with
manufacturers into 2022. Additionally, recent partnerships have also been expanded with B. Braun, Karl Storz, Olympus,
Origio, Roche, Beckman Coulter, Abbott and others.
Sustainable development risk management
As a responsible company, we recognise the importance of managing sustainability risks in order to protect our business and
create value for our stakeholders.
Through managing sustainability risks, we are able to improve our operational efficiency, enhance our reputation and
contribute to a more sustainable future for all. In line with a clearly defined and robust long-term strategy, MD Medical Group
acts to minimise such risks. It achieves this by regularly reviewing its risk management approaches.
Corporate governance and effective management are essential elements in MD Medical Group’s continued success.
The Board of Directors is committed to upholding the highest standards in all interaction with stakeholders. Alongside the
Board of Directors, the Group identifies the most significant risks to the Company, discusses the current methodology for
compensating identified risks, and decides on the need for any additional measures.
During this reporting period, MD Medical Group has identified five types of sustainable development risk, related to its business
operations and the broader healthcare sector. These general risks are:
Environmental impact risks
Social and employment risks
Human rights risks
Corruption and bribery risks
Security and IT risks
Страница 120 из 132
MD Medical Group has implemented targeted preventive measures regarding all identified risks, and notes that there is a low
likelihood that any of these risks will transpire as real events.
Environment
Risk
Incorrect hazardous waste disposal MD Medical Group continuously
Mitigation
improves its procedure for selecting
contractors, who are required to have
all the necessary resources and skills to
dispose of hazardous medical wastes in
a proper way.
MD Medical Group monitors
compliance with sanitary and
epidemiological standards in its
hospitals and clinics.
The Group equips clinical hospitals with
installations for disposing of medical
waste, which reduces the risk of
epidemiological infection and the costs
of disposal.
The Group monitors and ensures the
timely completion of staff training.
MD Medical Group is aware of the
importance of using a modern high-
performance power supply system.
MD Medical Group applies a number of
energy-saving measures in accordance
with internal standards and procedures.
Energy saving equipment is installed
and operational at all Group’s facilities.
MD Medical Group closely monitors the
condition of water and heat supply
pipelines.
MD Medical Group fulfils the
requirements of the official Electronic
Government programme in Russia
focused on supporting the shift to
electronic external document flow.
MD Medical Group actively develops
online, digital and mobile forms of
record keeping and information
exchange with key stakeholders.
MD Medical Group monitors
compliance with standard operating
procedures for medical product disposal
across its hospitals and clinics.
MD Medical Group is continuously
looking at its medical products and
equipment to ensure it is working as
intended.
Substantial increase in energy
consumption and decrease in energy
efficiency
Substantial increase in water
consumption
Increase in paper consumption
Incorrect disposal of defective or
unsuitable medical products
Key results in 2022
Automated the process of monitoring
the timely completion of staff training.
Installed waste disposal facilities in the
clinical hospitals MD Group Lakhta in
St. Petersburg and Tyumen-2, both of
which opened in 2022.
Replaced fluorescent lamp fixtures with
LED fixtures in the Lapino medical
cluster and in several out-patient clinics.
Drilled our own well in the Lapino
medical cluster, which helped reduce
water consumption.
Increased the share of electronic
document circulation both with external
contractors and within the organisation.
Implemented control over printer usage,
while having the ability to compare
usage between different departments
and organisations.
Communicated an internal order on the
rules for disposing of unused and
defective medications to responsible
employees.
Kept logs to document the disposal of
medications.
Installed waste disposal facilities in the
clinical hospitals MD Group Lakhta in
St. Petersburg and Tyumen-2, both of
which opened in 2022.
Страница 121 из 132
Employment and social issues
Risk
Statutory restrictions related
to employment
Mitigation
MD Medical Group monitors changes in
relevant legislation and reacts promptly.
Key results in 2022
Continuously monitored changes in
legislation.
Insufficient availability of Company’s
care services facilities
Deterioration of the Group’s relations
with staff
Insufficient availability of staff
necessary to fulfil medical
obligations
The Group monitors our staff's
professional qualifications and records
them in the 1C SPM (Salary and
Personnel Management) information
system to keep track of this information.
MD Medical Group is expanding
the geography of its presence, opening
new facilities to boost accessibility
and expand patient reach.
MD Medical Group’s price points
in each new location are selected
factoring in the income level of the local
population.
The Group is committed to meeting
the requirements of the federal IVF
programme under obligatory health
insurance policies.
MD Medical Group monitors employee
engagement and satisfaction levels
in regular surveys and creates
conditions for the development
and realisation of its employees’
professional potential.
Employee development and retention
were clear focus areas in the period
under review. MD Medical Group
continued to cooperate actively
with department heads in leading
universities on recruitment drives.
MD Medical Group has continued
to develop the continuous medical
education it offers its people –
in particular training in Moscow
for regional employees.
MD Medical Group is expanding
the geography of its presence, opening
new facilities and exposing itself to
additional talent for hiring.
MD Medical Group is constantly looking
for opportunities to hire personnel with
relevant expertise.
Internal educational and training
programmes are constantly being
provided to employees in order to
maintain competencies and improve
skills.
Continued to successfully diversify both
the range of services we provide and
the geography of our presence. During
this year, we have launched two clinical
hospitals in St. Petersburg and Tyumen,
while also entering the market of the
Sverdlovsk Region for the first time.
Strengthened our position in Moscow
and the Moscow regional market by
opening two medical centres in Butovo
and Mytishchi.
Improved the quality of the recruitment
process, as well as working conditions
and communication within the Group.
Opened MGIMO-Med Medical
University as a future personnel base,
where acting doctors train students in
the Lapino medical cluster.
Opened the MGIMO-MED Medical
University, improving our ability to train
personnel.
Initiating contracts with unreliable or
unverified counterparties
MD Medical Group closely monitors the
various counterparties with which it may
enter into contract with.
Established system for conducting
internal accreditation of tender winners
in accordance with the regulation on
procurement activities.
Страница 122 из 132
Risk
Mitigation
Key results in 2022
The Group constantly updates its
internal policies on procurement
strategies, including those on internal
accreditation of tender winners.
Contract approvals are processed
through an internal electronic document
management system, which minimises
the risk of entering into a contract with
an unverified counterparty.
MD Medical Group is constantly
improving its internal safety guidelines
and measures to ensure the safety of
our staff.
The Company dedicates significant
resources to replacing faulty equipment,
running safety training programmes for
its employees and on industry-leading
PPE.
Maintained the procurement policy
where contracts for an amount
exceeding RUB 500,000 for clinics, and
RUB 1 mln for hospitals, undergo
additional verification measures by
financial control employees.
Provided its healthcare professionals
and essential workers with personal
protective equipment that meet
the standards required.
Carried out extensive training
programmes relating to H&S and the
prevention of disease spread.
Implemented internal policies and
regulations to reduce the risk of
pathological situations and to be in line
with governing regulations and best
practices.
Mitigation
Key results in 2022
MD Medical Group does not tolerate
any form of discrimination and any
incidents are to be recorded.
There were no recorded cases of
discrimination within the Company in
2022.
Risk of deteriorating epidemiological
situation and increased disease
transmission between staff
Human rights
Risk
Discrimination
Work under compulsion
Remuneration discrimination
MD Medical Group’s corporate culture
and ethics are based on positive
engagement and encouragement.
Compulsion of any kind is not permitted.
MD Medical Group has a strict policy
on bonuses and rewards
as performance based, corresponding
to clearly set and agreed KPIs.
Continued to monitor and enhance our
anti-discrimination policies, to ensure
that our employees come to no harm
from such issues.
Continuously assessed whether our
corporate culture reflects modern
working practices and that it does not
negatively impact our employees
Continued to utilise our specific
remuneration policy, ensuring that
employees are aware of how it
functions.
Corruption and bribery risks
Risk
Risk of corrupt actions and payments
to government authorities
Mitigation
MD Medical Group carries out the setup
of its own information systems, equips
organisations with equipment and
manages the necessary document flow.
The Company also hires qualified
personnel and trains them in
accordance with legal requirements.
The Group conducts internal audits to
ensure compliance with legislation.
Key results in 2022
Approved the updated version of the
MD Medical Group Anti-Corruption
Policy.
In 2022, over 120 employees received
training on anti-corruption measures.
Страница 123 из 132
Risk
Risk of bribery of the Group’s
employees for the benefit of third
parties
Mitigation
Key results in 2022
MD Medical Group implements a
centralised purchasing process for all
medical institutions within the Group.
Increased the level of centralisation in
the procurement processes managed by
the Company.
Security and it
Risk
Inadequate protection of personal
data
The Company has implemented a
process for approving counterparties
and contracts, as well as financial
control over payments.
Implemented a control system for the
use of materials and medications in
accordance with the treatment provided.
This helps facilitate the monitoring of the
appropriateness of purchases and write-
offs.
Mitigation
MD Medical Group has installed
equipment for encrypting collected
personal data and protecting our
organisation from network attacks.
Key results in 2022
Transferred our server storage to a data
processing centre and network
protection was added to server
hardware to prevent external attacks.
The Company has strictly separate user
access rights to financial information
and patient treatment information.
Data is backed up every day to a
physical medium, which minimises the
risk of data loss.
Internal policies for personal data
protection are regulated. Antivirus
software is installed.
All modifications undergo rigorous
testing, and server data is backed up
daily for quick recovery.
Protection of critical IT infrastructure MD Medical Group has installed
equipment for encrypting collected
personal data and protecting our
organisation from network attacks.
MD Medical Group has implemented
restrictions on the installation of
programmes by users and the use of
memory cards.
The Company has developed
documentation on protecting critical
infrastructure, to put in place
contingency plans.
Regulatory documents have been
implemented: policies and instructions
for users on the protection of personal
data, instructions on password and
antivirus protection, and more.
Developed an internal policy for the
protection of personal data, which
employees become familiar with when
they are employed.
The data processing centre and server
of Lapino Hospital are equipped with
protective network shielding.
Equipment has been installed in
organisations for encrypting incoming
and outgoing traffic.
Objects of critical infrastructure have
been classified, and the data has been
submitted to the Federal Service for
Technical and Export Control of Russia
(FSTEC).
Environmental management
Reducing environmental impact is essential for MD Medical Group for several business-critical reasons.
This has many benefits, as it allows more resources to be re-focused on the Group’s core business, enabling increased
reinvestment in its healthcare facilities across the Russian Federation and benefitting patients and local communities.
Additionally, good environmental management goes hand in hand with MD Medical Group’s stated commitment to being
an innovative leader in healthcare. Lastly, it shows the communities, where MD Medical Group has a presence, that it
is dedicated to being a good partner in all respects.
Страница 124 из 132
The compliance with applicable federal, regional and local environmental legislation is as essential to MD Medical Group’s
successful operations as is its compliance with other rules, regulations and benchmarked best practices. The Company’s
management system meets the international requirement ISO 14001-2004 Environmental Management Systems and ISO
50001:2011 Energy Management Systems.
Energy efficiency
Heating at MD Medical Group facilities primarily draws on the electricity supply. However, clinics and hospitals are also
equipped with diesel generators to serve as backup power supply units in case of unforeseen electricity outages.
Common energy saving practices among both clinics and hospitals include ensuring, wherever possible, energy efficient
settings on general (non-medically critical) equipment and devices are used such as air-conditioning and motion responsive
lighting. In addition, clinics adopt halogen and fluorescent lamps with LED energy-saving light sources.
By adopting energy-saving practices MD Medical Group ensures more resources are directed to those operationally critical
areas, and supports the communities in which it has operations by setting an example for other entities of responsible resource
and facilities management.
Electricity consumption by MD Medical Group’s clinics and hospitals, GJ (gigajoule)
Clinics
Hospital
Total
2022
10,751
109,301
120,053
Heating energy consumption by MD Medical Groups clinics and hospitals, GJ
Clinics
Hospital
Total
2022
37,420
296,578
333,998
Total energy consumption by MD Medical Groups clinics and hospitals, GJ
Clinics
Hospital
Total
2022
48,172
405,879
454,051
Fuel consumption by MD Medical Group’s clinics and hospitals, litres
Petrol, litres
Clinics
Hospital
Total
Diesel, litres
Clinics
Hospital
Total
2022
19,177
71,937
91,114
2022
38,990
33,339
72,329
202111
10,607
110,519
110,519
20219
32,023
290,077
322,100
20219
42,630
400,597
443,226
20219
17,204
119,878
119,878
20219
54,040
81,689
135,729
11 Adjustments in 2021 are associated with a change in the methodology
change,%
1.4
(1.1)
8.6
change,%
16.9
2.2
3.7
change,%
13.0
1.3
2.4
change,%
11.5
(40.0)
(24.0)
change,%
38.6
(59.2)
(46.7)
Страница 125 из 132
Rational water consumption
MD Medical Group clinics and hospitals receive water from municipal water supply systems, which meets State Standard
GOST Р 51232–98 (2002). Efficient water use is a key component in MD Medical Group’s approach towards sustainable
operations. The Company is dedicated to improving its water management system as shown by the individual facilities.
Waste management in hospitals
Water consumption by MD Medical Group, cubic metres
Clinics
Hospital
Total
Waste management
2022
33,348
251,734
285,082
202112
31,112
245,776
276,888
change,%
7.2
2.4
3.0
MD Medical Group takes a responsible approach to managing medical waste, following the applicable legislation. The waste
disposal procedures and practices in place in MD Medical Group hospitals and clinics fall under the Sanitary
and Epidemiological Requirements for Treating Medical Waste (SanPin 2.1.7.2790-10).
Waste is categorised as hazardous or non-hazardous, and subject to treatment as defined below. The continued effect
of the COVID-19 pandemic and resulting medical practice changes, such as the introduction of additional protective measures
for staff and patients, meant that all medical facilities saw a greater volume of waste.
Hazardous waste is either treated in-house and disposed of using special equipment, or this is done by external contractors.
Where this is handled in-house, hazardous waste undergoes decontamination processes to remove harmful substances or
render them inert, until it becomes non-hazardous, whereupon it is processed as non-hazardous waste. External contractors
use landfills for non-hazardous waste or incineration for hazardous waste.
Waste by disposal method (hospitals), metric tonnes
Non-hazardous
Landfill
Bulk incineration
Hazardous
Landfill
Bulk incineration
Total
2022
4,190
4,190
-
333
-
333
4,522
202110
3,259
3,259
-
266
-
266
3,525
change,%
28.5
28.5
-
24.9
-
24.9
28.3
12 Adjustments in 2021 are associated with a change in the methodology
Страница 126 из 132
Waste by disposal method (clinics), metric tonnes
Non-hazardous
Landfill
Bulk incineration
Hazardous
Landfill
Bulk incineration
Total
2022
175
159
16
87
14
73
262
202110
183
165
18
78
13
65
261
change,%
(4.2)
(3.7)
(8.7)
12.3
5.8
13.6
0.7
ANNEXES
Annex 1: GRI index disclosure
GRI content index
Statement of use
GRI 1 used
MD Medical Group has reported the information cited in this GRI content index for the
period 31 December 2021 to 31 December 2022 with reference to the GRI Standards.
GRI 1: Foundation 2021
GRI standard
Disclosure
Location
GRI 2: General Disclosures
2021
2-1 Organizational details
2-4 Restatements of information
Management report
There were no restatements in the reporting period
2-6 Activities, value chain and
other business relationships
2-7 Employees
2-9 Governance structure and
composition
2-10 Nomination and selection of
the highest governance body
2-11 Chair of the highest
governance body
2-17 Collective knowledge of the
highest governance body
2-19 Remuneration policies
2-22 Statement on sustainable
development strategy
2-27 Compliance with laws and
regulations
2-28 Membership associations
2-29 Approach to stakeholder
engagement
2-30 Collective bargaining
agreements
3-1 Process to determine material
topics
3-2 List of material topics
GRI 3: Material Topics 2021
GRI 203: Indirect Economic
Impacts 2016
203-1 Infrastructure investments
and services supported
Delivering a comprehensive hi-tech medical service,
Supply chain development
Our People, Annex 3
Corporate governance report, Annex 2
Corporate governance report
Board of Directors
Corporate governance report – Board of Directors
information
Remuneration Committee
Sustainable Development
Annex 4,6,7
Corporate governance report - Membership in
associations
Our Patients, Sustainable development – Interaction
with Stakeholders
There are no collective bargaining agreements
within the organisation
Sustainable development – Identifying material
topics
Sustainable development – Identifying material
topics
Expanding a leading nationwide network
GRI 204: Procurement
Practices 2016
204-1 Proportion of spending on
local suppliers
Supply chain development
Страница 127 из 132
GRI 205: Anti-corruption 2016 205-2 Communication and
GRI standard
GRI 206: Anti-competitive
Behavior 2016
GRI 302: Energy 2016
GRI 303: Water and Effluents
2018
GRI 306: Waste 2020
GRI 401: Employment 2016
GRI 403: Occupational Health
and Safety 2018
GRI 404: Training and
Education 2016
GRI 405: Diversity and Equal
Opportunity 2016
GRI 406: Non-discrimination
2016
GRI 417: Marketing and
Labeling 2016
GRI 418: Customer Privacy
2016
training about anti-corruption
policies and procedures
205-3 Confirmed incidents of
corruption and actions taken
Disclosure
206-1 Legal actions for anti-
competitive behavior, anti-trust,
and monopoly practices
302-1 Energy consumption within
the organization
303-5 Water consumption
306-1 Waste generation and
significant waste-related impacts
306-3 Waste generated
401-1 New employee hires and
employee turnover
401-2 Benefits provided to full-
time employees that are not
provided to temporary or part-
time employees
401-3 Parental leave
403-1 Occupational health and
safety management system
403-5 Worker training on
occupational health and safety
404-2 Programs for upgrading
employee skills and transition
assistance programs
405-1 Diversity of governance
bodies and employees
406-1 Incidents of discrimination
and corrective actions taken
417-1 Requirements for product
and service information and
labeling
417-2 Incidents of non-
compliance concerning product
and service information and
labeling
417-3 Incidents of non-
compliance concerning marketing
communications
418-1 Substantiated complaints
concerning breaches of customer
privacy and losses of customer
data
Corporate governance report – Anti-corruption
measures
There were no confirmed incidents of corruption
Location
There were no such legal actions
Environmental management – Energy efficiency
Environmental management – Rational water
consumption
Environmental management – Waste management
Environmental management – Waste management
Our People – Personnel figures
Medical personnel working in another commercial
structure as their primary job are not guaranteed
privileged medical seniority (early retirement)
Our People – Personnel figures
Occupational safety management system
Occupational Health and Safety – Staff training
Our People – Professional development,
Occupational Health and Safety – Staff training
Annex 2, Our People – Personnel figures, Board of
Directors information
There were no incidents of discrimination in the
reporting period
Annex 7
There were no such incidents
There were no such incidents
There were no complaints
Annex 2:
Information on the gender, age and diversity of the Board of Directors as of 31 December 2022
Currently the Board of Directors consists of 80% men and 20% women, namely Tatiana Lukina. Tatiana is the Group’s
independent non-executive directors since December 2019. The Board of Directors also contains two ethnic minority members
on the basis of nationality, through Mark Kurzer and Vadim Mekler.
Страница 128 из 132
The Board composition currently contains Tatiana Lukina as a non-executive director, additionally there are two other women
in C-Suite positions within the Group. These are: Iya Lukyanova as Chief Financial Officer and Elena Balashova as Chief
Operating Officer.
Age composition:
30–50 years of age — 40%
Over 50 years of age — 60%
Annex 3:
Information on staff
2022
Female
Male
2021
Female
Male
2022
Full-time
employment
External part-time
2021
Full-time
employment
External part-time
MD Medical
Centre
MD Medical
Ural
MD Medical
Siberia
MD Medical
Volga
3,775
852
3,691
1,238
213
1,178
1,020
271
1,062
953
144
962
921
MD Medical
Centre
204
MD Medical
Ural
293
MD Medical
Siberia
150
MD Medical
Volga
3,393
1,234
3,441
1,171
1,208
243
1,147
235
958
333
1,016
339
906
191
912
200
Total
6,986
1,480
6,893
1,568
Total
6,465
2,001
6,516
1,945
Annex 4:
Sanpin 2.1.7.2790-10 sanitary and epidemiological requirements for treating medical waste
SanPin 2.1.7.2790-10 Sanitary and Epidemiological Requirements for Treating Medical Waste is a regulatory legal act
registered by the Ministry of Justice of the Russian Federation on 17 February 2011 (registration number: 19871). According
to this document, there are five major classes of medical waste:
Class A (А) – epidemiologically non-hazardous waste close in composition to municipal solid waste (packaging, paper,
cardboard, etc.)
Class B (Б) – epidemiologically hazardous waste. This class includes human blood and blood products as well as other
biological liquids
Class V (В) – extremely epidemiologically hazardous waste (materials that were in contact with patients with infectious
diseases)
Class G (Г) – toxicologically hazardous waste of classes from 1 to 4. This class includes medicines, diagnostics,
and disinfectants that cannot be used, namely those medical supplies that have been damaged or expired
Class D (Д) – radioactive waste
Страница 129 из 132
Annex 5:
Main methods for obtaining information
Most of the data is originated from the clinics’ and hospitals’ own records of actual water use, energy and fuel consumption.
However, for several clinics and hospitals some indicators were calculated, due to the fact that a number of facilities are
located in rented premises; and because of the lack of detailed accounting data or non-relevance of such information for
decision-making by the MD Medical Group or stakeholders.
It should be noted that there were changes made to the methodology for the recording of data, resulting in adjusted values for
the year 2021. All calculations were made by applying some of the following indicators:
Water consumption – average water consumption per square metre for clinics and hospitals
Electricity and heating – the amount of money spent on utilities and average heating energy consumption per square
metre for clinics. Regional tariffs were used for the calculations. The share of data on water, energy and fuel consumption,
obtained from calculations was insignificant in the overall dataset
Electricity, GL
Clinics
Hospitals
Lapino medical culster
MD Group hospital
MD Group Lakhta
Samara
Novosibirsk
Tyumen medical cluster
Ufa
Heating, GL
Clinics
Hospitals
Lapino medical culster
MD Group hospital
MD Group Lakhta
Samara
Novosibirsk
Tyumen medical cluster
Ufa
Petrol
Clinics
Hospitals
Lapino medical culster
MD Group hospital
MD Group Lakhta
Samara
Novosibirsk
Tyumen medical cluster
Ufa
2022
10,751
109,301
39,123
16,452
3,637
10,860
9,127
13,980
16,123
2022
37,420
296,578
139,072
23,704
4,921
23,638
11,321
39,340
54,583
2022
19,177
71,937
-
17,380
3,258
32,863
15,989
-
2,447
13 Adjustments in 2021 are associated with a change in the methodology
202113
10,607
110,519
43,145
16,769
-
11,159
9,963
12,522
16,961
202111
32,023
290,077
145,581
22,354
-
21,238
12,627
34,262
54,017
202112
17,204
119,878
45,521
22,087
-
30,500
17,023
-
4,747
change,%
1.4
(1.1)
(9.3)
(1.9)
-
(2.7)
(8.4)
11.6
(4.9)
change,%
16.9
2.2
(4.5)
6.0
-
11.3
(10.3)
14.8
1.0
change,%
11.5
(40.0)
(100.0)
(21.3)
-
7.7
(6.1)
-
(48.5)
Страница 130 из 132
Diesel
Clinics
Hospitals
Lapino medical culster
MD Group hospital
MD Group Lakhta
Samara
Novosibirsk
Tyumen medical cluster
Ufa
2022
38,990
33,339
2,500
11,351
1,000
3,160
11,228
4,100
-
202112
54,040
81,689
47,016
19,340
-
3,000
10,631
1,200
503
change,%
(27.8)
(59.2)
(94.7)
(41.3)
-
5.3
5.6
241.7
-
Annex 6:
Patient consent and legislative compliance
The matter of acquiring informed patient consent is a fundamental issue for all medical service providers. MD Medical Group
closely monitors its systems for presenting relevant information to its patients regarding the provision of medical service to
ensure that their decisions are informed. MD Medical Group maintains complete compliance with established regulations
regarding patient consent.
In accordance with Federal Law No. 323-FL dated 21 November 2011, ‘On the Basics of Protecting the Health of Citizens in
the Russian Federation’ (hereinafter referred to as Law No. 323-FL), the necessary prior condition for medical intervention is
the provision of informed consent (hereinafter referred to as IC) by the citizen or their legal representative for medical
intervention based on full information provided by the medical worker in an accessible form about the purposes, methods of
providing medical assistance, the associated risks, possible options for medical intervention, its consequences, and the
expected results of providing medical assistance (part 1, article 20 of Law No. 323-FL).
Informed voluntary consent for medical intervention or refusal of medical intervention is contained in the medical
documentation of the citizen and is made in the form of a document on a paper carrier, signed by the citizen, one of the
parents, or another legal representative, a medical worker, or is formed in the form of an electronic document, signed by the
citizen, one of the parents, or another legal representative using a strengthened qualified electronic signature or a simple
electronic signature through the use of a unified system of identification and authentication, and also by a medical worker using
a strengthened qualified electronic signature.(Chapter 7, Article 20 of Federal Law No. 323-FL).
Order of the Russian Ministry of Health No. 1051n dated 12 November 2021 establishes the procedure for giving informed
consent for medical intervention and refusal of medical intervention, as well as the forms of informed consent for medical
intervention and refusal of medical intervention. According to this Order, citizens give informed consent when choosing a
doctor and medical organisation for primary medical assistance.
Additionally, in accordance with Article 22 of Federal Law 323, everyone has the right to receive in a form accessible to them,
information on their health available in any medical organisation, including information on the results of a medical examination,
the presence of illness, the established diagnosis, and the forecast of the development of the illness, methods of providing
medical assistance, the risks associated with them, possible forms of medical intervention, its consequences and the results of
providing medical assistance.
MD Medical Group ensures compliance with the relevant law requirements as follows:
1.
Informed consent in the form approved by Order of the Ministry of Health of the Russian Federation No. 1051n dated
12 November 2021 is signed by each patient (their legal representative) who visits the Company's medical
organisation and is an annex to the contract for paid medical services. The same informed consent is signed by the
patient upon their initial visit for medical assistance under Mandatory Health Insurance (MHI).
The Company has developed an additional form of Informed Consent, providing a list and description of medical interventions
that patients give consent for during initial visits, for the purpose of providing information to patients in an accessible form.
2.
In the Group, lawyers and leading medical specialists developed informed consents for various medical interventions
by medical profiles (obstetrics, VRT, anaesthesia and transfusiology, HIV, etc.), containing information on the
objectives, methods of providing medical assistance, related risks, potential benefits, alternative treatments and
potential consequences of refusal.
Страница 131 из 132
The informed consents are reviewed and updated regularly in accordance with changes in medical practices and legislation.
The medical organisations in the Group ensure that patients receive accurate and understandable information about the
medical intervention and their rights to make informed decisions.
Annex 7:
Approach to medical service advertising
The requirements for advertising medical services are contained in Article 24 FL ‘On advertising’, according to which it should
not contain references to specific cases of curing of diseases, improvement of human health as a result of the application of
the object of advertising; contain expressions of gratitude of individuals in connection with the use of the object of advertising;
create an idea of the benefits of the object of advertising by reference to the fact of conducting research, that are mandatory for
the state registration of the object of advertising; contain allegations or assumptions about the presence of certain diseases or
health disorders among consumers.
Advertising should be accompanied by a warning about the presence of contraindications to their application and use, as well
as the need to familiarise oneself with the instructions for use or to receive expert advice. In advertisements broadcast on radio
programmes, such a warning should last at least three seconds; in advertisements for television programmes and for film and
video services – at least five seconds and must be allocated at least seven percent of the frame area, and in advertising
distributed by other means – at least five percent of the advertising area (advertising space).
Fulfilment of these requirements is controlled by the organisation of the Heads of Marketing and Advertising of medical
organisations MD Medical Group, as well as by the Director of Marketing and Advertising of MD Medical Group. Contracts for
advertising are approved by lawyers of MD Medical Group.
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