SHAPING OUR
TOMORROW
2022 ANNUAL REPORT
STRATEGIC REPORT
Introduction
3 Strategy roadmap
4 At a glance
6 Chair’s Review
9 Investment case
Strategy and performance
10 Group Chief Executive Ocer’s Report
14 Market review
16 Strategy overview
23 Key performance indicators
Business delivery and resource management
25 Business model
26 Stakeholder engagement
30 Section 172 statement
34 Sustainable development overview
47 TCFD report
57 Non-financial information statement
Operations and risk
58 Clinical services overview
72 Group Chief Financial Ocer’s Report
90 Five-year summary
91 Risk management report
GOVERNANCE AND
REMUNERATION REPORT
102 Chair’s introduction
103 Board of Directors
108 Group Executive Committee
109 Corporate Governance Statement
121 Audit and Risk Committee Report
132 Clinical Performance Committee Report
135 ESG Committee Report
137 Nomination Committee Report
143 Remuneration Committee Report
168 Other disclosures
171 Statement of directors’ responsibilities
FINANCIAL STATEMENTS
172 Independent Auditors’ Report
180 Group annual financial statements
258 Company annual financial statements
ADDITIONAL INFORMATION
263 Shareholder information
265 Company information
266 Forward-looking statements
267 Glossary of terms
MEDICLINIC INTERNATIONAL PLC 2021 ANNUAL REPORT1
OUR PURPOSE IS
TO ENHANCE THE
QUALITY OF LIFE
ICON NAVIGATION USED
THROUGHOUT THE REPORT
Reference to our website
Page driver to other content
Case studies
Video content
Targets
AndreasKlinik
Cham Zug,
Switzerland
Airport Road Hospital,
the Middle East
REPORT PROFILE
REPORTING SCOPE, BOUNDARY
AND CYCLE
We publish this annual report and financial
statements (‘Annual Report’) in respect
of the financial year ended 31 March 2022
(the ‘reporting period’ or ‘year under
review’ or ‘period under review’ or ‘FY22’)
with accompanying reports in respect of
both the 2021 calendar year and FY22,
available on our website from the date
of the distribution of this Annual Report
and the Company’s notice of annual
general meeting (‘AGM’) by no later than
21 June 2022.
2022 Clinical Services Report
2022 Sustainable Development Report
2022 Notice of Annual General Meeting
This Annual Report presents our
environmental, social and governance
(‘ESG’), clinical and financial
performance, and reports on the
operations of our subsidiaries in
Switzerland, South Africa and Namibia,
and the Middle East (collectively, the
‘Group’). It also compares results with
those of the prior financial year (‘FY21’)
and the 2020 financial year (‘FY20’)
representing a pre-pandemic period,
and indicates focus areas for the financial
year/s ahead (‘FY23’, ‘FY24’).
REPORTING PRINCIPLES
This Annual Report contains information
deemed useful and relevant to stakeholders,
with due regard to their expectations
through continuous engagement, or
information that the Company’s board of
directors (the ‘Board’) believes may influence
stakeholders’ perception or decision-making.
This Annual Report was prepared in
accordance with the:
• listing rules and disclosure guidance
and transparency rules of the Financial
Conduct Authority (‘FCA’) (‘Listing Rules’
and ‘DTRs’);
• listings requirements of the JSE (‘Listings
Requirements’);
• UK Corporate Governance Code
published by the Financial Reporting
Council (‘FRC’) in July 2018 (the ‘Code’);
• UK Companies Act 2006 (the ‘Act’) and
other relevant UK legislation; and
• UK-adopted international accounting
standards.
Our sustainable development reporting
(supplemented by the 2022 Sustainable
Development Report, which is available at
annualreport.mediclinic.com) was prepared
in accordance with the Global Reporting
Initiative Sustainability Reporting
Standards 2016 (‘GRI Standards’) and the
UK non-financial reporting regulations.
EXTERNAL AUDIT AND ASSURANCE
The Company’s and Group’s annual
financial statements were audited by
the Group’s independent external auditors,
PricewaterhouseCoopers LLP (the
‘external auditors’ or ‘PwC’), in accordance
with International Standards on Auditing
(UK) (‘ISA’).
The Group follows various other voluntary
external accreditation, certification and
assurance initiatives, complementing
the Group’s combined assurance model,
as reported on in the 2022 Clinical
Services Report and 2022 Sustainable
Development Report, available at
annualreport.mediclinic.com.
APPROVAL OF ANNUAL REPORT
AND FINANCIAL STATEMENTS
The Board approved this report, including
the Strategic Report and Governance
and Remuneration Report (including the
Remuneration Report and the Directors’
Report contained therein), on 24 May 2022.
Dame Inga Beale
Non-executive Chair
24 May 2022
Our purpose drives
everything we do
as an organisation,
galvanising our teams
across geographies
to deliver care for
our clients.
Dr Ronnie van der Merwe
Group Chief Executive Ocer
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 1
STRATEGIC
REPORT
Introduction
3 Strategy roadmap
4 At a glance
6 Chair’s Review
9 Investment case
Strategy and performance
10 Group Chief Executive
Ocer’s Report
14 Market review
16 Strategy overview
23 Key performance indicators
Business delivery and
resource management
25 Business model
26 Stakeholder engagement
30 Section 172 statement
34 Sustainable development
overview
47 TCFD report
57 Non-financial information
statement
Operations and risk
58 Clinical services overview
72 Group Chief Financial
Ocer’s Report
90 Five-year summary
91 Risk management report
Louis Leipoldt,
South Africa
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT2
STRATEGY ROADMAP
1
4
2
35
6
2026
STRATEGIC
GOALS
1
Become an integrated healthcare
provider across the continuum of care
4
Evolve as a data-driven organisation
5
Minimise our environmental impact
2
Improve our value proposition
significantly
3
Transform our services and client
engagement through innovation
and digitalisation
6
Grow in existing markets and expand
into new markets
OUR VISION
Be the partner of choice that people trust for all their healthcare needs
ENABLED BY ENGAGING
OUR STRATEGY OUR KEY STAKEHOLDERS OUR APPROACH TO SUSTAINABILITY
THROUGH OUR COMMITMENT TO
REINFORCED BY
OUR PURPOSE
Enhancing the quality of life
See page 16 See page 26
Client centred Trusting and respectful Patient safety focused
Performance driven
Team orientated
OUR VALUES
CONSERVE CONNECT COMPLY
Employees,
alumni
and potential
applicants
Governments
and authorities
Healthcare
insurers
Investors
Medical
practitioners
Clients
See page 7
See page 34
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 3
AT A GLANCE
74
Hospitals
2
20
Day case clinics
5
5
Subacute hospitals
3
453
Theatres
SWITZERLAND
Hirslanden, the largest private healthcare provider in Switzerland, is
recognised for clinical excellence and outstanding client experience.
www.hirslanden.ch
SOUTH AFRICA AND NAMIBIA
Mediclinic Southern Africa, one of the three largest private healthcare
providers in the region, boasts highly specialised acute care
infrastructure and has a relentless focus on oering value to all its
partners and clients.
www.mediclinic.co.za
THE MIDDLE EAST
Mediclinic Middle East is established as a leading healthcare provider
in the United Arab Emirates (‘UAE’) with a trusted brand and
strong reputation in this developing region, oering clinical care of
internationally recognised standards.
www.mediclinic.ae
THE UK
We have a 29.9% stake in Spire Healthcare Group plc (‘Spire’), a
leading independent hospital group with 39 hospitals and eight clinics.
www.spirehealthcare.com
OUR OPERATIONS
A UNIQUELY
INTEGRATED
INTERNATIONAL
HEALTHCARE PARTNER
22
Outpatient clinics
6
2
Mental health facilities
4
11 538
Beds
34 964
Full-time equivalents
Notes
In addition to three operating divisions,
UK and Corporate are not reportable
operating segments as they are not
separately included in the reports provided
to the chief operating decision-maker.
2
Provides patient treatment with
specialised medical and nursing sta,
and medical equipment.
3
Provides comprehensive goal-orientated
inpatient care designed for a patient
who has had an acute illness, injury or
exacerbation of a disease process.
4
Provides specialised treatment of serious
mental disorders.
5
Provides elective procedures, surgical
procedures and planned medical
procedures, but admits and discharges
patients on the same day.
6
Provides consultations (by general
practitioner, specialist or allied healthcare
professional) with no theatre facilities.
7
Number of full-time employees who could
have been employed if reported number
of hours worked by part-time employees
had been worked by full-time employees
instead.
Switzerland
UK
The UAE
South Africa
and Namibia
OPERATING PROFIT
£280m 34%
FY21: £209m
FY20: £(184)m
See the Group Chief Executive Ocer’s Report on page 10 and the Group Chief
Financial Ocer’s Report on page 72 for more on Spire
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT4
(15)
71
(7)
FINANCIAL HEADLINES
Notes
See page 80 of the Group Chief Financial Ocer’s Report for more on the Group’s use of adjusted non-IFRS financial measures
Other non-IFRS measures, which include constant currency, cash conversion, return on invested capital (‘ROIC’),
net incurred debt and leverage ratio, are further discussed, with reconciliations from the most comparable IFRS
measure provided, on pages 81–86.
2
Adjusted earnings before interest, tax, depreciation and amortisation (‘EBITDA’).
3
Adjusted operating profit.
4
Adjusted basic earnings per share (‘EPS’). See headline EPS (‘HEPS’) calculation on page 196
STATUTORY
REVENUE
£3 233m 8%
FY21: £2 995m
FY20: £3 083m
EPS
20.5p 122%
FY21: 9.2 pence
FY20: (43.4) pence
Contribution to revenue (£’m)
0 500 1000 1500 2000 2500 3000 3500
1503 909 820 1
Switzerland
47%
Southern Africa
28%
The Middle East
25%
Corporate
0%
Contribution to adjusted EBITDA (£’m)
0
0
100
25
200
50
300
75
400
100
500
125
600
150
700
175 200
236 170
68
123
51
Switzerland
45%
Southern Africa
33%
The Middle East
23%
Corporate
(1)%
Contribution to adjusted earnings (£’m)
Switzerland
43%
Southern Africa
41%
The Middle East
30%
Spire
(9)%
Corporate
(5)%
(8)
REVENUE
10%
24%
in constant
currency
in constant
currency
EPS
4
22.6p 65%
FY21: 13.7 pence
FY20: 24.0 pence
ADJUSTED
1
EBITDA
2
£522m 22%
As a % of revenue
16.1%
OPERATING PROFIT
£280m 34%
FY21: £209m
FY20: £(184)m
As a % of revenue
8.7%
FY21: 7.0%
FY20: n/a
OPERATING PROFIT
3
£311m 41%
FY21: £221m
FY20: £327m
As a % of revenue
9.6%
FY21: 7.4%
FY20: 10.6%
FY21: £426m
FY20: £541m
FY21: 14.2%
FY20: 17.5%
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 5
CHAIR’S REVIEW
Q&A
WHAT HAS ‘SHAPING OUR
TOMORROW’ MEANT FOR
THE BOARD?
We focused on two specific aspects:
the continuum of care, which is about
delivering integrated healthcare
services that meet clients’ future
expectations; and digital
transformation, which will improve
service delivery and drive eciencies
inside the organisation.
Dame Inga Beale
Non-executive Chair
INNOVATING AND
EVOLVING FOR
THE FUTURE
Scan the QR code or visit
annualreport.mediclinic.com
to view the video interview
SUCCESSFULLY DELIVERING
HEALTHCARE DURING THE SECOND
YEAR OF THE PANDEMIC
The year under review is the second full
year in which Mediclinic has met the
challenges of COVID-19 and, I am pleased
to report, we delivered further progress in
executing our strategy. The Business model
described on page 25 clearly indicates how
well positioned the Group is to create
long-term value going forward. The Market
review on pages 14–15 highlights the
long-term drivers of demand for healthcare
services, including an ageing population
and growing disease burden. The
fundamental purpose of investing across
the continuum of care is to deliver future
growth throughout the various care settings
we are expanding into; this will ensure our
services remain relevant to the future needs
of our clients.
By executing our strategy, the Group
is broadening its engagement and
strengthening long-term client relationships.
During the reporting period, we continued
to demonstrate the vital role Mediclinic
plays in delivering urgent and emergency
healthcare services. Trust in healthcare is
critical to long-term success and we have
earned that trust over nearly 40 years.
Not only does this position us favourably
to attract and retain clinical personnel,
but it also cements our leading market
positions, attracting new clients into the
healthcare ecosystems we are creating.
Many of the strategic milestones achieved
this year will be covered throughout the
report. However, I am particularly excited
about Mediclinic’s digital healthcare
initiatives. The MyMediclinic 24x7
application was launched in April 2021
in the Middle East; during a visit there,
I was able to see first-hand the value such
software and services create for clients,
doctors and healthcare systems. This is
a great example of how a Group-wide
strategy is being rolled out across the
divisions – a key focus area I discussed in
last year’s annual report – as we seek to
demonstrate the unique value Mediclinic
can create through its international
perspective, scale and expertise.
The Group’s financial performance improved
significantly in FY22 compared with the
previous year, as we continued to adapt
to the pandemic’s disruptive eects. The
results were driven by a strong recovery in
client activity, with the Group treating
around 750 000 inpatient and day case
admissions, driving an associated revenue
increase of 7%, and outpatient revenue up
10% from the previous year. With revenue
in all three divisions above pre-pandemic
levels, we remain focused on encouraging
clients to make use of our facilities, digital
applications and integrated services, while
ensuring that operational eciencies
continue to be delivered as we grow. The
detailed overview of financial performance
is on pages 72–89.
At the end of FY20, the Board took the
prudent and appropriate decision to
suspend the dividend as part of the Group’s
eorts to maintain its liquidity position and
maximise its ability to navigate through the
pandemic. Given the financial strength of
the Company today, the resilience we
displayed throughout the pandemic and
a more stable outlook, though subject to
macroeconomic factors, the Board felt it
appropriate to propose a final dividend of
3.00 pence. I would like to thank investors
for their commitment and support during
the pandemic.
6
OUR VALUES IN ACTION
CLIENT CENTRED
We determine clients’ needs, involve
them in decisions, actively manage
their experiences and deliver on
promises.
161 000+
client surveys received in FY22
TRUSTING AND RESPECTFUL
Our people treat others with
courtesy and kindness, embrace
diversity, provide and welcome
feedback, and respect privacy.
3.98
employee engagement grand mean
score (out of five)
PATIENT SAFETY FOCUSED
We prioritise clients’ safety, identify
and manage risks, and accurately
record and securely store patient
information.
150+
clinical indicators measured
PERFORMANCE DRIVEN
We set objectives and measure
progress, honour decisions and
address challenges, complaints
and ineciencies.
5
dashboards included in
Board reports
TEAM ORIENTATED
We support colleagues, collaborate
on problem-solving and decision-
making, encourage team spirit and
create opportunities for idea sharing.
84%
participation rate in employee
engagement survey
through active data management,
and leverage skills and experience on
a global scale.
A HEALTHY CULTURE
Our unique approach to ESG matters is to
‘Conserve Connect Comply’, which is firmly
embedded in both the Group’s culture and
how we conduct business. From FY23
onwards, we are also proposing the inclusion
of certain ESG performance metrics in our
long-term and short-term incentive (‘LTI’
and ‘STI’) schemes for management in the
revised Remuneration Policy. More details
are available on pages 144–145 and 147.
While the Sustainable development
overview on pages 34–46 and the
standalone 2022 Sustainable Development
Report detail our strong ESG performance
and material issues, we must, and can,
do more.
I am a firm believer that diversity of people
drives diversity of thought. The results
thereof are better outcomes and the
advancement of businesses, both financially
and socially. In November 2021, during
a virtual leadership event, I joined Ronnie
in discussing the topic of diversity and
inclusion with the top 400 leaders in the
organisation. Mediclinic is launching many
such initiatives to ensure that every
employee not only has an opportunity to
contribute to the conversation, but also
feels safe and heard.
Mediclinic regards its responsibility
towards our various stakeholders and the
environment very seriously. We have an
exemplary track record, high standards and
dedication to transparency – aspects which,
I believe, contribute significantly to our
reputation as a trusted, respected brand
and employer. Our approach to ESG is no
dierent. Having previously set ambitious
targets to become carbon neutral and have
zero waste to landfill by 2030, this year’s
focus was on progressing our development
of detailed roadmaps to support the
achievement of these goals. In FY22,
we also aligned our disclosure with the
requirements of the Task Force on Climate-
related Financial Disclosures (‘TCFD’) –
more details are available on page 47.
THE COLLECTIVE POWER
OF OUR GROUP
During the course of my two years with
Mediclinic, the connectivity between all
divisions improved significantly under the
leadership of our Group Chief Executive
Ocer (‘CEO’), Dr Ronnie van der Merwe,
and the Group Executive Committee.
This year, some investors asked me why
we operate as a Group in three dierent
healthcare systems. The Board believes
we are uniquely positioned to benefit in
the divisions through our international
perspectives and collective power. More so
than single-country operators, we are able
to see trends and opportunities emerge,
standardise our approach to key functions
and processes, benchmark internally
I am a firm believer that
diversity of people drives
diversity of thought.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 7
CHAIR’S REVIEW CONTINUED
Throughout this journey,
our people remain central
to our success.
EVOLVING THE ROLE OF THE BOARD
As a Board, we must ensure the right
balance is struck between providing the
necessary governance and oversight for
investors while simultaneously looking to
the future, supporting and encouraging
management to evolve the business.
Regarding the latter, we fully embrace the
aims and ability of management to deliver
on the Mediclinic Group Strategy and
encourage rapid execution which, in turn,
will support our growth aspirations.
As planned, Alan Grieve and Trevor
Petersen stepped down as directors of the
Company in February 2022. Both possess
exceptional organisational knowledge and
have dedicated many years of service to
their roles. It has been a pleasure working
alongside them and benefitting from their
experience. Dr Felicity Harvey succeeded
Alan as Senior Independent Director (‘SID’)
and has already engaged directly with the
Group’s top investors, along with myself,
to share her industry knowledge and hear
their views.
We remain committed to strengthening and
diversifying the Board. In this, I was pleased
to welcome two new independent directors:
Natalia Barsegiyan – who became a
member of the Audit and Risk Committee
and the ESG Committee – and Zarina Bassa,
who forms part of the Remuneration
Committee and will join the Audit and Risk
Committee with eect from 1 January 2023.
Consequently, we now enjoy equal
representation on the Board of male and
female Board members. This provides the
necessary diversity of views, cultures and
backgrounds, in addition to independence,
to ensure the appropriate decisions are
made with all stakeholders in mind.
A key function of this Annual Report is
to aid understanding of how my fellow
directors and I have exercised our duties
– under Section 172 of the Companies Act
2006 (‘Section 172’) – to promote the
long-term success of Mediclinic, with
consideration for all stakeholders’ views.
While more details are available on page 30,
I would like to highlight one key decision:
constituting a new ESG Committee, of
which I am the Chair, in September 2021.
Previously, ESG and clinical governance
had been combined under a single
committee. Such is the advancement of our
ESG strategy that we thought it appropriate
to give it the requisite attention. It will
support management in adopting the right
culture, attracting the right people and
providing prominence to the right activities,
enabling many key elements of our Group
strategy to fall into place.
FOCUS ON PROFITABLE GROWTH
As we look ahead, the Board believes
the opportunities and outlook for the
Group remain positive. Momentum is
building as we see the eects of the
pandemic on our operations lessen and
client volumes grow. Financial performance
has improved materially. Leverage is
reducing and returns are advancing towards
our weighted average cost of capital
(‘WACC’). Management remains focused
on driving eciencies and productivity.
These factors are expected to see
profitability return towards pre-pandemic
levels over the medium term.
Throughout this journey, our people remain
central to our success. I thank our dedicated
teams of doctors and nurses for living our
purpose to enhance the quality of life every
day. They have accomplished far more than
the Board and management could ever
have asked of them, especially during
the past two years. Our strategic execution
will provide them with new and exciting
opportunities as we continue our expansion
across the continuum of care in pursuit of
further growth. Nurturing and developing
their skills and promoting wellness are
critical to our prosperity and I look forward
to seeing them grow with the business in
the years to come.
Dame Inga Beale
Non-executive Chair
24 May 2022
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT8
• As a recognised employer and partner of
choice, attracts and retains the best talent
and independent medical practitioners
across all disciplines
• Collaborates with governments and
authorities to oer healthcare services
and participates in initiatives to strengthen
relationships across public and private
healthcare sectors
• Innovates with healthcare insurers and
industry partners to deliver products and
services that meet the changing needs
of clients
• Internationally recognised clinical expertise
and a relentless focus on improving patient
safety and clinical outcomes
• Committed to providing cost-ecient,
quality care and outstanding client
experiences as part of our mission to create
value every day
• Digitalisation competencies centred on
transforming services to oer seamless,
integrated client journeys across physical
and virtual care settings
• Robust cash generation
• Drives enhanced returns through
increased asset turnover and value-
oriented capital allocation
• Responsible approach to leverage
through proactive management of debt
levels, costs and maturity, providing
financial flexibility for future growth
• Dividend policy payout ratio of between
25% to 35% of adjusted EPS
• Group benefits of scale and
standardisation deliver cost savings
and operating eciencies
INVESTMENT CASE
1
2
3 5
64
PARTNER
OF CHOICE
CLIENT
CENTRED
TRUST
OPPORTUNITIES
FOR GROWTH
HIGH BARRIERS
TOENTRY
STRONG FINANCIAL
PROFILE
• Established leading market positions with
nearly 40 years of healthcare experience
• Operates world-renowned tertiary care
facilities
• One of the largest private healthcare
service providers and doctor networks
across the Europe, Middle East and Africa
(‘EMEA’) region
• International expertise across a balanced
portfolio of developed (Switzerland and
the UK) and emerging market (Southern
Africa and the Middle East) operations
• Committed to sustainable development
with clear ESG goals that advance the
growth prospects of the Group and
safeguard our people, clients and planet
• Market share growth propelled by leading
market positions and diverse services
• Focused expansion into new services
across the continuum of care through
investment in innovation, digital
transformation and technology
• Disciplined approach to grow into new
geographies by leveraging our core
competencies
• Leverages international expertise and
internal clinical benchmarking for eective
management of large multidisciplinary
acute facilities, Centres of Excellence
(‘CoEs’) and specialised services
• Extensive and well-invested asset portfolio
providing operational flexibility, including
expansion across the continuum of care
and other lighter asset investments to
grow the business
• Hub-and-spoke healthcare models
supported by widespread physical and
virtual integrated client referral channels
• Detailed knowledge of complex
and diverse reimbursement models
underpinned by data science
management
Klinik Im Park, Switzerland
Following a clear strategic roadmap
to accomplishing our vision, we are
constantly evolving and expanding
our integrated healthcare system
to oer clients easy access to
convenient, high-quality healthcare
in the most suitable care setting
at the most appropriate cost. By
approaching this with disciplined
capital allocation and a commitment
to a better tomorrow, we expect to
deliver superior and sustainable value
to shareholders.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 9
GROUP CEO’S REVIEW
TOWARDS
THE MEDICLINIC
OF THE FUTURE
DELIVERING AGAINST
OUR PRIORITIES
Amid the ongoing challenges posed by
COVID-19, the Group made good progress
in the achievement of our financial,
operational and strategic goals during the
year under review, further strengthening our
foundation for future growth.
To guide our actions during FY22, I set out
four key priorities at the start of the year:
1. Deal with the pandemic eectively;
2. Progress towards pre-pandemic
profitability;
3. Execute on the Mediclinic Group Strategy;
and
4. Further improve our Group value.
DEALING WITH THE PANDEMIC
EFFECTIVELY
Our international perspective and centrally
coordinated Clinical Services function
proved instrumental in navigating the
pandemic eectively, leveraging insight
and best practice from across the Group
to improve our response to each wave.
Through multidisciplinary task forces at
Group and divisional level, we continually
evaluate our ongoing pandemic response,
allowing for optimised treatment pathways.
We also remain focused on the safety and
wellbeing of every employee and partner
doctor, adapting our support as the
pandemic’s impact evolves.
Since the onset of the pandemic, we
have diligently cared for approximately
85 000 COVID-19 inpatients. Even though
COVID-19 patient volumes were similar
compared with the prior year, we
experienced a significant increase in overall
client activity, driven by demand for our
broad range of healthcare services. In
FY22, we treated around 750 000 inpatient
and day case admissions, up 14% compared
with FY21, with outpatient revenue
increasing by 10%.
Collaborating with and supporting public
and private stakeholders in all our
geographies has proven vital in combatting
the pandemic. In Switzerland, we
administered over 1 million COVID-19
vaccine doses at our vaccination centres,
and partnered with 12 cantons to manage
repetitive polymerase chain reaction
(‘PCR’) saliva testing on our digital platform,
TOGETHER WE TEST. Our on-site
vaccination centres in South Africa assisted
with the delivery of a further 360 000
vaccines, while five of our facilities in the
Middle East provide ongoing support to
the world-class, government-led vaccination
and testing programmes in the region.
Q&A
HOW HAVE THE PEOPLE OF
MEDICLINIC INSPIRED YOU IN
THE PAST YEAR?
To navigate challenges posed by
the pandemic, teams across the
business had to quickly adapt and
evolve. I have witnessed strong teams
at our facilities work together more
eectively than ever before, and this
team-orientated approach has spread
throughout the entire organisation.
Dr Ronnie van der Merwe
Group Chief Executive Ocer
Collaborating with and
supporting public and private
stakeholders in all our
geographies has proven vital
in combatting the pandemic.
GROUP CHIEF EXECUTIVE
OFFICER’S REPORT
Scan the QR code or visit
annualreport.mediclinic.com
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10
PROGRESSING TOWARDS
PRE-PANDEMIC PROFITABILITY
Our ability to provide our full breadth of
services improved in FY22 compared with
FY21. The Omicron variant proved less
clinically severe than previous variants,
resulting in fewer COVID-19 inpatient
admissions compared with other waves;
however, stang and patient scheduling
were severely disrupted at times by
the variant’s higher transmissibility.
Encouragingly, we were able to exit the
fourth quarter strongly across all three
divisions as the wave receded.
The Group delivered a strong operational
and financial performance this year, in line
with the improved outlook we indicated at
the half-year results. Group revenue in FY22
was up 8% at £3 233m (FY21: £2 995m),
adjusted EBITDA was up 22% at £522m
(FY21: £426m) and the adjusted EBITDA
margin significantly improved
by nearly 200 basis points to 16.1%
(FY21: 14.2%), signalling our progress
towards pre-pandemic profitability
(FY20: 17.5%). Reported operating profit
was up 34% at £280m (FY21: £209m);
adjusted operating profit was up 41% at
£311m (FY21: £221m). Reported earnings
were up 122% at £151m (FY21: £68m).
Reported and adjusted EPS were up
122% at 20.5 pence (FY21: 9.2 pence)
and 65% at 22.6 pence (FY21: 13.7 pence),
respectively.
Cash and cash equivalents increased during
the year to £534m (FY21: £294m), with
cash conversion at 127% (FY21: 77%). The
leverage ratio reduced to 3.9x at year end
(FY21: 5.1x), and ROIC increased to 4.0%
(FY21: 3.0%). The Board has proposed that
the dividend be reinstated with a final
dividend of 3.00 pence per share (FY21: nil).
EXECUTING ON OUR GROUP STRATEGY
The Group strategy aims to position
Mediclinic as an integrated healthcare
partner, harnessing data, technology and
innovation to facilitate our growth across
the continuum of care while oering
sustainable value to our clients. To facilitate
this, from 1 April 2022, we appointed Koert
Pretorius, former CEO of our Southern
Africa division, as Group Chief Operating
Ocer and refined Magnus Oetiker’s role
to focus purely on strategy. I believe these
changes will increase the speed of strategy
execution while maintaining operational
discipline in the business of today. It will
also improve project alignment, resource
allocation and operational excellence across
the Group and divisions, and support our
Group priority of returning to pre-COVID-19
levels of profitability.
DIGITAL TRANSFORMATION
Traditionally, we have invested significantly
in our global infrastructure, creating a
valuable and market-leading portfolio of
facilities. The pandemic, however, greatly
increased the need for convenience
and ease in accessing quality healthcare.
We are growing our information and
communications technology (‘ICT’),
electronic health records (‘EHRs’) and
digital initiatives accordingly to enable
seamless and coordinated client journeys
across physical and virtual care settings.
Through our collaboration with Mehiläinen,
we are broadening our capacity to provide
innovative digital healthcare solutions for
clients and healthcare professionals on the
BeeHealthy platform. We have launched
client-facing applications in all three
geographies, and are piloting various digital
patient pathways. This will allow us to foster
stronger direct relationships with our
clients, enhancing clinical outcomes, client
experience and stakeholder value.
Our virtual care initiative digitalises existing
services to create a real-time healthcare
system which comprises telehealth services,
remote patient monitoring (‘RPM’) and
virtual critical care unit solutions. We are
also well advanced in robotic process
automation (‘RPA’), which drives
productivity and eciency gains, and allows
our people to prioritise valued-added
activities.
INNOVATION
We established our healthcare technology
and innovation hub in Switzerland during
the year under review, and our precision
medicine services have launched in the
Middle East and Switzerland, with Southern
Africa to follow shortly. These services, led
by specialist geneticists, enable disease
treatment and prevention tailored to
individual clients’ genetic, environmental
and lifestyle variables.
The Group strategy aims to
position Mediclinic as an
integrated healthcare
partner, harnessing data,
technology and innovation
to facilitate our growth.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 11
GROWTH AND EXPANSION ACROSS
THE CONTINUUM OF CARE
In Switzerland, our numerous public-
private partnerships (‘PPPs’) support
cantonal hospitals to expand care delivery,
while Hirslanden, along with Medbase and
the insurance partners Groupe Mutuel,
Helsana and SWICA, launched a joint
digital ecosystem called Compassana,
which will allow Swiss clients to coordinate
their care. We also recently opened
OPERA Bern day case clinic, our fifth in
Switzerland, and are piloting an innovative
insurance product in the same region, in
collaboration with Medbase and Helsana
Insurance, which oers supplementary
insured clients access to high-quality,
integrated care.
In Southern Africa, we opened two new
day case clinics during the period, taking
the division’s total to 14. Following the
opening of our first renal facility in South
Africa in partnership with BGM Renal
Care in February 2021, three further
facilities were opened during the period.
Co-locating these services at existing
facilities ensures a comprehensive,
vertically integrated approach to renal
care in the acute and chronic environment.
In July 2021, we also partnered with
Icon Oncology to open a new flagship
oncology service.
We grew our services in the Middle East
through the 100-bed expansion and
the new integrated oncology unit at
Airport Road Hospital in Abu Dhabi.
In November 2021, we acquired the
remaining 70% shares in the Bourn
Hall Fertility Centre to further enhance
our in vitro fertilisation (‘IVF’) oering.
In Dubai, we successfully launched
a new Mediclinic Perform sports
medicine and rehabilitation centre, and a
cosmetic facility, Enhance, is due to open
by the end of May. We entered into the
first-ever healthcare PPPs awarded by the
Dubai Health Authority to operate two
dialysis centres.
RPM and home care services present new
growth opportunities. The Group invested
in DomoSafety, a Swiss at-home health
monitoring business; acquired Ayadi
Home Healthcare in the Middle East;
and commenced an RPM pilot with the
Abu Dhabi Government. Furthermore, we
converted 35 licensed beds in the Middle
East to provide long-term patient care as
we look to these and other specialties like
mental health for further expansion.
The Group’s entry into the Kingdom of
Saudi Arabia together with the Al Murjan
Group is progressing well. We expect to
open the 236-bed private hospital in 2023.
SUSTAINABLE DEVELOPMENT
Sustainable development is one of our core
strategic focus areas and is ingrained in
how we do business. Our people, clients
and the planet are our priority as we seek
to build healthier and happier societies for
a better future, which drives value for all
stakeholders.
We have allocated around £8m of capital
investment per annum over the next
three years towards projects that drive
environmental improvements as we seek to
achieve our 2030 targets, reducing costs
and diversifying our energy reliance.
Excellent, cost-eective initiatives are
already underway, including water usage
minimisation, alternatives to traditional
energy sources and packaging reduction.
During the period, we completed our first
sustainability-linked syndicated loan in
South Africa and signed agreements to
procure renewable energy at lower rates
than traditional energy taris while
transitioning to 100% renewable electricity
supply in Switzerland.
GROUP CHIEF EXECUTIVE OFFICER’S
REPORT CONTINUED
Our people, clients and the
planet are our priority as
we seek to build healthier
and happier societies for
a better future.
Constantiaberg,
South Africa
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT12
FURTHER IMPROVING
OUR GROUP VALUE
Our purpose, to enhance the quality of life,
drives everything we do as an organisation,
galvanising our teams across geographies to
deliver care for our clients. To enhance the
Group’s position as a market leader, we are
not restricted by geography or function, but
instead harness the skills, knowledge, best
practice and innovation from each of the
three continents where we operate. We
have seen clinical collaboration in areas
such as virtual critical care units, COVID-19
treatment pathways and RPM. Our Digital
Transformation and Innovation functions
collaborate with partners from around the
globe. Procurement initiatives ensure the
consistency and security of supply, as well
as competitive pricing which supports our
profitability. ESG projects enhance our
position as a trusted healthcare partner.
All of these are being managed centrally to
ensure we benefit from economies of scale,
eciencies and coordinated care, which will
continue to set us apart from less diversified
healthcare providers.
SPIRE’S PERFORMANCE
Spire’s partnership with the National Health
Service (‘NHS’) in the UK continued with
a volume-based contract in the first quarter
of 2021 – nine Spire hospitals became
NHS cancer hubs. Similar agreements
were established in the wake of the
Omicron wave.
The group delivered a strong financial
performance in the year ended 31 December
2021,
with revenue growth of 20%. Spire also
completed the sale and leaseback of its
Cheshire hospital and refinancing of its
borrowing facilities, paying down £100m
of debt.
We continue to work with the company’s
management and board to deliver on Spire’s
strategy of being the first choice for private
healthcare in the UK, and a key partner of
the NHS, while progressing eciency
programmes and growth initiatives.
POSITIVE GROUP OUTLOOK
It has been four years since my
appointment as Group CEO, and three
years since we introduced a comprehensive
strategy for the entire organisation.
During this time, there is no doubt we
have matured in our approach to strategy
execution and our ability to work cohesively
towards enhancing our collective value.
This gives me confidence in our future
and the opportunities being created for
the Group to deliver sustainable value.
In FY23, we expect a combination of
volume growth and eciency gains to
continue to drive the Group towards
pre-pandemic profitability, alongside a
meaningful improvement in earnings.
We continually invest in our people, referral
networks, innovative insurance products
and digital initiatives as we expand across
the continuum of care in an integrated
and value-focused way. Our organisation’s
resilience, the trust we have built with our
clients and partners, and our ability to seize
opportunities are only possible as a result
of our people; it is impossible to feign the
fortitude, positivity and commitment that
our employees display every day, let alone
the success that has resulted from their
eorts. I wish to thank every employee
and supporting doctor for their contribution
in this.
Dr Ronnie van der Merwe
Group Chief Executive Ocer
24 May 2022
PEOPLE AND CULTURE
4 600+
appointments in the past year
CREATING OPPORTUNITY
132
nationalities across
five geographies
40%
female and
40% male
representation
target at senior level
DEVELOPING SKILLS
30
questions in
employee
engagement survey
24/7
ethics line available
to all employees
BEING HEARD
1.45m+
COVID-19 vaccines administered during FY22
96%, 96% and 72%
of employees vaccinated against COVID-19
in Southern Africa, the Middle East and
Switzerland, respectively
ENABLING HEALTH AND SAFETY
10
partnerships with tertiary institutions
to assist with clinical training
EMBRACING DIVERSITY
To enhance the Group’s position as a market leader, we are
not restricted by geography or function, but instead harness
the skills, knowledge, best practice and innovation from each
of the three continents where we operate.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 13
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
ALWAYS IN DEMAND
OUR MARKETS
Although COVID-19 has had a fundamental impact on many
industries and economies across the globe, the demand for
healthcare services has not wavered. Over recent years, the
healthcare industry has been adapting to rapid development
in the global landscape, most notably driven by ageing
populations, a growing burden of lifestyle diseases, advances in
new medical technology, the development of virtual care and
emerging healthcare consumerism. These provide opportunities
for growth across the continuum of care.
LIFELONG PARTNERSHIP
Healthcare encounters are changing.
Today, clients seek a partner to accompany
them through life and champion their
wellness and mental health so they can
manage their health – regardless of time
or place. Due to the rapid advancement of
technology and services, their expectations
extend beyond treatment and recovery to
prevention and enhancement.
AFFORDABILITY
The healthcare regulatory environment
is evolving as stakeholders focus on
the aordability of care in light of ever-
increasing demand. This has resulted in
outmigration of care, an approach that
aims to reduce the cost of certain low-
acuity services and procedures by oering
these in more appropriate care settings.
In addition, there is an ongoing drive for
greater care coordination and data sharing
to ensure ecient delivery of enhanced
clinical outcomes.
> 3x increase
56%
USD7trn
in people aged 80 and older,
from 137m in 2017 to 425m
in 2050
1
±50%
of our lives spent in less-than-
good health, including 12% in
poor health
2
of the global disease burden
by 2030 will be due to
chronic disease
3
global wellness and preventative
care spend by 2025, up by over
40% from USD4.9trn in 2019
4
34x increase
in telehealth use compared with
pre-pandemic baseline
8.7m
84 years
stable population
6
OPPORTUNITIES
• Expand across the continuum of care:
day case clinics, genetics, radiology, family
medicine, virtual care
• Leverage collaboration in the sector to
expand referral networks and create new
insurance products
• Pursue additional PPPs
• Mature, high-quality healthcare system
• Ageing population
• Mandatory health insurance with the option
to purchase supplementary cover
74%
9
of bed capacity provided by public cantonal
hospitals, the largest providers of healthcare
HEALTHCARE
11.3%
3.7%
of gross domestic product (‘GDP’) spent on
healthcare, above the OECD average of 8.8%
7
GDP growth in 2021, recovering from 2.4%
contraction in 2020
8
average life expectancy, three years more than
other Organisation for Economic Co-operation
and Development (‘OECD’) countries
7
SWITZERLAND
IMPACT ON STAKEHOLDERS
Clients: Increasing need for healthcare, but
empowered to demand it on their own terms
Employees, alumni and potential applicants:
Training required for new technology; skills shortages
Governments and authorities: Insucient service
provision aecting aordability, skills and access
Healthcare insurers: Growing demand and greater focus on
aordable, accessible healthcare solutions
Investors: Opportunity cost of not addressing emerging
trends
Medical practitioners: Support needed with next-generation
developments; training required for new technology
MARKET REVIEW
Employees
Investors
Medical
practitioners
Clients
Healthcare
insurers
Clients
Governments
and authorities
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT14
The UAE Government is investing in diversification
strategies and stimulus packages to reduce
dependency on hydrocarbons, attract expatriates
to the region and reduce carbon footprint of power
generation by 70% through UAE Vision 2050.
OUR MARKETS OUR RESPONSE
OPPORTUNITIES
• Expand across the continuum of care:
primary care, day case clinics, dialysis,
mental health, oncology, radiology,
genetics
• Develop delivery models and insurance
products for private-pay and employed-
but-uninsured markets
OPPORTUNITIES
• Expand across the continuum of care: oncology,
genetics, RPM, long-term care, palliative care,
virtual care, diagnostics, sports medicine
• Expand into neighbouring countries
• Introduce new clinical specialties, technologies
and high-acuity care to the region
• Leverage strong international brand and
reputation
We are leveraging our expertise and leading market positions to partner and collaborate
with other public and private healthcare providers, evolving across the continuum
of care. This approach helps entrench us into the healthcare delivery systems of the
countries in which we operate, making the Group even more relevant to our stakeholders
over the long term.
Although our divisions operate in unique legal, regulatory and economic environments,
they share and strive towards the same Group strategic goals and high ESG standards.
• Mandatory health insurance
• Significant degree of variability in the types
of healthcare services oered, the breadth
and depth of clinical expertise, business and
operating practices, client experience and
clinical outcomes
45%
10
average insurance solvency ratio
(25% required by Medical Schemes Act,
No. 131 of 1998, in South Africa)
• Mature acute hospital sector
• Network formations common practice
HEALTHCARE
HEALTHCARE
See the Strategy overview on page 16 for progress during the year
Sources
1
‘Ageing and health’ fact sheet, World Health Organization
2
‘Adding years to life and life to years’, McKinsey Health Institute
3
‘Lifestyle diseases: An Economic Burden on the Health Services’, United Nations Chronicle
4
The Global Wellness Economy: Looking Beyond COVID Report, Global Wellness Institute
5
‘Telehealth: A quarter-trillion-dollar post-COVID-19 reality?’, McKinsey Health Institute
6
‘Switzerland population’, Worldometer
7
‘Health at a glance 2021’, OECD, describing countries that belong to the OECD, all with high Human
Development Index
8
‘Switzerland GDP growth rate’, Trading Economics
9
‘Privatkliniken Schweiz 2020’
10
Council for Medical Schemes 2020/2021 Annual Report
11
‘The South African economy records a positive fourth quarter’, Statistics South Africa
12
‘Total population of the UAE: 2020’, The World Bank – CAGR 2015-2020
13
‘Population of the UAE 2021’, Edarabia
14
‘UAE to post strong economic growth in 2022 and 2023’, Fitch Solutions
8.9m
10
9.9m
12
4.9%
11
89%
13
3.4%
14
stable population of privately
insured members
population in the UAE with a five-year compound
annual growth rate of 1.3%
recovery in GDP in 2021, following
6.4% decline in 2020
expatriate population as a percentage of
total population of the UAE
expected GDP growth in the UAE in 2021, with
an estimated increase of 4.6% in 2022 and 3.9%
in 2023
SOUTHERN AFRICA THE MIDDLE EAST
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 15
STRATEGY OVERVIEW
‘I carefully considered the nature
of the relationship between
Mediclinic and those who make
use of our services within an
evolving healthcare landscape.
A patient is a person receiving
medical care; a client is a person
who receives advice. The latter
implies a level of trust and
a long-term relationship that
extends beyond mere treatment.
We want our patients to interact
with Mediclinic beyond the
conventional treatment process,
rather as a client who turns to us
to enhance their quality of life.’
Dr Ronnie van der Merwe
Group Chief Executive Ocer
1
4
2
35
6
BECOME AN INTEGRATED
HEALTHCARE PROVIDER
ACROSS THE CONTINUUM
OF CARE
EVOLVE AS
A DATA-DRIVEN
ORGANISATION
IMPROVE OUR
VALUE PROPOSITION
SIGNIFICANTLY
TRANSFORM
OUR SERVICES
AND CLIENT
ENGAGEMENT
THROUGH
INNOVATION AND
DIGITALISATION
MINIMISE OUR
ENVIRONMENTAL
IMPACT
GROW IN
EXISTING MARKETS
AND EXPAND INTO
NEW MARKETS
2026
STRATEGIC
GOALS
PRINCIPAL AND
EMERGING RISKS
(ASDESCRIBEDINTHE
RISK MANAGEMENT
REPORTONPAGE 91)
1. Economic and business
environment
2. Regulatory and compliance
3. Information systems security
and cyberattacks
4. Pandemics and infectious
diseases
5. Disruptive innovation
and digitalisation
6. Competition
7. Workforce risks
8. Climate change
9. Patient safety, quality
of service and operational
stability
10. Availability and cost
of capital
11. Financial and credit risk
12. Business investments
and acquisitions
GOALS AND PROGRESS
POSITIONING TO BE
A HEALTHCARE PARTNER
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT16
1
BECOME AN INTEGRATED
HEALTHCARE PROVIDER ACROSS
THE CONTINUUM OF CARE
PROGRESS DURING FY22
• Expanded through investment in own
facilities, bolt-on investments and
partnerships
See page 12
• Defined business plans per division
• Continued development of care
coordination model
FOCUS AREAS FOR FY23
• Implement standardised BeeHealthy
platform
See page 19
• Implement client-centred, seamless
care coordination across the continuum
of care
LINK TO PRINCIPAL AND
EMERGING RISKS
1, 2, 3, 4, 5, 6, 9, 10, 12
LINK TO KEY STAKEHOLDERS
• Clients
• Employees, alumni and
potential applicants
• Financial institutions
• Healthcare insurers
• Industry partners
• Investors
OUR STRATEGY IN ACTION:
A COMPLETE APPROACH TO CANCER CARE
Our cancer service oering demonstrates how we are integrating care
to the benefit of clients.
Cancer is one of the leading threats to life
globally, accounting for nearly one in six
deaths in 2020. Yet early detection and
prompt treatment can significantly improve
life expectancy and quality.
The journey of diagnosis, treatment and
management is far from straightforward,
however. Involving a myriad of services and
experts, its fragmented nature can consume
valuable time and costs while uncoordinated
treatment risks being inecient.
To address these challenges, in May 2021,
we opened an integrated oncology unit in
the Middle East at Airport Road Hospital,
creating one point of care to provide clients
with unswerving support throughout.
The new Abu Dhabi unit supplements our
Comprehensive Cancer Centre (‘CCC’) in
Dubai, developed in collaboration with our
Swiss operations.
At Airport Road, we bring together experts in
oncology, radiotherapy and nuclear medicine.
A multidisciplinary tumour board discusses
each new case to determine an optimal,
personalised treatment plan. Sophisticated
equipment enables advanced detection and
precise treatment while a breast care nurse
and buddy service provide personalised
support.
This integrated approach is also in evidence
at our flagship cancer facility in Southern
Africa. The ZAR45-million oncology unit
at our Constantiaberg hospital, opened in
partnership with Icon Oncology, consolidates
clinical capabilities and industry expertise
under one roof. Like our advanced oncology
units in Switzerland and the Middle East, it
boasts a Varian Truebeam Linear Accelerator
for targeted radiation therapy. By oering
full-service chemotherapy and radiotherapy
alongside surgery, we can streamline the
client journey and deliver the right care at the
right time. The first of its kind in the region,
the integrated oncology facility is indicative
of our strategy.
We recognise that an individual’s health needs
are not confined to isolated incidents but
span a sequence of episodes necessitating
diverse contributions. This is why we are
expanding across the continuum of care –
our goal is nothing less than accompanying
our clients throughout their entire healthcare
journey.
SETTING THE STANDARD
One in five Swiss women with breast cancer is treated at one of our breast cancer
centres across the country – testament to the high-quality care provided by our
teams. Our focus on cancer includes a CCC and a unit dedicated to prostate
cancer at Klinik Hirslanden, Zurich. Certification by the Swiss Cancer League and
the German Cancer Society demonstrates our commitment to holistic treatment
founded on the latest scientific evidence.
Note
Based on financial year healthcare revenue.
CLIENT ACTIVITY BREAKDOWN
1
8%
FY21:
70%
FY21:
6%
FY21:
24%
Inpatient
cases
Day surgery
cases
Outpatient
cases
24%
68%
• Develop further service oerings that prevent, care, recover
and enhance
• Align reimbursement models with the respective continuum
of care oering
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 17
STRATEGY OVERVIEW CONTINUED
2
IMPROVE OUR VALUE PROPOSITION
SIGNIFICANTLY
PROGRESS DURING FY22
• Elevated client experience as integral part
of clinical care
• Introduced Net Promoter Score® (‘NPS®’)
as new client experience measure and
integrated into management incentive
metrics
• Implemented safety event reporting
system
• Enhanced research collaboration and
established research committee in
Southern Africa
• Established minimum standards for
obstetrics and surgical safety
FOCUS AREAS FOR FY23
• Implement minimum standards for safe
surgery and obstetrics
• Improve clinical cost eciency and care
eectiveness by:
– implementing Early Recovery After
Surgery principles;
– optimising care process through
digitalisation and virtual care; and
– managing outcome and cost variation in
elective surgery
• Gain integrated view of client needs
and incorporate their voice in decision-
making by:
– improving NPS® across all care settings;
and
– embedding client advisory groups
LINK TO PRINCIPAL AND
EMERGING RISKS
1, 2, 4, 5, 6, 7, 9
LINK TO KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential applicants
• Healthcare insurers
• Industry partners
• Medical practitioners
Client feedback is crucial for service
excellence, perhaps nowhere more so than
in healthcare. Measuring client experience
not only enables us to shape our care
services to better meet their needs, it
also helps us achieve our goal of zero
preventable harm to patients.
Research has shown that better patient
experience is associated with favourable
outcomes. Satisfied clients make better use
of the clinical advice given and there are
lower rates of in-hospital complications. We
have, therefore, been surveying inpatients
since 2014 using the internationally
recognised Press Ganey® survey and this
has now been expanded to include clients
in other settings such as day case clinics
and emergency centres. Additionally, we
provide multiple feedback channels to
capture the client’s unfiltered voice. In FY22,
we introduced a taxonomy to systematically
analyse complaints and implement quality
improvement projects in response. We
furthermore have employees dedicated
to handling these matters across all our
geographies.
But our expansion across the continuum of
care has necessitated the implementation
of a single client experience metric that
applies across physical and virtual settings.
For this reason we have implemented NPS®
to track customer satisfaction. Moreover, from
FY23, management’s variable remuneration
will be linked to NPS® achievement.
See page 144 for more
OUR STRATEGY IN ACTION:
PROMOTING CLIENT CENTRICITY
UNDERSTANDING NET
PROMOTER SCORE®
One question = top indicator
of customer loyalty
‘How likely are you to recommend
us to a friend, family member
or colleague?’
NOT AT ALL LIKELY
EXTREMELY LIKELY
0–6 DETRACTORS
Dissatisfied clients whose
negativity can harm a brand
7–8 PASSIVES
Satisfied but indierent,
will switch readily
9–10 PROMOTERS
Loyal clients that refer
others
% promoters – % detractors = NPS®
INTERPRETING THE SCORE
NPS®
-100–0
0–30
31–70
71–100
RANKING
Needs improvement
Good
Great
Excellent
HOW IS NPS® DETERMINED?
• Partner with clients to create true client centricity
• Aim for zero preventable harm toclients
• Reduce the ‘cost of us’
We have expanded our client
experience measures to ensure
we thoroughly understand clients’
needs and adapt our care
accordingly.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT18
3
TRANSFORM OUR SERVICES AND
CLIENT ENGAGEMENT THROUGH
INNOVATION AND DIGITALISATION
PROGRESS DURING FY22
• Partnered with Mehiläinen (business-to-
consumer tool BeeHealthy) to launch
client app in Switzerland, virtual clinic
in Southern Africa and virtual clinic pilot
in the Middle East
See alongside
• Established Centre of Expertise for
automation and solid pipeline for initiatives
• Mapped Group digital capabilities and
expanded on virtual intensive care unit
(‘ICU’) project
• Established innovation hub in Switzerland
• Launched innovation and digital
transformation ambassadors
• Initiated cultural transformation projects
FOCUS AREAS FOR FY23
• Drive innovation pipeline with at least
11 distinct innovation projects across three
horizons
• Build relationships with other innovation
centres and start-up curators
• Increase uptake of automation
• Drive adoption and expand use cases for
BeeHealthy
• Establish baseline for real-time sensing
capability
LINK TO PRINCIPAL AND
EMERGING RISKS
3, 4, 5, 6, 10, 12
LINK TO KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential applicants
• Industry partners
• Medical practitioners
Our Mediclinic apps deliver on clients’ expectations of a healthcare
experience that is convenient, personalised, and easy to use.
Our promise of ‘Expertise you can trust’
is being realised in novel ways through
our client-facing apps. Made possible by
our partnership with Nordic healthcare
provider Mehiläinen, our healthcare apps
utilise the BeeHealthy platform to combine
authoritative content with digitally delivered
expert healthcare.
Since April 2021, Swiss mothers-to-be
can turn to us for health support via
their smartphones. On discovering she
is pregnant, a woman might first use the
Hirslanden app to work out her due date
and receive customised weekly information
on her progress. If she suers from morning
sickness, she can chat to a midwife and
make an appointment if in-person care is
recommended. When it comes to choosing
a maternity hospital, she can take a virtual
tour, then visit her chosen facility in the
real world for a birth preparation course.
This journey will soon be expanded to
incorporate IVF and family planning for
prospective parents, and early infant care
for those who have just welcomed a baby.
This interplay between our physical and
virtual oerings enables us to proactively
guide clients through seamless, well-defined
healthcare journeys and achieve better
outcomes as a result, as well as improve
client experience. Clients who might have
delayed consulting a doctor can get medical
advice and an e-prescription via smartphone
where and when it suits them. This enables
Mediclinic to reach clients outside of our
normal sphere and opens up opportunities
to enhance our service. Already the
pregnancy journey has been expanded to
include paediatrician and GP chats as well as
lifestyle coaching in Switzerland. Additional
products such as birth kits can be oered
through an online shop.
The end-to-end solution is not only a benefit
for clients; it oers us several strategic
advantages. Continuous insight into client
needs and preferences empowers us to
improve our oering, shaping not only
the business of today, but the business of
tomorrow through the use of data. This
allows us to become a more business-to-
consumer-focused organisation. We are
working on BeeHealthy as a Group and
sharing the learnings across the geographies,
which has accelerated implementation. In
September 2021, our subsidiary, Intercare,
launched a pilot for a digital clinic in
Southern Africa. This on-demand service
uses chat-based symptom assessments and
oers video consultations. Roll-out to the
public is planned during FY23.
Furthermore, apps oer operational benefits
through the use of digital services to find
a doctor or make an appointment. Online
bookings decrease the burden on our
engagement centres – in the Middle East,
some
28 000 appointments a month are now
booked digitally. They also reduce the number
of non-arrivals at appointments due to the
ease of cancelling and rescheduling. This
makes more ecient use of doctors’ time and
frees up our employees to do what they do
best: bring the human touch to
healthcare.
OUR STRATEGY IN ACTION:
INNOVATIVE SERVICE DELIVERY THROUGH TECHNOLOGY
• Establish radical innovation capability
• Optimise through automation
• Drive digital transformation
• Establish comprehensive virtual care oering
• Optimise people, technology and data through healthcare
informatics to improve care
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 19
STRATEGY OVERVIEW CONTINUED
4
EVOLVE AS A DATA-DRIVEN
ORGANISATION
PROGRESS DURING FY22
• Established data lake and commenced
Cloud migration, enabling us to source
and integrate data (structured and
unstructured) across many applications
and processes, and support dierent data
usage scenarios, including real-time
predictive and prescriptive analytics
• Created solutions for ESG, mobile device
management and continuum of care
scenario evaluation in support of other
strategic goals
FOCUS AREAS FOR FY23
• Create data solution to better understand
clients, learning how they engage with us
in order to improve our value proposition
• Develop machine learning solutions that:
– identify revenue leakage;
– reduce cost; and
– support value-based and virtual care
LINK TO PRINCIPAL AND
EMERGING RISKS
3, 5
LINK TO KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential applicants
• Governments and authorities
• Healthcare insurers
• Industry partners
• Medical practitioners
5
MINIMISE OUR ENVIRONMENTAL IMPACT
PROGRESS DURING FY22
• Centralised environmental data
management
• Reached agreement with Energy Exchange
of Southern Africa (‘Energy Exchange’) to
initially procure renewable energy for five
facilities in Southern Africa
• Procured 38 554MWh of clean energy in
the Middle East
• Finalised roadmaps to become carbon
neutral and have zero waste to landfill in
Southern Africa
• Ongoing implementation of
ISO 14001:2015 environmental management
system (‘EMS’) in Switzerland and the
MIddle East
• Achieved most qualitative targets to
reduce carbon emissions and waste to
landfill
FOCUS AREAS FOR FY23
• Finalise action plans to reduce anaesthetic
gases and NO emissions in Southern
Africa and the Middle East, respectively
• Finalise Swiss roadmap to become carbon
neutral and develop roadmap to reduce
waste and increase recycling
• Finalise Middle East roadmap to become
carbon neutral and have zero waste to
landfill
• Progress ISO 14001:2015 EMS
implementation in Switzerland and
the Middle East
LINK TO PRINCIPAL AND
EMERGING RISKS
8
LINK TO KEY STAKEHOLDERS
• Clients
• Communities
• Employees, alumni and potential applicants
• Financial institutions
• Industry partners
• Medical practitioners
• Professional societies
• Suppliers
See the Sustainable development overview on page 34
• Build data lake that curates all data assets
• Manage data as strategic asset
• Develop company culture of using data every day for fact-based
decision-making
• Implement data-driven innovation using advanced analytics,
artificial intelligence and machine learning
• Become carbon neutral by 2030
• Have zero waste to landfill by 2030
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT20
6
GROW IN EXISTING MARKETS AND
EXPAND INTO NEW MARKETS
PROGRESS DURING FY22
• Proactively searched for and investigated
growth opportunities
• Completed market analyses of identified
priority areas, including country and
site visits
FOCUS AREAS FOR FY23
• Deliver on geographical strategies for
growth across the continuum of care
• Continue with building and preparing
to open first hospital in Kingdom of
Saudi Arabia
LINK TO PRINCIPAL AND
EMERGING RISKS
1, 2, 5, 6, 10, 12
LINK TO KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential
applicants
• Financial institutions
• Industry partners
• Investors
• Medical practitioners
OUR STRATEGY IN ACTION:
GROWTH ACROSS THE CONTINUUM OF CARE
PREVENT, CARE, RECOVER AND ENHANCE
Innovation both inside and outside
healthcare is increasingly influencing the
way clients perceive the quality of care,
as well as how and where it should be
oered. Expansion across the continuum
of care widens our service focus, improves
accessibility, delivers integrated care
solutions and creates the opportunity to
form a lasting relationship with clients.
It also allows us to deliver services in the most
appropriate care setting at an optimal cost.
During the year under review, we continued
to expand our service oering through
acquisitions, partnerships, collaborations
and own investments. We also made strides
in strengthening existing services through
technology and innovation, laying the
foundation for coordinated care.
• Grow in existing markets based on the continuum of care goal
• Expand into new markets
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 21
STRATEGY OVERVIEW CONTINUED
CARE
PREVENT
RECOVER
ENHANCE
DIGITAL & CLIENT
ENGAGEMENT
Invested in
at-home health-
monitoring
company
DomoSafety in
Switzerland
Acquired Ayadi
home healthcare
business in the
Middle East
Launched precision
medicine service
Opened four renal
care facilities in
Southern Africa and
entered into PPPs in
the Middle East to
operate two dialysis
centres
Opened three
day case clinics
Opened oncology
centre in partnership
with Icon Oncology in
Southern Africa and
integrated oncology
unit in the Middle East
See page 17
Entered into
four PPPs
Commenced
infrastructure expansions
at two hospitals
Opened nuclear
medicine unit
Finished
two hospital
expansions,
including
100-bed hospital
expansion in
Abu Dhabi
Opened two
outpatient clinics
Launched sports
medicine unit,
Mediclinic Perform
Cosmetic centre
opening early
FY23
Partnered with
Mehiläinen to
launch client app in
Switzerland, virtual
clinic in Southern
Africa and virtual
clinic pilot in
the MIddle East
See page 19
Acquired remaining
70% of Bourn Hall
Fertility Centre
Launched
new insurance
product with
Helsana,
Medbase
Converted acute
care beds to
long-term care
beds
Launched
HomeCareOnline
for RPM
Baby client-journey
framework
established and
implemented
Launched digital
online booking
Established care
collaboration centre
for coordination
of chronic disease
management
(incorporating RPM),
virtual clinic pilot for
sta, and pharmacy
home delivery
OUR STRATEGY IN ACTION: GROWTH ACROSS THE CONTINUUM OF CARE CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT22
In pursuit of our strategy execution and
value creation, we track a broad range of
key performance indicators (‘KPIs’) that
materially impact on the business, and
align all our operations in improving these
to deliver long-term success.
ALIGNING KPIs WITH
REMUNERATION
Our LTI and STI schemes are aligned
with the Mediclinic Group Strategy, with
specific targets on revenue growth,
adjusted EPS, ROIC, gender diversity
and carbon emission reduction for LTI
participants, and targets on adjusted
operating profit, cash conversion,
NPS® and operational performance
for STI participants. This ensures a
comprehensive, transparent approach
that balances financial and non-financial
metrics.
OUR PERFORMANCE
See the Remuneration Committee Report
on page 143
KEY PERFORMANCE INDICATORS
FINANCIAL KPIs
1
REVENUE
2
(£’M)
LINK TO STRATEGIC GOALS
WHY IS THIS A KPI?
Revenue measures growth generated from
both our core business and our expansion
across the continuum of care, and aligns with
the growth ambition within our strategy.
FY22 PERFORMANCE
Despite ongoing challenges presented by the
pandemic, revenue increased by 8% (10% in
constant currency terms) during the period,
driven by increased client activity, up 9%
in constant currency terms compared with
pre-pandemic FY20 (FY22 in constant
currency: £3 366m).
3 083
2 995
3 233
1 6
ROIC (%)
LINK TO STRATEGIC GOALS
WHY IS THIS A KPI?
ROIC indicates the ecient and eective use of
capital in our operations by delivering improved
net operating profit after tax. By focusing
on improved asset turnover and delivery of
profitable growth, we seek to achieve our Group
WACC over the medium term.
FY22 PERFORMANCE
ROIC increased to 4.0%, driven by the material
improvement in Group profitability compared
with the first year of the pandemic in FY21,
while still reflecting COVID-19-impacted results.
4.4
3.0
4.0
ADJUSTED EPS (PENCE)
LINK TO STRATEGIC GOALS
WHY IS THIS A KPI?
Adjusted EPS measures profitable growth that
results from successful strategy delivery.
FY22 PERFORMANCE
Adjusted EPS was up 65%, reflecting a strong
operational and financial performance. All
three divisions’ earnings in local currency
were ahead of pre-pandemic levels with only
translation dierences resulting in Group
adjusted earnings being down 6% compared
with pre-pandemic levels (FY20: £177m).
24.0
13.7
22.6
ADJUSTED OPERATING PROFIT (£’M)
LINK TO STRATEGIC GOALS
WHY IS THIS A KPI?
Adjusted operating profit measures
profitability, which is considered a primary
driver of our success, and incorporates
depreciation and amortisation.
FY22 PERFORMANCE
Strong operational and financial performance
delivered a recovery in adjusted operating
profit, which was flat on the pre-pandemic
FY20 period in constant currency terms
(FY22 in constant currency: £326m).
327
221
311
CASH CONVERSION (%)
LINK TO STRATEGIC GOALS
WHY IS THIS A KPI?
Cash generated from operations is applied
to investments in existing infrastructure and
future growth. Driving EBITDA performance
and cash conversion provides the liquidity
and financial flexibility to pursue our growth
strategy.
109
77
127
1 2 3 6
1 2 3 6 1 6
1 2 3 6
FY22 PERFORMANCE
Cash generated from operations increased
year on year by 101% to £663m (FY21: £330m),
supported by strong EBITDA performance
and improvement in cash conversion through
catch-up of the slower recovery in the prior
year.
FY21
FY20
FY22
FY21
FY20
FY22
FY21
FY20
FY22
FY21
FY20
FY22
FY21
FY20
FY22
1
Become an integrated healthcare
provider across the continuum of care
4
Evolve as a data-driven organisation
5
Minimise our environmental impact
2
Improve our value proposition
significantly
3
Transform our services and client
engagement through innovation
and digitalisation
6
Grow in existing markets and expand
into new markets
LINK TO STRATEGIC GOALS
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 23
KEY PERFORMANCE INDICATORS CONTINUED
NON-FINANCIAL KPIs
GENDER DIVERSITY
Female representation at senior
management level (%)
LINK TO STRATEGIC GOALS
WHY IS THIS A KPI?
Gender diversity at senior and executive
management levels ensures our people are led
by a leadership team that is representative of
our gender-diverse workforce.
FY22 PERFORMANCE
Female representation in senior management
increased from 36.0% to 36.9% against the
Group target of at least 40% female and
at least 40% male representation at senior
management and executive level.
36.9
2 3
NPS®
6
LINK TO STRATEGIC GOAL
WHY IS THIS A KPI?
NPS® is a client experience metric that
measures loyalty. We introduced it during
the period as the client experience measure
for all physical and virtual care settings
because it is comparable across the Group,
applies to all service oerings in the continuum
of care, and tracks the quality of service
provided to our clients.
FY22 PERFORMANCE
In the past, the NPS® was collected as part
of the Press Ganey® survey tool, but not
actively reported on. As the Group continues
to increase its focus on being a business-to-
consumer organisation, we created greater
awareness and included it in operational
dashboards during the financial year.
51
FY22
CARBON EMISSION REDUCTION
5
Group Scope 1 and 2 CO emissions
(tonnes)
LINK TO STRATEGIC GOALS
WHY IS THIS A KPI?
Carbon emissions play a substantial role in
climate change, which, in turn, has a significant
impact on the business. By reducing our
carbon emissions, we mitigate the eects
of climate change on the Company and,
globally, improve public health and maintain
biodiversity.
FY22 PERFORMANCE
By meeting most qualitative targets to reduce
carbon emissions, we reduced total Scope 1
and 2 CO emissions for the Group by 16.2%,
despite the increase in client activity during
the period.
211 969
36.0
226 048
2 5 2
See the TCFD report on page 47
See the client experience case study in the
Strategy overview on page 18
34.5
Notes
See page 80 of the Group Chief Financial Ocer’s Report for more on the Group’s use of adjusted non-IFRS financial measures
Other non-IFRS measures, which include cash conversion and ROIC, are further discussed, with reconciliations from the most comparable
IFRS measure provided, on pages 81–86.
2
Revenue refers to fees charged for medical and other non-medical services, including rental income.
See note 4 to the Group annual financial statements on page 190
3
WACC considers the respective debt and equity costs and ratios.
4
See note 33 to the Group annual financial statements on page 238
5
Reporting on carbon emission reduction commenced only in 2021 and is disclosed on a calendar-year basis. As such, only two data
points are disclosed.
6
Reporting on NPS® commenced only during the period. As such, no prior-year data is available.
FY21
FY20
FY22
CY20
CY21
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT24
We are driven by our purpose – it motivates us every day and aligns more than 34 000 employees
BUSINESS MODEL
To deliver our purpose, we rely
onourcapabilities and resources…
…enabling us to grow the business of
todayand the business of tomorrow…
…while creating value that benefits
allourstakeholders
TALENT AND
EXPERTISE
across more than 415
dierent roles leverage
skills and experience on
a global scale for current
and future success
NATURAL RESOURCES
are managed responsibly
to minimise our impact
on the environment,
contain operating costs
and ensure ongoing
access to water and
energy supplies
PARTNERSHIPS AND
COLLABORATIONS
facilitate rapid product
and service delivery,
so we can meet the
changing needs of clients
INTERNATIONAL
PERSPECTIVE
enables us to identify
emerging trends
and opportunities,
standardise our
approach to key
functions and processes,
and benchmark internally
TECHNOLOGY
Digital competencies
transform services to
oer seamless, integrated
client journeys
Data
improves our decision-
making and allows us
to oer better care
Medical technology
enables traditional
surgical procedures to be
done in less invasive ways
in and out of hospital
Automation
drives productivity
and eciency gains,
empowering our people
to prioritise valued-
added activities
PARTNER TO CARE
• Improving the health and wellbeing of our people
• Improving overall access to quality healthcare
• Supporting health authorities in combatting
COVID-19
PARTNER TO CREATE
• Creating jobs, delivering training and imparting skills
• Contributing to the economy
• Helping educate and prepare future healthcare
workers
PARTNER TO IMPROVE
• Enhancing clinical outcomes and client experience
• Building and implementing scalable, replicable
operations
• Enhancing eciency and optimising resource use
• Minimising environmental impact
Growing our integrated healthcare oering by
expanding across the continuum of care and
improving coordination across physical and virtual
care settings
Improving our current value to clients through
access to the most appropriate care in the most
appropriate setting
Investing in regional expansion of existing operations
and bolt-on investments
See the Clinical services overview on page 58 for more
on client value, our services and geographical footprint
P
R
E
V
E
N
T
R
E
C
O
V
E
R
C
A
R
E
E
N
H
A
N
C
E
CLIENTS
= +
VALUE COSTCLINICAL
OUTCOMES
CLIENT
EXPERIENCE
See page 26 for more on the value we create for
stakeholders
inpatient and day case
admissions
employee benefit and contractor
costs incurred in FY22
Commitment to achieving
carbon neutrality and zero waste
to landfill by 2030
±750 000
2030
£1.5bn
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 25
All stakeholders are important to us, and engagement is prioritised and improved upon continuously.
Each year, we identify priority stakeholder groups, and report on the most material ones. This section
includes the actions (‘A’) and decisions (‘D’) taken during the period in response to feedback received
from our key stakeholders, and the outcomes from these and past actions.
See the 2022 Sustainable Development Report
at annualreport.mediclinic.com for a more
comprehensive overview of our stakeholders
CLIENTS
IMPORTANCE Our business is built on our clients’ wellbeing and our ability to build long-term relationships with them
HOW WE ENGAGE
• Systematic patient rounds during hospital stay
• Dedicated client-experience employees
• 24-hour helplines
• Press Ganey® patient experience index surveys
• Health awareness days and campaigns
• Client-centred product and programme development
• Corporate events
• Client advisory groups
• NPS® feedback
HOW THE BOARD COMPLEMENTS THOSE EFFORTS
• Clinical Performance Committee meets regularly with
Group and divisional chief clinical ocers; reviews clinical
performance indicators, Ward-to-Board accountability
reports, client experience data, clinical risk and internal audit
reports, ethics reports, and follow-up action plans
• Audit and Risk Committee reviews reports on fraud and
ethics, information security and data privacy arrangements
• Investment Committee considers proposals to invest in
facilities
• Board reviews summary clinical performance reports and
dashboards; considers impact of decisions and dividends
on facilities, services and investments
• Director patient safety training; site visits to facilities
WHAT MATTERS TO THEM
• Easy access to safe, quality and cost-eective healthcare
• Appropriate care settings
• Treatment information
• The right to make decisions on their care
• Client experience
• Personal data and patient rights
• Timely communication
• Operational eciency
• Courteous, empathetic and personalised care
LINK TO STRATEGIC GOALS
1 2 3 4 5 6
See the Clinical services overview on page 58
STAKEHOLDER ENGAGEMENT
EXAMPLE OF ACTIONS AND DECISIONS TAKEN
A: Introduced client-facing apps in all three divisions
See the BeeHealthy case study in the Strategy overview on page 19
D: Established sports medicine centre in the Middle East
D: New hospital in George, South Africa, to be developed to replace
existing facilities
D: Established City Hospital in Dubai as cardiovascular CoE
A: Rolled out patient safety event management software across
the Group
OUTCOME FOR CLIENTS
• Easy access to a broader range of digital healthcare services
• Easy access to world-class facilities and technology
• Adoption of tools to deliver further patient safety
improvements
• New facilities and specialisms to meet changing client needs
VALUE CREATED
17%
increase in total client activity in FY22
LINK TO STRATEGIC GOALS
1
Become an integrated healthcare provider
across the continuum of care
4
Evolve as a data-driven organisation
5
Minimise our environmental impact
2
Improve our value proposition significantly
3
6
Transform our services and client engagement through
innovation and digitalisation
Grow in existing markets and expand into new markets
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT26
EMPLOYEES, ALUMNI AND POTENTIAL APPLICANTS
IMPORTANCE Our workforce is key to maintaining high standards and achieving Mediclinic’s strategic and ESG goals
HOW WE ENGAGE
• Recruitment and retention strategies
• Consistent support of engagement initiatives
• Progress in diversity goals and an inclusive approach
• Commitment to employee health and wellbeing
HOW THE BOARD COMPLEMENTS THOSE EFFORTS
• The designated non-executive director provides an annual
report on workforce engagement to the Board and helps
to convey the voice of employees in meetings
• The Board gains views of employees through direct
interaction with leadership and site visits
• It also monitors the culture of the organisation through
a variety of qualitative and quantitative information
• Nomination Committee oversees the development of
a diverse talent pipeline to senior leadership roles
• Remuneration Committee reviews and provides feedback
on workforce remuneration arrangements
See the Remuneration Committee Report on page 143
• ESG Committee reviews progress against employee
sub-goals and objectives in Mediclinic’s Sustainable
Development Strategy
WHAT MATTERS TO THEM
• Employment opportunities
• Recognition and fair remuneration
• Flexible work arrangements
• An ethical, safe, fair and healthy working environment
• Access to growth and development opportunities through
relevant assignments and/or learning material
LINK TO STRATEGIC GOALS
1 2 3 4 5 6
See the Corporate Governance Statement on page 109
EXAMPLE OF ACTIONS AND DECISIONS TAKEN
A: Action plans to address outcomes from employee
engagement survey
A: Strategies and initiatives supporting the aims and
objectives of the Group Diversity and Inclusion Policy
and talent development
A: Reviewed human resources strategy and investment in
human resources technology
A: Closely monitored safety, morale and wellbeing of sta,
recognising the impact of COVID-19
A: Educated employees and aliated doctors on COVID-19
vaccinations and supported them in receiving vaccines
OUTCOME FOR EMPLOYEES
• Increased opportunities arising from focus on talent
development and diversity and inclusion
• Increased exposure to the Board for Group Executive
Committee and their teams
• Increased wellbeing support during COVID-19
VALUE CREATED
7%
increase in 2021 employee engagement survey participation rate,
the highest since commencement
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 27
STAKEHOLDER ENGAGEMENT CONTINUED
GOVERNMENTS AND AUTHORITIES
IMPORTANCE Compliance with applicable legislation and regulations safeguards our ability to oer services
HOW WE ENGAGE
• Regular meetings
• Participation in conferences, seminars, national health
training and education, and PPPs to enable healthcare,
training and research
• Representation on industry bodies and government boards
• Engagement with senior country leaders
HOW THE BOARD COMPLEMENTS THOSE EFFORTS
• Clinical Performance Committee and Board consider outcomes
of management’s dialogue and provide support with regulators
• Clinical, regulatory and legal compliance reports reviewed by
relevant committees and/or Board
WHAT MATTERS TO THEM
• Transparency and disclosure
• Initiatives and collaboration on issues such as skills shortages
and the cost of private healthcare
• Universal access to aordable, quality healthcare
OUTCOME FOR GOVERNMENTS AND AUTHORITIES
We proved ourselves a reliable partner, capable of delivering
eective and ecient healthcare outcomes
VALUE CREATED
4
new PPPs during FY22
HEALTHCARE INSURERS
IMPORTANCE Privately insured patients constitute our largest client base
HOW WE ENGAGE
• Regular discussions on value-based reimbursement models
• Annual tari negotiations in a fair and transparent manner
• Network formation discussions
HOW THE BOARD COMPLEMENTS THOSE EFFORTS
Reviews reports on outcomes of tari negotiations
and value-based reimbursement models
WHAT MATTERS TO THEM
• Quality of care
• Aordability of care
• Integrated clinical services
• Network arrangements
OUTCOME FOR HEALTHCARE INSURERS
Confidence in us as a partner and provider of eective and
ecient healthcare outcomes across the continuum of care
VALUE CREATED
200+
registered healthcare insurer partnerships
LINK TO STRATEGIC GOALS
1 2 4 6
LINK TO STRATEGIC GOALS
1 2 4 6
EXAMPLE OF ACTIONS AND DECISIONS TAKEN
A: Actively sought or responded to opportunities to support
national and local authorities’ eorts to deal with the
COVID-19 pandemic
A: Proactively responded to tari reforms
D: Introduced Chair to senior representatives
A: Proactively engaged on National Health Insurance in
South Africa through public hearings and submissions
EXAMPLE OF ACTIONS AND DECISIONS TAKEN
A: Worked closely with healthcare insurers to address
regulatory reforms
A: Developed new products to increase the addressable
market
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT28
INVESTORS
IMPORTANCE Our owners and providers of equity capital deserve to have their priorities understood and addressed
HOW WE ENGAGE
• Established investor relations programme ensures regular
and transparent communication
• Financial results reporting and presentations
• Stock exchange announcements
• Corporate website
HOW THE BOARD COMPLEMENTS THOSE EFFORTS
• Board and ESG, Nomination and Remuneration committees
consider guidance issued by investors and feedback received
at AGMs
• Direct engagement with major institutional investors and
investor representative bodies, as necessary
• Reviews regular internal reports and external briefings on
investor sentiment and feedback
WHAT MATTERS TO THEM
• Financial sustainability and performance
• Disciplined capital allocation
• Diverse opportunities for long-term value creation
• Our strategic and ESG goals
• Regulatory environment
• Operational drivers of each division
OUTCOME FOR INVESTORS
• Wider opportunities to engage directly with the Chair
of the Board, the chairs of Board committees and other
non-executive directors
• ESG investors able to meet with specialists in certain fields
VALUE CREATED
25%
total shareholder return (‘TSR’) outperformance over
a 12-month period by Mediclinic against comparator group
(FTSE 250, excluding Financial Services and Extraction companies)
MEDICAL PRACTITIONERS
IMPORTANCE Medical practitioners enable our continued success and quality-of-care improvements
HOW WE ENGAGE
• Regular meetings and information sharing
• Participation in hospital clinical committees and hospital
boards
• Continuous professional education events
• Engagement events
• Annual Clinical Services Report
HOW THE BOARD COMPLEMENTS THOSE EFFORTS
• Clinical Performance Committee considers outcomes of
doctor satisfaction surveys and recommended action plans
• Also provides input on measures taken to support doctors
in provision of eective and ecient patient care
• Reviews feedback from external clinical experts appointed
to provide objective guidance to management and clinical
performance committees
WHAT MATTERS TO THEM
• Facilities and equipment
• Nursing care
• Patient safety
• Client experience
• Involvement in strategic clinical issues
• Implementation of EHRs
• Continued professional development
• Adaptability in the face of an evolving healthcare industry
OUTCOME FOR MEDICAL PRACTITIONERS
• Continuous support for delivery of eective and ecient
treatment
• Digital solutions that expand healthcare oering and
improve experience for doctors and clients
VALUE CREATED
5 900+
medical practitioner partnerships in Switzerland and Southern Africa
LINK TO STRATEGIC GOALS
1 3 6
LINK TO STRATEGIC GOALS
1 2 3 4 5 6
See the Clinical services overview on page 58
See the Section 172 statement on page 30 for information on how the Board collectively, together with its directors
individually, is committed to acting in a way that promotes our success to the benefit of all stakeholders
EXAMPLE OF ACTIONS AND DECISIONS TAKEN
A: Regular meetings with Group CEO, Group Chief Financial
Ocer (‘CFO’) and Head of Investor Relations
A: Meetings with Chair and SID
A: Held online shareholder engagement event ahead of AGM
A: Engaged shareholders on voting at AGM and on
remuneration matters
EXAMPLE OF ACTIONS AND DECISIONS TAKEN
A: Reviewed Swiss doctor performance management framework
D: Developed Group frameworks for obstetrics, surgery and
procedures
A: Completed roll-out of EHRs in Switzerland and the Middle East
A: Launched client-facing applications in all geographies
See the Corporate Governance Statement on page 109
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 29
SECTION 172 STATEMENT
During the year, the Board made a number of decisions crucial to promoting our purpose,
strategy and success, in each case having regard to our key stakeholders and other
relevant matters set out in Section 172. This section illustrates how the Board reached
some of these key decisions.
The Board adopts the following general approach in its discussions and decision-making:
• The papers for each meeting include a reminder of directors’ Section 172 duties and
our key stakeholders. In addition, each paper supporting a discussion and request for
a decision from the Board and its committees includes a table setting out the Section 172
factors and corresponding considerations. The Chair of the Board and committee chairs
ensure that the ensuing discussions are properly informed by all relevant Section 172
matters.
• The Board assesses and approves our purpose, values and strategy, ensures the
strategy is aligned with our culture, and is responsible for promoting those values
and culture.
• The Board regularly monitors progress on the implementation of our strategy and
associated business plan, and reviews both annually to ensure they remain appropriate.
• Details of how the Board and its committees engage with our key stakeholders can be
found on pages 26–29 of this Strategic Report and pages 115–117 of the Governance
and Remuneration Report.
• The Board and its committees consider the potential consequences of its decisions
in the short, medium and long term. It ensures that the Group’s risk management
processes identify any resulting risks to the business and its stakeholders, and have
plans to appropriately address these risks.
.
SECTION 172 IN ACTION
SECTION 172 CONSIDERATIONS
Promote the success of the business for the benefit of our shareholders, having regard to:
(a) the likely long-term consequences of any decision;
(b) the interests of the Company’s employees;
(c) the need to foster business relationships with suppliers, customers and others;
(d) the impact of the Company’s operations on the community and the environment;
(e) the desirability of maintaining a reputation for high standards of business
conduct; and
(f) the need to act fairly between the Company’s shareholders.
PRINCIPAL AND EMERGING RISKS
(as described in the Risk management report on page 91)
1. Economic and business environment
2. Regulatory and compliance
3. Information systems security and cyberattacks
4. Pandemics and infectious diseases
5. Disruptive innovation and digitalisation
6. Competition
7. Workforce risks
8. Climate change
9. Patient safety, quality of service and operational stability
10. Availability and cost of capital
11. Financial and credit risk
12. Business investments and acquisitions
The Board regularly
monitors progress on the
implementation of our
strategy and associated
business plan, and reviews
both annually to ensure
they remain appropriate.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT30
CAPITAL ALLOCATION PLAN AND DIVIDEND
BACKGROUND The Investment Committee and then the Board held several discussions
on the principles governing the allocation of the Group’s capital and their
application in practice.
KEY ISSUES
DISCUSSED
• The sources of, and demands for, operating and non-operating capital,
the broad capital allocation framework and proposed allocations of
capital for the next five years
• Optimal levels of debt funding
• Potential non-operating uses of capital
• Alternative sources of non-operating capital and their advantages
and disadvantages
SECTION 172
CONSIDERATIONS
(a), (b), (d)
• The Group’s strategy and business plan for the next five years
• The impact of the temporary suspension of major capital projects
• The various views on leverage of institutional investors and providers
of debt funding
• The adequacy of the proposed maintenance and capital expenditure
levels
• Investors’ expectations regarding leverage and dividends
• The going concern and viability analyses performed at various stages
during the year
• The prudence of preserving the Group’s liquidity due to the uncertainty
caused by COVID-19 balanced against the gradual strengthening of our
performance and the desire to execute on our strategy
OUTCOMES • Discussing this at committee level allowed for a detailed examination
and subsequent tuning of the proposal, supporting a focused and
thorough discussion by the Board and incorporation into the Group’s
strategy and business plan
• As with many other businesses, in May 2021 and November 2021,
the Board took the prudent and appropriate decision to continue to
suspend the dividend to maintain liquidity preservation
• In May 2022, the Board assessed the financial performance of the
Group and the dierent interests of our stakeholders and decided to
resume the dividend, as noted in the Chair’s Review on page 6
• The Board was satisfied that the allocations planned for each of the
uses of the Group’s capital were appropriately balanced
LINK TO
STRATEGIC
GOALS
LINK TO PRINCIPAL AND
EMERGING RISKS
1, 4, 5, 7, 10, 12
LINK TO KEY STAKEHOLDERS
Clients
Employees, alumni and potential applicants
Financial institutions
Industry partners
Investors
Medical practitioners
Al Noor Hospital, the Middle East
1
5
2 3
6
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 31
SECTION 172 STATEMENT CONTINUED
APPOINTMENT OF TWO NEW DIRECTORS
BACKGROUND The Nomination Committee Report in the 2021 Annual Report
confirmed that work was underway to appoint two new directors to
fill the vacancies created by the planned retirement of Alan Grieve
and Trevor Petersen. The Nomination Committee managed the
search process with an external agency, providing updates to the
Board at each stage of the process and final recommendations on its
preferred candidates for the roles.
KEY ISSUES
DISCUSSED
AND PROCESS
• The candidate brief for each vacancy, taking account of (among
other things): the current and future needs of the business, a detailed
review of the Board’s composition, the outcome of the recent Board
evaluation, and the Board Diversity Policy
• The key criteria to be prioritised in the candidate briefs: one
international- and one South Africa-based candidate, an
understanding of the Company’s listed environment, financial literacy,
and experience in audit, remuneration and digital transformation
• The quality and diversity of the initial list of candidates, which
included individuals from diverse geographical backgrounds,
experience, knowledge and skills
• An initial assessment of their level of competence against the
set criteria, other commitments, and actual or potential conflicts
of interest
• The shortlist of candidates selected for an informal discussion with
the Chair and the Group CEO and interviews with the Nomination
Committee, and a more detailed assessment against the specific
briefs
• Input from the chairs of the Audit and Risk and the Remuneration
committees was sought and considered during the process, in view
of the roles anticipated for the new directors
• Candidates’ references, existing time commitments, and actual or
potential conflicts of interest were explored
SECTION 172
CONSIDERATIONS
(a), (b), (c),
(d), (e)
• The candidates’ ability to support the development and delivery
of our strategy and their alignment to our purpose and culture
• Insights into our key stakeholders and approach to stakeholder
engagement that they would contribute
• Their integrity and commitment to supporting high standards of
corporate governance and business ethics
• Their other appointments and time commitments
OUTCOME The governance processes adopted for the identification and selection
of the Nomination Committee’s preferred candidates led to the
appointment of Natalia Barsegiyan and Zarina Bassa as directors. Each
brings important skills, experience and attributes that strengthen the
Board’s composition and support the current strategy and future needs
of the business.
APPOINTMENT OF TWO NEW DIRECTORS CONTINUED
LINK TO
STRATEGIC
GOALS
LINK TO PRINCIPAL
AND EMERGING RISKS
1, 5, 6, 7
LINK TO KEY STAKEHOLDERS
Clients
Employees, alumni and potential applicants
Investors
1
5
2 3
64
RESTRUCTURING OF THE GROUP EXECUTIVE COMMITTEE
BACKGROUND Management proposed to restructure and expand the Group Executive
Committee. The Nomination Committee provided guidance and
support, and the Chair was involved in the process for making two new
appointments to the Group Executive Committee.
KEY ISSUES
DISCUSSED
• The Group’s current and future leadership requirements and new
roles required
• Potential candidates for the roles, the importance of following
a robust and objective selection process
• The gender and ethnic diversity of the Group Executive Committee,
their direct reports and the talent pipeline leading up to those roles
• The importance of providing training and development opportunities
to persons placed in new roles to support their success
• The adjustments required to succession plans for the Group
Executive Committee and their direct reports
• The importance of executing a strong and timely communication
strategy
SECTION 172
CONSIDERATIONS
(a), (b), (e)
• The leadership team’s increased capacity to deliver improvements in
the Group’s financial performance from the existing business, continue
to position us for the future, and execute on other elements of our
strategy and ESG goals
• The potential opportunity to make further progress towards the
objectives and targets set out in the Group Diversity and Inclusion
Policy
• The impact of the changes on the working groups, reporting
structures and dierent constituencies within the Group and their
likely response
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT32
RESTRUCTURING OF THE GROUP EXECUTIVE COMMITTEE CONTINUED
OUTCOMES
• Enhanced positioning of the Group Executive Committee to focus
on strategy and governance priorities and of the Group Operations
Committee to focus on strategy execution
• Appointment of Koert Pretorius (CEO of Southern Africa) to newly
created role of Group Chief Operating Ocer
• Resulting vacancy created an internal promotion opportunity – after
a rigorous selection process, Greg van Wyk (Chief Human Resources
Ocer of Southern Africa) was appointed to succeed Koert in leading
the Southern Africa operations
• The separation of the Group Chief Strategy and Human Resources
Ocer role into separate streams and appointment of a Group
Chief Human Resources Ocer will create an opportunity to further
increase the diversity of the Group Executive Committee (Magnus
Oetiker will remain in the Group Chief Strategy Ocer role)
LINK TO
STRATEGIC
GOALS
LINK TO PRINCIPAL
AND EMERGING RISKS
1, 5, 6, 7
LINK TO KEY STAKEHOLDERS
Clients
Employees, alumni and potential applicants
Governments and authorities
Healthcare insurers
Industry partners
Investors
Medical practitioners
1
5
2 3
64
AGREEMENT TO PROCURE RENEWABLE ELECTRICITY
BACKGROUND The Board discussed and approved an agreement between our
Southern Africa operations and Energy Exchange to procure
renewable electricity up to a total value of £110m.
KEY ISSUES
DISCUSSED
• Energy Exchange being the only platform through which the
Southern Africa operations could purchase renewable energy
• Entering into the agreement was a smaller related-party transaction
under the FCA’s Listing Rules, as Remgro is a substantial
shareholder in Mediclinic, and one of the founding partners
and 35% shareholder in Energy Exchange
• Jannie Durand’s declaration of interest in the agreement and conflict
of interest as CEO of Remgro
SECTION 172
CONSIDERATIONS
(a), (c), (d),
(e), (f )
The Board, excluding Jannie and his alternate, Pieter Uys, carefully
considered:
• the key commercial terms of the agreement;
• the importance of the agreement for our Southern Africa operations
to become carbon neutral by 2030;
• Jannie’s declarations; and
• the written opinion provided by Morgan Stanley (the Company’s
financial sponsor for UK-listing purposes) that the terms of the
agreement were fair and reasonable as far as Mediclinic’s shareholders
were concerned
OUTCOMES • Following careful consideration – and in accordance with the Act,
the Company’s Articles of Association as adopted on 22 July 2020
(‘Articles’), and the relationship agreement between the Company
and its principal shareholder, Remgro (‘Relationship Agreement’),
as described on page 169 – the Board (excluding Jannie and Pieter)
agreed to approve the agreement and Jannie’s conflict of interest on
the basis that doing so would promote the success of the Company
for the benefit of its stakeholders as a whole by supporting the
delivery of the Group’s carbon-neutral strategy
• The governance processes followed and conditions attached to the
approval of Jannie’s conflict of interest ensured the Group was able
to pursue its strategic objectives while acting fairly between the
Company’s shareholders
LINK TO
STRATEGIC
GOALS
LINK TO PRINCIPAL
AND EMERGING RISKS
8
LINK TO KEY STAKEHOLDERS
Employees, alumni and potential applicants
Communities
Investors
Suppliers
2
5
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 33
This Sustainable development overview is a condensed version of the Group’s
2022 Sustainable Development Report, available at annualreport.mediclinic.com.
It covers the most important sustainable development activities across the Group
with specific reference to our material issues, initiatives and outcomes for the
2021 calendar year, unless stated otherwise.
SUSTAINABLE
DEVELOPMENT
OVERVIEW
DOING THE
RIGHT THING
Dame Inga Beale, Chair of the Board and
the ESG Committee, sheds light on what
sustainability means for Mediclinic.
Q. WHAT DOES MEDICLINIC’S
COMMITMENT TO ESG MEAN FOR
CLIENTS AND INVESTORS? While we have
to take into account the pressures from
investors, concentrating on ESG is the right
thing to do, which means it is the right thing
for our clients. Our focus has to be on
giving them the best quality care. If we do
not have an environment that attracts the
best talent, we cannot deliver the best care.
So, it all fits together to make sure we are
doing the right thing for all stakeholders.
Q. WHAT HAS BEEN THE OUTCOME FROM
THE BOARD’S INCREASED FOCUS ON
EMPLOYEE ENGAGEMENT? We had a
wonderful session where Ronnie asked the
entire Board to join a virtual leadership
event with several hundred Mediclinic
employees from our divisions around the
world. As a Board, we were able to hear
what was on our employees’ minds and
they asked us questions. What I loved about
that was the pressure the employees are
putting on top management and the Board,
telling us what we have to focus on.
CONTENT
2022 SUSTAINABLE
DEVELOPMENT
REPORT
SUSTAINABLE
DEVELOPMENT
OVERVIEW
Highlights • n/a
Interview with Dame Inga Beale • abbreviated
Our approach to sustainability • abbreviated
Our material issues • abbreviated
Conserve
Climate change
• abbreviated
Carbon neutrality
Energy consumption
Waste management
Water usage
Environmental management systems
Biodiversity
Connect
Our significant stakeholders • n/a
Our clients • abbreviated
Our people
•
abbreviated
Recruitment and retention
Employee engagement
Diversity and inclusion
Wellbeing
Our communities
• abbreviated
Future workforce
CSI
Human rights
Our suppliers
Comply
ESG governance structure • abbreviated
Governance • n/a
Ethics • abbreviated
Information assets • abbreviated
Healthcare infrastructure • abbreviated
Independent assurance • n/a
Five-year data overview • n/a
Scan the QR code to view
a condensed video
version of the interview
Concentrating on ESG is
the right thing to do,
which means it is the
right thing for our clients.
Dame Inga Beale
Non-executive Chair
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT34
SUPPORTS STRATEGIC GOALS
1 2 3 4 5 6
OUR ENVIRONMENTAL TARGETS
• 2030 carbon neutral
• 2030 zero waste to landfill
IN 2021
• 94% of our Swiss hospitals use hydropower
• New photovoltaic (‘PV’) installations at five hospitals
in Southern Africa, increasing the total to 18
• 38 554MWh of clean energy procured for all
facilities in Abu Dhabi
SUPPORTS STRATEGIC GOALS
1 2 3 4 5 6
OUR SOCIAL AMBITIONS
• Introduce NPS® performance metric as part of
STI scheme for management
• Achieve at least 40% female and at least 40% male
representation at senior management and executive
level throughout the organisation
• Be among the top three employers of choice in
each of our markets
IN 2021
• 36% increase in clients surveyed in Press Ganey®
experience index since last year
• 1.4% increase in female representation at senior
management and executive level since last year
SUPPORTS STRATEGIC GOALS
1 2 3 4 5 6
OUR GOVERNANCE GOALS
• Quadruple the number of people using data
products for decision-making by 2026
• Introduce data privacy online learning
IN 2021
• Information and cybersecurity and data privacy
employee awareness campaign
• Anti-bribery and ethics line awareness campaign
aimed at onboarding employees and suppliers
CONSERVE CONNECT COMPLY
1
Become an integrated healthcare provider
across the continuum of care
4
Evolve as a data-driven organisation
5
Minimise our environmental impact
2
Improve our value proposition significantly
3
6
Transform our services and client engagement through
innovation and digitalisation
Grow in existing markets and expand into new markets
LINK TO STRATEGIC GOALS
OUR APPROACH TO SUSTAINABILITY
MEDICLINIC’S SUSTAINABLE DEVELOPMENT MISSION STATEMENT
‘We are committed to ensuring that every day we improve sustainability by managing our
resources responsibly and eciently to the benefit of our stakeholders and the environment.’
SUSTAINABILITY MODEL
Minimising environmental impact Building stakeholder trust Being an ethical and responsible corporate citizen
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 35
SUSTAINABLE DEVELOPMENT OVERVIEW CONTINUED
OUR MATERIAL ISSUES
OUR SIGNIFICANT
STAKEHOLDERS
The ESG Committee reviews the Group’s
material sustainability issues annually. This is
done to ensure our management initiatives
target the sustainable development matters
that are most significant to Mediclinic and
directly aect our ability to create long-term
value for significant stakeholders. Our top
ESG priorities are:
• Energy eciency
• Reduction of carbon emissions
• Waste management
• Employee engagement
• Employee wellness and safety
• Diversity and inclusion
• Client value proposition
• Protection of information assets
FIGURE 1: HEAT MAP OF OUR MATERIAL ISSUES
1 Climate change
2 Environmental
management system
3 Energy eciency
4 Carbon emissions
5 Waste management
6 Water use
7 Biodiversity
8 Employee engagement
9 Employee wellness
and safety
10 Diversity and inclusion
11 Human rights
12 Client value proposition
13 Corporate social
investment (‘CSI’)
14 Supply chain
15 Ethics
16 Anti-corruption
17 Protection of information
assets
18 Healthcare infrastructure
See Stakeholder engagement on page 26,
the Section 172 statement on page 30, and the
Corporate Governance Statement on page 109
for more on stakeholder engagement
See the 2022 Sustainable Development Report
at annualreport.mediclinic.com for further
details
IMPORTANCE TO STAKEHOLDERSLow High
IMPORTANCE TO THE BUSINESSLow High
Performing well Performing relatively well Requiring greatest focus
CONSERVE
Material issue 1:
Minimising environmental
impact
CONNECT
Material issue 2:
Building stakeholder
trust
COMPLY
Material issue 3:
Being an ethical and
responsible corporate citizen
1
4
8
14
12
18
16
17
15
3
9
5
6
11
2
10
13
7
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT36
MATERIAL ISSUE 1:
MINIMISING
ENVIRONMENTAL
IMPACT
Preserving the health of the planet is
essential to help our clients lead healthier
lives, reduce costs and risks, and protect
the wellbeing of our communities.
During 2021, there were no incidents
of material non-compliance with any
environmental legislation, regulations,
accepted standards or codes applicable
to the Group, with no significant fines
imposed.
RISKS TO THE BUSINESS
• Business interruptions
• Increased operational costs
• Reputational damage
• Impact of carbon tax and climate
change legislation
• Fines and penalties
RISK MITIGATION
• Environmental goal forms part of
Mediclinic Group Strategy
• Risk management process and
systems of internal control embedded
in the Group
• Annual review of policies governing
risk management, sustainable
development, environment and waste
management
CONSERVE
2021 IN GROUP NUMBERS
1
Total Scope 1 & 2 CO
2
emissions
in tonnes (t)
2
Total energy consumption in gigajoule
(GJ)
Total water usage in megalitres (ML)
3
Total waste diverted from landfill
in tonnes (t)
211 969
1 284 086
2020:
1 648
2020:
2 629
2020:
226 048
2020:
1 188 023
1 685
5 563
Notes
1
Data reported in line with the 2021 Carbon Footprint
Report and succeeds the data provided in the 2021
Sustainable Development Report.
2
Decrease in total Scope 1 and 2 emissions due to
the purchase of nuclear power with zero emissions
for hospitals in Abu Dhabi (nuclear power accounts
for 50% of the total electricity consumption in the
Middle East).
3
Water usage increased compared with 2020, but is
still lower than pre-pandemic usage.
See the 2022 Sustainable Development Report
at annualreport.mediclinic.com for carbon
emissions, energy consumption, water and waste
figures for the Group and per division for the last
five calendar years
CLIMATE CHANGE
See the TCFD report on page 47 for our response
to climate change and its impact on our business,
as well as our year-on-year comparative figures
on carbon emissions, energy consumption, waste
and water
BECOMING CARBON NEUTRAL BY 2030
CARBON EMISSIONS
Our commitment to carbon-neutral
status is supported by a sound strategy.
Emission-reduction activities help save
costs, secure energy supply, and leave
a healthy planet for posterity. Rising
electricity costs are an incentive to
reduce consumption by investing in
energy-ecient equipment and
renewable energy sources.
The boundary for carbon neutrality covers
Scope 1 and 2 emissions. Our business can
eliminate Scope 2 emissions by purchasing
100% renewable energy, but it must also
oset direct carbon emissions and reconsider
energy consumption and emissions from
power generation.
ANAESTHETIC GASES
We are working to reduce the use of
harmful anaesthetic gases in Southern
Africa and the Middle East. Control
strategies include elimination, substitution,
engineering control (CO
2
absorbers, gas
capturing technologies), administrative
controls, and education and awareness.
Currently, no immediate action or
expenditure is required in Switzerland
due to the use of less-harmful gases.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 37
ENERGY CONSUMPTION
Electricity is the main contributor to our carbon footprint. Healthcare facilities require
significant energy; medical equipment and air-filtration and -conditioning units run
continuously at many hospitals. Improved operational eciency of technical installations,
the introduction of various new energy-ecient and renewable technologies, and
changes in employee behaviour are essential for reducing energy use.
The main sources of direct energy are gas and diesel oil, motor gasoline, liquefied
petroleum gas and natural gas. Indirect energy sources refer to electricity.
Returning to business as usual and continuing to address COVID-19 within facilities
resulted in an overall increase in the use of energy in 2021.
HAVING ZERO WASTE TO LANDFILL BY 2030
Our Group Waste Management Policy outlines our objectives to refuse, reuse, reduce,
recycle and recover. We follow stringent protocols to ensure waste management within
the Group complies with all applicable legislation and regulations. During 2021, there were
no incidents at our facilities or oces leading to significant spills.
SUSTAINABLE DEVELOPMENT OVERVIEW CONTINUED
Note
1
In Switzerland, our market-based hydroelectricity emissions are assumed to be zero, with a Certificate of
Origin to support such assumption.
Note
1
Newster sterilisers use patented frictional heat treatment technology for the sustainable processing
of HCRW.
SWITZERLAND
• Purchased electricity
mainly from European
hydroelectricity for all
but one hospital and the
Corporate Oce
• 16 of 17 hospitals registered
as CO
2
-reduced businesses
and monitored annually by
the Energy Agency of the
Swiss Private Sector
• Replaced ventilation,
heating and cooling
systems with energy-
ecient alternatives and
adjusted operating times
• LED light fittings
• Renewed ICT infrastructure
• Used energy-ecient
systems and equipment
in all facilities
SWITZERLAND
• Healthcare risk waste
(‘HCRW’) transported
by licensed companies
and incinerated at waste
stations
• Monitored and archived
weight and waste type
by hospital, transport
provider and incinerator
• Processed food waste in
biogas facility
SOUTHERN AFRICA
• Agreement to purchase
renewable energy
starting with five
facilities
• Renewable energy
through PV systems
• Solar panels for water
heating
• Supervisory control
and data acquisition
systems (‘SCADA’) to
monitor consumption
• Completed hospital
audits and agreed
potential savings
• Implemented energy-
ecient practices
SOUTHERN AFRICA
• Waste management
tenders to incorporate
new requirements
• HCRW transported
and treated by
licensed companies
by means of autoclave
or electrothermal
deactivation
• Incinerated anatomical
waste
• Donated redundant
furniture and equipment
• Recovered cooking oil
for biodiesel
• Newster technology
1
implemented at one
hospital
THE MIDDLE EAST
• Purchased clean energy
for all facilities in Abu
Dhabi
• Chiller replacement
at two hospitals
• Plans to replace fleet
vehicles with hybrid
options
• Installed smart
thermostats at the
Corporate Oce and
selected clinics
• Adjusted air-
conditioning
temperature
• LED light fittings and
movement sensors
THE MIDDLE EAST
• HCRW, chemical waste
handled by approved
environmental service
providers
• Implemented food waste
reduction initiatives
• Recycling of cooking oil
• Investigating projects to
sterilise medical waste
and compost organic
waste
REGIONAL INFORMATION
REGIONAL INFORMATION
Our Group Waste Management
Policy outlines our objectives
to refuse, reuse, reduce, recycle
and recover.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT38
UNLOCKING CIRCULAR ECONOMIES
Our Group Sustainable Development Strategy recognises the value of circular economies
to reduce waste. During 2021, we agreed to reduce waste at the source with Johnson &
Johnson MedTech. This initiative focuses on single-use medical devices and packaging
not being recycled. Feasibility studies to determine stakeholder readiness will be scalable
to include single-use medical devices and products from other suppliers.
ENVIRONMENTAL MANAGEMENT SYSTEMS
We align our environmental management practices with international best practices
and national legislation to provide assurance regarding the environmental quality, safety
and reliability of our processes and services. Moreover, we have opted to implement the
ISO 14001:2015 EMS in all our hospitals.
PROTECTING BIODIVERSITY
The ISO 14001:2015 EMS provides a clear understanding of how our activities impact
biodiversity, enabling us to take corrective measures. For each new building project,
we undertake an environmental impact assessment to determine whether a more
comprehensive assessment is required. In 2021, no new building projects in the financial
year required an environmental impact assessment. None of our owned, leased and
managed facilities are in, or adjacent to, protected areas or areas of high biodiversity value.
USING AND REUSING WATER RESOURCES SUSTAINABLY
Good quality fresh water is essential for hygiene, quality care and infection prevention
and control. Initiatives across Mediclinic support sustainable water usage and we benefit
from the expertise gained across our divisions as they address water-use challenges
unique to each geography.
SWITZERLAND
• EMS implementation
at five hospitals and
Corporate Oce in
progress
• All hospitals but one
part of H+ programme
for occupational health
and safety
SWITZERLAND
• Operational water
quantity and quality risk
assessments in progress
• Waste water treated
directly by local
municipalities
• Water-flow limiters on
taps, water-saving valves
in toilets
• Replaced kitchen
dishwashers
SWITZERLAND
Pilot project implemented
at two hospitals, with
results expected in the first
quarter of FY23. Pilot to be
extended to one hospital
per region in FY23.
SOUTHERN AFRICA
• 44 of 50 hospitals
ISO 14001-certified
by British Standards
Institute
• Conducted ISO 14001
gap audits at 39 facilities,
with average score of
81% compliance with
EMS requirements
SOUTHERN AFRICA
• Completed operational
water quantity and
quality risk assessments
• Installed bulk water
storage facilities
• Increased boreholes
to 40
• Water-saving instruments
in washers, washing
machines and autoclaves
• Recycling of autoclave
water at certain facilities
• Priority focus on
detecting and fixing leaks
SOUTHERN AFRICA
Feasibility study initiated,
with results expected in the
first quarter of FY23. Pilot
project at two hospitals
planned for FY23 pending
outcome of feasibility
study.
THE MIDDLE EAST
• EMS implementation at
five hospitals in progress
• Annual environmental,
health and safety audits
at all facilities
THE MIDDLE EAST
• Operational water
quantity and quality risk
assessments in progress
• Reduction in cistern
water and automatic
flushing
• Condensation water
from CSSD autoclaves
used for irrigation
• Control sensors on taps
in units
• Investigation of water-
conserving shower
heads
THE MIDDLE EAST
Feasibility study
completed, with pilot
project in FY23 initiated at
three hospitals in Dubai.
REGIONAL INFORMATION
REGIONAL INFORMATION
REGIONAL INFORMATION
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 39
SUSTAINABLE DEVELOPMENT OVERVIEW CONTINUED
MATERIAL ISSUE 2:
BUILDING
STAKEHOLDER TRUST
Our employees, aliated doctors, suppliers
and industry partners form the foundation
that enables us to oer our services to
clients and communities.
RISKS TO THE BUSINESS
• Poor employee engagement and
wellbeing
• Inability to recruit healthcare
practitioners to meet business demand
• Ageing nursing workforce with
decreasing entrants to profession
• Poor clinical outcomes and services
• Medical malpractice liability
• Reputational damage
• Inability to continue business due to
inadequate supplies
CONNECT
2021 IN GROUP NUMBERS
Gallup® employee engagement grand
mean score (out of five)
Female representation in senior and
middle management roles
1
Total absenteeism rate
2
New suppliers
Contribution to CSI
3.98
37.0%
3.8%
3 192
£7.9m
2020:
3.98
2020:
35.6%
2020:
3.9%
2020:
3 230
2020:
£7.8m
Notes
1
Disclosed on a financial-year basis.
2
Actual days lost expressed as a percentage of total
days scheduled to be worked by the workforce
during 2021.
Notes
1
Number of full-time employees who could have been employed if reported number of hours worked by
part-time employees had been worked by full-time employees instead.
2
Includes Mediclinic International plc’s one employee based in the UK.
3
Increase from 2020 to 2021 largely attributable to overall business growth.
CONNECTING TO OUR PEOPLE
Our workforce is key to maintaining high standards and achieving Mediclinic’s strategic
and ESG goals. We maintain a two-way conversation to improve the working environment.
EMPLOYEE OVERVIEW
CONNECTING TO OUR CLIENTS
Our business is built on our clients’ wellbeing. Client surveys and dedicated client-
experience employees contribute towards strengthened long-term relationships.
average total Group
monthly employee benefit
and contractor cost
±£124m
Switzerland
Southern Africa
The Middle East
7996 7 32118366
2020:
7 815
2020:
18 644
2020:
7 071
Group
33683
FULL-TIME EQUIVALENTS
1
PER GEOGRAPHY AT 31 DECEMBER 2021
FULL-TIME EMPLOYEES
2020:
33 530
59%
of full-time employees
across the Group
involved in client care
Average tenure across the Group
RISK MITIGATION
• Group Sustainable Development
Strategy with social objectives
• Implementation of Mediclinic Diversity
and Inclusion Strategy
• Eective execution of employee
engagement action plans
• Extensive training and skills
development programmes
• Establishment of Global Leadership
Development Framework
• Continued implementation of
a Group learning architecture
to support Group strategy
• CSI initiatives monitored by senior
management with feedback to
ESG Committee
• Group purchasing organisation
established to secure products at
reduced prices
• Five-year Group procurement vision
to optimise end-to-end supply chain
performance
See the Clinical services overview on page 58 for our unique approach to creating value for clients
5–14 years: 42%
> 15 years: 14%
< 5 years: 44%
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT40
RECRUITMENT AND RETENTION
RECRUITMENT
The healthcare industry has a very
competitive employer market. We
continuously monitor regional and
global industry challenges and trends to
anticipate any changes needed to our
recruitment approach. Our recruitment
practices aim to optimise attraction
of scarce and critical skills through
targeted employer branding initiatives.
RETENTION
We optimise retention by providing
opportunities for a diverse workforce
to thrive, and by creating an inclusive
environment. Our retention strategies
include employee engagement, flexible
work practices that not only address
future skill needs but also speak to
employee expectations, and investment
in career growth and development
through implementation of global
learning frameworks and systems.
Every year, employees are invited to
share their perceptions of the workplace
through the Your Voice employee
engagement survey, which provides
the opportunity to proactively assess
employees’ sense of belonging, whether
they feel valued and whether they feel
empowered to do their best every day.
These results are analysed and trends
are explored through focus groups to
understand perceptions and ultimately
optimise engagement and retention.
Exit interviews are conducted in a safe,
non-threatening manner to help us
gain valuable insight into patterns that
exceed healthy turnover benchmarks.
REMUNERATION, REWARDS
AND BENEFITS
Our employees are remunerated fairly
and in a manner that supports our Group
strategy while attracting, retaining and
motivating scarce skills.
In line with our value of high performance,
we reward eligible employees for achieving
strategic objectives through a combination
of STI and LTI, with additional benefits
oered in line with local practices and
regulatory compliance.
EMPLOYEE ENGAGEMENT
We encourage and enable continuous
employee engagement across the entire
organisation through various methods,
including:
• the annual Your Voice employee
engagement survey and resultant action
plans;
• training and performance management;
• access to various supporting resources
such as interactive call centres;
• occupational health clinics and wellbeing
programmes; and
• ethics lines.
See ‘Workforce engagement’ in the Corporate
Governance Statement on page 109
YOUR VOICE
We use our annual Your Voice employee
engagement survey to measure employee
engagement, identify gaps at a team level,
and support line managers in developing
action plans to address employee
engagement concerns. Research by
Gallup® has shown that highly engaged
employees contribute to better financial
results, improved clinical outcomes and
increased patient safety.
TRAINING AND DEVELOPMENT
Every team member’s growth is valued
and we are dedicated to providing
accessible learning opportunities that can
optimally enable employee performance
and support career growth.
During the critical performance
management process, line managers and
employees align expectations and goals
to ensure the focused and deliberate
contribution of each employee to the team
and, ultimately, the divisional and Group
goals.
Continuous performance conversations are
encouraged across the Group, with formal
annual/six-monthly performance tracking
conversations between managers and
employees. Managers are held accountable
for specific measurable objectives. These
objectives are aligned to those of a
function and, ultimately, a division that
contributes to organisational achievement
of the strategic goals.
To support succession planning, the
Group Talent Review Committee actively
reviews the bench strength, development
momentum and diversity of pipelines
biannually in January and August.
LABOUR RELATIONS
All policies and procedures are maintained
according to applicable local labour
legislation. New employees are orientated
on employment policies (i.e. misconduct,
incapacity, and disciplinary and grievance
procedures), which are also available
internally. In most cases, an elected
workplace forum meets regularly with
facility management to ensure sound
labour relations.
We optimise retention
by providing opportunities
for a diverse workforce to
thrive, and by creating an
inclusive environment.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 41
SUSTAINABLE DEVELOPMENT OVERVIEW CONTINUED
DIVERSITY AND INCLUSION
Our dedication to diversity and inclusion
is strongly endorsed by the Board and
executive management, and we allocate
financial resources for the eective
implementation of our long-term
Diversity and Inclusion Strategy. A Group
Talent Centre of Expertise (consisting
of representatives from all divisions)
governs and guides the planning and
implementation of initiatives from a Group
perspective. Divisional teams implement
geography-specific initiatives, which may
vary within the broad Group themes, to
contextualise the content and achieve local
objectives.
AT ORGANISATIONAL LEVEL
Over the past year, the Board and Group
Executive Committee actively monitored
progress on gender diversity at senior
management level. In this, we have uniform
gender and generational focus areas
across all geographies, supplemented by
division-specific diversity priorities.
See the 2022 Sustainable Development Report
at annualreport.mediclinic.com for a summarised
employment equity report and comprehensive
information on diversity and inclusion
GENDER PAY GAP
An in-depth gender pay gap analysis
was conducted in December 2021 to
understand the state of gender pay equity
within the organisation and to support
our Diversity and Inclusion Strategy. The
analysis revealed that the gender pay
gap as experienced at 1 December 2021
is a result of fewer women holding senior
positions within the Company compared
with men. At the time of the analysis, 74%
of our permanent employees were women.
EQUAL PAY FOR EQUAL WORK
In addition, an equal pay analysis across the
Group showed that there are no inexplicable
dierences between employees performing
the same job at the same job level. The
analysis demonstrated that at Mediclinic, men
and women receive equal pay for equal work.
See the Nomination Committee Report on
page 137 and the Corporate Governance
Statement on page 109 for more information
on representation at Board and executive level
OUR TARGETS
GROUP
• At least 40% female and at least
40% male representation at senior
management and executive level
throughout the organisation
SOUTHERN AFRICA
• Racial representation aligned with
broad-based black economic
empowerment (‘B-BBEE’)
• Employment equity targets per
occupational level
THE UAE
• An Emiratisation target of 5% Emirati
representation by March 2023 and
10% by March 2024
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT42
WELLBEING
We oer a wide variety of
initiatives, services (on-site and
o-site), and activities tailored
to local considerations. These
cover dierent aspects of
employee wellbeing, including
occupational health and
wellness, as well as physical,
community and environmental,
intellectual, emotional and
mental, and financial wellness.
Occupational health services
are also provided and the
health, safety and cleanliness
of all our facilities adhere to
health and safety policies and
procedures aligned to national
regulations.
Notes
1
Oered in accordance with local regulations and best practice. Whether the cost is
covered by the employee, division, health insurance or government depends on the
individual circumstances and geography.
2
Oered to qualifying employees.
Part-time
work arrangements
2
Remote work
arrangements
2
Purchase of
additional leave
Family planning
Occupational health services
and primary care
Aordable, healthy
on-site catering
Occupational
health audits
Free fitness
facilities at
some locations
Wellbeing awareness drives
and/or programmes
Free employee assistance
helpline
Confidential counselling
Wellbeing committee
• Select facilities
•
For Corporate Oce
• Responsible for
all employees
Transport and
accommodation for frontline
workers during COVID-19
pandemic, if required
• For qualifying employees
SWITZERLAND
SOUTHERN AFRICA
THE MIDDLE EAST
Health and safety
governance
• Committees at
facility level and
Corporate Oce
• Corporate function
Sharps injury
management
and safety
procedures
Supplier
compliance
Mandatory
consideration for
vendor selection
and evaluation
Inspections
• Planned and
unplanned visits by
authorities evaluate
occupational health
and safety at
facilities
• Planned and
unplanned visits by
authorities evaluate
occupational health
and safety at
facilities
• Annual licensing by
authorities subject
to inspection with
safety aspect
COVID-19
testing
1
Vaccinations
• Hepatitis B
Annual flu
• Annual flu
• Hepatitis B
Annual flu
Air composition,
temperature and
humidity
• Compliance with
Swiss Labour
Law standards
• Compliance with
local legislation
REGIONAL INFORMATION
SAFETY WELLBEING
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 43
SUSTAINABLE DEVELOPMENT OVERVIEW CONTINUED
CONNECTING TO OUR
COMMUNITIES
We care for our neighbours by acting
responsibly in our operations and making
a positive impact in their lives. Earning
their trust plays an important part in the
sustainability of our business.
FUTURE WORKFORCE
To secure healthcare for tomorrow, we
actively invest in training opportunities
for healthcare students and support of
applicable studies.
HUMAN RIGHTS
Our commitment to conducting business
in a manner that respects and promotes
human rights and dignity is entrenched in
our Code of Business Conduct and Ethics.
We undertake to:
• avoid and not contribute to any indirect
adverse human rights impacts linked
to our operations or services by our
suppliers or other business relations;
• respect clients’ rights, including but not
limited to privacy, confidentiality, dignity,
no discrimination, comprehensive health
status and treatment information,
a second opinion, access to medical
records, self-determination and
participation, refusal of treatment
and the right to complain;
• value diversity and equal opportunities
for all employees; and
• not tolerate any form of unfair
discrimination, such as access to
employment, career development,
training or working conditions based
on gender, age, religion, nationality,
race/ethnic origin, language, HIV/Aids
status, family status, disability, etc.
During 2021, there were no material
incidents of discrimination or violations
involving rights of indigenous peoples in
the Group.
MODERN SLAVERY AND HUMAN
TRAFFICKING
The Mediclinic Modern Slavery and Human
Tracking Statement details the steps
we have taken to prevent such abuses,
including any direct form of forced labour
or child labour in our business or indirectly
through our supply chain.
CORPORATE SOCIAL INVESTMENT
We contribute to the wellbeing of our
communities by investing in sustained
initiatives that address socio-economic
issues. CSI activities are structured around
the improvement of healthcare through
training and education, sponsorships,
donations, employee volunteerism, PPPs
and joint ventures. CSI focus areas are
determined per geography to address the
needs of the specific region.
The Group’s Modern Slavery and Human
Tracking Statement can be found on the
home page of the Company’s website at
www.mediclinic.com
The Mediclinic Supply Chain Management
Philosophy is available at www.mediclinic.com
CONNECTING TO
OUR SUPPLIERS
Expert, responsible suppliers enable us
to oer our healthcare services in a way
that improves wellbeing for people and
the planet.
Our Supply Chain Risk Management
Policy and Code of Business Conduct
and Ethics provide a supplier selection
framework that aligns with our purpose
and culture while delivering high-quality
products and services.
We strive to do business with third parties
who are environmentally responsible
and influence our suppliers and service
providers to limit their impact on the
environment. Suppliers are reviewed
during onboarding and regularly
thereafter to ensure they comply with
ISO 9000 and/or ISO 13485 quality
management certification, relevant
ISO certification of the products utilised,
CE Medical Device Regulation
certification and/or certification by
the Food and Drug Administration of
the United States of America.
Mediclinic predominantly procures in local
markets of operation. We do not import
directly or procure across borders unless
there are challenges. None of our divisions
procure less than 98% of spend from local
suppliers.
Centralised procurement prevents
employees and medical practitioners at
hospital level from influencing decisions.
Employees involved in purchasing are
bound by strict ethical principles and
corporate policies on gifts and invitations
to ensure impeccable standards of
integrity.
Additional measures were put in place to
monitor supplier conduct.
OUR TARGET
We aim to realise eective savings
through governance, safety and
control over all procurement in the
Group by harnessing standardised
procedures and information
management and driving adoption
across business units through
a simplified human interface.
Note
1
CE marking = a certification mark that indicates
conformity with health, safety and environmental
protection standards for products sold within
the European Economic Area (‘EEA’); also found
on products sold outside the EEA that are
manufactured in, or designed to be sold in, the EEA.
To secure healthcare for
tomorrow, we actively
invest in training
opportunities for
healthcare students
and support of
applicable studies.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT44
MATERIAL ISSUE 3:
BEING AN ETHICAL
AND RESPONSIBLE
CORPORATE CITIZEN
We endeavour to conduct business with
transparency, honesty and integrity,
applying sound governance and compliance
principles across the Group to foster an
ethical culture.
RISKS TO THE BUSINESS
• Fines and possible prosecution
• Reputational damage
• Inability to continue business due to
legal and non-regulatory compliance
• Financial damage caused by poor
governance
• Cyber incidents
• Data privacy breaches
• Poor facility conditions
RISK MITIGATION
• Visible ethical leadership
• Regular fraud and ethics feedback to
management, the Board and relevant
committees
• Independent ethics lines
• Group Risk Management and
Compliance, and Internal Audit functions
• Annual review of policies governing
ethics, competition law compliance, risk
management, investor relations, data
privacy and information security
• Data privacy awareness campaigns and
e-learning
• Key financial controls
• Planned facility maintenance and
upgrades
• Facility audits
COMPLY
2021 IN GROUP NUMBERS
Calls to ethics lines
1
Board members with ESG knowledge
and experience
Board committees
Investment in capital projects and new
equipment
2
Investment in equipment replacement
and property upgrades
2
Expenditure on repair and
maintenance
2
187
7
2020:
5
FY21:
£72m
FY21:
£54m
FY21:
£61m
2020:
148
2020:
4
6
£84m
£95m
£67m
Notes
1
Twenty-four high-priority cases were reported
during the year. These were subsequently
investigated and closed.
2
Capital expenditure is audited annually by PwC as
part of the Annual Report. Consequently, amounts
are disclosed on a financial-year basis.
PREVENTING BRIBERY AND
CORRUPTION
Our Code of Business Conduct and Ethics
guides honourable business conduct while
a Group-wide monitoring programme
reinforces regulatory compliance.
We have independent ethics lines for
whistleblowers to report concerns
confidentially or anonymously. Information
on our ethics lines forms part of
onboarding materials for all new recruits
and suppliers. Over the years, the majority
have been grievance-related calls. Only in
exceptional cases has information exposed
unethical, corrupt or fraudulent behaviour.
The Group’s Anti-bribery Policy and
Guidelines govern the oering of gifts,
hospitality and entertainment; approval
is given only if a proper business case
exists without reputational risk. This policy
prohibits the direct sponsorship of supplier
and/or third-party events, ensuring all
such sponsorships are administered and
overseen by the relevant division.
In 2021, we observed no incidents
of material non-compliance with the
Code of Business Conduct and Ethics,
Anti-bribery Policy or any applicable
legislation concerning corruption, bribery
or antitrust, with no significant fines
imposed. Additionally, Mediclinic
was not subject to any significant
fines or non-monetary sanctions for
non-compliance with laws or regulations
in the social or economic arena.
See the Audit and Risk Committee Report on
page 121 for more and page 71 for a summary of
our approach to clinical ethical issues
Our Code of Business Conduct and Ethics is
available at www.mediclinic.com
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
45
SUSTAINABLE DEVELOPMENT OVERVIEW CONTINUED
MAINTAINING HIGH-QUALITY
HEALTHCARE INFRASTRUCTURE
To ensure the best overall experience
for both clients and employees, we
continuously invest in capital projects,
innovation and digital transformation,
new equipment to expand and refurbish
our facilities, replacement of existing
equipment, and repair and maintenance
of existing property and equipment.
Our facilities can be high-risk environments
in which complex treatment processes are
executed using sophisticated equipment
and techniques. Independent accreditation
ensures we adhere to international
standards, thereby reducing the risk of
injury or harm.
SUSTAINING EFFECTIVE AND
TRANSPARENT GOVERNANCE
See the 2022 Sustainable Development Report
at annualreport.mediclinic.com for more on
compliance with consumer protection laws and
governance of advertising
The Group Tax Strategy is available on the
‘Risk management’ section of our website at
www.mediclinic.com
PROTECTING INFORMATION ASSETS
We have an eective information and
cybersecurity programme to protect our
technology, information assets and users.
Our operations span multiple geographies,
necessitating an adequate international
data network and Group approach to
threat management.
DATA PRIVACY
We protect stakeholders’ personal data
through an extensive Group-wide data
privacy project, which ensures compliance
with all relevant data protection legislation
in our countries of operation, including the
European Union’s General Data Protection
Regulation (‘GDPR’).
OTHER JURISDICTIONS
All our registered entities in other
jurisdictions comply with relevant data
privacy legislation as well as the principles
of GDPR.
We have an eective
information and
cybersecurity programme
to protect our technology,
information assets
and users.
See the 2022 Sustainable Development Report
at annualreport.mediclinic.com for more on
independent assurance
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT46
TCFD REPORT
Driven by our purpose to enhance the quality of life, at Mediclinic we have an unwavering
motivation to prevent, treat, care and protect. We acknowledge that climate change poses
a material risk to our operations, the environment and society, and that appropriate action
is required to reduce this impact. Mediclinic is committed to stepping up to the climate
change challenge and transparently reporting on progress.
The disclosures made in this report are consistent with the TCFD recommendations, bar
the specific exclusions as indicated in the index alongside. Although we believe we have a
sound risk management process and strategy to mitigate the eects of climate change on
our business, we acknowledge that further work needs to be done to quantify the financial
and operational impact of the three temperature scenarios identified in this report. In this,
we are committed to evolving our processes and reporting.
See the 2022 Sustainable Development Report at annualreport.mediclinic.com for supplementary
information on our Group Sustainable Development Strategy and related practices
See our CDP Report on our website at www.mediclinic.com
Notes
1
At the time of writing this report, our detailed impact analysis, including time frames and transition plans, and
the associated financial modelling of each risk/opportunity item described in this report, still had to be finalised,
and, as a result, will be available only during the next reporting period. The impact analysis will involve assessing
the impact and likelihood (exposure) of each identified item. Based on this assessment, we will be able to
determine the potential financial impact for each risk/opportunity item relative to the three scenarios and time
horizons specified in this report. The analysis will be done per geography as the risk profiles for some risk
items/opportunities dier significantly depending on the operating environment. The outcome of this analysis
will enable us to classify a risk or opportunity as low, medium or high, based on the financial impact
determined. The outcome of this detailed impact analysis will enable us to prioritise our most significant
risks in order to build resilience and improve mitigating actions. We will also be able to prioritise opportunities
to maximise potential positive impacts. This process, and the outcome thereof, will be included in future
TCFD reports.
2
Measuring Scope 3 emissions is a challenge, as these refer to emissions that are beyond our direct control. In
2021, we worked on aligning the reporting of Scope 3 emissions between the dierent geographies. Scope 3
emissions that are material to us currently include purchased goods and services, electricity transmission and
distribution losses (in Southern Africa and the Middle East), upstream transportation (in Southern Africa and
the MIddle East), waste generated in operations, business travel, employee commuting and downstream leased
assets (in Southern Africa). Capital goods and investments must still be evaluated. Our main focus for the next
year will be to improve data quality and coverage.
3
Although internal targets have been set to manage climate-related risks and opportunities, these will be
reported on only in the future.
TCFD CONTENT INDEX
ELEMENT RECOMMENDATIONS
PAGE
REFERENCE
COMPLIANCE
OR ADDITIONAL
COMMENTARY
Governance
a) Describe the board’s oversight of
climate-related risks and opportunities
48–49
b) Describe management’s role in
assessing and managing climate-related
risks and opportunities
48–49
Strategy
a) Describe the climate-related risks
and opportunities the organisation has
identified over the short, medium and
long term
49–50, 53
See note 1
alongside
b) Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy and
financial planning
50
See note 1
alongside
c) Describe the resilience of the
organisation’s strategy, taking into
consideration dierent climate-related
scenarios, including a 2°C or lower
scenario
51
Risk
management
a) Describe the organisation’s processes
for identifying and assessing climate-
related risks
51–52
b) Describe the organisation’s processes
for managing climate-related risks
54
c) Describe how processes for identifying,
assessing and managing climate-related
risks are integrated into the organisation’s
overall risk management
51–54
Metrics and
targets
a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process
54
b) Disclose Scope 1, Scope 2 and, if
appropriate, Scope 3 Greenhouse Gas
(‘GHG’) emissions, and the related risks
54–55
See note 2
alongside
c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets
54
See note 3
alongside
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 47
GOVERNANCE
BOARD OVERSIGHT
As part of its function to promote
Mediclinic’s sustainable success, the Board
has oversight of our sustainability and risk
management eorts. Climate change is a
principal risk of the Group.
See the Risk management report on page 91 for
further details on our principal risks and how they
are determined
The Audit and Risk Committee is responsible
for reviewing principal risks and advising the
Board on the likelihood, potential impact,
management and mitigation thereof. The
Audit and Risk Committee Chair reports
all feedback, which includes progress on
climate-related risks, to the Board at regular
intervals.
In 2020, the Board approved the Group
Sustainable Development Strategy, setting
ESG goals. This ESG strategy encompasses
the opportunities identified to improve
environmental practices, as set out in the
‘Strategy’ section of this report.
The Board reviews progress on the Group
strategic goal to minimise our environmental
impact. To support the achievement of
the Mediclinic Group Strategy, the risk
management process is fully integrated
into the strategic planning process.
To ensure focused implementation of
objectives related to our environmental
sub-goals, the Board has approved the
inclusion of carbon emission reduction as a
performance target for the LTI scheme for
FY23, in principle, subject to feedback from
shareholders.
See the Remuneration Committee Report on
page 143
The Chair of the Board has encouraged all
Board members to join Chapter Zero, the UK
Chapter of the Climate Governance Initiative.
Developed in collaboration with the World
Economic Forum, Chapter Zero equips
non-executive directors to lead crucial
boardroom discussions on the impacts of
climate change.
The Board is committed to equipping itself
with the understanding and skills necessary
for appropriate decision-making on climate
change-related aspects. During 2021, the
Board approved the constitution of an ESG
Committee to ensure ecient oversight of
the Group’s ESG strategy and related
practices. Previously, this oversight function
formed part of the responsibilities of the
Clinical Performance and Sustainability
Committee, which now solely focuses
on the Group’s clinical performance.
The ESG Committee thoroughly assesses
opportunities for improving our
environmental practices and recommends
to the Board, for approval, any material
Note
1
ISO 14001:2015 specifies the requirements for
an EMS that an organisation can use to enhance
its environmental performance and manage its
responsibilities in a systematic manner. All hospital
managers are trained to utilise this system.
changes proposed by the Group Executive
Committee.
The ESG Committee is led by the Chair
of the Board, who reports all feedback to
the Board at regular intervals. Any material
concerns are brought to the Board for
discussion, together with suitable
recommendations for their resolution.
MANAGEMENT RESPONSIBILITY
The Group Chief Governance Ocer is
responsible for sustainable development
activities, which includes addressing
climate-related risks and opportunities,
as described on page 49. Divisional
environmental data is reported to the
Group’s Environmental Sustainability
department.
The Group Executive Committee, supported
by the Group General Manager: Risk
Services, recommends Mediclinic’s
proposed principal risks to the Audit and
Risk Committee and, ultimately, the Board
for approval. Principal risks are risks that
can materially aect Mediclinic’s business
model, performance, prospects, solvency,
liquidity or reputation. These are
determined through a strategic risk
review process where top risks are identified
and assessed by divisional executive
committees and the Group Executive
Committee, with input from non-executive
directors. Political, economic, social,
technological, environmental and legal
developments that may impact the Group’s
operations and business model viability
in the short, medium or long term are
reviewed to identify emerging physical and
transition risks such as new climate policy
or technological shifts.
The Group’s Enterprise-wide Risk
Management (‘ERM’) Policy follows the
International Committee of Sponsoring
Organizations of the Treadway Commission’s
Internal Control – Integrated Framework and
is reviewed annually.
See the Risk management report on page 91
The mitigation of climate change is the
responsibility of the Group Manager:
Environmental Sustainability, who is
supported by divisional environmental leads.
Material feedback is included in monthly
reports to the Group Executive Committee.
With the ISO 14001:2015 EMS fully
functional in our Southern Africa hospitals,
implementation in Switzerland and the
Middle East is in progress. The EMS assists
management in determining climate
change-related risks and opportunities
per facility.
The Group Executive Committee
assesses opportunities for improving our
environmental practices and recommends
related targets and roadmaps to the ESG
Committee for approval.
The Board is committed to
equipping itself with the
understanding and skills
necessary for appropriate
decision-making on climate
change-related aspects.
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MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT48
FIGURE 1: MEDICLINIC’S CLIMATE CHANGE GOVERNANCE ORGANOGRAM
BOARD
Assesses the Company’s emerging
and principal risks and reviews
eectiveness of risk management
and internal control systems
Number of Board members with
ESG skills and experience: 7
AUDIT AND RISK COMMITTEE
Oversees evaluation of risk
management systems and advises
Board on risk management
and mitigation
ESG COMMITTEE
Biannually reviews Group ESG strategy
and approves implementation plans
as well as roadmaps to environmental
targets
GROUP EXECUTIVE COMMITTEE
Identifies opportunities for improving environmental
practices and recommends roadmaps for achieving targets;
biannually reviews principal risks
GROUP MANAGER:
ENVIRONMENTAL SUSTAINABILITY
Responsible for developing
environmental targets and roadmaps,
overseeing execution at divisional level,
and monitoring and reporting
on progress
GROUP GENERAL
MANAGER:
RISK SERVICES
Manages and reports
on environmental risks
DIVISIONAL ENVIRONMENTAL
LEADS
Oversee energy usage in each division
and reduce consumption
GROUP CHIEF GOVERNANCE OFFICER
Coordinates sustainable development activities across the Group,
with monthly progress reports to Group Executive Committee
STRATEGY
CLIMATE-RELATED RISKS
AND OPPORTUNITIES
Business interruptions due to extreme events
– such as floods, storms, droughts, fires and
earthquakes – could have a significant
impact on Mediclinic. The impacts of climate
change, including sea-level rise, heat waves,
storms, drought and wildfires, will influence
global migration and the demand for our
facilities in aected areas. The consequences
will be felt directly and indirectly via resource
availability and population movements from
rural to urban areas or from vulnerable
coastal communities, with consequences
across our market and workforce.
Further identified climate-related risks
include increased costs for water and
electricity, the impact of carbon tax, the cost
for compliance to climate change legislation,
fines and penalties, and potential
reputational damage.
See the Risk management report on page 97
for further details on identified short-, medium-
and long-term risks
In order to minimise our contribution
towards climate change and appropriately
manage its potential impact on our business,
we developed a Group ESG strategy,
matured the Group Environmental Policy and
Group Sustainable Development Policy, and
introduced a Group Waste Management
Policy. The Group ESG strategy includes the
sub-goals of becoming carbon neutral and
having zero waste to landfill by 2030. These
sub-goals have been rolled up to the
Mediclinic Group Strategy to reinforce their
importance and ensure the necessary
resources are allocated.
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2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 49
to the potential revenue loss should water
availability be restricted.
OPPORTUNITY FOUR:
Shift in consumer preference. The
reputational benefits of being a
sustainable brand and responsible
corporate citizen could result in improved
revenues and market share growth. By
containing costs and managing our
impact on the environment while
providing high-quality care and facilities,
we position ourselves as a respected and
trusted provider of healthcare services.
OPPORTUNITY FIVE:
Eligibility for sustainability-linked loans
with improved interest margins. During
2021, our Southern Africa division
concluded the first syndicated
sustainability-linked loan in Africa. Carbon
emission reduction and diversion of waste
from landfill count as two of the four loan
metrics.
OPPORTUNITY SIX:
Burden of disease. Increased incidence
of certain chronic, communicable and
non-communicable diseases arising from
climate change provides the opportunity
to develop aordable targeted quality
care models. PPPs that target these
diseases could increase revenue and
quality care models while delivering
cost-eective quality care. The dierence
in temperature rise between the climate
scenarios has stark consequences for
human wellbeing. During the past decade,
with an average temperature rise of 1.1°C
above pre-industrial levels, the migration
of regional occupational diseases, such
as malaria, from Southern Africa’s
northern to central regions was evident
Our sub-goals to become carbon neutral
and have zero waste to landfill by 2030
present six climate-related opportunities:
OPPORTUNITY ONE:
Investing in energy-ecient technology
and procuring renewable energy at lower
prices and with fewer harmful emissions.
The implementation of the EMS at all
hospitals across the Group will lead to
improved operational eciency of
technical installations, the introduction of
various new energy eciencies – including
renewable technologies – and positive
change in employee behaviour.
OPPORTUNITY TWO:
Increasing the amount of waste that is
recycled and recyclable. The shortage of
landfill sites, their ever-increasing cost and
the associated GHG emissions make this
opportunity compelling. An increase in
waste recycling mitigates related cost
concerns and also helps reduce associated
carbon emissions.
OPPORTUNITY THREE:
Reducing water usage and consumption.
This is key to Mediclinic mitigating the
risks related to water scarcity and reduced
water quality. Being situated in a water-
scarce part of the world, our Southern
Africa operations have unlocked many
opportunities to reduce and recycle water,
ensuring minimal impact on communities
and securing the water required to
function. This is further enabled by the
Corporate Sustainable Water Management
Strategy, which was adopted in 2016 and
is reviewed annually. Investigations to
implement similar measures in Switzerland
and the Middle East are ongoing. The
opportunity benefit can be directly related
at Mediclinic hospitals, necessitating the
need for medical assistance.
IMPACT ON THE BUSINESS
The eect of climate change on the
business is a valid concern. Our strategy,
therefore, not only focuses on financial
output, but also on managing and utilising
social and environmental resources
eciently to ensure long-term sustainability.
From a climate change perspective, our
strategy is informed by the divisional safety,
health and environmental policies, the
Group Environmental Policy, the Group
Sustainable Development Policy and the
Code of Business Conduct and Ethics.
The aforementioned policies are reviewed
annually by management, with
recommendations to the ESG Committee.
The Group Safety, Health and Environmental
Policy guides the identification and
management of risks and opportunities
relating to water use and recycling, energy
use and conservation, emissions and climate
change, and waste management and
recycling.
Responsible resource use oers Mediclinic a
strategic advantage. We work continuously
to reduce fuel and electricity consumption
and associated carbon emissions. In this
way, we contain operating costs and ensure
ongoing access to water and energy
supplies.
During FY22, £7m was budgeted for
initiatives to minimise the Group’s
environmental impact. These funds
were mostly utilised for energy-saving
technologies, LED light replacements,
PV installations at facilities for energy
generation, and renewal of ICT components
for better energy eciency. Over the next
three years, nearly £8m per annum has
been budgeted to invest in environmental
projects. These funds will be utilised to
expand on the initiatives set out above.
It is the responsibility of each division to
budget for the initiatives and programmes
associated with this environmental goal.
Once the divisional executive committees
have approved budget requirements,
the budgets are presented to the Group
Executive Committee and Board for
approval.
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MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT50
IDENTIFY RISKS
Pinpoint risks, including climate-related
risks, using publications, data and
available literature
ASSESS RISKS
Quantify risks based on impact and
likelihood; thereafter, prioritise risks
MANAGE RISKS
Identify mitigating steps and actions
for each risk item
OUR RISK MANAGEMENT PROCESS
REPORT RISKS
Disclosure will include the
TCFD recommendations
BUSINESS RESILIENCE
Mediclinic’s use of the EMS facilitates
climate change risk assessments based on
specific scenarios, followed by action plans
in each facility’s environmental management
programme (‘EMP’). The EMS has been in
operation in our Southern Africa division
since 2002.
Climate-related opportunities and risks are
incorporated into the Group’s ESG strategy.
Sub-goal 2: ‘Mitigate the impact of climate
change’ has dedicated objectives to address
transition and physical risks. The ESG
strategy is annually reviewed and updated
by the Group Executive Committee to adapt
to actual physical events and to confirm the
possible pathways to various scenarios.
The Group’s Environmental Risks and
Opportunities Aspect Survey is updated
annually, taking into consideration the
previous year’s physical events, change in
ambient temperature, climate-related
legislation, carbon tax legislation, change in
objectives and goals, and controlled and
uncontrolled conditions.
The ESG strategy considers major
environmental factors such as carbon
emissions, energy, water, waste and
biodiversity, and any impacts specific to
a geography and/or facility.
See the Risk management report on page 97
As part of the revised ESG strategy,
Mediclinic has undertaken climate scenario
analysis, as described on page 52.
RISK MANAGEMENT
RISK IDENTIFICATION
At Mediclinic, the objective of risk
management is to establish an integrated
and eective risk management framework
within which important risks, including
climate-related ones, are identified,
quantified, prioritised and managed for
an optimal risk/reward profile.
The ERM Policy defines the risk
management objectives, risk appetite
and tolerance, methodology, process
and responsibilities of the various risk
management role players in the Group,
and is subject to annual review. Regarding
climate-related risks, the ERM takes into
consideration the Group’s ESG strategy,
Sustainable Development Policy and the
Safety, Health and Environmental Policy,
reviewed annually.
Our ERM Policy includes the following levels:
• Top-down: At Group level, key risks to
the business are identified, understood,
assessed and prioritised. This process
includes climate-related and other
environmental risks.
• Bottom-up: At asset or operational level,
individual hospitals perform an
environmental risk assessment and
each division completes an online
Environmental Risks and Opportunities
Aspect Survey to determine its risk profile
annually. Based on the survey scores
achieved per hospital and per area,
high-risk areas and individual risk items
are identified. These areas/items have the
potential to lead to a financial, operational
or reputational impact and will be
addressed through each hospital’s EMP
with action plans for risk mitigation.
The ESG strategy is
annually reviewed and
updated by the Group
Executive Committee to
adapt to actual physical
events and to confirm
the possible pathways
to various scenarios.
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 51
• World takes immediate action to
reduce global emissions; coordinated
action taken
• High level of transition risks for this
scenario
• Physical risks for this scenario will be
limited compared with scenario 3
• No introduction of new policies
beyond the policies already known
and announced
• Limited transition risks for this scenario
• Physical risks are the highest under
this scenario
SCENARIO 1:
1.5°C increase – Paris ambition
• World takes action to reduce global
emissions, but more slowly than in
scenario 1; coordinated action taken
but with a delayed start
• High level of transition risks for this
scenario
• Physical risks for this scenario will be
limited compared with scenario 3
SCENARIO 2:
2.0°C increase – Policy action
but with delayed start
SCENARIO 3:
3.0°C increase – Business as
usual
The following scenarios have
been identified:
These scenarios are aligned with the TCFD recommendations in the following ways:
• at least one provides for a 2°C or lower scenario that considers transition to a lower-carbon economy;
• they categorise the risks identified as transition or physical risks (see page 53); and
• they are modelled to the year 2050, aligning with the Paris Agreement and other governmental net-zero 2050 targets.
TIME HORIZONS
We selected the following intervals to represent a range of time horizons for our impact modelling:
Short term: 1–5 years
Medium term: 6–10 years
Long term: 11 years – 2050
The ongoing identification of potential risk items and the assessment thereof will be done annually; this will ensure emerging risks
are included and risk profiles adjusted to align with the changing environment and new information and projections.
Fundamentally, the financial impacts of
climate change on an organisation are
determined by the specific climate-related
risks and opportunities to which it is exposed
and its strategic decisions on managing
these risks – i.e. whether to mitigate, transfer,
accept or control – and seizing these
opportunities.
OUR APPROACH
Since we own the majority of the buildings in
which we operate, it is crucial we understand
climate-related risks and the modifications
required to render facilities resilient.
Therefore, we established an internal working
task team representing key stakeholders and
business functions across the Group. This
enables us to understand how our strategy
addresses climate-related risks and
opportunities. Identified material risks will be
assessed by evaluating their impact and
likelihood, and these ratings will be adjusted
for the three scenarios discussed alongside.
OUR CLIMATE SCENARIOS
We have identified three climate scenarios
to gain an understanding of climate-related
risks and opportunities, and to assess our
business resilience to these risks. To
determine the most plausible climate
scenarios across our geographies, we used
publicly available data and information as
well as verified environmental data, in
combination with the Intergovernmental
Panel for Climate Change (‘IPCC’) 6
th
Assessment Report (‘AR6’) of August 2021,
IPCC AR6 Regional Fact Sheet Africa, IPCC
AR6 Regional Fact Sheet Europe and IPCC
AR6 Regional Fact Sheet Asia. The South
African Risk and Vulnerability Atlas
(SARVA 3.0, 2020), a central repository for
a wide range of climate and environmental
data for South Africa, was also used.
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MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT52
Risk factors Potential risk impact Mitigating actions taken
TRANSITION RISKS: Risks relating to policy, legal, technological and market changes arising from the transition to a lower-carbon economy
• Carbon tax
• Climate-related legislation
• Cost of investment in new technology
• Increase in cost due to carbon tax
• The cost of fines and reputational damage
• High cost of implementing new technology
Implementation of ESG strategy sub-goal 1:
‘Become carbon neutral by 2030’
Implementation of ESG strategy sub-goal 2: ‘Mitigate
the impact of climate change on our business’
Eective management of the EMS
PHYSICAL RISKS: Risks resulting from the physical impacts of climate change. These can be event driven (acute) or longer-term climate shifts (chronic)
Acute
Extreme weather events that include floods, storms,
droughts, sandstorms, heat waves, etc.
Partial or complete closure or total loss of impacted
facility/ies depending on frequency and intensity of events
Insurance for property damage and/or business
interruptions
Eective management of the EMS Major Incident
Framework – Emergency Preparedness
Chronic
(Referring to sustained higher temperatures, sea-level
rise, etc.):
• Rising temperatures resulting in increased electricity
consumption due to the need for additional cooling
• Rising temperatures leading to water shortages and
subsequently aecting water quality
• Increase in cost due to increased energy consumption for
additional cooling
• Increase in cost due to potential water scarcity or water
quality being compromised
Investing in energy-ecient technology
Procuring renewable energy at lower prices
Implementation of ESG strategy sub-goal 3: ‘The eective
use and reuse of our water resources’
The table below includes the most significant climate-related risks and opportunities identified as well as the requisite mitigating actions.
Opportunity factors Potential opportunity impact
OPPORTUNITIES: Eorts to mitigate and adapt to climate change also produce opportunities for managing operating costs and increasing revenue
• Investing in energy-ecient technology and procuring renewable energy at lower prices
• Increasing the amount of waste that is recycled and recyclable, executing on the
objectives associated with having zero waste to landfill by 2030
• Reducing water usage and consumption
• Shift in consumer preference
• Sustainability-linked loans
• Increase and shifting of disease burden
• Saving on energy costs
• Saving on associated waste costs
• Saving on water costs
• Improved revenues and market growth due to enhanced reputation
• Improved borrowing costs
• Increase in admissions and revenue due to greater disease burden
RISKS
OPPORTUNITIES
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2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 53
MANAGEMENT PROCESS
The annual Environmental Risks and
Opportunities Aspect Survey identifies risk
areas at hospital level and establishes a
clear response strategy with action plans to
mitigate identified risks and shortcomings in
risk management.
The EMP includes appointing persons
responsible for completing the actions and
setting targets, objectives and due dates.
The EMP is reviewed at least quarterly by
each facility’s top management to ensure
its continuing suitability, adequacy and
eectiveness. Progress is documented in
the EMP.
Second-party EMS gap audits are
conducted by the Corporate Oce to
ensure compliance and assess the
environmental performance of action plans
set out in the EMP. Divisional CEOs receive
an update on environmental performance
during the three-monthly Environmental
Management Review.
RISK INTEGRATION
Results from the Environmental Risks
and Opportunities Aspect Survey are
used to assess environmental risks
within the Group risk register. High risks
will be reported on and addressed at
Group level.
The risk or aspect identification informs
environmental objectives aimed at
making meaningful improvements to our
environmental performance. Environmental
risks are elevated to the ESG and the Audit
and Risk committees for due consideration
and guidance. The ESG Committee meets
twice a year and the Audit and Risk
Committee on a quarterly basis.
METRICS AND TARGETS
We continuously review priorities to
maintain momentum in our journey to
becoming carbon neutral and having zero
waste to landfill by 2030. These assist us in
monitoring our progress against climate
change-related risks and opportunities.
With the assistance of external consultants,
the divisions measure their carbon footprint
using the GHG Protocol with boundaries
established under the operational control
approach. These measures include, in
varying degrees:
• Scope 1 emissions: direct emissions
from Mediclinic-owned or -controlled
equipment (stationary fuels); air-
conditioning and refrigeration gas refills;
anaesthetic and other gas consumption;
emergency response vehicles; and fleet
and pool vehicles (mobile fuels).
• Scope 2 emissions: indirect emissions
from purchased electricity.
• Scope 3 emissions: indirect emissions in
the supply chain; business travel activities;
employee commuting; upstream and
downstream third-party distribution;
oce paper consumption; electricity
transmission; and distribution losses and
waste.
• Non-Kyoto Protocol GHG emissions,
such as from Freon, which is used in
air-conditioning and refrigerant
equipment. Emission data was converted
into a carbon dioxide equivalent (‘COe’)
using recognised calculation methods and
emission factors, and stating assumptions
made where relevant.
We calculate energy consumption by using
the Department for Environment, Food and
Rural Aairs’ 2021 fuel conversions and
GRI standards methodology.
The applicable metrics are reported below:
• Carbon emissions (tonnes CO
2
e)
• Direct and indirect energy consumption
(calculations are done in kilowatt hour
and then converted to gigajoules [GJ])
• Waste diverted from landfill (tonnes)
• Water usage (kilolitres)
In 2020, we increased our reporting
boundary to cover the Group’s operations in
Switzerland, Southern Africa and the Middle
East. This comprises Hirslanden, Mediclinic
Southern Africa, Mediclinic Middle East,
Medical Innovations and Mediclinic Group
Services. In previous CDP submissions, only
Mediclinic Southern Africa was reported.
We do not have operations in the UK with
significant emissions or energy consumption,
and only report per calendar year on the
data of the geographical regions in which
we operate.
Our internal targets, inclusive of 2020 as the
baseline year and 2021 as the target year, have
been set in Southern Africa and the Middle East
for activities to reduce carbon emissions, with a
particular focus on electricity and GHG-emitting
activities with high global warming potential.
In Switzerland, hydroelectricity is utilised, which
has minimal harmful emissions. With the Swiss
operations being close to carbon neutral, their
internal environmental targets are based on
the improvement of operational eciencies
and eciency targets set by the Energy
Agency of the Swiss Private Sector. CO- and
kWh-reduced certificates will be awarded upon
achievement.
RELATED RISKS LINKED TO
THE TARGETS SET:
Transition and physical risks
Scope 2 emissions are the biggest contributor
to our carbon footprint, particularly in
Southern Africa and the Middle East. To
reduce our carbon emissions, the respective
roadmaps to carbon neutrality focus on
drastically reducing the use of electricity
associated with high CO
2
emissions.
This will be achieved through:
• procurement of renewable and clean
energy where available;
• PV installation at facilities where feasible;
• energy-ecient technologies such as LED
light replacements, chiller replacements,
upgrade of the SCADA building
monitoring system, replacement of district
heating with geothermal probes for CO
reduction, window replacement for
improved insulation, and replacement of
emergency diesel and heating for better
emission values; and
• changes in human behaviour to reduce
energy use.
To reduce our carbon
emissions, the respective
roadmaps to carbon
neutrality focus on
drastically reducing the use
of electricity associated
with high CO
2
emissions.
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MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT54
BECOMING CARBON NEUTRAL BY 2030
GROUP SWITZERLAND
1
SOUTHERN AFRICA THE MIDDLE EAST
2021 2020 2021 2020 2021 2020 2021 2020
Scope 1 emissions 34 656 30 736 6 670 4 780 22 215
2
22 083 5 771
3
3 869
Scope 2 emissions 177 313 195 312 646 595 154 982
4
151 054 21 686 43 379
Total Scope 1 & 2 211 969
5
226 048 7 316 5 374 177 197 173 136 27 456 47 248
Scope 3 emissions 65 068 54 278 5 915 143 47 115 39 576 12 038 14 559
Non-Kyoto Protocol emissions 3 122 5 815 0 0 2 292 3 180 830 2 635
Total Scope 1 & 2 CO
2
e/full-time
equivalent
6.25 n/a 0.94 0.72 9.32 10.96 3.86 6.97
Notes
1
Increase in Scope 1 and 2 emissions due to operational requirements; Scope 3 increase due to the inclusion of the portion of waste that is incinerated (not included in previous reporting).
2
Increase due to diesel consumption on account of load shedding, anaesthetic gases used in theatre and use of mobile fuel.
3
Increase due to use of air-conditioning and refrigeration gases, diesel consumption as a result of generators used in tents for COVID-19 PCR testing and expansion project at Airport Road Hospital, Abu Dhabi, where diesel boilers
were installed.
4
Scope 2 emissions (purchased electricity) increased as a result of an increase in the emission factor (conversion of kWh to COe), even though total electricity consumption decreased year on year.
5
Decrease in total Scope 1 and 2 emissions due to the purchase of nuclear power with zero emissions for hospitals in Abu Dhabi. (Nuclear power accounts for 50% of the total electricity consumption in the Middle East.)
6
Increase due to resumption of business travel and upstream transportation.
Notes
1
Increase due to higher fuel-oil use and inclusion of purchased diesel and mobile fuel not included in prior year’s reporting.
2
Increase due to higher diesel consumption on account of load shedding, as well as use of mobile fuel and aviation fuel.
3
Increase in district heating and electricity consumption.
4
Increase in district cooling and electricity consumption influenced by expansion of Airport Road Hospital, Abu Dhabi, and operational requirements.
TABLE 1: CARBON EMISSIONS (TONNES COe)
In the Middle East, sources of clean energy are limited. In 2021, 38 554MWh of clean energy was purchased for all facilities in Abu Dhabi.
TABLE 2: DIRECT AND INDIRECT ENERGY CONSUMPTION (GJ)
GROUP SWITZERLAND SOUTHERN AFRICA THE MIDDLE EAST
2021 2020 2021 2020 2021 2020 2021 2020
Direct energy purchased 266 344 224 524 117 147
1
86 932 117 940
2
103 132 31 257 34 398
Direct energy produced 4 620 3 021 3 063 1 584 1 557 1 437 0 0
Indirect energy consumed 1 013 123 960 478 176 665
3
172 290 542 950 548 249 293 507
4
237 258
Total energy consumption 1 284 086 1 188 023 296 876 260 807 662 447 652 818 324 764 271 656
Energy consumption/full-time
equivalent
37.84 36.02 38.00 35.09 34.84 35.05 45.70 40.08
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2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 55
We implemented several initiatives to reduce waste, in particular healthcare general waste,
including:
• standardised waste management tenders where applicable;
• increased recycling;
• implementation of circular economies with key suppliers;
• behavioural change aimed at refusing waste and recycling; and
• use of new waste technologies where feasible.
TABLE 3: WASTE MANAGEMENT TABLE 4: WATER USAGE FROM UTILITIES
Note
1
In Switzerland, there is no waste to landfill as all waste is incinerated.
Note
1
Water usage increased compared with 2020 but was still lower than pre-pandemic usage.
The increase was mainly due to returning to business as usual and increased hand-washing
and laundry during COVID-19 waves.
Total
waste
generated HCRW
Total waste
to landfill
Total waste
diverted
from landfill
Waste
diverted
from landfill
as a
percentage
of total
waste (%)
GROUP
2021 17 843 5 246 7 034 5 563 31.1
2020 14 276 4 766 6 882 2 629 13.4
SWITZERLAND
2021 4 043
2
375 0
4
3 668 90.7
2020 1 371 352 0 1 019 43.4
SOUTHERN
AFRICA
2021 8 363 3 741 3 034 1 588 19.0
2020 7 892 3 438 3 094 1 360 13.6
THE MIDDLE
EAST
1
2021 5 437
3
1 130 4 000 307 5.7
2020 5 006 976 3 781 249 5.0
Water usage (kL) kL/full-time equivalent
GROUP
2021 1684 707 49.65
2020 1 647 749 50.18
SWITZERLAND
2021 344 500 44.09
2020 366 648 49.33
SOUTHERN
AFRICA
2021 1 086 815 57.16
2020 1 029 058 55.25
THE MIDDLE
EAST
1
2021 253 391 35.66
2020 252 042 37.19
HAVING ZERO WASTE TO LANDFILL BY 2030
We will continue to develop our roadmaps, consider new technologies and evolve
targets to ensure we reach our 2030 sub-goals of becoming carbon neutral and having
zero waste to landfill.
Notes
1
Although business returned to normal in 2021, hospitals were still coping with the COVID-19 pandemic and the
associated increase in HCRW generated and disposal of personal protective equipment. This resulted in an
even larger increase in waste generated than the prior year.
2
Includes a total of 2 690 tonnes of healthcare general waste that is incinerated, which was not previously
reported on.
3
In the Middle East, food waste is not processed or reused, HCRW is disposed of after treatment and hazardous
chemical waste is shipped to Germany for incineration.
4
No waste to landfill as all waste is incinerated.
USING WATER SUSTAINABLY
Healthcare is a water-intensive industry, with the main uses being cooling equipment,
plumbing fixtures, medical process rinses, laundry and landscaping.
To reduce water use, we are:
• implementing water-saving technologies in facilities;
• changing human behaviour; and
• setting annual targets for decreased consumption.
TCFD REPORT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT56
The table below sets out where stakeholders can find information in the Strategic Report that
relates to non-financial matters detailed under Section 414CB of the Act.
NON-FINANCIAL
INFORMATION STATEMENT
NON-FINANCIAL MATTER RELEVANT POLICIES AND STATEMENTS READ MORE IN THIS REPORT PAGE REFERENCE
Anti-corruption and
anti-bribery
• Anti-bribery Policy
1
• ERM Policy
• Fraud Risk Management Policy
1
• Group Privacy and Data Protection Policy
• Regulatory Compliance Policy
• Code of Business Conduct and Ethics
• Sustainable development overview
(Material issue 3: Being an ethical and responsible corporate citizen)
45
Business model n/a • Business model
• Strategy overview
25
16
Employees • Board Diversity Policy
• Code of Business Conduct and Ethics
• Employee relations policies
• Group Diversity and Inclusion Strategy
• Health and safety policies and procedures
• Chair’s Review
• Group Chief Executive Ocer’s Report
• Business model
• Sustainable development overview
(Material issue 2: Building stakeholder trust)
6
10
25
40–44
Environmental matters • Group Sustainable Development Policy
• Group Environmental Policy
• Group Waste Management Policy
• Strategy overview
• Sustainable development overview
(Material issue 1: Minimising environmental impact)
• TCFD report
16
37–39
47–56
Non-financial KPIs n/a • Key performance indicators
• Sustainable development overview
• Clinical services overview
23
34
58
Principal risks ERM Policy Risk management report 91
Respect for human rights • Code of Business Conduct and Ethics
• Group Diversity and Inclusion Strategy
• Modern Slavery and Human Tracking Statement
Sustainable development overview
(Material issue 2: Building stakeholder trust)
40–44
Social matters • Code of Business Conduct and Ethics
• Group Supply Chain Risk Management Policy
• Group purpose
• Values
• Chair’s Review
• Strategy overview
• Business model
• Sustainable development overview
6
16
25
34
Note
1
These policies include anti-corruption matters.
See the 2022 Sustainable Development Report at annualreport.mediclinic.com and policy documents at www.mediclinic.com for further details
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 57
CLINICAL SERVICES
OVERVIEW
This Clinical services overview is a condensed version of the Group’s 2022 Clinical
Services Report, available at annualreport.mediclinic.com. It covers the most important
clinical characteristics across the Group with specific reference to our initiatives and
clinical outcomes for the 2021 calendar year, unless stated otherwise.
CONTENT
2022 CLINICAL
SERVICES
REPORT
CLINICAL
SERVICES
OVERVIEW
Milestones • •
Interview with Dr René Toua • abbreviated
How we create value • abbreviated
Our healthcare landscape • abbreviated
Better ways to connect
Our clients • n/a
Patient experience • abbreviated
Health awareness • n/a
Better ways to care Clinical performance
1
• abbreviated
Better care settings • n/a
Partnerships • n/a
Independent assurance • n/a
Clinical ethics summary • abbreviated
Note
Clinical performance covered in the standalone 2022 Clinical Services Report includes international
benchmarking, never events, adverse events, hand hygiene, healthcare-associated infections,
device-associated infections, surgical site infections, antimicrobial stewardship, mortality, readmission,
re-operation and extended stay.
KEEPING
CLIENTS
AT HEART
Dr René Toua, Group Chief Clinical
Ocer, reflects on the past year.
Our focus is on
understanding our clients
and capturing their
unfiltered voices.
Dr René Toua
Group Chief Clinical Ocer
Q. WHAT MILESTONES DID MEDICLINIC
ACHIEVE IN INTEGRATING CARE IN 2021?
Providing integrated care requires more
than just a clinical model. We need the right
technology platform. In 2021, we made
significant strides with the latter and it is in
various stages of implementation across all
our geographies.
Q. WHAT IS MEDICLINIC DOING TO
BETTER UNDERSTAND CLIENTS?
Our focus is on understanding our clients
and capturing their unfiltered voices. To
do this, we are embedding client advisory
groups and have also increased the number
of patient-reported outcomes that are
measured. In the past, client feedback
focused on inpatient settings – it is now
expanded to cover all care settings: physical
and virtual.
Data also plays a crucial role as it
allows us to create a 360° view of our
clients, enabling us to understand their
needs better.
See the 2022 Clinical Services Report at
annualreport.mediclinic.com for the full interview
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT58
March
Through TOGETHER
WE TEST, we began
providing COVID-19
repetitive testing to Swiss
companies and schools as
well as health and public
organisations. The canton
of Schwyz became the
first to adopt our online
platform, which facilitates
logistics, laboratory
analysis and reporting of
results. By the end of the
year, 12 cantons and over
9 000 organisations had
made use of the service,
with more than 4.5 million
tests having been
performed.
We broke ground on
a multiyear development
at Klinik St. Anna in
Lucerne. The first stage of
the extension will house
the Institute for Radiology
and Nuclear Medicine,
enabling the hospital to
expand its service.
In Southern Africa, as
part of our strategy to
oer services across the
healthcare spectrum, we
expanded our Milnerton
hospital to include
Intercare Milnerton
Medical and Dental Centre.
The co-location of the
primary care facility
expedites care
coordination and
complements the acute
hospital’s oering.
The Bloemfontein day
case clinic became our 13
th
facility in Southern Africa for
same-day surgery. The clinic
has three fully equipped
theatres and its focus on
planned surgery facilitates
scheduling, oering clients
convenience while
simultaneously making
treatment more ecient and
cost-eective. Three months
later, Winelands day case
clinic followed.
Intercare Milnerton Medical and Dental Centre
January
From the beginning of
2021, patients could take
comfort that the Diabetes
Clinical Care Programme
at Welcare Hospital had
been accredited by Joint
Commission International
(‘JCI’) – a first for Dubai. The
programme brings together
a multidisciplinary team
comprising endocrinologists,
nutritionists and diabetes
educators. With 16.3% of
the UAE’s adult population
suering from diabetes,
quality holistic care is ever
more important.
February
In collaboration with
the canton of Thurgau, we
opened Switzerland’s first
vaccination centre on a
boat. Up to 170 people a
day could be assisted on
the MS Thurgau, moored
on Lake Constance.
Prof. Stephen Roche, a surgeon at our
Constantiaberg hospital in South Africa,
collaborated on an international mixed-reality
(‘MR’) surgery trial. Using HoloLens 2,
Microsoft’s MR headset, he participated in three
holographic surgeries: one performed in Cape
Town and two in Europe. Operated with hand
gestures and voice commands, the headset lets
surgeons view and manipulate 3D images while
consulting with colleagues elsewhere.
We opened the first of four renal clinics in
Southern Africa in Bloemfontein. Realised through
a merger with BGM Renal Care, this further
integrates our comprehensive healthcare oering
to clients.
MILESTONES
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 59
April
Together with the
canton of Zurich, we
opened the canton’s
biggest vaccination centre
at Messe Zürich – the city’s
convention centre. By
administering vaccines at
five-minute intervals, our
centre delivered up to
4 000 vaccinations a day.
Messe Zürich
May
The Mala Connected
Trophy was awarded to
our Middle East division
for work done on
implementing EHRs.
Following an
agreement with the Dubai
Health Authority (‘DHA’),
we began operating the
DHA’s Al Barsha Dialysis
Centre. Running the
60-bed centre – which
also oers preventive
renal services – aligns
with our drive to set the
gold standard in kidney
care in the UAE. JCI-
accredited City Hospital
in Dubai is home to a
pioneering transplant
programme.
Al Barsha
Dialysis Centre
August
We opened our flagship
cancer treatment facility
in Southern Africa at our
Constantiaberg hospital.
The ZAR45-million oncology
unit, operated in partnership
with Icon Oncology, oers
patients access to a range
of specialists and treatments
in a single venue. The
investment in technology
enables us to provide
full-service chemotherapy
and state-of-the-art
radiation therapy. This
coordinated approach
reduces wastage and brings
clients the best quality and
most eective care at the
most aordable price.
October
The UAE’s first
robotic kidney surgery
was performed at City
Hospital in Dubai. Using
the da Vinci Surgical
System, a joint team
from Mediclinic and the
Mohammed Bin Rashid
University of Medicine
and Health Sciences
removed a kidney from
a living donor.
In a first for the UAE,
the stroke programme
at our City Hospital
was recognised by
the American Heart
Association for its
advanced imaging
capabilities, availability of
specialised treatments
and qualified employees.
Following inspection
in September, the
hospital was awarded
Comprehensive Stroke
Centre accreditation on
29 October – World
Stroke Day.
November
With the 100%
acquisition of Bourn Hall
Fertility Centre in Dubai,
we further expanded our
oering across the
continuum of care. The
provision of IVF neatly
complements our maternity
and neonatal intensive care
services, and newly
launched precision
medicine. The opening of
a second fertility centre in
Abu Dhabi in 2022 will
capitalise on this.
December
The tumour centre
of Klinik St. Anna in
Lucerne successfully
met the stringent
criteria of
the German
Cancer Society in
a two-day audit by
independent experts.
The certification
guarantees high-quality
oncological care based
on an interdisciplinary
approach and the
latest scientific
findings.
INTERNATIONAL RECOGNITION FOR QUALITY
Seven of our hospitals ranked in the top 30
for Switzerland according to Newsweek’s list of the
World’s Best Hospitals for 2022. That equates to
nearly a quarter of the top hospitals in the country,
even though we represent only around 5% of Swiss
hospital beds. The same list ranked three of our
Middle East hospitals in the top 28 in the UAE.
The Newsweek ranking is a reflection of the 2021
calendar year and draws on surveys of medical
experts, patient experience feedback and KPIs such
as hygiene measures. In both countries, we had the
number-one-ranked private hospital.
CLINICAL SERVICES OVERVIEW CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT60
SUPPORTS STRATEGIC GOALS
1 2 3 4 5 6
SUPPORTS ESG GOAL
Be the partner of choice that stakeholders trust
OUR AMBITIONS FOR 2022
• Reduce the number of never events and adverse
obstetric outcomes
• Standardise obstetric and surgical care
• Implement an enhanced intensive care and
emergency centre strategy in Southern Africa
IN 2021
• Group clinical management system:
- implemented safety event reporting module at
all divisions
- implemented patient feedback module pilot
• Progress with establishment of KPIs
SUPPORTS STRATEGIC GOALS
1 2 3 4 5 6
SUPPORTS ESG GOAL
Be the partner of choice that stakeholders trust
OUR AMBITIONS FOR 2022
• Quantify and reduce variation in clinical care
outcomes
• Quantify and reduce cost of care complications
• Expand fast-track orthopaedics in Switzerland
• Pilot home care in Southern Africa
IN 2021
• Expanded alternative care settings and treatment
modalities, e.g. telemedicine and home care
• Expanded disciplines covered by indication boards
to include oncology, complex visceral and cardiac
surgery, and bariatric surgery
1
Become an integrated healthcare provider
across the continuum of care
4
Evolve as a data-driven organisation
5
Minimise our environmental impact
2
Improve our value proposition significantly
3
Transform our services and client engagement
through innovation and digitalisation
6
Grow in existing markets and expand
into new markets
LINK TO STRATEGIC GOALS
VALUE
COST
CLINICAL
OUTCOMES
CLIENT
EXPERIENCE
SUPPORTS STRATEGIC GOALS
1 2 3 4 5 6
SUPPORTS ESG GOAL
Be the partner of choice that stakeholders trust
OUR AMBITIONS FOR 2022
• Launch training initiative on key principles of great
client experiences
• Expand patient-reported outcome measures
• Establish patient advisory groups
• Measure client experience in integrated care
solutions and virtual care
IN 2021
• Expanded Press Ganey® survey to all care settings
• Implemented NPS® as an additional client loyalty
measure
See the client experience case study in the
Strategy overview on page 18
• Embedded standardised complaint taxonomy
THE VALUE
EQUATION
CLIENT EXPERIENCE
Partnering with clients to create true client centricity Aiming for zero preventable harm to clients Reducing the cost of us (clinical)
CLINICAL OUTCOMES COST
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 61
CLINICAL SERVICES OVERVIEW CONTINUED
FACILITIES
17
hospitals
7 secondary
care community
hospitals
7 tertiary
care city
hospitals
4
SWITZERLAND
Including:
day case
clinics
HEALTHCARE SERVICES
DIAGNOSTICS
ROUTINE ELECTIVE PROCEDURES
SPECIALISED TREATMENTS
EMERGENCY CARE
ADVANCED TECHNOLOGY
PRECISION MEDICINE
CLIENT APP
RESEARCH AND TRAINING
COVID-19 VACCINATION CENTRES
COVID-19 ONLINE
REPETITIVE TESTING
Inpatient 80%
Day cases 4%
Outpatient 16%
Care settings
WORLD-CLASS CARE
• 6 certified breast cancer centres
• CCC at Klinik Hirslanden
• Prostate cancer centre at
Klinik Hirslanden
• Tumour centre at Klinik St. Anna
• Certified stroke centre at
Klinik Hirslanden
• 4 cardiac centres
• CAR-T therapy at Klinik Hirslanden
• 9 hospitals oer robotic surgery
• CyberKnife at Klinik Hirslanden
QUALITY ASSURANCE
• ISO 9001:2015 certification for all
participating facilities
• ISO 13485 certification for reprocessing
of medical devices – 5 facilities
• German Cancer Society certification
– 2 cancer centres
• Joint Accreditation Committee
ISCT-Europe and EBMT (‘JACIE’)
accreditation – Klinik Hirslanden
• Swiss Cancer League certification
– 6 breast cancer centres
• Swiss Cancer League and Swiss Society
for Senology certification – Bern Biel
Cancer Centre
• Swiss Federation of Clinical Neuro-
Societies certification (2020–2023)
– Klinik Hirslanden Stroke Centre
Cardiology 12%
Laboratory 1%
General medicine 2%
General surgery 29%
Obstetrics and gynaecology 7%
Orthopaedics 19%
Paediatrics 1%
Internal medicine 16%
Oncology 1%
SPECIALTY SPLIT
Radiology 12%
34%34%
EMERGENCY
2
NON-SURGICAL ELECTIVE
32%
Notes
1
Based on revenue.
2
Reflecting inpatient and day case admissions only.
In Switzerland, major trauma, neonatal intensive care
and advanced critical care handled by cantonal and
university teaching facilities.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT62
Canton of Aargau
1
Hirslanden Klinik Aarau
1
Canton of Bern
4
Klinik Beau-Site
5
Klinik Linde
1
6
Klinik Permanence
7
Salem-Spital
1
Canton of Geneva
8
Clinique des Grangettes
1
9
Clinique La Colline
Canton of Basel-Land
3
Klinik Birshof
Hospitals
Canton of Appenzell
Ausserrhoden
2
Klinik Am Rosenberg
Canton of Vaud
13
Clinique Bois-Cerf
14
Clinique Cecil
1
Canton of Zurich
16
Klinik Hirslanden
1
17
Klinik Im Park
1
Canton of Lucerne
10
Klinik St. Anna
1
11
St. Anna in Meggen
Canton of St. Gallen
12
Klinik Stephanshorn
1
Canton of Zug
15
AndreasKlinik Cham Zug
1
Day case clinics
Canton of Lucerne
1
St. Anna im Bahnhof
Canton of Zurich
2
Operationszentrum Bellaria
3
OPERA Zumikon
Canton of St. Gallen
4
OPERA St. Gallen
AUSTRIA
FRANCE
GERMANY
1
4
6
7
5
15
9 8
2
14
13
11
3
12
17
2
10
3
Geneva
Bern
Zurich
SWITZERLAND
1
16
ITALY
4
Lucerne
SWITZERLAND
Note
1
Hospital with obstetrics department.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 63
CLINICAL SERVICES OVERVIEW CONTINUED
FACILITIES
1
SOUTHERN AFRICA
HEALTHCARE SERVICES
ROUTINE ELECTIVE PROCEDURES
SPECIALISED TREATMENTS
EMERGENCY CARE
TRANSPLANT MEDICINE
ADVANCED TECHNOLOGY
CLIENT APP
RESEARCH AND TRAINING
50
14
42
5
subacute
hospitals
hospitals
2
mental
health
facilities
day case
clinics
emergency
transport bases
and 19 industrial
site bases in
South Africa
QUALITY ASSURANCE
37 hospitals participate in COHSASA
5
accreditation programme
6
WORLD-CLASS CARE
• Solid Organ Transplant Centre at Wits
Donald Gordon Medical Centre in
partnership with Wits University
• Haematology and Bone Marrow
Transplant Centre at our
Constantiaberg hospital
• 45 emergency centres
• Arthroplasty network
• 9 cardiac centres
• 2 electrophysiology centres
• Robotic surgery at our
Durbanville hospital
• 36 neonatal ICUs for high-risk infants,
34 of which form part of VON
4
Notes
Includes Intercare facilities.
Based on revenue.
Reflecting inpatient and day case admissions only.
The two ICUs not on VON have only one bed each.
Council for Health Service Accreditation of Southern Africa (‘COHSASA’).
The accreditation programme was paused during COVID-19 with COHSASA granting an extended grace period
for reaccreditation. Reaccreditation has now restarted. Accreditation is limited to the largest hospitals caring
for the more complex cases. These hospitals undergo regular reaccreditation surveys on a rotational basis,
the findings of which are shared with the hospitals and the Southern Africa Corporate Oce. Learning
points emerging from findings inform focus areas for improvement initiatives, which also benefit smaller
non-participating hospitals. In addition, the smaller facilities adhere to all the required regulatory requirements
and industry standards.
Inpatient 90%
Day cases 7%
Outpatient 3%
Care settings
25%
EMERGENCY
3
NON-SURGICAL ELECTIVE
32%
Cardiology 7%
Nursing and allied health
professionals 1%
General medicine 7%
General surgery 20%
Obstetrics and gynaecology 9%
Orthopaedics 15%
Paediatrics 8%
Internal medicine 32%
Oncology 1%
SPECIALTY SPLIT
43%
64 MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT
Cape
Town
4
1
34
36
40
43
42
44
45
48
37
7
6
49
11
47
35
12
1
2
26
22
31
28
NAMIBIA
SOUTH AFRICA
29
17
23
24
20 8
16 10
25 9
Windhoek
Bloemfontein
Cape Town
Pretoria
Johannesburg
Johannesburg
41
18
27
Pretoria
50
1 2
2
4
6
7
8
9
10
11
12
13
3
5
14
15
32
33
38
3
5 14
3
4
5
1
2
46
39
19
21
13
30
Hospitals
Free State
1
Mediclinic Bloemfontein
2
Mediclinic Hoogland
3
Mediclinic Welkom
Gauteng
4
Intercare Medfem Hospital
5
Mediclinic Emfuleni
6
Mediclinic Heart Hospital
7
Mediclinic Kloof
8
Mediclinic Legae
9
Mediclinic Medforum
10
Mediclinic Midstream
11
Mediclinic Morningside
12
Mediclinic Muelmed
13
Mediclinic Sandton
14
Mediclinic Vereeniging
15
Wits Donald Gordon
MedicalCentre
1
KwaZulu-Natal
16
Mediclinic Newcastle
17
Mediclinic Pietermaritzburg
18
Mediclinic Victoria
Limpopo
19
Mediclinic Lephalale
20
Mediclinic Limpopo
21
Mediclinic Thabazimbi
22
Mediclinic Tzaneen
Mpumalanga
23
Mediclinic Ermelo
24
Mediclinic Highveld
25
Mediclinic Nelspruit
Subacute hospitals
1
Intercare Hazeldean Subacute
and Rehabilitation Hospital
2
Intercare Irene Subacute and
Rehabilitation Hospital
3
Intercare Sandton Subacute
and Rehabilitation Hospital
4
Intercare Tyger Valley
Subacute Hospital
5
Welkom Medical Centre
Subacute Hospital
Mental health facilities
1
Denmar Specialist
PsychiatricHospital
2
Mediclinic Neuro Clinic
Day case clinics
1
Intercare CenturyCity
Day Hospital
2
Intercare Hazeldean Day
Hospital
3
Intercare Irene Day Hospital
4
Intercare Sandton Day Hospital
5
Mediclinic Bloemfontein
DayClinic
6
Mediclinic Cape Gate DayClinic
7
Mediclinic Durbanville DayClinic
8
Mediclinic Limpopo Day Clinic
9
Mediclinic Nelspruit Day Clinic
10
Mediclinic Newcastle
DayClinic
11
Mediclinic Stellenbosch
DayClinic
12
Mediclinic Vergelegen
DayClinic
13
Mediclinic Winelands
DayClinic
14
Welkom Medical Centre
Day Clinic
Namibia
26
Mediclinic Otjiwarongo
27
Mediclinic Swakopmund
28
Mediclinic Windhoek
Northern Cape
29
Mediclinic Gariep
30
Mediclinic Kimberley
31
Mediclinic Upington
North West
32
Mediclinic Brits
33
Mediclinic Potchefstroom
Western Cape
34
Mediclinic Cape Gate
35
Mediclinic Cape Town
36
Mediclinic Constantiaberg
37
Mediclinic Durbanville
38
Mediclinic Geneva
39
Mediclinic George
40
Mediclinic Hermanus
41
Mediclinic Klein Karoo
42
Mediclinic Louis Leipoldt
43
Mediclinic Milnerton
44
Mediclinic Paarl
45
Mediclinic Panorama
46
Mediclinic Plettenberg Bay
47
Mediclinic Stellenbosch
48
Mediclinic Vergelegen
49
Mediclinic Winelands
Orthopaedic Hospital
50
Mediclinic Worcester
Note
1
Associated company being equity accounted (Mediclinic Southern Africa holds 49.9%).
SOUTHERN AFRICA
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 65
CLINICAL SERVICES OVERVIEW CONTINUED
FACILITIES
THE MIDDLE EAST
HEALTHCARE SERVICES
OUTPATIENT CARE
REMOTE CARE
TELEMEDICINE
CLIENT APP
DIAGNOSTICS
PRECISION MEDICINE
ROUTINE ELECTIVE PROCEDURES
SPECIALISED TREATMENTS
EMERGENCY CARE
ADVANCED TECHNOLOGY
RESEARCH AND TRAINING
7
2
22
hospitals
day case
clinics
outpatient
clinics
QUALITY ASSURANCE
• CAP
4
accreditation – City Hospital
laboratory
• EASO
5
’s Collaborating Centres for
Obesity Management accreditation
– specialised unit at 3 hospitals
• ISO 15189:2009 certification for
9 laboratories
• JCI accreditation for all facilities,
except Springs, dialysis centres
and fertility centres
• JCI Clinical Care Programme
certification – diabetes clinical
programme at Welcare Hospital,
acute coronary syndrome programme
at City Hospital and Airport Road
Hospital, and breast cancer programme
at City Hospital
• Surgical Review Corporation CoE
accreditation – specialised bariatric unit
at Airport Road Hospital
WORLD-CLASS CARE
• CCC in the North Wing adjacent
to City Hospital
• 7 cardiology units
3
• 2 cardiac centres
• Robotic surgery at City Hospital
• Stroke centre at City Hospital
• 7 neonatal ICUs for high-risk infants,
all of which form part of VON
Inpatient 25%
Day cases 12%
Outpatient 63%
Care settings
20%
EMERGENCY
2
NON-SURGICAL ELECTIVE
30%50%
Cardiology 5%
Laboratory 13%
General medicine 12%
General surgery 7%
Obstetrics and gynaecology 7%
Orthopaedics 5%
Paediatrics 7%
Internal medicine 28%
Oncology 6%
SPECIALTY SPLIT
Nursing and allied
health professions 3%
Radiology 7%
Notes
Based on revenue.
Reflecting inpatient and day case admissions only.
3
Al Jowhara Hospital does not have a catheterisation
laboratory and does not oer interventional
cardiology.
College of American Pathologists (‘CAP’).
European Association for the Study of Obesity
(‘EASO’).
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT66
1
Mediclinic Airport Road
Hospital
2
Mediclinic Al Ain Hospital
3
Mediclinic Al Jowhara
Hospital
4
Mediclinic Al Noor Hospital
5
Mediclinic City Hospital
6
Mediclinic Parkview Hospital
7
Mediclinic Welcare Hospital
1
Bourn Hall Al Ain
2
Bourn Hall Dubai
3
ENEC
4
Mediclinic Al Bawadi
5
Mediclinic Al Madar
6
Mediclinic Al Mamora
7
Mediclinic Al Qusais
8
Mediclinic Al Sufouh
9
Mediclinic Al Yahar
10
Mediclinic Arabian
Ranches
11
Mediclinic Baniyas
12
Mediclinic Ibn Battuta
13
Mediclinic Khalifa City
14
Mediclinic Madinat Zayed
15
Mediclinic Meadows
16
Mediclinic Me‘aisem
17
Mediclinic Mirdif
18
Mediclinic Mussafah
19
Mediclinic Springs
20
Mediclinic Zakher
Hospitals Outpatient clinics
Day case clinics
1
Mediclinic Deira
2
Mediclinic Dubai Mall
SAUDI ARABIA
ARABIAN GULF
1
2
3
4
5
6
4
9
11
13
14
18
20
Dubai
Al Ain
Abu Dhabi
UNITED ARAB
EMIRATES
3
Dubai
5
7
6
7
8
12
15
16
17
19
1
2
10
Public-private partnerships
1
Al Barsha Dialysis Centre
2
Al Tawar Dialysis Centre
1
THE MIDDLE EAST
1
2
2
STRATEGIC REPORT
GOVERNANCE AND
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 67
The wellbeing of clients and building long-term relationships
with them form the cornerstone of the business and the Group’s
ability to pursue its purpose.
BETTER WAYS
TO CONNECT
PATIENT EXPERIENCE
What do we survey?
Admissions process
Condition of room
Nurses
Physicians
Tests and treatments
Visitor experience
Meals
Personal issues
(i.e. privacy, safety, hygiene,
respect)
Discharge process
Overall experience
Client experience refers to a wide spectrum of interactions our clients have with us.
Patient experience is a subsection of client experience and relates to the experience
of a patient in most settings across the continuum of care.
Notes
New metric introduced in 2021. As such, no prior-year comparable data available.
2
The 2020 results are for a nine-month period; surveying started on 1 April 2020.
NPS®
In 2021, we introduced NPS®, a client experience metric that measures loyalty, and will
expand this to all client interactions across the continuum of care.
See the client experience case study in the Strategy overview on page 18
2021 IN GROUP NUMBERS
85
56
79
35
91
2020:
84
2020:
80
2020:
91
Overall mean score
(out of 100)
PRESS GANEY®
INPATIENT SURVEY
PRESS GANEY®
EMERGENCY
CENTRE SURVEY
2
PRESS GANEY®
AMBULATORY
SURGERY SURVEY
NPS® INPATIENT NPS® EMERGENCY
CENTRE
Press Ganey®
We benchmark and publicly report on patient experience at a divisional level
through Press Ganey®, an internationally recognised leading provider of patient
experience measurement for healthcare organisations. Patients are surveyed after
discharge, and this valuable feedback helps us better understand patients’ needs
and adapt care services accordingly.
CLINICAL SERVICES OVERVIEW CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT68
CLINICAL
PERFORMANCE
BETTER WAYS
TO CARE
To ensure the best possible outcomes for patients, we use a simple,
yet powerful clinical performance framework built on a sound
clinical governance foundation.
See the Clinical Performance Committee Report on page 132 for more on clinical governance
CLINICAL INDICATORS
We measure more than 150 clinical
indicators monthly in line with a
standardised set of definitions and
classifications. Many of these outcome
indicators are self-reported while others
are derived from administrative data.
These indicators are monitored for trends
and used to identify opportunities for
improvement. The hospitals closely monitor
their results and compare themselves with
other hospitals in the same division. A
subset of these indicators is compared
against international benchmarks.
STATISTICAL SIGNIFICANCE
Statistical significance is determined
to identify areas of improvement that
create knowledge leveraging and sharing
opportunities to the benefit of all divisions.
By also identifying areas of concern, it
allows us to determine key focus areas for
future initiatives.
Where variation in the current year’s data
is found to be statistically significant
compared with prior reporting periods,
the applicable data in the graph is marked
with an orange dot and an explanation is
provided, if available. In these instances it is
unlikely that the changes in the numbers are
due to chance.
See the 2022 Clinical Services Report at
annualreport.mediclinic.com for more on
statistical significance and how it is calculated
PATIENT SAFETY
Achieving patient safety requires a
collective commitment to building a
patient safety culture. This means each
employee focuses on reporting and
learning from patient safety events. An
open culture where teams are comfortable
discussing patient safety events and
concerns is fostered through the
inclusive completion of systems analysis
of serious reportable events in hospitals.
Fundamental to this is the ‘just culture’
(Frankl framework), wherein employees
involved in adverse events are treated
fairly. The result is an informed culture:
teams learn from patient safety events to
mitigate future incidents. Moreover, they
also learn from one another when things
go right by sharing best practices.
Note
1
The never event rate is reported to the third decimal
to negate the obscuring eect of rounding.
FIGURE 1: NEVER EVENTS
1
2020
2021
2019
The Middle East
0.012 (20)
0.011 (20)
0.014 (27)
2020
2021
2019
Southern Africa
0.017 (3)
0.035 (6)
2020
2021
2019
Switzerland
0.006 (3)
0.002 (1)
0.002 (1)
0.007 (1)
NEVER EVENTS
We adhere to the World Health
Organization surgical safety checklist to
ensure standard practices are followed,
increase teamwork and communication
during surgery, decrease the risk of errors
and prevent adverse events.
The implementation of the surgical safety
checklist remains a key focus area. We
report on only a subset of surgical and
procedural never events at present, focusing
on the correct identification of patients,
procedures and sites, and the prevention
of retained foreign objects.
STRATEGIC REPORT
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2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 69
ADVERSE EVENTS
An important aspect of improving quality
and safety in patient care is preventing
adverse events that could harm patients,
including hospital-associated pressure
ulcers, falls and medication errors.
2.03
1.92
2.26
Falls
1.51
1.17
Medication errors
0.78
0.52
Hospital-associated pressure ulcers
FIGURE 2: ADVERSE EVENTS
Rate per 1 000 patient days
0.14
SWITZERLAND
Statistically significant
1.26
The 73.86% decrease in the hospital-
associated pressure ulcer rate from 0.52
in 2020 to 0.14 in 2021 is statistically
significant. The change in patient
demographics due to COVID-19 and
improvement projects contributed to the
reduction in the rate.
The division commenced reporting on
medication errors in 2018. The 16.56%
decrease in the medication error rate from
1.51 in 2020 to 1.26 in 2021 is statistically
significant and was influenced by improved
reporting through the electronic safety
reporting system and a focus on improving
medication safety.
SOUTHERN AFRICA
FIGURE 3: ADVERSE EVENTS
Rate per 1 000 patient days
1.13
1.08
1.12
Falls
0.71
0.98
0.74
Medication errors
0.23
0.30
0.41
Hospital-associated pressure ulcers
Additional mechanisms involving
pharmacists for reporting near-miss
medication events related to prescription
and dispensing have been implemented.
This reporting is supplementary to the
safety event management system,
quantitative, and dependent on time
availability of pharmacists. The data
collection to date has been used to guide
hospitals to identify specific areas for
quality improvement and prevention of
medication errors, and to provide a
measurement tool to track progress.
THE MIDDLE EAST
FIGURE 4: ADVERSE EVENTS
Rate per 1 000 patient days
Falls
9.21
2.94
8.87
Medication errors
Hospital-associated pressure ulcers
0.29
0.61
Statistically significant
0.23
0.47
0.52
0.42
The increase in the hospital-associated
pressure ulcer rate by 110.34% from 0.29
in 2020 to 0.61 in 2021 is statistically
significant and was mainly due to COVID-19.
All patients are risk-assessed for pressure
injuries, and appropriate preventive
measures are implemented.
CLINICAL SERVICES OVERVIEW CONTINUED
2020
2020
2020
2021
2021
2021
2019
2019
2019
2020
2021
2019
2020
2021
2019
2020
2021
2019
2020
2021
2019
2020
2021
2019
2020
2021
2019
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT70
CLINICAL ETHICS SUMMARY
ISSUE MEDICLINIC’S RESPONSE
Advanced care planning,
end-of-life and terminal care
Clinical governance structures to report, audit and
address in line with local regulations and legislation
Assisted reproductive
technology and IVF
• Centres governed by local regulatory and legal
framework
• Compliance monitored by licensing authorities
Competence and scope
of practice
Clinical governance structures to monitor and address
concerns
Doctor cover, availability
and response
• On-call rosters at emergency centres
• Reporting system for non-compliant independent
doctors, human resources process for employed
doctors
Doctor qualifications and
performance, and illegal
practice
• Formal process verifies registration, qualifications
and credentials
• Feedback from peers solicited
• Established prevention policies and investigations of,
among others, deteriorating clinical quality indicators
and complaints
Drug trials and medical
research
• Aligned with the Declaration of Helsinki and local
legislation
• Approval by independent, accredited ethics committee
and recorded on a registry
• No unocial drug testing allowed
• Clinical research approval committee and policies
Employee and patient
protection
• Occupational health specialists at each hospital
• Healthcare employees screened for pulmonary
tuberculosis, and screened and vaccinated against
Hepatitis B if necessary
• HIV/Aids diagnosis and support oered to aected
employees in accordance with local regulations
• In case of Methicillin-resistant Staphylococcus aureus,
healthcare employees screened and decolonised if
necessary
• Annual flu vaccine, other vaccines when indicated
• In Switzerland, radiation exposure monitored centrally
ISSUE MEDICLINIC’S RESPONSE
Ethical behaviour and billing,
and falsification of diagnosis
and documentation
• Regular documentation and clinical coding audits at
hospital level
• Human resources policies for misconduct and criminal
behaviour
• Ethics lines for reporting
Euthanasia
Neither practised nor condoned
Forced female circumcision
Informed consent required for any medical or surgical
intervention
Genetics
• Testing and counselling according to local regulations
and legislation
• Data privacy principles and rules apply to results
Inappropriate care
Managed by indication boards in Switzerland, cost per
event in Southern Africa and the Middle East
Organ trade
Organ donation and receipt process carefully
documented and in line with applicable legislation
Pharmacy
Policies, procedures and audits to comply with
legislation, ethical and operational requirements
Remuneration, kickbacks
Perverse incentives prohibited
Reporting and disclosure of
safety events
• Formal safety event reporting system at hospital level
• Recorded events discussed at clinical hospital
committees
Technology (including
robotics)
• Equipment must be CE-certified and approved by the
local regulator and/or certified by the Food and Drug
Administration of the United States of America
• Used for approved indication as dictated by guidelines
• Clinical safety proven before new technology
implemented
Termination of pregnancy
• Strict control measures to ensure legal compliance
• Freedom of choice for employees regarding
participation
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 71
GROUP CHIEF FINANCIAL
OFFICER’S REPORT
DRIVING VALUE
THROUGH STRATEGY
EXECUTION
Page 80 in the ‘Financial review’ section sets out the Group’s use of adjusted non-IFRS
financial measures. Other non-IFRS measures, which include constant currency, cash
conversion, ROIC, net incurred debt and leverage ratio, are further discussed, with
reconciliations from the most comparable IFRS measure provided, on pages 81–88.
GROUP FINANCIAL SUMMARY
Stellenbosch, South Africa
Q&A
WHAT ARE THE GROUP’S KEY
PRIORITIES FOR CAPITAL
ALLOCATION AS YOU LOOK AHEAD?
For us, capital allocation is about
generating operating cash flows and
then allocating these in a way that
drives value and improved returns.
We not only focus on maintaining and
growing current facilities, but also
pursue opportunities in businesses
across the continuum of care, in
innovation and digitalisation, and
through bolt-on investments.
Jurgens Myburgh
Group Chief Financial Ocer
FY22
£’m
FY21
£’m
Variance
FY22 vs
FY21
1
FY20
£’m
Variance
FY22 vs
FY20
1
Reported results
Revenue 3 233 2 995 8% 3 083 5%
Operating profit 280 209 34% (184) 253%
Earnings
3
151 68 122% (320) 147%
EPS (pence) 20.5 9.2 122% (43.4) 147%
Total dividend per share (pence) 3.00 – 100% 3.20 (6)%
Adjusted results
4
Adjusted EBITDA 522 426 22% 541 (3)%
Adjusted operating profit 311 221 41% 327 (5)%
Adjusted earnings 167 101 65% 177 (6)%
Adjusted EPS (pence) 22.6 13.7 65% 24.0 (6)%
Net incurred debt 1 269 1 483 (14)% 1 622 (22)%
Cash conversion 127% 77% 109%
Notes
The percentage variances are calculated in
unrounded sterling values and not in millions.
2
2020 Full-year Results Announcement was
published on 2 June 2020.
3
Reported earnings refers to profit for the year
attributable to equity holders.
4
The Group uses adjusted income statement
reporting as non-IFRS measures in evaluating
performance and to provide consistent and
comparable reporting.
See the policy and ‘Reconciliations’ section
on pages 80–86
5
Net incurred debt reflects bank borrowings
and excludes IFRS 16 lease liabilities.
See calculation on page 85
Scan the QR code or visit
annualreport.mediclinic.com
to view the video interview
72
ADJUSTED RESULTS
The Group delivered a strong financial
performance compared with FY21, driven
by increased client activity. Compared
with pre-pandemic levels, the volumes in
Switzerland and the Middle East increased,
while Southern Africa gradually recovered
after a more severe impact from the
pandemic. The improvement in FY22 was
despite the disruption of further COVID-19
waves – with the Omicron wave proving
particularly challenging from a stang and
patient scheduling perspective due to its high
transmissibility and regulated self-isolation.
Group revenue was up 8% at £3 233m
(FY21: £2 995m) and up 10% in
constant
currency terms. Compared with
pre-pandemic FY20, Group revenue was up
5% (FY20: £3 083m) and up 9% in constant
currency terms. Revenue increased in all
three divisions compared with both the
prior year and the pre-pandemic FY20 year.
Adjusted EBITDA was up 22% at £522m
(FY21: £426m) and up 24% in constant
currency terms. Across the Group,
incremental COVID-19-related expenses
totalled around £27m (FY21: £32m),
reflecting the ongoing treatment of
COVID-19 inpatients during various
pandemic waves. The Group’s adjusted
EBITDA margin increased materially
to 16.1% (FY21: 14.2%), driven by the
revenue performance.
Compared with the pre-pandemic FY20
period, adjusted EBITDA was down 3%
(up 1% in constant currency terms). The
adjusted EBITDA margin is approaching
pre-pandemic levels (FY20: 17.5%) while
still reflecting increases in employee costs
and in consumable and supply costs driven
by COVID-19-related expenses and input
costs associated with higher acuity revenue,
the impact of which is expected to reduce
over time.
Adjusted depreciation and amortisation
were up 1% to £209m (FY21: £207m) and
down 3% compared with the pre-pandemic
period (FY20: £217m), reflecting prudent
delays in capital expenditure and translation
dierences more than osetting the IFRS 16
impact of the commissioning of Airport
Road Hospital in Abu Dhabi.
Adjusted operating profit was up 41%
at £311m (FY21: £221m; FY20: £327m),
resulting in an improved ROIC of 4.0%
compared with 3.0% in FY21. In constant
currency terms, adjusted operating profit
was up 41% and flat compared with FY21
and FY20, respectively.
Adjusted net finance cost was down 8%
at £67m (FY21: £72m; FY20: £78m),
mainly due to the eect of lower net
borrowings more than osetting the IFRS 16
impact of the Airport Road Hospital
commissioning.
GROUP RESULTS
• Group revenue increased by 8%
compared with FY21 (up 10% in
constant currency), driven by
growth in client activity; revenue
up 5% on pre-pandemic levels
(up 9% in constant currency)
• Group adjusted EBITDA
increased by 22% compared
with FY21 (up 24% in constant
currency), driven by revenue
growth, and adjusted EBITDA
margin improved to 16.1%
(FY21: 14.2%); adjusted EBITDA up
1% in constant currency compared
with pre-pandemic FY20
• Adjusted operating profit of
£311m; up 41% on FY21 and down
5% on pre-pandemic FY20; in
constant currency terms up 41%
and flat compared with FY21
and FY20, respectively
• Operating profit up 34% to
£280m (FY21: £209m)
• Adjusted earnings and adjusted
EPS increased by 65% compared
with prior year; local currency
adjusted earnings ahead of
pre-pandemic levels in all three
divisions
• Reported earnings up 122%
to £151m (FY21: £68m) and
reported EPS up 122% to
20.5 pence (FY21: 9.2 pence)
• Operating performance and
cash conversion of 127%
(FY21: 77%) delivered increase
in cash and cash equivalents
to £534m (FY21: £294m)
• Recovery in profitability
and reduction in net incurred
debt reduced leverage ratio
(including lease liabilities) to
3.9x (FY21: 5.1x)
• Proposed final dividend of
3.00 pence per share in line
with dividend policy payout ratio
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 73
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
The adjusted tax charge was £45m
(FY21: £27m; FY20: £56m) and the adjusted
eective tax rate for the period was 19.5%
(FY21: 19.3%; FY20: 22.3%).
Adjusted non-controlling interests were
up 72% to £19m (FY21: £11m; FY20: £18m),
reflecting higher contributions from
Southern Africa hospitals with outside
shareholdings. Adjusted net loss from
equity-accounted investments increased
from £10m in FY21 to £13m in FY22,
reflecting the net loss reported by Spire for
the 12 months ended 31 December 2021.
Both adjusted earnings and adjusted EPS
were up 65% at £167m (FY21: £101m), and
22.6 pence (FY21: 13.7 pence; FY20: 24.0
pence), respectively. All three divisions’
earnings in local currency were ahead of
pre-pandemic levels with only translation
dierences resulting in Group adjusted
earnings being down 6% compared with
pre-pandemic levels (FY20: £177m).
The Group delivered cash conversion of
127% (FY21: 77%), with all three divisions
above the Group target of 90–100%,
through catch-up of the slower recovery in
the prior year.
Ongoing investment across the Group
to enhance the existing facilities and
deliver future growth resulted in capital
expenditure of £178m. As planned, this was
up on the prior year (FY21: £126m), a period
when capital expenditure was reduced in
light of the initial uncertainty posed by the
pandemic. FY22 spend was lower than
planned due to the timing of projects
with FY23 expected to reflect a catch-up,
forecast to total around £251m in constant
currency terms.
Given the recovery in profitability and
cash conversion, the Group’s leverage
ratio (including lease liabilities)
significantly reduced during the year
to 3.9x (FY21: 5.1x). While the Swiss and
Middle East divisions continued to pay
down debt by around £91m, translation
dierences at year end resulted in
reported incurred bank debt remaining
broadly flat at £1 803m (FY21: £1 777m).
Strong cash generation supported a
reduction in net incurred debt by £214m
to £1 269m (FY21: £1 483m).
At the end of FY20, the Board took the
prudent and appropriate decision to
suspend the dividend, as part of the Group’s
response to maintaining its liquidity position
through the pandemic and maximising its
support in combatting COVID-19. The Board
believes the Group is in a stronger financial
position and the outlook, though subject to
macroeconomic factors, is more certain
than at any time in the past two years.
Therefore, the Board is proposing to
reinstate the dividend in line with the
dividend policy targeting a payout ratio
of 25–35% of adjusted earnings, and has
proposed a final dividend per share of
3.00 pence (FY21: nil), representing
25% of 2H22 adjusted EPS.
In arriving at FY22 adjusted operating
profit, reported operating profit was
adjusted for the following items:
• past service cost of £9m relating to
Swiss pension benefit plan changes
and £2m relating to Middle East
end-of-service benefit obligation;
• insurance proceeds of £7m received for
the damage of buildings and equipment
at Klinik Hirslanden, Zurich;
• accelerated depreciation of £19m
relating to the dismantling of two
hospital wings as part of an expansion
project at Klinik St. Anna, Lucerne;
• impairment charges of £7m relating to
damaged buildings and equipment at
Klinik Hirslanden; and
• fair value adjustment of £1m on the
deemed disposal of the equity-
accounted investment, Bourn Hall.
Prior period FY21 operating profit was
adjusted for the following items:
• accelerated depreciation of £10m relating
to the dismantling of two hospital wings
as part of an expansion project at Klinik
St. Anna;
• impairment charges of £4m relating to
Southern Africa; and
• insurance proceeds of £2m received for
the loss of equipment in Southern Africa.
Operating profit in FY20 was adjusted for
the following items:
• recognition of an impairment charge of
£481m to Middle East goodwill;
• recognition of an impairment charge of
£33m to fixed assets in Switzerland;
• impairment reversal of £4m relating to
properties in Switzerland;
• impairment charges of £2m relating to
Southern Africa; and
• fair value adjustments on derivative
contracts of £1m.
Reported revenue was up 8%
to £3 233m (FY21: £2 995m),
driven by the recovery in
client activity and reduced
restrictions on elective and
non-urgent care.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT74
FY22 reported earnings were further
adjusted for the following items:
• Mediclinic’s share of the equity-accounted
gain on sale and leaseback from Spire
of £7m;
• Mediclinic’s share of the equity-accounted
tax credit in respect of Spire’s sale and
leaseback of £5m;
• increase in the redemption liability related
to Clinique des Grangettes, Geneva, due
to remeasurement of £1m; and
• related tax impact on adjusting items of
£4m.
FY21 reported earnings were further
adjusted for the following items:
• Mediclinic’s share of the equity-accounted
impairment loss from Spire of £60m;
• reversal of previously recorded
impairment losses against the carrying
value of the equity investment in Spire
of £60m;
• increase in the redemption liability related
to Clinique des Grangettes due to
remeasurement of £23m; and
• related tax impact on adjusting items
of £2m.
FY20 reported earnings were further
adjusted for the following items:
• increase in the redemption liability related
to Clinique des Grangettes due to
remeasurement of £5m;
• recognition of an impairment charge on
the equity investment in Spire of £10m;
• the reduction of Swiss property deferred
tax liabilities of £29m resulting from
corporate tax reforms in Switzerland; and
• related tax impact on adjusting items of
£3m.
REPORTED RESULTS
Reported revenue was up 8% to £3 233m
(FY21: £2 995m), driven by the recovery in
client activity and reduced restrictions on
elective and non-urgent care.
Depreciation and amortisation increased
by 5% to £228m (FY21: £217m) and
includes accelerated depreciation of £19m
(FY21: £10m) relating to the expansion
project at Klinik St. Anna. Operating profit
was up by 34% to £280m (FY21: £209m).
Net finance cost decreased by 29% to £68m
(FY21: £95m) with the prior year reflecting
the remeasurement of the redemption
liability related to Clinique des Grangettes
of £23m.
The Group’s eective tax rate for the
period was 19.5% (FY21: 24.4%). The higher
eective tax rate in the prior year was due
to the remeasurement of the redemption
liability, which is not deductible for tax
purposes and had a tax eect of £4m.
Earnings and EPS were both up 122% at
£151m (FY21: £68m) and at 20.5 pence
(FY21: 9.2 pence), respectively.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
75
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
DIVISIONAL RESULTS
FY22 FY21 FY20
Variance
FY22 vs FY21
Variance
FY22 vs FY20 FY22 FY21 FY20
Variance
FY22 vs FY21
Variance
FY22 vs FY20
Revenue £3 233 £2 995 £3 083 8% 5%
Switzerland £1 503 £1 478 £1 438 2% 5% 1 885 1 784 1 804 6% 4%
Southern Africa £909 £734 £907 24% 0% 18 416 15 573 17 031 18% 8%
Middle East £820 £781 £737 5% 11% 4 111 3 760 3 445 9% 19%
Corporate £1 £2 £1 (50)% – n/a n/a n/a
Adjusted EBITDA £522 £426 £541 22% (3)%
Switzerland £236 £225 £245 5% (4)% 297 272 306 9% (3)%
Southern Africa £170 £106 £188 60% (10)% 3 430 2 209 3 536 55% (3)%
Middle East £123 £102 £110 21% 12% 614 492 521 25% 18%
Corporate £(7) £(7) £(2) – 250% n/a n/a n/a
Adjusted EBITDA margin
2
Group 16.1% 14.2% 17.5%
Switzerland
3
15.6% 15.1% 17.0%
Southern Africa 18.6% 14.2% 20.8%
Middle East 14.9% 13.1% 15.1%
Adjusted operating profit £311 £221 £327 41% (5)%
Switzerland £121 £107 £119 13% 2% 151 128 149 18% 1%
Southern Africa £131 £71 £151 85% (13)% 2 656 1 477 2 838 80% (6)%
Middle East £68 £51 £57 33% 19% 338 248 273 36% 24%
Corporate £(9) £(8) – 13% 100% n/a n/a n/a
Adjusted operating profit margin
2
Group 9.6% 7.4% 10.6%
Switzerland 7.9% 7.1% 8.2%
Southern Africa 14.4% 9.5% 16.7%
Middle East 8.2% 6.6% 7.9%
The Group uses adjusted income statement reporting as non-IFRS measures in evaluating performance and to provide consistent and comparable reporting.
Notes
1
Divisional currency for Switzerland is shown in Swiss franc (CHF), Southern Africa in South African rand (ZAR) and Middle East in UAE dirham (AED).
2
Adjusted EBITDA and adjusted operating profit as a percentage of revenue.
3
The numerator used for calculating the adjusted EBITDA and adjusted operating profit margins of Switzerland includes government grants of £16m (CHF19m) (FY21: £10m [CHF13m]) disclosed as ‘Other income’.
See the policy and ‘Reconciliations’ section on pages 80–86
Group currency (millions) Divisional currency (millions)
1
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT76
SWITZERLAND
A robust performance in Switzerland
was underpinned by the recovery in client
activity, exceeding pre-pandemic levels.
As Switzerland adapted its response to the
pandemic, it enabled greater operational
flexibility to healthcare providers to deliver
care for non-COVID-19 patients while
continuing to provide significant support
to health authorities and caring for
COVID-19 patients.
Revenue for the period increased by 6%
to CHF1 885m (FY21: CHF1 784m;
FY20: CHF1 804m), exceeding pre-pandemic
revenue by 4%. This was due to a good
recovery in inpatient activity, up 2.1%
compared with FY21, and 2.0% compared
with the pre-pandemic period. The general
insurance mix remained broadly flat at
51.3% (FY21: 51.0%), with supplementary
insured volumes up 1.4% and general
insured volumes up 2.7% as the division
continued to support cantonal health
authorities during the pandemic. Inpatient
revenue per case increased by 1.1% due to
higher acuity. As a result, inpatient revenue
increased by 3%. Average length of stay
increased by 0.4%, which in combination
with the increase in inpatient activity
delivered an occupancy rate of 62.6%
(FY21: 61.1%).
Outpatient and day case revenue also
recovered well during the period, up 6%,
contributing some 20% (FY21: 20%) to total
revenue in the period.
The division engaged extensively with
Swiss cantonal authorities in planning for
and navigating the pandemic, and, as part
of this, provided hospital bed and sta
capacity. In recognition and reimbursement
of the support and capacity provided,
several Swiss cantonal authorities introduced
appropriate financial contributions for
hospitals to oset certain costs and
disruptions to operations. As a result, total
government grants of CHF19m (FY21:
CHF13m) were recognised as other income.
The increase in revenue supported a 9%
increase in adjusted EBITDA to CHF297m
(FY21: CHF272m), recovering towards
pre-pandemic levels (FY20: CHF306m).
The adjusted EBITDA margin increased to
15.6% (FY21: 15.1%; FY20: 17.0%) while the
division continued to absorb COVID-19-
related expenses of around CHF18m
(FY21: CHF10m) and the direct and indirect
impact on operational performance due to
the pandemic.
Adjusted depreciation and amortisation
increased by 2% to CHF146m (FY21: CHF143m;
FY20: CHF157m). Adjusted operating profit
increased by 18% to CHF151m (FY21: CHF128m;
FY20: CHF149m). Adjusted net finance
cost was flat at CHF58m (FY21: CHF58m;
FY20: CHF58m).
Adjusted earnings increased by 44% to
CHF67m (FY21: CHF47m), ahead of
pre-pandemic levels (FY20: CHF57m).
Despite COVID-19, the division significantly
improved its cash conversion to 126%
(FY21: 66%) through improvement of its
net working capital, enabling a CHF50m
voluntary payment of senior debt.
Total capex spent during FY22 was broadly
in line with expectations at CHF129m
(FY21: CHF81m), comprising maintenance
capex of CHF68m (FY21: CHF38m)
and expansion capex of CHF61m
(FY21: CHF43m).
The continued improvements in operating
cash flow expected in Switzerland will
enable the Group to proportionately
increase the division’s annual capital
investment while continuing to generate
appropriate free cash flow to equity holders
(including the annual CHF50m debt
repayment). FY23 total capex is forecast
at around CHF155m. Expansion capex of
around CHF60m includes investment in
the projects at Klinik St. Anna and Klinik
Aarau to strengthen the competitive
position and growth opportunities of these
key hospitals. Maintenance capex is forecast
at around CHF95m (including around
CHF4m for ESG projects that will enhance
our long-term sustainability), in line with the
medium-term maintenance capex spend,
which is expected to average around 4–5%
of revenue.
Klinik Aarau, Switzerland
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 77
SOUTHERN AFRICA
Despite the significant demands and
disruption caused by the pandemic,
the division delivered an exceptional
performance compared with the prior year.
The Group has continued to treat the
majority of its COVID-19 inpatients in its
Southern Africa division, with over 40 000
cared for in FY22 (FY21: around 35 000).
The division continued to adapt and
eectively navigate multiple pandemic
waves during the year, treating 18% more
non-COVID-19 admissions compared
with FY21.
The most severe and sustained wave to
date impacted the division during 1H22,
peaking in July 2021. In 2H22, the onset of
the Omicron wave resulted in a rapid spike
in COVID-19 admissions in December 2021.
However, this remained below peak
admissions compared with previous waves,
before starting to recede quickly in January
2022. The greater challenge during the
Omicron wave, as experienced in the other
divisions, was the impact on stang
self-isolation and patient scheduling due to
the variant’s increased transmissibility.
Revenue for the period increased by 18%
to ZAR18 416m (FY21: ZAR15 573m;
FY20: ZAR17 031m), reflecting the
recovery in client activity. Revenue was
ahead of pre-pandemic levels by 8%.
Compared with FY21, paid patient days
(‘PPDs’) increased by 14% and remained
marginally below pre-pandemic levels,
down 3%. COVID-19-related PPDs were
around 17% of total PPDs during the period,
compared with around 18% in FY21. The
lowest six-month level of COVID-19-related
PPDs since the pandemic began was
experienced in 2H22 at 7% of total PPDs, as
non-COVID-19 inpatient activity increased.
Occupancy improved with the growth in
PPDs to average 64.3% (FY21: 56.3%),
approaching pre-pandemic levels
(FY20: 67.9%). Encouragingly, February
and March 2022 had the strongest
occupancy levels experienced since the
start of the pandemic at 69%. Average
revenue per bed day was up 3.2%
compared with FY21 and up 11.7% on
pre-pandemic levels, continuing to reflect
the elevated acuity of treatments. The
average length of stay was down 2.5%
compared with FY21, reflecting the increase
in non-COVID-19 PPDs and their shorter
average length of stay compared with
COVID-19 inpatients.
Adjusted EBITDA increased by 55%
to ZAR3 430m (FY21: ZAR2 209m),
driven by the revenue performance,
and recovering towards pre-pandemic
levels (FY20: ZAR3 536m). The adjusted
EBITDA margin materially increased in
FY22 to 18.6% (FY21: 14.2%). The eects of
COVID-19-related costs of around ZAR207m
in FY22 (FY21: ZAR323m) and the change
in case mix continued to impact the margin
when compared with the pre-pandemic
period (FY20: 20.8%).
Depreciation and amortisation were broadly
flat at ZAR772m (FY21: ZAR763m; FY20:
ZAR698m), mainly due to the prudent delay
to investments in the prior period due to
the pandemic. Adjusted operating profit
increased by 80% to ZAR2 656m
(FY21: ZAR1 477m; FY20: ZAR2 838m). Net
finance cost decreased by 17% to ZAR465m
(FY21: ZAR561m; FY20: ZAR554m) due to
interest income on increased deposits and
lower base interest rates.
Adjusted earnings increased to ZAR1 359m
(FY21: ZAR519m), ahead of pre-pandemic
levels (FY20: ZAR1 335m).
The division converted 108% (FY21: 111%) of
adjusted EBITDA into cash generated from
operations.
Total capex spent during the period
increased to ZAR957m (FY21: ZAR702m),
comprising maintenance capex of
ZAR654m (FY21: ZAR302m) and expansion
capex of ZAR303m (FY21: ZAR400m).
Expansion projects during the year included
Brits, Hoogland and Midstream hospitals,
and Vergelegen and Winelands day
case clinics.
FY23 total capex is forecast at around
ZAR1 360m. Expansion capex is forecast
at around ZAR635m, including projects at
George, Legae, Vereeniging, Brits and
Medforum hospitals and Pietermaritzburg
day case clinic. In addition, further
investment in ICT infrastructure projects will
be made to support future growth initiatives
including initial investment in an EHR. FY23
maintenance capex is forecast at around
ZAR725m (including around ZAR60m for
ESG projects that will enhance our long-
term sustainability), broadly in line with the
medium-term maintenance capex spend,
which is expected to average around 3–4%
of revenue.
Vergelegen day case clinic, South Africa
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT78
THE MIDDLE EAST
In the Middle East, the Group delivered
a strong performance driven by
inpatient and outpatient volume growth.
Volumes reached new highs exceeding
the pre-pandemic period, underpinned by
investment over recent years to expand and
enhance facilities and services in the region.
Similar to August 2020, counter-seasonal
holiday trends due to global travel
restrictions resulted in elevated client
volumes compared with the pre-pandemic
1H20 period, a trend which is expected to
normalise in FY23.
Revenue for the period increased by
9% to AED4 111m (FY21: AED3 760m;
FY20: AED3 445m), which includes around
AED315m (FY21: AED485m) in COVID-19-
related and new revenue streams. Inpatient
admissions and day cases were up 17%
and outpatient cases up 16%. The volume
increase was partly oset by a decrease in
the average revenue per inpatient and day
case admission, and in outpatient cases by
10% and 2%, respectively, reflecting a move
towards pre-pandemic acuity levels and
revenue mix.
Despite ongoing COVID-19-related costs of
around AED10m (FY21: AED28m), adjusted
EBITDA increased 25% to AED614m
(FY21: AED492m; FY20: AED521m) due
to the revenue performance. As a result,
the adjusted EBITDA margin increased to
around pre-pandemic levels at 14.9%
(FY21: 13.1%; FY20: 15.1%).
Adjusted depreciation and amortisation
increased by 10% to AED272m
(FY21: AED248m; FY20: AED249m),
largely reflecting the phased commissioning
at Airport Road Hospital during the period,
with an additional increase to be reflected
in FY23. Adjusted operating profit increased
by 36% to AED338m (FY21: AED248m;
FY20: AED273m).
Net finance cost increased by 2% to
AED79m (FY21: AED78m; FY20: AED91m),
due to a reduction in gross debt and the
base rate, and revised lease agreement
rental savings, oset by the IFRS 16 interest
associated with the Airport Road Hospital
commissioning.
Adjusted earnings increased by 51% to
AED257m (FY21: AED170m; FY20: AED181m).
The division significantly improved its cash
conversion to 141% (FY21: 73%) through
catch-up of under-recovery in the prior year.
Total capex spent during the period
was lower than expected at AED141m
(FY21: AED124m), mostly related to timing
dierences for expansion projects with
the catch-up expected in FY23. FY22
investment comprised maintenance capex
of AED41m (FY21: AED36m) and expansion
capex of AED100m (FY21: AED88m), which
mostly related to investment at Airport
Road Hospital for the upgrade at the
existing wing following the opening of the
new facility and the EHR roll-out.
FY23 total capex is forecast at around
AED275m. Expansion capex is forecast at
AED190m, reflecting the catch-up from the
lower than expected FY22 investment.
Additional new projects are planned at
Parkview and Al Jowhara hospitals,
Me’aisem and Reem Mall clinics, and the
opening of Mediclinic Enhance. Expansion
capex is expected to materially reduce
in FY24. FY23 maintenance capex
is forecast at around AED85m (including
around AED8m for ESG projects that will
enhance our long-term sustainability), in line
with the medium-term maintenance capex
spend, which is expected to average around
2–3% of revenue.
Al Tawar Dialysis Centre, the Middle East
The division significantly
improved its cash conversion
to 141% (FY21: 73%) through
catch-up of under-recovery
in the prior year.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 79
Based on the most recent trends and expectations,
COVID-19-related cases are expected to recede further,
leading to an increase in more normalised client activity
and fewer direct COVID-19-related costs. The underlying
demand for Mediclinic’s broad range of services, its
trusted and leading market positions, expansion across
the continuum of care and new digital oerings are
together expected to deliver sustained growth in
revenue and profitability over the coming years. This –
combined with targeted cash conversion, disciplined
capital allocation, reduced leverage, improved returns
and a clearly defined approach to sustainable
development – is all expected to positively drive
shareholder value. The Group is subject to
macroeconomic factors, including inflationary and
supply chain dynamics, and is proactively managing
these through, among other levers, global procurement
mobilisation, as well as productivity and eciency gains.
FY23 GUIDANCE
The Group expects the positive momentum in revenue
growth, margin improvement and earnings of FY22 to
continue in FY23, driven by increased client activity
supported by expected underlying economic growth in all
three regions. Seasonal trends in patient activity levels,
most notably in Switzerland and the Middle East, are
expected to return, in the absence of any material new
waves of COVID-19. Improving profitability and strong cash
generation are expected to support continued deleveraging.
Switzerland expects to deliver modest FY23 revenue
growth and EBITDA margin improvement to around 16%.
Southern Africa expects to deliver FY23 revenue growth
in the mid-single digit percentage range and an EBITDA
margin improvement, approaching 20%.
The Middle East expects to deliver FY23 revenue growth
in the high-single digit percentage range and an EBITDA
margin improvement approaching the mid-15% range.
ADJUSTED NON-IFRS FINANCIAL MEASURES
Reported results represent the Group’s overall performance
and have been presented in accordance with IFRS.
Management also uses adjusted non-IFRS measures to
assess the financial and operational performance of the
Group. Adjusted results may be considered in addition
to, but not as a substitute for, or superior to, information
presented in accordance with IFRS. Such measures may
not be comparable to similar measures presented by
other companies.
Adjusted results provide investors and analysts with
complementary information to better understand the
financial performance and position of the Group from period
to period. Adjusted results are used by management for
budgeting and planning purposes, as well as by the
directors for evaluating management’s performance and
in setting management incentives.
The main alternative performance measures used by the
Group are explained and/or reconciled with our IFRS
measures as presented in the financial statements.
The Group’s policy is to adjust, among others, the following
types of significant income and charges from the reported
IFRS measures to present adjusted results:
• cost associated with major restructuring programmes;
• profit/loss on sale of assets and transaction costs incurred
on corporate transactions;
• gains or losses on the remeasurement of previously held
equity interests in acquirees in terms of IFRS 3;
• remeasurement of right-of-use assets and lease
liabilities as a result of lease modifications in terms of
IFRS 16 Leases;
• past service cost charges/credits in relation to retirement
benefit obligations;
• accelerated depreciation and amortisation charges;
• mark-to-market fair value gains/losses relating to
derivative financial instruments including ineective
interest rate swaps;
• remeasurement of redemption liabilities due to changes
in estimated underlying value;
• impairment charges and reversal of impairment charges;
• insurance proceeds for items of property, equipment
and vehicles impaired;
• prior-year tax adjustments and significant tax rate
changes; and
• tax and non-controlling interest impact of the
above items.
EBITDA is defined as operating profit before depreciation
and amortisation and impairments of non-financial assets,
excluding other gains and losses.
EBITDA and adjusted EBITDA are regarded as useful metrics
to analyse the performance of the business from period to
period. Measures like adjusted EBITDA are used by analysts
and investors in assessing performance. EBITDA eliminates
potential dierences in performance caused by variances in
capital structures and cost and age of capitalised assets
The Group has consistently applied this definition of
adjusted measures in reporting on its financial performance
in the past as the directors believe this additional
information is important to allow shareholders to better
understand the Group’s trading performance for the
reporting period. It is the Group’s intention to continue
to apply this definition consistently in the future.
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
OUTLOOK FINANCIAL REVIEW
Note
1
The policy has been expanded in the current year to include gains or losses on the remeasurement of previously held equity interests in acquirees in
terms of IFRS 3.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT80
FY22 results
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
Spire
£’m
Corporate
£’m
Operating profit/(loss) 280 93 131 65 – (9)
Add back:
- Other gains and losses 3 – – 2 – 1
- Depreciation and amortisation
228 134 39 54 – 1
-
Impairment of property, equipment and vehicles 7 7 – – – –
EBITDA 518 234 170 121 – (7)
- Past service cost 11 9 – 2 – –
- Insurance proceeds (7) (7) – – – –
Adjusted EBITDA 522 236 170 123 – (7)
Operating profit/(loss) 280 93 131 65 – (9)
- Past service cost 11 9 – 2 – –
- Insurance proceeds (7) (7) – – – –
- Impairment of properties, equipment and vehicles 7 7 – – – –
- Accelerated depreciation and amortisation 19 19 – – – –
- Fair value adjustments on remeasurement of investment in associate 1 – – 1 – –
Adjusted operating profit/(loss) 311 121 131 68 – (9)
Profit/(loss) for the year
1
170 54 79 48 (3) (8)
Non-controlling interests (19) (8) (11) – – –
- Past service cost 11 9 – 2 – –
- Insurance proceeds (7) (7) – – – –
- Impairment of properties, equipment and vehicles 7 7 – – – –
- Accelerated depreciation and amortisation 19 19 – – – –
- Fair value adjustments on remeasurement of investment in associate 1 – – 1 – –
- Remeasurement of redemption liability (written put option) 1 1 – – – –
- Equity-accounted portion of gain on sale and leaseback (7) – – – (7) –
- Equity-accounted portion of tax impact of sale and leaseback (5) – – – (5) –
- Tax on adjusting items (4) (4) – – – –
Adjusted earnings 167 71 68 51 (15) (8)
Weighted average number of shares (millions) 737.2
Adjusted EPS (pence) 22.6
RECONCILIATIONS
NON-IFRS FINANCIAL MEASURES
Note
1
Profit for the year in Switzerland is shown
after the elimination of intercompany loan
interest of £18m.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 81
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
FY21 results
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
Spire
£’m
Corporate
£’m
Operating profit/(loss) 209 97 69 51 – (8)
Add back:
- Other gains and losses (2) – (1) (1) – –
- Depreciation and amortisation
217 128 36 52 – 1
-
Impairment of properties, equipment and vehicles, and intangible assets 3 – 3 – – –
-
Impairment of intangible assets 1 – 1 – – –
EBITDA 428 225 108 102 – (7)
- Insurance proceeds (2) – (2) – – –
Adjusted EBITDA 426 225 106 102 – (7)
Operating profit/(loss) 209 97 69 51 – (8)
- Insurance proceeds (2) – (2) – – –
- Impairment of properties, equipment and vehicles, and intangible assets 3 – 3 – – –
- Impairment of intangible assets 1 – 1 – – –
- Accelerated depreciation and amortisation 10 10 – – – –
Adjusted operating profit/(loss) 221 107 71 51 – (8)
Profit/(loss) for the year
1
79 32 29 35 (10) (7)
Non-controlling interests (11) (6) (5) – – –
- Insurance proceeds (2) – (2) – – –
- Impairment of properties, equipment and vehicles, and intangible assets 3 – 3 – – –
- Impairment of intangible assets 1 – 1 – – –
- Accelerated depreciation and amortisation 10 10 – – – –
- Remeasurement of redemption liability (written put option) 23 23 – – – –
- Equity-accounted portion of impairment of intangible assets 60 – – – 60 –
- Reversal of impairment of associate (60) – – – (60) –
- Tax on adjusting items (2) (2) – – – –
Adjusted earnings 101 57 26 35 (10) (7)
Weighted average number of shares (millions) 737.2
Adjusted EPS (pence) 13.7
RECONCILIATIONS CONTINUED
NON-IFRS FINANCIAL MEASURES CONTINUED
Note
1
Profit for the year in Switzerland is shown
after the elimination of intercompany loan
interest of £18m.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT82
FY20 results
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
Spire
£’m
Corporate
£’m
Operating (loss)/profit (184) 90 149 (423) – –
Add back:
- Other gains and losses (4) – – (1) – (3)
-
Depreciation and amortisation
217 126 37 53 – 1
- Reversal of impairment of properties (4) (4) – – – –
- Impairment of properties, equipment and vehicles, and intangible assets 34 33 1 – – –
- Impairment of intangible assets 482 – 1 481 – –
EBITDA 541 245 188 110 – (2)
No adjustments – – – – – –
Adjusted EBITDA 541 245 188 110 – (2)
Operating (loss)/profit (184) 90 149 (423) – –
- Reversal of impairment of properties (4) (4) – – – –
- Impairment of properties, equipment and vehicles, and intangible assets 34 33 1 – – –
- Impairment of intangible assets 482 – 1 481 – –
- Fair value adjustments on derivative contracts (1) – – (1) – –
Adjusted operating profit 327 119 151 57 – –
Profit/(loss) for the year
1
(299) 68 84 (442) (8) (1)
Non-controlling interests (21) (8) (13) – – –
- Reversal of impairment of properties (4) (4) – – – –
- Impairment of properties, equipment and vehicles, and intangible assets 34 33 1 – – –
- Impairment of intangible assets 482 – 1 481 – –
- Fair value adjustments on derivative contracts (1) – – (1) – –
- Remeasurement of redemption liability (written put option) 5 5 – – – –
- Impairment of associate 10 – – – 10 –
- Tax rate changes
2
(26) (26) – – – –
- Tax on adjusting items (3) (3) – – – –
Adjusted earnings 177 65 73 38 2 (1)
Weighted average number of shares (millions) 737.2
Adjusted EPS (pence) 24.0
RECONCILIATIONS CONTINUED
NON-IFRS FINANCIAL MEASURES CONTINUED
Notes
1
Profit for the year in Switzerland is shown
after the elimination of intercompany loan
interest of £17m.
2
Tax rate changes of £26m are shown after
taking non-controlling interests of £3m
into consideration.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 83
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
RECONCILIATIONS CONTINUED
NON-IFRS FINANCIAL MEASURES CONTINUED
DEPRECIATION AND AMORTISATION
Adjusted and reported depreciation and amortisation were calculated as follows:
NON-CONTROLLING INTERESTS
Adjusted non-controlling interests were calculated as follows:
INCOME TAX
Adjusted income tax was calculated as follows:
NET FINANCE COST
Adjusted and reported net finance cost was calculated as follows:
SHARE OF NET PROFIT OF EQUITY-ACCOUNTED INVESTMENTS
Adjusted share of net (loss)/profit of equity-accounted investments was calculated
as follows:
FY22
£’m
FY21
£’m
FY20
£’m
Depreciation and amortisation 228 217 217
Accelerated depreciation and amortisation
(19) (10) –
Adjusted depreciation and amortisation 209 207 217
FY22
£’m
FY21
£’m
FY20
£’m
Non-controlling interests 19 11 21
Adjusting items attributable to non-controlling interests
– – (3)
Adjusted non-controlling interests 19 11 18
FY22
£’m
FY21
£’m
FY20
£’m
Income tax expense 41 25 24
Swiss tax rate changes – – 29
Tax impact of adjusting items 4 2 3
- Past service cost 2 – –
- Accelerated depreciation 2 2 –
- Reversal of impairment of properties – – (1)
- Impairment of properties – – 4
Adjusted income tax expense
45 27 56
Adjusted eective tax rate
1
19.5% 19.3% 22.3%
FY22
£’m
FY21
£’m
FY20
£’m
Finance cost 74 99 92
Finance income (6) (4) (9)
Net finance cost 68 95 83
Remeasurement of redemption liability (written put option)
(1) (23) (5)
Adjusted finance cost 67 72 78
FY22
£’m
FY21
£’m
FY20
£’m
Share of net (loss)/profit of equity-accounted investments (1) (70) 2
Equity-accounted portion of impairment of
intangible assets – 60 –
Equity-accounted portion of gain on sale and leaseback (7) – –
Equity-accounted portion of tax impact of sale and
leaseback transaction
(5) – –
Adjusted share of net (loss)/profit of equity-accounted
investments (13) (10) 2
Note
1
The eective tax rate percentages are calculated in unrounded sterling values and not in millions.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT84
Note
1
Switzerland 126% (FY21: 66%), Southern Africa 108% (FY21: 111%), the Middle East 141% (FY21: 73%).
Notes
1
Tax on adjusted operating profit is calculated as adjusted operating profit before tax multiplied by underlying
statutory tax rates of each entity in the country where it operates.
2
The return on average invested capital percentages are calculated in unrounded sterling values and not in
millions.
RECONCILIATIONS CONTINUED
NON-IFRS FINANCIAL MEASURES CONTINUED
CASH CONVERSION
Cash conversion, calculated as cash generated from operations as a percentage of adjusted
EBITDA, is shown as a non-IFRS measure as this is used by management and investors to
measure cash generation by the Group.
Cash conversion was calculated as follows:
RETURN ON INVESTED CAPITAL
ROIC is included as a non-IFRS measure as it is used by management to help inform and
reflect capital allocation decisions within the business. ROIC is calculated as adjusted
operating profit after tax paid expressed as a percentage of average invested capital.
Average values for total invested capital are calculated as the average monthly balance for
the year.
ROIC was calculated as follows:
FY22
£’m
FY21
£’m
Cash from operations (a) 663 330
Adjusted EBITDA (b)
522 426
Cash conversion ([a]/[b] x 100)
1
127% 77%
FY22
£’m
FY21
£’m
Adjusted operating profit 311 221
Tax on adjusted operating profit
(58) (38)
Adjusted operating profit after tax (a) 253 183
Total assets 7 207 6 672
Less: equity-accounted investments (165) (171)
Less: current liabilities (823) (684)
Add back: short-term portion of interest-bearing borrowings
and lease liabilities 171 146
Invested capital 6 390 5 963
Average invested capital (b) 6 254 6 120
Return on average invested capital ([a]/[b] x 100)
2
4.0% 3.0%
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 85
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
RECONCILIATIONS CONTINUED
NON-IFRS FINANCIAL MEASURES CONTINUED
CONSTANT CURRENCY
The Group uses constant currency measures primarily for comparable performance analysis.
Constant currency measures are presented using prior-year exchange rates, which exclude
the impact of fluctuations in foreign currency exchange rates. Constant currency values are
calculated by translating both the current and the prior-period local currency amounts into
sterling using the prior-year average exchange rates.
Constant currency measures using FY21 average exchange rates were calculated as follows:
Constant currency measures using FY20 average exchange rates were calculated as follows:
FY22
£’m
FY21
£’m Variance
Revenue 3 233 2 995
Retranslation at prior-year rates 52 –
Revenue in constant currency at prior-year rates 3 285 2 995 10%
Adjusted EBITDA 522 426
Retranslation at prior-year rates 6 –
Adjusted EBITDA in constant currency at prior-year rates 528 426 24%
Adjusted operating profit 311 221
Retranslation at prior-year rates 1 –
Adjusted operating profit in constant currency
at prior-year rates 312 221 41%
FY22
£’m
FY20
£’m Variance
Revenue 3 233 3 083
Retranslation at FY20 rates 133 –
Revenue in constant currency at FY20 rates 3 366 3 083 9%
Adjusted EBITDA 522 541
Retranslation at FY20 rates 23 –
Adjusted EBITDA in constant currency at FY20 rates 545 541 1%
Adjusted operating profit 311 327
Retranslation at FY20 rates 15 –
Adjusted operating profit in constant currency
at FY20 rates 326 327 (0)%
PROPERTY, EQUIPMENT AND VEHICLES, AND INTANGIBLE ASSETS
Property, equipment and vehicles increased to £4 385m at 31 March 2022 (FY21: £4 052m),
mainly due to the recognition of a right-of-use asset to the value of £102m in respect of the
expansion at Airport Road Hospital, as well as the strengthening of the period-end Swiss
franc, South African rand and UAE dirham rates against sterling.
Total capital expenditure for the period was £178m (FY21: £126m). Maintenance and
expansion capex amounted to £94m (FY21: £54m) and £84m (FY21: £72m), respectively.
The underspend compared with expectations was due to timing dierences, which are
expected to be reflected in FY23.
Mediclinic is one of the largest private healthcare providers across Europe, Middle East and
Africa, with unique clinical expertise and scale. Aligned with the Group’s strategic goals and
balanced approach to capital allocation, we will seek to execute on opportunities to grow
within our existing business across the continuum of care, invest in various innovation and
digital transformation initiatives, and pursue opportunities for regional expansion through
bolt-on investments at the appropriate time.
Intangible assets increased to £1 126m at 31 March 2022 (FY21: £1 061m), mainly due to the
impact of the strengthening period-end UAE dirham rate against sterling on the Middle East
goodwill.
INVESTMENT IN ASSOCIATES
SPIRE
Mediclinic holds a 29.9% investment in Spire which is equity accounted. Spire reported its
full-year financial results for the period ended 31 December 2021 on 3 March 2022.
For the 12 months ended 31 December 2021, Spire reported a loss after taxation of £9m,
which included a gain on sale and leaseback of £23m and a related tax credit of £16m
(31 December 2020: loss of £234m, which included a goodwill impairment charge of
£200m). Mediclinic’s equity-accounted loss amounted to £3m (FY21: £70m loss). The
adjusted equity-accounted loss amounted to £15m (2021: £10m loss).
STATEMENT OF
FINANCIAL POSITION
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT86
STATEMENT OF FINANCIAL POSITION CONTINUED
Notes
1
Non-IFRS measure reflecting net debt as a percentage of adjusted EBITDA.
2
Non-IFRS measure reflecting adjusted EBITDA less expenses related to short-term leases as a percentage of
total rent and interest paid.
NET DEBT AND LIQUIDITY
The Group’s leverage ratio
1
reduced to 3.9x at 31 March 2022 from 5.1x at FY21 year end.
Incurred bank debt marginally increased to £1 803m (FY21: £1 777m) due to translation
dierences, while lease liabilities increased to £786m (FY21: £676m) mainly due to
additional lease liabilities associated with the commissioning of the hospital expansion
and new integrated oncology unit at Airport Road Hospital, Abu Dhabi.
The Group maintains a strategy of responsible leverage, largely using its extensive asset
base to secure cost-ecient borrowings. The Group’s fixed charge cover ratio
2
improved to
4.3x (FY21: 3.6x). While property ownership drives operational and financial benefits, the
approach is not fixed, reflecting the business needs of the Group as it expands across the
continuum of care, which includes less asset-intensive investments and partnerships.
Debt is ring-fenced within each division, with no cross guarantees or cross defaults.
Borrowings are denominated in the same currency as the divisions’ underlying revenue and
therefore not exposed to foreign exchange rate risk. In August 2021 in Southern Africa, we
successfully completed the refinancing of existing debt through a new sustainability-linked
banking facility. The new facility comprises ZAR7 950m senior secured debt and a
ZAR500m revolving credit facility (‘RCF’), replacing the previous facilities. The new five-year
agreement is priced initially at three-month JIBAR plus 1.54% and 1.60% on the senior
secured debt and RCF, respectively.
In FY22, debt repayments in Switzerland and the Middle East totalled around CHF51m and
AED250m, respectively. The Middle East division currently expects to continue repaying all
incurred debt, which funded the multiyear expansion period that supports the division’s
future growth aspirations, by August 2023.
Cash and cash equivalents increased to £534m at 31 March 2022 compared with £294m
at 31 March 2021. All three divisions’ cash and cash equivalents increased during the
period supported by the improved operating performance and strong cash conversion.
INTEREST RATE SENSITIVITY
After taking the interest rate swaps into account, the Group’s net debt is exposed to
movements in variable interest rates. The sensitivity of interest rates can be summarised
as follows:
• Switzerland: At 31 March 2022, the SARON was -0.70% (FY21: -0.75%). Interest rates
would have to increase by 70 basis points to have an impact on post-tax profit for
the period with all other variables held constant. An increase in the interest rate of
25 basis points would have no impact on post-tax profit for the period (FY21: no impact).
• Southern Africa: Post-tax profit for the period would decrease/increase by £0.4m
(FY21: decrease/increase by £0.7m) if the interest rates had been 100 basis points
higher/lower in Southern Africa with all other variables held constant; and
• The Middle East: Post-tax profit for the period would decrease/increase by £0.1m
(FY21: decrease/increase by £0.4m) if the interest rates had been 50 basis points
higher/lower in the Middle East with all other variables held constant.
FY22
£’m
FY21
£’m
Borrowings 1 803 1 777
Less: cash and cash equivalents (534) (294)
Net incurred debt 1 269 1 483
Lease liabilities 786 676
Net debt 2 055 2 159
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 87
GROUP CHIEF FINANCIAL OFFICER’S REPORT CONTINUED
STATEMENT OF FINANCIAL POSITION CONTINUED
NET DEBT AND LIQUIDITY CONTINUED
COVENANTS
The Group had headroom over all covenants, waived or eective, at the end of FY22,
with the headroom on all three leverage ratios improving in line with improved operating
performance.
In Switzerland, we have a covenant waiver in place and the first test will be performed at
the end of September 2022.
The following table illustrates the headroom to the covenant tests:
SWISS PENSION BENEFIT OBLIGATION
In Switzerland, we provide defined contribution pension plans in terms of Swiss legislation
to employees, the assets of which are held in separate trustee-administered funds. These
plans are funded from employee and company contributions, taking into account the
recommendations of independent qualified actuaries. Because of the strict definition of
defined contribution plans in IAS 19, these plans are classified as defined benefit plans, since
the funds are obliged to take some investment and longevity risk in terms of Swiss law. The
IAS 19 net pension liability was valued by the actuaries at the end of the year and amounted
to £6m (FY21: net asset of £83m), consisting of a net pension asset of £1m (FY21: £110m)
relating to one of the plans and a net pension liability of £7m (FY21: £27m) relating to three
of the plans. An asset ceiling restriction was applied to one of the plans and resulted in a net
liability of £nil. The net pension asset is included under ‘Retirement benefit assets’ in the
Group’s statement of financial position, whereas the net pension liabilities are included
under ‘Retirement benefit obligations’. The decrease in the net pension asset was largely
due to the recognition of an asset ceiling of £194m on one of the pension plans and an
increase in the liability due to plan amendments that resulted in the recognition of past
service cost of £9m, partly oset by an increase in the plan assets.
DERIVATIVE FINANCIAL INSTRUMENTS
Through the acquisition of Clinique des Grangettes, Geneva, the Group entered into a
put/call agreement over the remaining 40% interest of Clinique des Grangettes and Clinique
La Colline. At 31 March 2022, the value of the redemption liability related to the written put
option amounted to £126m (FY21: £115m).
Status
Headroom
variable
FY22
Headroom
1
FY21
Headroom
1
Compliant
Switzerland
Leverage ratio Waived
2
EBITDA 13% 5% n/a
Economic capital ratio
Eective Equity 27% 30% Yes
Loan-to-value ratio Eective Property
value
17% 17% Ye s
Southern Africa
Leverage ratio Eective EBITDA 52% 6% Yes
Net interest cover ratio
Eective Equity 56% 18% Yes
Middle East
Leverage ratio Eective EBITDA 95% 48% Yes
Debt service coverage ratio
Eective Cash flow 54% 21% Yes
Minimum net worth Eective n/a > AED700m > AED700m Ye s
Minimum monthly
receivables Eective n/a > AED100m
3
> AED240m
3
Yes
Notes
1
Headroom is calculated with reference to the indicated headroom variable, keeping other inputs constant.
2
Waived covenant compliance tests are to be performed at the end of September 2022 for Switzerland.
3
Average of last three months.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT88
FOREIGN EXCHANGE RATES
Although the Group reports its results in sterling, the divisional profits are generated in
Swiss franc, South African rand and UAE dirham. During the reporting period, the average
and closing exchange rates were as follows:
GOING CONCERN
For the purposes of assessing liquidity specifically and going concern broadly at 31 March 2022,
the Group modelled a combination of severe but plausible downside scenarios on
a month-by-month basis and also applied appropriate mitigation actions which would
be within the Group’s control. The eect of the downside scenarios was informed by
knowledge and insight gained during the COVID-19 pandemic.
Due to the mostly fixed employee cost base across the business, lower revenue due to
either a reduction in taris or volumes will most likely have the most pronounced impact on
EBITDA. Compared with the business plan, in modelling the severe but plausible scenarios,
the combined adverse eect of reduction of taris and volumes after mitigation amounts to
an aggregate decline of 18% of EBITDA over the 18-month period to 30 September 2023
compared with the base case. On a monthly basis, the EBITDA eect ranges from 12% to
29% compared with the base case.
Based on the assumptions applied and the eect of mitigating actions, most within the
control of the Group, the analyses demonstrate that the divisions will continue to be able to
meet their obligations for the 18-month period to 30 September 2023.
While recognising that there remains risk to the Group’s financial performance for at least
the next 12 months, the directors have a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they fall due for a period of at least
12 months from the date of approving the financial statements.
DIVIDEND POLICY AND PROPOSED DIVIDEND
The Group’s existing dividend policy is to target a payout ratio of between 25% to 35% of
adjusted earnings. The Board may revise the policy at its discretion.
The Board proposes a final dividend from retained earnings of 3.00 pence per ordinary
share for the year ended 31 March 2022 for approval by the Company’s shareholders at the
AGM on Thursday, 28 July 2022.
See page 264 of Shareholder information for details on the final dividend, including salient dates
Jurgens Myburgh
Group Chief Financial Ocer
24 May 2022
Movements in exchange rates aected the reported earnings and reported balances in the
statement of financial position. The resulting currency translation dierence, which is the
amount by which the Group’s interest in the equity of the divisions increased because of
spot rate movements, amounted to £182m (FY21: decrease of £235m) and was credited
(FY21: debited) to the statement of comprehensive income. The increase was the result of
the strengthening of the period-end rates against the sterling.
Foreign exchange rate sensitivity:
• The impact of a 10% change in the £/CHF exchange rate for a sustained period of one
year is that profit after tax would increase/decrease by £4m (FY21: increase/decrease
by £1m) due to exposure to the £/CHF exchange rate.
• The impact of a 10% change in the £/ZAR exchange rate for a sustained period of one
year is that profit after tax would increase/decrease by £8m (FY21: increase/decrease
by £3m) due to exposure to the £/ZAR exchange rate.
• The impact of a 10% change in the £/AED exchange rate for a sustained period of one
year is that profit after tax would increase/decrease by £5m (FY21: increase/decrease
by £4m) due to exposure to the £/AED exchange rate.
Average rates with
reference to sterling FY22 FY21
Variance
FY22 vs
FY21 FY20
Variance
FY22 vs
FY20
Swiss franc 1.25 1.21 4% 1.25 0%
South African rand 20.27 21.30 (5)% 18.76 8%
UAE dirham 5.02 4.80 5% 4.67 7%
Year-end rates with
reference to sterling FY22 FY21 Variance
Swiss franc 1.21 1.30 (7)%
South African rand 19.23 20.37 (6)%
UAE dirham 4.82 5.07 (5)%
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 89
Presented in sterling, rounded to the nearest million
FIVE-YEAR SUMMARY
IFRS 16 Pre-IFRS 16
INCOME STATEMENTS
FY22
£’m
FY21
£’m
FY20
£’m
FY19
£’m
FY18
£’m
Revenue
3 233 2 995 3 083 2 932 2 876
Adjusted EBITDA
522
426
541 493 515
Operating profit/(loss)
280
209
(184) 81 (288)
Adjusted operating profit
311
221 327 330
370
Reported earnings/(loss)
151
68
(320) (151) (492)
Adjusted earnings
167
101 177 198
221
PER SHARE STATISTICS
FY22
pence
FY21
pence
FY20
pence
FY19
pence
FY18
pence
Basic earnings/(loss) basis
20.5 9.2 (43.4) (20.5) (66.7)
Diluted earnings/(loss) basis
20.5 9.2 (43.4) (20.5) (66.7)
Basic adjusted
earnings basis
22.6 13.7 24.0 26.9 30.0
Diluted adjusted
earnings basis
22.6 13.7 24.0 26.9 30.0
Dividends declared
per share
3.00 - 3.20 7.90 7.90
IFRS 16 Pre-IFRS 16
STATEMENTS OF
FINANCIAL POSITION
FY22
£’m
FY21
£’m
FY20
£’m
FY19
£’m
FY18
£’m
ASSETS
Non-current assets
5 733 5 440 5 741 5 335 5 382
Current assets
1 474 1 232 1 213 1 091 961
Total assets
7 207 6 672 6 954 6 426 6 343
EQUITY
Owners of the parent
3 107 2 849 2 890 3 151 3 286
Non-controlling interests
139
118 113 115 87
Total equity
3 246 2 967 3 003 3 266 3 373
LIABILITIES
Non-current liabilities
3 138 3 021 3 182 2 576 2 445
Current liabilities
823 684 769 584 525
Total liabilities
3 961 3 705 3 951 3 160 2 970
Total equity and liabilities
7 207 6 672 6 954 6 426 6 343
STATEMENTS OF
CASH FLOWS
FY22 FY21 FY20 FY19 FY18
Cash generated from
operations (£’m)
663 330 589 451 466
Adjusted EBITDA cash
conversion (%)
127 77 109 91 90
Page 80 in the ‘Financial review’ section in the Group Chief Financial Ocer’s Report sets out the Group’s
use of adjusted non-IFRS financial measures. Non-IFRS measures, which include cash conversion, are further
discussed, with reconciliations from the most comparable IFRS measure provided, on pages 81–86.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT90
RISK MANAGEMENT
REPORT
INTRODUCTION
The Group’s ERM Policy follows the International Committee of Sponsoring Organizations
of the Treadway Commission’s Internal Control – Integrated Framework and is reviewed
annually. The policy defines the risk management objectives, methodology, risk appetite,
risk identification, assessment and response, as well as the responsibilities of the various risk
management role players in the Group.
Through risk management, an integrated and eective framework is established which seeks
to identify, assess and manage important and emerging risks which could impact on our
ability to achieve strategic, financial and operational goals, and regulatory compliance. The
risk management process is fully integrated into the strategic planning process and supports
the achievement of our strategy.
Become an integrated healthcare
provider across the continuum of care
Transform our services and client engagement
through innovation and digitalisation
Minimise our environmental impact
Improve our value proposition significantly
Evolve as a data-driven organisation
Grow in existing markets and expand into
new markets
See the Strategy overview on pages 16–22
The Board is ultimately accountable for
the Group’s risk management processes
and internal control system, and for
determining the Group’s risk appetite.
It receives regular updates on the current
and emerging risks facing the business,
and considers the impact these risks
may have on key stakeholders and the
achievement of our strategic goals.
The Audit and Risk Committee supports
the Board in the management of risk and is
responsible for reviewing the eectiveness
of the risk management and internal
control processes during the year.
See the Audit and Risk Committee Report
on pages 121–131
The Board is further supported by the
Clinical Performance Committee, which
provides governance and oversight over
clinical performance, related risks and
control eectiveness, and the ESG
Committee, which fulfils a similar function
in relation to ESG matters including
climate change.
See the reports of the Clinical Performance
and the ESG committees on pages 132–134
and 135–136, respectively
Risks are classified according to their degree
of controllability and relevance to our
strategy. Risk management processes are
tailored to the relevant risk type:
• Strategic risks – We consider it
appropriate to assume some risk in
achieving our strategy and generating
appropriate returns for shareholders.
Strategic risks are dierent from
preventable risks in that they are
not inherently undesirable. The risk
management system is designed to
reduce the likelihood that the assumed
risks materialise and to improve our
ability to manage or contain the risk
events, should they occur.
• External risks/Threats – Certain risks
arise from events or circumstances
external to our influence or control,
e.g. natural disasters, geopolitical
tensions or macroeconomic changes.
Management’s response focuses on
identifying the sources of such risks and
mitigating their impact on the business.
• Internal preventable risks – These risks
arise from within the Group and are
controllable. They are managed through
active prevention by monitoring
operational processes and guiding
behaviours and decisions towards
desired norms.
1
4
5
2
3
6
2026 STRATEGIC GOALS
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 91
STRATEGIC
RISKS
EXTERNAL
RISKS/
THREATS
INTERNAL
PREVENTABLE
RISKS
1
Economic and business environment
2
Regulatory and compliance
3
Information systems security
and cyberattacks
4
Pandemics and infectious diseases
5
Disruptive innovation and
digitalisation
6
Competition
7
Workforce risks
8
Climate change
9
Patient safety, quality of service and
operational stability
10
Availability and cost of capital
11
Financial and credit risk
12
Business investments and acquisitions
RISK MANAGEMENT REPORT CONTINUED
9
8
11 12
6 7
35 1 2
4
10
Higher
Lower
Likelihood
Impact Higher
PRINCIPAL RISKS AND UNCERTAINTIES
Principal risks are risks that can materially aect our business model, performance, prospects,
solvency, liquidity or reputation. These are determined through a strategic risk review process
where top risks are identified and assessed by divisional executive committees and the Group
Executive Committee (with input from non-executive directors).
Our risk landscape is reviewed regularly by the Group Executive Committee and the
Board. Political, economic, social, technological, environmental and legal developments
that may impact the Group’s operations and business model viability in the short, medium
or long term are reviewed to identify emerging and transition risks (i.e. climate policy or
technological shifts).
The Board reconsidered the Group’s key risks and have made the following changes to the
principal risks:
• The principal risks ‘Business projects’ and ‘Disruptive innovation and digitalisation’ were
combined, and ‘Patient safety and clinical quality’ was combined with ‘Quality of service
and operational stability’ due to the integrated or connected nature of these risk items.
• Given the potential direct and indirect impacts the changing climate poses to our
operations, ‘Climate change’ has been added as a principal risk.
Divisional
executive
committee risk
assessments
Group Executive
Committee risk
assessment
Principal risks
Risk assessments
at functional,
project and
operational level
THE HEAT MAP SHOWS THE PRINCIPAL RISKS OF THE GROUP
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT92
1. ECONOMIC AND BUSINESS ENVIRONMENT
TYPE OF RISK
External risk/Threat
OWNER
Group CFO
RISK APPETITE
Moderate to significant
RISK RATING
Critical
PRINCIPAL RISK
Downturn in the general economic
and business environments impacting
the aordability of healthcare for funders
and self-paying patients.
The business environment risks include
the eect of market dynamics on taris
and fees as well as political stability and
geopolitical risks.
KEY STAKEHOLDERS
• Clients
• Governments and authorities
• Healthcare insurers
• Investors
CONSIDERED IN VIABILITY ASSESSMENT
Yes, modelled volume reduction and
downturn in the macroeconomic and
business environment.
KEY MITIGATION
• Monitor developments and trends in the
economic and business environments and
early warning indicators
• Proactive monitoring and negotiation with
funders
• Focus on quality and continuum of care to
reinforce our market position
TREND
FY22 FY21
Escalation due to the increase in the
political and geopolitical risk landscape.
LINK TO STRATEGY
2. REGULATORY AND COMPLIANCE
TYPE OF RISK
External risk/Threat
OWNER
Group Chief Governance Ocer
and divisional CEOs
RISK APPETITE
Low
RISK RATING
Critical
PRINCIPAL RISK
Adverse changes in legislation and
regulations impacting on the Group,
or where failure to comply with legislation
and regulations may result in losses, fines,
penalties or damage to reputation. We are
also exposed to an increasing compliance
monitoring cost.
The risks include healthcare reform by
regulators aimed at reducing the cost of
healthcare, broadening the access to quality
healthcare, and increasing quality standards
monitoring by regulators.
KEY STAKEHOLDERS
• Governments and authorities
• Industry partners
• Investors
• Medical practitioners
CONSIDERED IN VIABILITY ASSESSMENT
Yes, modelled reductions in taris and
volumes.
KEY MITIGATION
• Proactive engagement with stakeholders
• Health policy units created to conduct research
and provide strategic input into reform
processes
• Active industry participation across all
divisions
• Company Secretarial, Legal and Compliance
functions support operational management,
monitor regulatory developments and, where
necessary, obtain expert legal advice for the
eective implementation of compliance
initiatives
• Compliance risks identified and assessed as
part of compliance management processes
TREND
FY22 FY21
Increase due to healthcare reform
and related impact on regulated taris,
and the introduction of new legislation
or regulations.
LINK TO STRATEGY
1 2 3 4 5 6
1 2 3 4 5 6
Risk exposure has increased due to change in the business environment,
increased investments, increased dependency of operations on
information technology (‘IT’), information sensitivity, and associated cost.
Proactive and continuous monitoring, favourable results
of negotiations, eective treasury, and risk management
processes have resulted in lowering of risk exposure.
Risk exposure remains largely unchanged as the operating and
regulatory environments have remained stable, and enhanced
risk mitigation measures have kept the risk at the same level.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 93
RISK MANAGEMENT REPORT CONTINUED
3. INFORMATION SYSTEMS SECURITY AND CYBERATTACKS
TYPE OF RISK
External risk/Threat
OWNER
Group Chief Information Ocer
RISK APPETITE
Low
RISK RATING
Critical
PRINCIPAL RISK
Unauthorised access to information systems
through external or internal attack or
unauthorised breaches, resulting in the
unavailability of systems, failure of data
integrity and loss of confidential data.
KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential
applicants
• Governments and authorities
• Investors
CONSIDERED IN VIABILITY ASSESSMENT
Yes, considered the potential impacts on
systems and operations and the possible
eect of delayed billing on liquidity.
KEY MITIGATION
• Comprehensive information systems identity
access management, change and physical
access controls
• Regular security reviews
• Business continuity and disaster recovery plans
• Group information security and data privacy
policies
• Insurance
• Group ICT Security Committee
TREND
FY22 FY21
Escalation due to increased prevalence
of ransomware attacks compared with
the prior reporting period.
LINK TO STRATEGY
4. PANDEMICS AND INFECTIOUS DISEASES
TYPE OF RISK
External risk/Threat
OWNER
Group Chief Clinical Ocer
RISK APPETITE
Low
RISK RATING
Critical
PRINCIPAL RISK
A pandemic occurs when an infectious disease
rapidly infects many people and spreads to
multiple countries and continents.
These risks refer to our ability to respond
eectively to the potential adverse clinical,
operational and business eects caused by
a pandemic or infectious disease.
KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential
applicants
• Governments and authorities
• Investors
• Medical practitioners
• Professional societies
CONSIDERED IN VIABILITY ASSESSMENT
Yes, modelled adverse impact on volumes
caused by COVID-19 pandemic.
KEY MITIGATION
• Hospital and business incident response
planning
• Central coordination of task teams and
clinical governance
• Monitoring
• Financial scenario planning
• Communication strategy
TREND
FY22 FY21
The risk relating to the COVID-19
pandemic has decreased due to the
eectiveness of the global response,
vaccination programmes and the robust
performance of the Group throughout
the period.
LINK TO STRATEGY
1 2 3 4 5 6
1 2 3 4 5 6
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT94
5. DISRUPTIVE INNOVATION AND DIGITALISATION
TYPE OF RISK
Strategic
OWNER
Group Chief Innovation Ocer
RISK APPETITE
Moderate to significant
RISK RATING
High
PRINCIPAL RISK
The disintermediation and erosion of our business
model due to the impact of technological
development. It refers to the extent and speed
at which new technologies (and combinations
thereof) change and transform industries, and to
what extent an organisation can exploit these
opportunities by being responsive and innovative,
while managing associated risks.
We are implementing various business projects
as we adapt to the evolving operational and
regulatory environment and healthcare market.
These business projects carry risks relating to
occurrences that could interfere with successful
completion of projects, including timelines, cost
and quality.
KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential applicants
• Industry partners
• Investors
• Medical practitioners
CONSIDERED IN VIABILITY ASSESSMENT
No
KEY MITIGATION
• Dedicated Innovation function, which
includes digital transformation
• Strategic planning processes
• Proactive monitoring
• Continuum of care strategy
• Eective project governance practices,
methodologies and reporting
• Experienced project management
teams
• Proactive monitoring and oversight
TREND
FY22
FY21
Improved as we continue to invest in our
innovation and digitalisation initiatives
across the continuum of care.
LINK TO STRATEGY
6. COMPETITION
TYPE OF RISK
External risk/Threat
OWNER
Group CEO and divisional CEOs
RISK APPETITE
Moderate
RISK RATING
Medium
PRINCIPAL RISK
Uncertainty created by existing and/or emerging
competitors with alternative business models,
including outmigration of care (partly driven by
further technological developments) and the
development of alternative care models.
KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential applicants
• Healthcare insurers
• Industry partners
• Investors
• Medical practitioners
CONSIDERED IN VIABILITY ASSESSMENT
Yes, modelled reductions in volumes as well as
taris.
KEY MITIGATION
• Proactive monitoring
• Strategic planning processes
• Quality and value of care processes
TREND
FY22
FY21
Providers in the healthcare market
remained stable for the period under
review with no significant change in our
risk profile.
LINK TO STRATEGY
1 2 3 4 5 6
1 2 3 4 5 6
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 95
RISK MANAGEMENT REPORT CONTINUED
7. WORKFORCE RISKS
TYPE OF RISK
Internal preventable risk
OWNER
Group Chief Strategy and Human
Resources Ocer and divisional CEOs
RISK APPETITE
Low
RISK RATING
Medium
PRINCIPAL RISK
Availability, retention, recruitment and
aordability of qualified healthcare workers.
The availability and support of admitting
medical practitioners, whether independent
or employed, are critical to our services.
Potential negative eect of COVID-19 on
frontline healthcare workers, who are working
under immense and unprecedented pressure
for extended periods and putting their
physical, mental and social wellbeing at risk.
KEY STAKEHOLDERS
• Employees, alumni and potential
applicants
• Investors
• Medical practitioners
CONSIDERED IN VIABILITY ASSESSMENT
Yes, modelled shortage of qualified and
experienced healthcare employees as part
of cost inflation in business environment
scenario.
KEY MITIGATION
• Systems to monitor satisfaction, movement
and profiles of medical practitioners
• Details on the relationship and engagement
with medical practitioners provided in the
2022 Sustainable Development Report
• Employment, recruitment and retention
strategies explained in the 2022 Sustainable
Development Report
• Extensive training and skills development
programme and international recruitment
programme explained in the 2022 Sustainable
Development Report
• The wellbeing of all employees is actively
monitored and managed through well-
established support structures, as expanded
on in the 2022 Sustainable Development
Report
TREND
FY22 FY21
Vacancies and turnover ratios in respect
of skilled resources and medical
practitioners are expected to remain at
similar levels in the Group, supported
by a growing number of wellbeing and
mental health initiatives.
LINK TO STRATEGY
1 2 3 4 5 6
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT96
8. CLIMATE CHANGE
TYPE OF RISK
External risk/Threat
OWNER
Group Chief Governance Ocer
RISK APPETITE
Low to moderate
RISK RATING
Medium
PRINCIPAL RISK
Potential impacts caused by long-term shifts
in climate patterns. This includes the rise in
temperatures across the globe as well as the
increase in extreme weather events, which, in
turn, may impact negatively on the economic
environment. Climate changemay disrupt our
day-to-day operations and increase our cost
of doing business due to:
• increased risk of extreme weather events;
and
• increased costs due to
• increased electricity consumption,
• carbon tax,
• investment in new technology, and
• water scarcity.
KEY STAKEHOLDERS
• Employees, alumni and potential
applicants
• Governments and authorities
• Industry partners
• Investors
CONSIDERED IN VIABILITY ASSESSMENT
No
KEY MITIGATION
• Group’s Sustainable Development Strategy
addresses environmental risks
See the Sustainable development overview on page 34
• Monitoring of the risks from climate change
• Programmes to reduce waste to landfill
• Reducing water and electricity usage
• Investing in energy-ecient technologies and
procuring renewable energy
• Insurance cover
• Group actions to mitigate and minimise the
impact of climate change, and minimise our
impact on the environment are described on
pages 37–39
TREND
FY22: New risk item added. FY21: -
The risk is added as a principal risk
as the eects of climate change are
expected to make extreme climate
events more frequent and significant
for the Group.
LINK TO STRATEGY
See the TCFD report on page 53 for a list of
transitional and physical risks
1 2 3 4 5 6
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2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 97
RISK MANAGEMENT REPORT CONTINUED
9. PATIENT SAFETY, QUALITY OF SERVICE AND OPERATIONAL STABILITY
TYPE OF RISK
Internal preventable risk
OWNER
Group Chief Clinical Ocer and divisional
chief operating ocers
RISK APPETITE
Low
RISK RATING
Medium
PRINCIPAL RISK
These risks firstly relate to all clinical risks
associated with clinical care provision resulting
in undesirable clinical outcomes.
Such risks may also result in damage to
Mediclinic’s reputation and impact on brand
equity
1
.
Operational risks refer to diverse types of
operational events with a potential for financial
loss, operational interruptions or reputational
damage. These risks refer to the quality of
service and the stability of the operations,
including:
• incidents of poor service or where
operational management fails to respond
eectively to complaints;
• operational interruptions, which refer to any
disruption of the facility and may include
the threat of disrupted electricity or water
supply; and
• fire and allied perils causing damage or
business interruption.
KEY STAKEHOLDERS
• Clients
• Employees, alumni and potential
applicants
• Healthcare insurers
• Industry partners
• Investors
• Medical practitioners
CONSIDERED IN VIABILITY ASSESSMENT
No
KEY MITIGATION
See the 2022 Clinical Services Report for a detailed
analysis of the strategies to manage and monitor
clinical risks
• Accreditation processes
• Clinical governance processes
• Monitoring of clinical performance indicators
• Focus on quality management processes
• Stakeholder engagement and disclosure
strategies
• Clinical audits
• Client experience surveys (both internal and
external)
• Complaints monitoring
• Training programmes and supervision of
service levels
• Emergency backup electricity generation
• Emergency and disaster planning
• Extensive fire-fighting and detection systems,
including comprehensive maintenance
processes
• Comprehensive insurance cover for financial
impact of disasters
TREND
FY22 FY21
These risks did not change significantly
and remained stable for the period under
review.
LINK TO STRATEGY
Note
1
Brand equity refers to the commercial value derived from the consumer perception of our brand names rather
than the services provided under those brand names.
1 2 3 4 5 6
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT98
10. AVAILABILITY AND COST OF CAPITAL
TYPE OF RISK
External risk/Threat
OWNER
Group CFO
RISK APPETITE
Moderate
RISK RATING
Medium
PRINCIPAL RISK
We require capital to finance strategic
expansion opportunities and/or refinance or
restructure existing debt – the cost, terms and
availability of which depend on prevailing
market conditions.
KEY STAKEHOLDERS
• Financial institutions
• Investors
CONSIDERED IN VIABILITY ASSESSMENT
Yes, modelled increased cost of capital
as part of cost inflation in business
environment risk scenario. Modelled
working capital as part of deterioration
in the Middle East accounts receivable
scenarios.
KEY MITIGATION
• Long-term planning of capital requirements
and cash-flow forecasting
• Scrutiny of cash-generating capacity within
the Group
• Proactive and long-term agreements with
banks and other funders relating to funding
facilities
• Systems to monitor compliance with
requirements of debt covenants
See note 25 to the Group annual financial statements on
page 215 for further details on capital risk management
and the Group’s borrowings
TREND
FY22 FY21
Long-term financing arrangements are
in place.
The Group’s leverage across the divisions
has reduced and is at levels where the
refinancing at current market conditions
should be possible. Although interest
rates are expected to increase during
FY23, they are not giving rise to an
increase in the risk rating.
LINK TO STRATEGY
11. FINANCIAL AND CREDIT RISK
TYPE OF RISK
External risk/Threat
OWNER
Group CFO
RISK APPETITE
Low
RISK RATING
Medium
PRINCIPAL RISK
Credit risks relate to possible loss arising from
a funder’s inability to pay the outstanding
balance owing, default by banks and/or other
deposit-taking institutions, or the inability to
recover outstanding amounts due from
patients.
Credit risk with respect to trade receivables
consists mainly of medical schemes and
insurance companies, which are required
to maintain minimum reserve levels. In
Switzerland and the Middle East, a large part
of trade receivables is owed by cantonal or
government-funded programmes.
KEY STAKEHOLDERS
• Healthcare insurers
• Investors
CONSIDERED IN VIABILITY ASSESSMENT
Yes, modelled working capital
deterioration.
KEY MITIGATION
• Preservation of a sound internal financial
control environment
• Eective operational risk management
processes
• Eective monitoring and oversight of
operations
• Regulated minimum solvency requirements
for funders
• Monitoring of approved funders
• Group Treasury Policy
TREND
FY22 FY21
The credit risks did not change
significantly and remained stable.
LINK TO STRATEGY
n/a
1 2 3 4 5 6
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 99
RISK MANAGEMENT REPORT CONTINUED
12. BUSINESS INVESTMENTS AND ACQUISITIONS
TYPE OF RISK
Strategic
OWNER
Group CFO
RISK APPETITE
Moderate
RISK RATING
Medium
PRINCIPAL RISK
Increased financial exposure resulting from
major strategic business investments and
acquisitions, including the sensitivity of the
assumptions made when capital is allocated
and the eective implementation of major
investment decisions.
KEY STAKEHOLDERS
• Governments and authorities
• Industry partners
• Investors
CONSIDERED IN VIABILITY ASSESSMENT
No
KEY MITIGATION
• Strategic planning processes
• Due diligence processes
• Investment mandates
• Board oversight
• Post-acquisition management processes
TREND
FY22 FY21
The investment and governance processes
remained unchanged for the period under
review.
LINK TO STRATEGY
1 2 3 4 5 6
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT100
ASSESSMENT OF PROSPECTS
T
he directors have assessed the prospects of
the Group by reference to its current financial
position, its recent performance, investment
case, strategy, annual financial planning and
risk assessment. The Group’s strategy, which
informs the annual financial planning process,
considers factors such as technological,
social and environmental changes.
ASSESSMENT PERIOD
The directors have determined the five years
to March 2027 to be an appropriate period
for providing the viability statement as it is
consistent with the annual planning period,
which largely reflects the benefit of
investments made in the present period.
ASSESSMENT OF VIABILITY
The business plan reflects the Group’s
strategy, associated risks and the directors’
best estimate of its prospects. Fundamental
to the assessment of the Group’s prospects is
the long-term business model of quality
service delivery and revenue growth under
acceptable risk tolerance. The annual financial
planning process includes a detailed bottom-up
approach per division for the budget year
(performed by each clinic and hospital) and
an extension of the key assumptions to the
forecast period. The budgets and five-year
plans, including the Group strategic goals, are
iteratively reviewed and finally approved by
the divisional executive committees, the
Group Executive Committee and the Board.
The five-year period extends beyond the
maturities of a material portion of the
Group’s borrowings in each division. The
Group expects to be able to refinance
existing borrowings on broadly similar terms
and conditions before the existing facilities
expire.
See page 237 for the maturity profile of the
Group’s borrowings
The impact of each scenario and certain
scenarios in combination were modelled and
assessed on EBITDA or profit after tax as
appropriate, net debt and debt covenant
tests over the five-year forecast period.
The principal risks and related key
assumptions underlying each division’s
business plans were stress tested. Due to
the mostly fixed employee cost base across
the business, lower revenue – due to either
a reduction in taris or volumes – has the
most pronounced impact on EBITDA.
See pages 186–187 for a further analysis of the
going concern assertion, which has been adopted
in preparing the financial statements
VIABILITY ASSESSMENT
The assessment included stress tests of various severe but plausible scenarios.
RISK SCENARIOS IMPACT
1. Adverse regulatory changes and pressure
on taris
Annual impact on Group EBITDA between
2.6% and 4.4%
2. Reduction in volumes Annual impact on Group EBITDA between
9.8% and 15.9%
3. Macroeconomic environment and cost
inflation in business environment
Annual impact on Group EBITDA between
4.6% and 11.3%
4. Deterioration in the Middle East accounts
receivable collection
Net debt impact between £4.0m and £5.0m
5. Deterioration in health insurance mix Annual impact on Group EBITDA between
1.5% and 9.4%
6. Impact of COVID-19 pandemic FY23 Group EBITDA of 5.6%
VIABILITY STATEMENT
The assessment described alongside showed
that the business, with its geographically
diverse portfolio, would be able to withstand
any of the severe but plausible individual
scenarios and the combinations modelled,
ceteris paribus, by taking management action
with the following key mitigating steps:
reducing discretionary investment, initiating
cost management initiatives, using drawdown
of overdraft facilities, and improving net
working capital days.
Considering the Group’s prospects and
principal risks and uncertainties, the directors
confirm that the Group will be able to
continue in operation and meet its liabilities
as they fall due, in the ordinary course of
business, over the five-year period of their
detailed assessment, ending 31 March 2027.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 101
GOVERNANCE AND
REMUNERATION REPORT
CHAIR’S INTRODUCTION
I am pleased to present this year’s
Governance and Remuneration Report. As I
mentioned earlier in this Annual Report, it has
been another challenging year for our people,
management and my fellow Board members,
and I am proud of how we supported not only
each other, but also our clients, our colleagues
and other stakeholders across the business.
The Board and executive team remain
committed to applying robust and eective
corporate governance practices and the
highest standards of integrity and ethics,
embodied in our purpose, values and culture.
These aspects are embedded in our policies,
practices and day-to-day operations, actively
managed by the Group’s leadership, and closely
monitored by the Board. This Governance and
Remuneration Report provides further details
on our corporate governance, the activities of
the Board and its committees during the year,
and their alignment with the strategic direction
of the Group.
The Board continued to exercise keen
oversight of the Group’s strategy and its
implementation. In parallel, we took the
opportunity to review the composition of the
Board, and the structure of its committees
and the Group Executive Committee, and
align them more closely to the Group’s
strategy. Natalia Barsegiyan and Zarina Bassa
were welcomed to the Board as independent
non-executive directors during the year,
broadening and strengthening our existing
skills and experience. We also welcomed
Professor Wim de Villiers as an independent
external expert adviser to support the work
of the Clinical Performance Committee.
The Board bid farewell to Alan Grieve and
Trevor Petersen as they stepped down as
directors, and we express our gratitude for
their contribution during their many years
of service. I am grateful to Dr Felicity Harvey
for assuming the role of SID, and to Tom
Singer and Steve Weiner for taking over
as chairs of the Audit and Risk and the
Remuneration committees, respectively.
Following these changes, the composition
of the Board exceeds the targets set by the
Hampton-Alexander and Parker reviews, as
well as the Board-level targets of the FTSE
Women Leaders Review. The restructuring
of the Group Executive Committee has
created new opportunities to increase the
diversity of the executive leadership team,
in line with the aims and objectives of the
Group’s Diversity and Inclusion Policy. The
Nomination Committee will continue to work
with management to strengthen the breadth,
depth and diversity of the talent pipeline
leading up to the executive directors. This
eort will be supported in part by the new
committee charged with oversight of ESG
matters, reflecting the importance of this
area to our success and to management, the
Board and our stakeholders. The composition
of each of the Board’s committees has been
carefully designed to ensure they have the
necessary skills and links to committees with
overlapping interests, enhancing the flow
of information between them. The benefit
of these new arrangements started to become
evident as we prepared to publish our first
TCFD report this year.
Lintstock Ltd (‘Lintstock’) conducted a
detailed Board evaluation during the period
to ensure the Board continued to operate
eectively and was well positioned to lead
the Group going forward. The Board and
its committees subsequently reviewed and
updated their priorities as necessary, to
ensure our time is allocated to the areas of
most importance to the Group in the coming
year. After a long period of meeting mostly
virtually, we are excited by the opportunity
for more in-person interactions in FY23.
See page 114 of the Corporate Governance
Statement and pages 30–33 of our Section 172
statement for more details of the Board’s principal
areas of focus and key decisions
We are looking forward to welcoming
shareholders to our 2022 AGM (assuming
no untoward developments). We will also
be holding a pre-AGM online event for anyone
unable to attend the AGM. I hope you will
be able to join and engage with us at one
of these opportunities.
Dame Inga Beale
Non-executive Chair
24 May 2022
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT102
CONTENTS
102 Chair’s introduction
103 Board of Directors
108 Group Executive Committee
109 Corporate Governance Statement
121 Audit and Risk Committee Report
132 Clinical Performance
Committee Report
135 ESG Committee Report
137 Nomination Committee Report
143 Remuneration Committee Report
148 Directors’ Remuneration Policy
157 Annual Remuneration Report
168 Other disclosures
171 Statement of directors’
responsibilities
1
Dr Muhadditha Al Hashimi
2
Dr Ronnie van der Merwe
3
Jannie Durand
4
Steve Weiner
5
Dr Anja Oswald
6
Danie Meintjes
7
Natalia Barsegiyan
8
Jurgens Myburgh
9
Zarina Bassa
10
Tom Singer
11
Dame Inga Beale
12
Dr Felicity Harvey
21 3 4 5 6 7 8 9 10 11 12
BOARD OF
DIRECTORS
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 103
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT104
KEY STRENGTHS AND EXPERIENCE
• Nearly 40 years’ business management
and leadership experience
• Instrumental in large-scale digital and cultural
transformation
As the first female CEO of Lloyd’s of London,
from 2014 to 2018, Inga led its expansion into
Dubai, China and India, and advanced diversity
and inclusion initiatives across the international
insurance sector. Her background in global
financial services, insurance and risk management
brings a dierent perspective to the Board’s
debates. Previously, she held various senior
leadership positions at Converium, Zurich
Insurance Group, Canopius and GE Insurance
Solutions.
She has been an associate of the Chartered
Insurance Institute since 1987 and was appointed
Dame Commander of the Order of the British
Empire in 2017 for services to the UK economy.
KEY EXTERNAL APPOINTMENTS
Independent non-executive director of Crawford
& Company, Inc. and Willis Towers Watson plc,
member of the supervisory board of NN Group N.V.,
and Patron of Insuring Women’s Futures.
KEY STRENGTHS AND EXPERIENCE
• Strong track record of leadership and
management within private sector healthcare
• Experience in strategy, organisational
development, clinical performance, technology
adoption and quality management
• Qualified anaesthesiologist with expertise
in intensive care, acute and chronic pain,
and trauma, as well as managed healthcare
principles and reimbursement models
Ronnie joined Mediclinic in 1999 and served as
Chief Clinical Ocer before his appointment
as Group CEO. He was an executive director of
Mediclinic International Ltd from 2010 up to the
reverse takeover of Al Noor Hospitals Group plc.
Ronnie has extensive knowledge of Mediclinic’s
operations. He established the Clinical Services,
Clinical Information, Advanced Analytics, Health
Information Management and central Procurement
functions at Mediclinic, driving growth.
He holds an MBChB (Stellenbosch University),
a DA (SA) (College of Anaesthetists of South
Africa) and the FCA (SA) (Fellowship of the
College of Anaesthetists of South Africa), and has
completed the Advanced Management Program
(Harvard Business School).
KEY EXTERNAL APPOINTMENTS
Non-executive director of Spire since 24 May 2018
under the terms of the shareholder agreement
between Spire and Mediclinic.
KEY STRENGTHS AND EXPERIENCE
Over 20 years’ broad financial and
accounting experience
As a qualified chartered accountant with
extensive investment banking experience,
Jurgens takes a balanced approach to
financial management and growth. Since
joining Mediclinic as Group CFO, he has
driven a structured approach to capital
allocation with an emphasis on free cash
flow and ROIC. Previously, he served as CFO
at Datatec Ltd. He qualified with KPMG and,
in 2001, joined The Standard Bank of South
Africa Ltd, where he was appointed as Head
of Mergers and Acquisitions in 2009.
He holds a BCom Hons in Accounting
(University of Johannesburg) and is
registered with the South African Institute
of Chartered Accountants (‘SAICA’).
KEY EXTERNAL APPOINTMENTS
None.
NATIONALITY:
BRITISH
APPOINTED:
CHAIR DESIGNATE
MARCH 2020,
CHAIRJULY 2020
A
Audit and Risk Committee
C
Clinical Performance Committee
E
ESG Committee
I
Investment Committee
N
Nomination Committee
R
Remuneration Committee
Chair of committee
DAME INGA BEALE
NON-EXECUTIVE CHAIR
NE I CR E I I
NATIONALITY:
SOUTH AFRICAN
APPOINTED:
AUGUST 2016
JURGENS MYBURGH
GROUP CHIEF FINANCIAL OFFICER
COMMITTEE MEMBERSHIP KEY
The biographies of the directors and
their committee memberships are set
out in this section.
NATIONALITY:
SOUTH AFRICAN
APPOINTED:
JUNE 2018
DR RONNIE VAN DER MERWE
GROUP CHIEF EXECUTIVE OFFICER
BOARD OF DIRECTORS CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 105
KEY STRENGTHS AND EXPERIENCE
• Significant experience of healthcare and higher
education industry in the UAE
• Strategic and tactical expertise in operations,
fiscal management and transaction negotiation
Muhadditha contributes valuable insights into the
Middle East’s geopolitical landscape. Previously,
she was CEO of Dubai Healthcare City; CEO
of the Mohammed Bin Rashid Al Maktoum
Academic
Medical Center; Deputy CEO of
Tatweer; a member
of Dubai Holding; Executive
Dean of the Faculty of Health Sciences, Higher
Colleges of Technology (‘HCT’); Acting Deputy
Vice Chancellor of Academic Aairs at HCT; and
Director of Education of the Harvard Medical
School Dubai Center.
She holds a BS in Medical Technology (University
of Minnesota), an MSc in Clinical Laboratory
Services (University of Minnesota) and a Doctor
of Public Health (University of Texas).
KEY EXTERNAL APPOINTMENTS
President and chair of the board of trustees of the
Sharjah Education Academy; chair of the Sharjah
Private Education Authority; a member of the
University of Sharjah’s board of trustees, Audit and
Compliance Committee and Academic Committee.
KEY STRENGTHS AND EXPERIENCE
• Strong finance background with commercial
and strategic focus
• Extensive understanding of data analytics
to support transformation
Natalia is a former Chief Commercial Ocer of
Yum! Brands, Inc. (owner of brands such as KFC)
and former CFO of its subsidiary, Taco Bell.
A certified professional accountant (RF CPA)
and certified management accountant (USA
CMA), she was born in Ukraine, and has lived
and worked across the United States, Europe,
Russia and the UK.
She holds an MEng in Electrical Engineering
(Moscow State University of Transport, Russia)
and an MBA (Academy of National Economy,
Russia), and completed executive education
programmes on Valuation, Mergers and
Acquisitions (Harvard), Financial Management
(Stanford Graduate School of Business), and
Organisational Design for Digital Transformation
(MIT Sloan School of Management).
KEY EXTERNAL APPOINTMENTS
Non-executive director of Domino’s Pizza
Group plc, chair of its Sustainability Committee
and member of its Audit, Remuneration and
Nomination committees; adviser to Kharis
Capital, a private equity firm based in Belgium.
C E C AN R E
NATIONALITY:
BRITISH
APPOINTED:
INDEPENDENT NON-
EXECUTIVE DIRECTOR
OCTOBER 2017,
SID SEPTEMBER 2021
DR FELICITY HARVEY CBE
SENIOR INDEPENDENT DIRECTOR
NATIONALITY:
EMIRATI
APPOINTED:
NOVEMBER 2017
DR MUHADDITHA AL HASHIMI
INDEPENDENT NON-EXECUTIVE DIRECTOR
NATIONALITY:
FRENCH, RUSSIAN
APPOINTED:
AUGUST 2021
NATALIA BARSEGIYAN
INDEPENDENT NON-EXECUTIVE DIRECTOR
KEY STRENGTHS AND EXPERIENCE
• Strategic and operational experience in
complex, regulated environments
• Strong financial and accounting background
• Diverse experience in listed companies
across a breadth of sectors and jurisdictions
Zarina has served as a non-executive director
at several companies, including Kumba Iron Ore
Limited, Mercedes Benz SA Ltd, Sun International
Ltd, Vodacom South Africa Proprietary Ltd, Yebo
Yethu Ltd and Woolworths Holdings Ltd, as well
as SAICA, the Accounting Standards Board, and
the Financial Services Board. She also chaired the
South African Public Accountants’ and Auditors’
Board, and the South African Auditing Standards
Board. Prior to that, she was a partner of Ernst &
Young Inc. and, in 2002, joined the Absa Group,
where she served as an executive director of
Absa Bank, a member of the group’s executive
committee and Head of the Private Bank.
She holds a BAcc (University of Durban-
Westville) and is registered with SAICA.
KEY EXTERNAL APPOINTMENTS
SID of Investec plc and Investec Ltd, the
specialist banking and wealth management
group with dual listings on the LSE and JSE,
and non-executive director of certain of their
subsidiaries; non-executive director of
JSE Ltd and Oceana Group Ltd, South
African companies listed on the JSE.
NATIONALITY:
SOUTH AFRICAN
APPOINTED:
FEBRUARY 2022
ZARINA BASSA
INDEPENDENT NON-EXECUTIVE DIRECTOR
R
KEY STRENGTHS AND EXPERIENCE
• In-depth knowledge of health sector with both
clinical experience and public health expertise
• Strong insight into healthcare technology
and sustainable development
Felicity was previously Director General for Public
and International Health for the UK Government;
Head of Medicines, Pharmacy and Industry Group
at the Department of Health, London; Director
of the UK Prime Minister’s Delivery Unit; Director
of Prison Health for Her Majesty’s Prison Service;
Head of Quality Management at NHS Executive;
and Private Secretary to the Chief Medical Ocer.
She holds an MBBS (St Bartholomew’s Medical
College, University of London), a PgDip in Clinical
Microbiology (The Royal London Hospital College,
University of London) and an MBA (Henley
Management College). She was appointed CBE
in 2008 and is an Honorary Fellow of the Royal
College of Physicians and a Fellow of the Faculty
of Public Health.
KEY EXTERNAL APPOINTMENTS
Non-executive director of Guy’s and St Thomas’
NHS Foundation Trust and Halcyon Topco Ltd
(ultimate parent company of Sciensus); visiting
professor at the Institute of Global Health
Innovation, Imperial College London; co-chair
of the World Health Organization Independent
Oversight and Advisory Committee for Health
Emergencies Programme.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT106
KEY STRENGTHS AND EXPERIENCE
• Over 20 years’ investment experience with
substantial strategic and tactical expertise
• Significant knowledge of capital markets,
finance and accounting, risk management,
investor relations
Jannie joined the Rembrandt Group in 1996
and became CEO of Remgro in 2012. He is the
Board representative for Remgro, which holds
a 44.56% interest in the Company. Jannie was a
non-executive director of Mediclinic International
Ltd from 2012 to 2016, when it combined with
the Company (then Al Noor Hospitals Group plc)
to become Mediclinic International plc.
He holds a BAcc Hons in Accountancy
(Stellenbosch University) and an MPhil in
Management Studies (Oxford University).
Jannie is registered with SAICA.
KEY EXTERNAL APPOINTMENTS
CEO of Remgro; non-executive chair for the
following listed companies within the Remgro
group: Distell Group Holdings Ltd, RCL Foods Ltd
and Rand Merchant Investment Holdings Ltd.
KEY STRENGTHS AND EXPERIENCE
• Significant operational, strategic and risk
management experience
• Extensive knowledge of the healthcare sector
As the former Group CEO, Danie led Mediclinic’s
eorts to invest in our workforce and is uniquely
positioned to oversee and evaluate employee
engagement. He was CEO of Mediclinic from 2010
up to his retirement on 1 June 2018. He became an
executive director and Group CEO of the Company
on 15 February 2016 upon the Company’s listing
on the LSE. Danie served in various management
positions in the Remgro group before becoming
the Hospital Manager of Mediclinic Sandton in
1985. He joined Mediclinic’s Executive Committee
in 1995 and became a director in 1996. He was
seconded to the Group’s Dubai operations in 2006
and appointed CEO of Mediclinic Middle East in
2007. He served as a non-executive director of
Spire from 2015 to 2018.
He holds a BPL Hons in Industrial Psychology
(University of the Free State) and completed
the Advanced Management Program (Harvard
Business School).
KEY EXTERNAL APPOINTMENTS
Non-executive director of Capitec Bank Holdings
Ltd and Capitec Bank Ltd.
KEY STRENGTHS AND EXPERIENCE
• Experience in healthcare, clients’ needs and
the medical operational sector
• Experience in digital transformation and digital
ecosystems in healthcare services
• Insights into political, regulatory and
administrative context of healthcare in
Switzerland
Anja was previously Deputy Medical Ocer in the
Department of Health and Head of Medical and
Pharmaceutical Services. She served on various
cantonal, regional and national committees in
Swiss health administration, working closely with
political opinion leaders. She was also CEO of a
healthcare start-up company and worked several
years as a medical doctor in various hospitals.
Anja holds an MD-PhD (University of Basel),
specialising in Orthopaedic Surgery and
Traumatology, as well as in Sports Medicine; an
Executive MBA (University of Rochester-Bern);
a certificate in General Management (University
of Bern); and a certificate of the Swiss Board
School (International Center for Corporate
Governance of the University of St. Gallen).
KEY EXTERNAL APPOINTMENTS
CEO of Klinik Sonnenhalde AG; member of the
boards of Integrierte Psychiatrie Winterthur and
Zippsafe AG; Past-President of the Association
of Private Hospitals in Basel.
KEY STRENGTHS AND EXPERIENCE
• Thorough understanding of UK-listed
company environment, including risk
management and internal control
• Experience in healthcare, innovation and
transformation
Tom’s long career in finance makes him ideally
suited to his role as Chair of the Audit and Risk
Committee. He is a former non-executive director
of Liberty Living Group PLC and DP Eurasia N.V.
and previously served as CFO of InterContinental
Hotels Group PLC and British United Provident
Association (‘BUPA’), a provider of health-related
services including private hospitals. Earlier in his
career, Tom was CFO and Chief Operating Ocer
of William Hill PLC and Finance Director of Moss
Bros PLC. He started his career in professional
services and spent a total of 12 years at Price
Waterhouse and McKinsey.
He is a qualified chartered accountant with
a BSc Hons Finance and Accounting (University
of Bristol) and has completed the Advanced
Management Programme (INSEAD).
KEY EXTERNAL APPOINTMENTS
Non-executive director of Halfords Group plc, chair
of their Audit Committee and member of their
ESG, Nomination and Remuneration committees.
I N C N IE I
NATIONALITY:
SOUTH AFRICAN
APPOINTED:
NON-EXECUTIVE DIRECTOR
AUGUST 2018, NON-
EXECUTIVE DIRECTOR
FOR WORKFORCE
ENGAGEMENT APRIL 2019
DANIE MEINTJES
NON-EXECUTIVE DIRECTOR
NATIONALITY:
SWISS
APPOINTED:
JULY 2018
DR ANJA OSWALD
INDEPENDENT NON-EXECUTIVE DIRECTOR
NATIONALITY:
BRITISH
APPOINTED:
JULY 2019
TOM SINGER
INDEPENDENT NON-EXECUTIVE DIRECTOR
NATIONALITY:
SOUTH AFRICAN
APPOINTED:
FEBRUARY 2016
1
JANNIE DURAND
NON-EXECUTIVE DIRECTOR
BOARD OF DIRECTORS CONTINUED
Note
1
Pieter Uys, the Head of Strategic Investment at Remgro,
was appointed as Jannie’s alternate in April 2016.
Prior to joining Remgro, he was a founding member
and ultimately became the CEO of the Vodacom
Group. Pieter holds an MEng in Electronic Engineering
(Stellenbosch University) and an Executive MBA
(Stellenbosch University).
R
A
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 107
KEY STRENGTHS AND EXPERIENCE
• Significant healthcare and international
consumer goods experience
• Finance and business transformation
leadership roles in large, complex
organisations in developed and developing
markets
Steve spent the majority of his finance career with
the international consumer goods group Unilever,
most recently as Group Controller responsible for
performance management, accounting, reporting
and control. He was a member of Unilever’s
Global Finance Leadership Team, working closely
with the group’s board and Audit Committee.
He has a Masters in Finance (Columbia University)
and a BSc in Management (Rutgers University).
KEY EXTERNAL APPOINTMENTS
Non-executive director of Guy’s and
St Thomas’ NHS Foundation Trust, chair of
their Transformation and Major Programmes
Committee and member of their Audit and
Risk, Quality and Performance, Remuneration,
and Strategy and Partnership committees;
non-executive director of King’s College Hospital
NHS Foundation Trust and member of its Audit
and Finance and Commercial committees.
Indicates strong oversight
or practical experience
A RC
NATIONALITY:
AMERICAN
APPOINTED:
JULY 2020
STEVE WEINER
INDEPENDENT NON-EXECUTIVE DIRECTOR
HEALTHCARE
SUSTAINABILITY
RISK MANAGEMENT
IT, CYBERSECURITY
OTHER STAKEHOLDER
MANAGEMENT
INNOVATION,
TRANSFORMATION
MEDICAL/CLINICAL/
OPERATIONAL
MARKETING AND
CUSTOMER FOCUS
AUDIT, FINANCE
AND CONTROL
STRATEGY, CAPITAL
MARKETS, INVESTOR
MANAGEMENT
HUMAN RESOURCES,
TALENT MANAGEMENT,
COMPENSATION AND
BENEFITS
Dame Inga Beale
Dr Ronnie van der Merwe
Jurgens Myburgh
Dr Felicity Harvey
Dr Muhadditha Al Hashimi
Natalia Barsegiyan
Zarina Bassa
Jannie Durand
Danie Meintjes
Dr Anja Oswald
Tom Singer
Steve Weiner
BOARD SKILLS MATRIX
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT108
The Group CEO is supported by an experienced and capable executive management
team, with extensive industry experience and organisational knowledge. The success
of Mediclinic is testament to the strong management team and its ability to execute
on the Mediclinic Group Strategy.
See page 104 for the biographies of the Group CEO
and Group CFO
See the ‘About Mediclinic International’ section of
our website at www.mediclinic.com for the complete
biographies of the Group Executive Committee
GROUP EXECUTIVE
COMMITTEE
DR DIRK LE ROUX
Group Chief Information
Ocer
DR DANIEL LIEDTKE
Chief Executive Ocer:
Hirslanden
MAGNUS OETIKER
Group Chief Strategy Ocer
GREG VAN WYK
Chief Executive Ocer:
Mediclinic Southern Africa
KOERT PRETORIUS
Group Chief Operating Ocer
DAVID HADLEY
Chief Executive Ocer:
Mediclinic Middle East
DR RENÉ TOUA
Group Chief Clinical Ocer
GERT HATTINGH
Group Chief Governance
Ocer
DR TYSON WELZEL
Group Chief Innovation Ocer
CORPORATE GOVERNANCE
STATEMENT
COMPLIANCE WITH THE UK CORPORATE GOVERNANCE CODE
AND LISTING RULES
This Governance and Remuneration Report describes how the Board has applied the
principles of the Code published by the FRC (www.frc.org.uk) and complied with its
provisions. The five themes set out in the Code are covered in this Corporate Governance
Statement (the ‘Statement’) and subsequent pages of the Governance and Remuneration
Report or in other sections of the Annual Report, where indicated with cross references.
The Board is pleased to report that during
FY22 and up to 24 May 2022 (the ‘Last
Practicable Date’), the Company complied
with all the provisions of the Code, with the
following exceptions:
• Steve Weiner’s appointment as Chair
of the Remuneration Committee on
13 September 2021 was not fully
compliant with Provision 32 as, prior
to that, he had served as a member
of the Remuneration Committee for only
10 months. Nevertheless, the Nomination
Committee had every confidence that
Steve had the appropriate skills and
experience to carry out the role. He
had attended five meetings of the
Remuneration Committee after his
appointment as a member, and was
therefore familiar with its discussions
• Under the Code and associated FRC
guidance, the chair is not subject
to the independence test after
appointment, and excluded from
the Board independence calculation,
but is expected to exercise objective
judgement throughout their service.
The Code allows a chair who was
independent upon appointment to
be a member of the remuneration
committee. However, there is no
explicit indication on how the same
chair should be treated for the purpose
of calculating the independence of
the nomination committee. The Board
considers Dame Inga Beale to be fully
independent, as explained on page 111 of
the Annual Report, but notes that if this
were not the case, the composition of
the Nomination Committee would not be
viewed as compliant with Provision 17 of
the Code.
In addition to complying with all other
applicable corporate governance
requirements in the UK in accordance
with the Company’s primary listing on
the LSE, the Board is also satisfied that
the Company meets all the relevant
requirements of the JSE Listings
Requirements and the NSX Listings
Requirements arising from its secondary
listings on the JSE in South Africa and
the NSX in Namibia, respectively.
THEME PAGE/S
Board leadership and Company purpose 26–34, 91–92, 102, 110–112, 114–117, 129
Division of responsibilities 110–114, 119, 136, 157–161
Composition, succession and evaluation 110–111, 117–119, 137–142
Audit, risk and internal control 89, 91–101, 121–131, 171
Remuneration 143–167
Midstream, South Africa
and workings. In addition, as a member
of the Audit and Risk and the Clinical
Performance committees, he had
excellent insight into the setting of
appropriate financial and non-financial
performance measures and targets
for the STI and LTI schemes.
• The Remuneration Committee
has engaged with investors on the
Company’s Remuneration Policy and
outcome. However, the Remuneration
Committee has not engaged directly
with the workforce on remuneration
matters and is therefore not fully
compliant with Provisions 40 and 41
of the Code.
See page 156 of the Remuneration Committee
Report for a more detailed explanation
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 1092022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 109
BOARD COMPOSITION AND DIVERSITY
At the date of this Annual Report, the
Board comprised the non-executive
Chair, two executive directors, seven
independent non-executive directors
and two non-executive directors.
The Board seeks to construct an
eective, robust, well-balanced and
complementary Board, the capability
of which is appropriate to the nature,
complexity and strategic demands of the
business. The Board and the Nomination
Committee actively consider the structure,
size and composition of the Board and
its committees when contemplating new
appointments and succession planning for
the year ahead. Various diversity factors
are taken into account in determining the
optimal composition of the Board and its
committees, together with the need to
balance their composition and refresh this
progressively over time.
The Company’s non-executive directors
come from varied industries, backgrounds
and geographical locations and have
appropriate experience of organisations
with international reach. The skills and
expertise of the Board have been further
extended and reinforced through the
appointment of Natalia Barsegiyan and
Zarina Bassa during the year under review.
See pages 139–141 of the Nomination Committee
Report for more information on Board diversity,
the Board Diversity Policy and Board succession
planning
EXTERNAL APPOINTMENTS
AND CONFLICTS OF INTEREST
The Board has well-established and
eective procedures to identify and
manage directors’ conflicts of interest,
including those that may result
from Remgro’s shareholding in the
Company, and thus ensure that the
overall independence of the Board is
not compromised or overridden by the
influence of a third party. Candidates for
Board roles are required to complete a
questionnaire prior to Board approval of
their appointment to establish whether
they have any direct or indirect, actual
or potential conflict of interest or any
direct or indirect interest in a proposed
or existing transaction or arrangement
entered into by the Company. Directors
are required to complete this questionnaire
annually and are reminded at each meeting
of their duty to declare any new conflicts,
interests in proposed transactions or
changes to previous declarations.
Candidates for Board roles are also
requested to provide a list of their existing
significant external commitments and
associated time commitments to inform
the decisions made by the Nomination
Committee and the Board. Following their
appointment, the Board Charter requires
directors to seek the Board’s approval prior
to accepting any new appointments.
Independence (%)
Gender and ethnicity
Independent non-executive directors
Diverse ethnicity
3
Non-executive directors
White 4 6 10
2 0 2
Executive directors
Total 50% 50% 12
FIGURE 1: BOARD COMPOSITION AND DIVERSITY
1
18%18%64%
Tenure
4
– non-executive directors (%)
3–6 years: 30%
< 3 years: 50%
> 6 years: 20%
FEMALE MALE TOTAL
Notes
1
The composition of the Board is shown at the Last Practicable Date.
2
Calculation excludes the Chair of the Board, as per Provision 11 of
the Code.
3
Diverse ethnicity refers to individuals of African, Asian, Middle Eastern,
Central and South American background (as considered by the Parker
Review) or from other historically disadvantaged ethnic groups.
4
Tenure is calculated at 31 March 2022, from the date of first appointment
as a director of the Company or one of its predecessor companies.
Country of residence (number of directors)
South Africa
The UK
France The UAE
Switzerland
45 1 11
See the directors’ biographies and skills matrix on pages 104–107
The Board seeks to
construct an eective,
robust, well-balanced and
complementary Board.
CORPORATE GOVERNANCE STATEMENT CONTINUED
110
Any proposed appointment, new conflict
of interest or interest in a proposed
transaction notified to the Company
is considered for authorisation by the
Board at the next scheduled meeting.
The relevant director is not permitted
to count towards quorum nor vote
on the corresponding resolution. The
directors eligible to vote give particular
consideration to the type of role, expected
time commitments, the impact on the
director’s ability to discharge their duties
to Mediclinic, any relationships between
the Group and the external organisation,
and their duties as directors under the Act.
Any authorisation is granted in accordance
with the Act and the Articles, with
conditions attached where appropriate.
The ESG Committee annually reviews any
authorisations granted by the Board and
makes the appropriate recommendations
to the Board. The Board is satisfied that
the external commitments of the Chair
and other non-executive directors serve
to enhance their skills and experience for
the benefit of Mediclinic and do not aect
their ability to commit sucient time to
their roles as directors of the Company,
as evidenced by their attendance records
and contributions in meetings.
DIRECTORS’ INDEPENDENCE
The ESG Committee, at the request of the
Board, also reviews the independence of
the non-executive directors. Each review
is undertaken by reference to Provision 10
of the Code and the director’s individual
circumstances, including their external
appointments and conflicts of interest,
to ensure there are no relationships or
matters likely to aect their judgement.
Careful consideration is also given to the
conduct and independence of thought
and judgement exhibited by the director.
The Board is satisfied that all seven
directors identified as independent
non-executive directors in their
biographies are independent and free
from any relationship that could aect their
judgement and continue to demonstrate
their independence by how they conduct
themselves in Board meetings, including
how they exercise independent thinking.
The Board also carefully considered
the independence of the Chair, in view
of the composition of the Nomination
Committee after Alan Grieve stepped
down as a member on 13 September 2021.
After following the approach adopted
by the ESG Committee to assess the
independence of the other non-executive
directors, outlined above, the Board is
satisfied that the Chair continues to be
fully independent.
DIRECTORS’ ELECTION/RE-ELECTION
Under the Company’s Articles and the
Code, a director appointed by the Board
must stand for election at the first AGM
subsequent to such appointment and other
directors must stand for re-election annually.
Taking into account the results of the
FY22 Board evaluation, the skills of each
director and the composition of the Board,
including the balance of independence, the
Board considers that each of the current
directors is committed to their role, has
sucient time available to fully discharge
their duties, and will continue to contribute
positively and eectively to the Group’s
long-term, sustainable success. The Board
therefore recommends the election of
Natalia Barsegiyan and Zarina Bassa
(appointed on 1 August 2021 and
1 February 2022, respectively) and the
re-election of all other current directors at
the Company’s 2022 AGM.
Remgro holds 44.56% of the issued
ordinary shares of the Company and
is therefore regarded as a controlling
shareholder of the Company for the
purposes of the Listing Rules. Accordingly,
as explained in more detail in the 2022
Notice of AGM, the election or re-election
of the independent non-executive directors
must be approved by a majority of: (a) the
shareholders of the Company; and (b) the
independent shareholders of the Company.
FIGURE 2: SUMMARY OF MEDICLINIC’S CORPORATE GOVERNANCE FRAMEWORK
MANAGEMENT
ACCOUNTABILITY
BOARD
OVERSIGHT
BOARD OF THE COMPANY
AUDIT AND RISK
COMMITTEE
INVESTMENT
COMMITTEE
CLINICAL
PERFORMANCE
COMMITTEE
NOMINATION
COMMITTEE
ESG COMMITTEE
REMUNERATION
COMMITTEE
GROUP EXECUTIVE COMMITTEE
DIVISIONS AND BUSINESS UNITS
See pages 121–131
See page 112
See pages 132–134
See pages 137–142
See pages 135–136
See pages 143–167
Information flows between Committees as well up to Board
MEDICLINIC’S CORPORATE
GOVERNANCE FRAMEWORK
The Board has adopted a robust
corporate governance framework
which encompasses the minimum
expectations of the Board in terms
of standards, ethical conduct and
internal controls. The framework
maps out where accountability
resides in line with delegated
authorities and is shaped in part by
the areas of importance to the Group’s
operations and to the Board. Oversight
of delegated matters is supported by
formalised reporting channels, described
further below.
Our governance framework guides all our decisions and outcomes,
to support the delivery of our strategy
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 111
CORPORATE GOVERNANCE STATEMENT CONTINUED
THE ROLE OF THE BOARD
The Board is responsible for promoting
Mediclinic’s long-term, sustainable
success, in line with the Group’s purpose
and vision. Consequently, the Board is
deeply engaged in developing the Group’s
strategic direction, ensuring it aligns
with the Group’s purpose, vision, values
and culture, and monitoring progress of
its delivery.
The Board is also responsible for organising
and directing the aairs of the Group in a
manner that supports the eective delivery
of the Group’s strategy and reflects the
Group’s purpose and values.
DIVISION OF RESPONSIBILITIES
There is a clear segregation of
responsibilities between the Chair and
Mediclinic’s executive leadership, set out
in a Board Charter, which is reviewed
annually by the Board. The charter clearly
defines the roles of the Chair, SID, Group
CEO, Company Secretary, non-executive
directors and the Board committees.
See the ‘Governance’ section of the Company’s
website at www.mediclinic.com for further details
of each of the above roles
In particular:
• The Chair is primarily responsible for
leading the Board’s eective operation
and governance. The Chair also ensures
that the Board understands key
stakeholders’ views and seeks assurance
that they have been considered. The
role is a non-executive one, but the
Chair meets regularly with the Group
CEO to stay informed and provide
advice.
• The Group CEO, supported by the
wider Group Executive Committee,
is responsible for implementing the
Group’s strategy and leading the day-
to-day operation of the business within
the agreed delegations of authority,
governance and processes, and with
clearly defined accountabilities. The
Group CEO and Group CFO provide
written reports at each Board meeting
on executive matters and Board
papers include dashboards tracking
the Group’s financial and non-financial
performance.
• The SID’s role includes acting as a
sounding board for the Chair, leading
the performance evaluation of the
Chair, and generally being available
to directors and shareholders should
they wish to discuss matters that have
not been addressed through normal
channels.
• In order to operate eciently and
provide the appropriate level of
attention and consideration to relevant
matters, the Board has established
six committees that carry out certain
tasks on its behalf in accordance with
their expertise and written terms of
reference. The composition of each
committee is deliberately designed to
ensure common membership between
committees with overlapping interests
and that individual directors are not
overburdened by their committee
roles. The terms of reference of each
committee are reviewed at least
annually by the Board to ensure they
remain appropriate.
Details of the key responsibilities and
activities of the Audit and Risk, Clinical
Performance, ESG, Nomination and
Remuneration committees are set
out in the separate reports for these
committees that follow this Statement.
The key responsibility of the Investment
Committee is to provide strategic input
and direction on capital allocation
and growth opportunities in new
geographies. It reviews and approves or
makes recommendations to the Board
on proposed investments and capital
expenditures, in accordance with its
authority levels. It further monitors the
performance of approved investments
and debt funding, including the
refinancing of existing facilities which
fall within its remit.
MATTERS RESERVED FOR THE BOARD
The Board’s delegated authorities
framework includes a schedule of
matters reserved for approval by the
Board, which covers areas material to the
Group’s strategy and overall resilience.
This schedule is reviewed annually by the
Board and includes:
• the Group’s purpose, values, strategy
and strategic goals;
• the annual budget and long-term
financial and business plan, and financial
results and reporting;
• the Group’s dividend policy and
dividend payments;
• the Group’s risk appetite and system of
risk management and internal control;
• changes to the Group’s capital
structure;
• major acquisitions and disposals,
and other transactions outside the
delegated limits;
• changes to the Board and Board
committee structure, size and
composition, including new
appointments; and
• succession plans for the Board and
senior management.
Other key elements of the Board’s role
include:
• establishing and overseeing a framework
of prudent and eective controls; and
• ensuring eective engagement with
shareholders and other stakeholders.
See the Risk management report and the Audit
and Risk Committee Report on pages 91–92 and
128–129, respectively, as well as pages 115–117 of
this Statement and Stakeholder engagement on
pages 26–29
The composition of each
committee is deliberately
designed to ensure
common membership
between committees with
overlapping interests.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT112
Notes
1
The ESG Committee was constituted with eect 1 September 2021. Prior to that, sustainable development matters were addressed by the former Clinical Performance
and Sustainability Committee, which was refocused as a purely Clinical Performance Committee with eect 1 September 2021.
2
The number of meetings held refers to scheduled Board and committee meetings during FY22. In addition, the Board held one ad hoc meeting relating to the proposed
takeover of Spire by Ramsay Health Care Limited. Between the Company’s financial year end and the Last Practicable Date, the Board held one scheduled meeting,
primarily to approve this Annual Report and related matters. The Investment Committee held three ad hoc meetings during the year to deal with urgent approvals
required. Further details of the other committees’ meetings can be found in their separate committee reports that follow this Statement.
3
Attendance of committee meetings is shown for committee members only. Dr Muhadditha Al Hashimi was appointed to the Remuneration Committee on 13 September 2021.
Natalia Barsegiyan was appointed to the Board and as a member of the Audit and Risk and the ESG committees on 1 August 2021. Zarina Bassa was appointed to the
Board and as a member of the Remuneration Committee on 1 February 2022. Alan Grieve and Trevor Petersen stepped down from their roles as committee members from
13 September 2021 and retired from the Board on 14 February 2022.
Table 1 alongside sets out the directors’
attendance record for scheduled Board
and committee meetings during FY22.
Meetings continued to be held as virtual or
hybrid meetings due to various COVID-19
travel restrictions at the time. The new
practices adopted have also facilitated
greater participation by employees in
relevant discussions, increasing the
interaction between directors and senior
leadership and their teams, and providing
more visibility over the talent pipeline
within the Group.
Directors are expected to attend all
Board and relevant committee meetings.
Directors who are unable to attend
a meeting due to certain exceptional
circumstances, such as ill health or pre-
existing or unexpected and unavoidable
business or personal commitments,
still receive the relevant papers. Where
feasible, they will communicate their
comments and observations to the Chair
of the Board or relevant committee for
raising as appropriate during the meeting.
On the rare occasions where Jannie
Durand is unable to attend a meeting, he
ensures his alternate, Pieter Uys, attends
in his place and is fully briefed in advance.
Each director’s attendance record is
considered as part of the formal annual
review of their performance. Despite
the challenges posed by COVID-19,
directors’ external appointments had
no, or extremely limited, impact on their
attendance. The Board was satisfied that
all absences from Board or committee
meetings were the result of serious or
unforeseen circumstances outside the
directors’ control.
COMMITTEES
NAME BOARD
AUDIT
AND RISK
CLINICAL
PERFORMANCE
1
ESG
1
INVESTMENT NOMINATION REMUNERATION
Number of meetings held
2
7 4 5 1 2 2 5
Directors at 31 March 2022
Dame Inga Beale 7/7
- -
1/1 2/2 2/2 5/5
Dr Ronnie van der Merwe 7/7
-
5/5 1/1 2/2
- -
Jurgens Myburgh 7/7
- - -
2/2
- -
Dr Felicity Harvey 7/ 7
-
5/5 1/1
-
2/2
-
Dr Muhadditha Al Hashimi
3
7/7
-
5/5
- - -
3/3
Natalia Barsegiyan
3
4/5 3/3
-
1/1
- - -
Zarina Bassa
3
2/2
- - - - -
2/2
Jannie Durand 6/7
- - -
2/2 1/2
-
Danie Meintjes 7/7
- -
1/1 2/2
- -
Dr Anja Oswald 7/7
-
4/5
- -
2/2
-
Tom Singer 7/7 4/4
- -
1/1
-
5/5
Steve Weiner 7/7 4/4 5/5
- - -
5/5
Directors retired during the year
Alan Grieve
3
6/6 2/2
- -
1/1
- -
Trevor Petersen
3
5/6 2/2
- - - -
2/2
TABLE 1: BOARD AND COMMITTEE MEETING ATTENDANCE
BOARD AND COMMITTEE MEETINGS
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 113
Board and committee meetings follow clear
agendas developed by the Chair of the
Board or committee, the Group CEO and/or
other relevant members of management
and the Company Secretary. These are
based on an annual plan of business and
adjusted to reflect current strategic and
operational developments. Each agenda is
structured to prioritise matters for decision
and discussion, and ensure that sucient
time is allocated to address all necessary
matters. Meeting papers are circulated at
least one week in advance of each meeting
via an electronic portal, which also includes
a library of reference resources.
In order to support fully informed decision-
making, committee meetings are carefully
sequenced to allow insights and decisions to
be shared between committees on a timely
basis. In addition, committee meetings are
held in advance of Board meetings, allowing
committee chairs to provide a prompt and
full report on the key matters discussed. All
committee papers are made available to all
directors, except for those on matters of
a particularly sensitive nature. In addition,
copies of committee minutes are circulated
to all Board members at the next opportune
meeting. The Chair of each committee attends
the AGM to respond to investors’ questions
regarding the committee’s activities.
FY22 PRINCIPAL AREAS
OF FOCUS
The Board’s principal areas of focus and key
decisions taken during FY22 and up to the
Last Practicable Date are set out alongside.
See the Section 172 statement on pages 30–33
for more detailed information about some of the
principal decisions made by the Board during FY22
Approval of:
• the Group’s Capital Allocation Policy
• adjustments to the Group’s strategy and monitoring of its implementation, including:
– deep dives into innovation and digital transformation, and growth across the continuum of care and
into new markets;
– renewable energy purchase agreement with Energy Exchange; and
– project to relocate, combine and expand two existing facilities on one site in the city of George, South Africa
• FY22 budget and five-year plan and preparation for FY23 process
• the Group’s response to Ramsay Health Care Limited cash oer to acquire Spire
Approval of:
• FY21 and FY22 preliminary results and Annual Report
• FY22 interim results and trading updates
• final and interim dividend proposals
• impact of COVID-19
• going concern and viability
Consideration of:
• the Group’s holistic performance through Group CEO report and suite of financial and non-financial information
dashboards at each Board meeting
Consideration of:
• senior leadership succession plans and development
• workforce and stakeholder engagement outcomes and eectiveness
• diversity and inclusion progress
• employee wellbeing and impact of COVID-19
Approval of:
• risk appetite statement, robust assessment of emerging and principal risks and their management or mitigation
• changes in the structure and composition of the Board committees to establish a separate ESG Committee
• Group policies, including Board Charter and committees’ terms of reference
Consideration of:
• external evaluation of Board and committees
• external appointments and conflicts of interest
• cybersecurity preparedness
• legal, regulatory and governance updates and compliance
Review of:
• eectiveness of risk management processes and material internal controls
Consideration of:
• share register analysis
• investor feedback from meetings and quarterly QuantiFire reports
• investor feedback and voting at the 2021 AGM
• feedback from investor consultations on remuneration matters
CORPORATE GOVERNANCE STATEMENT CONTINUED
TABLE 2: BOARD’S FOCUS AREAS
Strategy
Performance
Leadership
and people
Governance
and risk
Investor
engagement
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT114
PURPOSE AND CULTURE
The Group’s purpose, to enhance the
quality of life, was approved by the Board
in February 2019 and sits at the core of the
Group’s strategy and all decisions made by
the Board.
The Board is responsible for promoting,
assessing and monitoring the Group’s
culture and ensuring it is aligned with
the Group’s purpose, values and strategy.
The Group’s Code of Business Conduct
and Ethics, which applies to all directors
and employees and is reviewed and
approved annually by the Board, encourages
an organisational culture that is client
centred, trusting and respectful, patient
safety focused, performance driven and
team orientated. The Board fully endorses
these values and the behaviours they seek
to promote, and ensures they are reflected
in its discussions and decision-making.
The Board monitors workforce culture
with the assistance of its committees
in a number of ways, including through:
• reports on medical practitioner and client
experience surveys;
• direct feedback from employees and
reports on workforce engagement, as
described in the ‘Workforce engagement’
section alongside;
• clinical performance reports;
• reports on internal audits, compliance,
ethics and fraud; and
• non-financial information dashboards
presented at each Board meeting.
The quantitative and qualitative information
received allows the Board to ensure that
the Group’s culture reflects its stated values
and is aligned with its purpose.
WORKFORCE ENGAGEMENT
Employee wellbeing continued to be of
the utmost importance to the Group and
at the forefront of every decision made by
the Board as employees had to deal with
COVID-19 for a second year. Listening and
responding to employee needs through
eective communication and sound relations
are important components in being regarded
as the employer of choice among existing
and prospective employees, and vital to
maintaining an engaged and loyal workforce
that will help deliver the Group’s strategic
goals. The negative impact of COVID-19
continues to magnify the workforce-related
risks for the Group, as discussed in the Risk
management report on page 96.
Workforce engagement is conducted
through various methods, including virtual
leadership conferences, annual employee
engagement surveys and other methods
outlined in our report on stakeholder
engagement on pages 26–29.
Danie Meintjes is the designated non-
executive director responsible for
workforce engagement. As the former
Group CEO and with his prior experience
as divisional Human Resources Executive,
he was closely involved with the
Company’s approach to engaging with,
investing in and rewarding employees.
Given his knowledge and experience
gained over 30 years in dierent capacities
at Mediclinic, the Board considers him well
positioned to oversee engagement eorts
and relay the voice of the workforce.
His responsibilities in this regard include:
• reviewing and assessing the existing
workforce engagement programmes;
• understanding and interpreting the views
of the workforce;
• providing feedback to the Board on
the impact and eectiveness of the
Group’s various workforce engagement
initiatives;
• conveying feedback from the Group’s
workforce (as consolidated via multiple
channels) to the Board and investors;
• providing feedback to the workforce
through existing (or, if appropriate,
new) communication channels on how
their input was communicated to and
considered by the Board; and
• providing a formal report on workforce
engagement once a year to the ESG
Committee and to the Board.
Danie works closely with the Group Chief
Strategy and Human Resources Ocer and
his team in accordance with a work plan
designed to support him in the fulfilment
of this role. The regular dashboards
presented to the Board, reports from
the Group CEO and an annual detailed
report from Danie enable the Board
to assess and monitor the themes
arising from the employee engagement
programmes. The creation of a separate
ESG Committee in September 2021
has increased the opportunity for
more in-depth discussion of employee
engagement, and diversity and inclusion
outcomes.
The Board reviewed the existing
and planned workforce engagement
channels, with due consideration for
recommendations by the designated
non-executive director, and was satisfied
that these provide an eective means of
collecting feedback from and providing
feedback to the workforce. It is recognised
that the programme of engagement
activities and reports to the ESG
Committee and the Board will continue
to evolve in the coming year in response
to directors’ feedback and as the Board
resumes in-person meetings and annual
site visits.
See the Sustainable development overview on
pages 34–46 for more
Employee wellbeing
continued to be of the
utmost importance to the
Group and at the forefront
of every decision made by
the Board as employees
had to deal with COVID-19
for a second year.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 115
SHAREHOLDER ENGAGEMENT
The Board seeks to maintain open and
regular communication and engagement
with shareholders throughout the year
on a range of matters and values their
opinions and the time they make available
to engage with the Company. The Group
CEO, Group CFO and Head of Investor
Relations have primary responsibility
for managing eective, regular and
transparent communications with
institutional investors on matters such as
operational and financial performance,
regulatory changes, governance and
strategy. They do so through an annual
programme of meetings and conferences,
which remained mostly virtual during FY22
in view of the diculties with international
travel due to COVID-19.
The Chair and the SID also engage
regularly with major investors and Board
committee chairs are available upon
request to meet with investors. The Chair
ensures that the Board as a whole has
a clear understanding of investors’ views
and the Board considers that appropriate
and proportionate mechanisms exist
to acquire a good understanding of
major investors’ key focus areas. These
include direct feedback from investors to
management and the Investor Relations
function, which is then shared through
the investor relations reports at every
Board meeting, and quarterly reports
prepared by QuantiFire, a service provider
that collects feedback and confidence
measures from investors.
CORPORATE GOVERNANCE STATEMENT CONTINUED
Geographical breakdown of shareholders
Africa 76%
North America 7%
Remgro 45%
Other 4%
Rest of Africa 31%
UK 13%
AGM
The Board values the AGM as a valuable
opportunity to engage with shareholders,
including retail investors, and meet them
informally in person after the main business
of the meeting. All directors will generally
attend the AGM, in particular the Chair,
the Group CEO and Group CFO, and the
committee chairs.
It was therefore disappointing that the
Company’s 2021 AGM was again disrupted
by COVID-19 travel restrictions and public
health guidelines. However, the Board held
an online shareholder event ahead of the
AGM’s proxy voting deadline, allowing
shareholders to ask questions in writing
in advance or at the event and reflect the
responses received in their proxy votes.
A recording of the event, including the
responses from the Board to questions
received, was published on the Company’s
website shortly afterwards. Shareholders
were also invited to submit questions ahead
of the AGM. Over 90% of the issued share
capital of the Company was voted at the
2021 AGM.
The Company’s 2022 AGM will take place
on 28 July 2022 in London and (subject to
no change in circumstances) shareholders
are encouraged to attend in person. The
specific arrangements for the meeting are
outlined in the separate Notice of AGM
accompanying this document. In addition,
for shareholders unable to attend the
meeting, the Board is again holding an online
event on 14 July 2022. The Board looks
forward to engaging with a broad range
of the Company’s shareholders at these
two events.
Typical investor relations programme
FY22
• Management and the Head of Investor Relations participated in 19 roadshows,
investor conferences and ad hoc capital market events
• The Chair and the SID held one-to-one meetings with 10 major international and
South African investors
• The Head of Investor Relations conducted private client broker meetings in the UK
• Meetings with more than 129 unique financial institutions
• Initiation of dedicated ESG engagement
• AGM and pre-AGM shareholder event
• Material published on the Group website and divisional social media channels
and websites
Continuous physical and virtual engagement with capital markets, including:
• one-to-one and group meetings;
• investor conferences;
• roadshows;
• results presentations;
• site visits; and
• ad hoc events with investors, sell-side analysts and sales teams.
19
ROADSHOWS
AND OTHER
EVENTS
129
MEETINGS WITH
UNIQUE FINANCIAL
INSTITUTIONS
10
ONE-TO-ONE
MEETINGS WITH
MAJOR INVESTORS
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT116
SHAREHOLDER ENGAGEMENT
FOLLOWING THE 2021 AGM
At the Company’s 2021 AGM, the resolution
to authorise the directors to allot ordinary
shares (Resolution 18) received 79.60%
support. In accordance with the Code,
the Company sought to engage with key
investors after the AGM to ensure it fully
understood the reasons behind the result
and published an update on the Group’s
website on 25 January 2022. As noted in
the update, the voting outcome reflects
the diering market practice between
the UK and South Africa, where investors
in the latter jurisdiction usually approve
more restricted levels of authority to issue
shares and prefer to vote on the proposed
allotments of shares on a case-by-case
basis. Most South African investors
acknowledge that they operate under
policies that do not permit them to support
the UK standard level of authority to allot
shares, although a number do understand
the Company’s position.
ASSESSING THE BOARD’S
EFFECTIVENESS
The Board is committed to monitoring
and improving its performance and
eectiveness. This is achieved primarily
through a formal annual evaluation of
the Board, its committees and individual
directors (including the Chair), and
ensuring the feedback received is acted
upon. The Board conducts an in-depth,
externally facilitated evaluation every
three years and an internally facilitated,
questionnaire-based evaluation during the
other two years.
The Chair also meets regularly with the
SID and other non-executive directors,
individually and as a whole, and with
the Company Secretary and members
of management after each meeting.
These sessions provide opportunities to
exchange feedback on the functioning of
the Board and identify opportunities for
improvement, supplementing the formal
evaluation process.
As Mediclinic is a UK premium-listed
company, the Board considers it
appropriate to seek authorities in line with
the UK’s Investment Association’s Share
Capital Management Guidelines to respond
to market developments and finance
business opportunities as they arise.
The Board will continue to engage with
investors on this topic; however, as the voting
outcome reflects the diculty in balancing
the expectations of dierent markets, it is
possible this outcome will continue.
ENGAGEMENT IN RELATION TO THE NEW
DIRECTORS’ REMUNERATION POLICY
During FY22, the Remuneration Committee
also engaged with major institutional
shareholders and investor-representative
bodies on various aspects of the new
Directors’ Remuneration Policy being
proposed at the Company’s 2022 AGM,
with feedback being largely positive.
See the Directors’ Remuneration Policy on
pages 148–156 for more
OTHER STAKEHOLDER
ENGAGEMENT
The Group Executive Committee
is responsible for the day-to-day
relationships with the Group’s key
stakeholders and reports on these
activities are provided to the Board at
each meeting. The Board, directly or
through its committees, engages or
oversees engagement with the Group’s
key stakeholders through a number of
mechanisms.
The Board last reviewed and
approved the Group’s stakeholders
in November 2021. In addition to
employees and investors, the following
groups of significant stakeholders were
agreed: clients, communities, alumni and
potential applicants, financial institutions,
governments and authorities, healthcare
insurers, industry associations, industry
partners, media, medical practitioners,
professional societies, and suppliers.
The Board also reviewed the Group’s
mechanisms for engagement with each
group of stakeholders and is satisfied that
they remain eective.
See Stakeholder engagement on pages 26–29
for more
The Board is committed to
monitoring and improving
its performance and
eectiveness.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 117
TABLE 3: STATUS OF KEY ACTIONS IDENTIFIED IN THE FY21 BOARD EVALUATION
KEY ACTIONS IDENTIFIED STATUS
Increase visibility of succession
planning at Board level
• A detailed report on succession planning and
development plans for the Group Executive
Committee and the divisional executive
committees was presented to the Board
• The group of senior leaders invited to present
on relevant topics at Board meetings has been
broadened to increase visibility over the talent
pipeline
Increase opportunities for
reporting on Group and
divisional competitors to
the Board
• The Board now receives a biannual detailed
analysis of the Group’s competitive landscape
as well as updates on key developments in the
Group CEO’s report at every Board meeting
• An external expert briefing session on the topic
has been arranged for FY23
Continue to identify and
introduce new methods for
the Board to access external
expertise and insights into
digital business transformation
and other pertinent matters
• A number of expert briefing sessions have been
arranged for the Board on a range of relevant
matters, as noted in the Audit and Risk and the
Nomination committees’ reports
• Further sessions are being arranged
Increase opportunities for
discussion on the Company’s
risk appetite at Board level
The risk appetite statement is presented to the
Board for discussion and approval twice a year,
following a detailed review by the Audit and Risk
Committee
Maintain focus on continuous
improvement in the quality of
information provided to the
Board by way of management
information dashboards
Dashboards have been developed to support the
Board in monitoring and assessing the culture of the
business; these continue to evolve and mature with
use and input from the Board
FY22 EVALUATION
The Board was due to undertake an external evaluation in FY21; however, due to the
relatively recent appointment of the Chair and the disruption and uncertainty caused by
COVID-19, it was agreed that an externally facilitated but questionnaire-only evaluation
would be conducted instead, with a full external evaluation being delayed until FY22.
In accordance with that commitment, Lintstock was appointed to undertake an in-depth
review with interviews of the Board, its committees and the individual directors (including
the Chair), as described below. Lintstock had conducted the Board evaluation in FY18 and
FY21, but otherwise had no other connections to the Company or individual directors.
TABLE 4: FY22 EVALUATION PROCESS
APPOINTMENT EVALUATION DESIGN
Following the Board’s approval of the
scope and process of the FY22 Board
evaluation, the Chair, the SID designate
and the Group CEO reviewed the
proposals presented by three providers
and selected Lintstock. Their choice
reflected in part the opportunity to benefit
from continuity from the previous year’s
review, while acknowledging that the next
external review should be conducted by
another evaluator, in line with good
practice.
Lintstock developed questionnaires in
consultation with the Company Secretary,
the Chair of the Board and the committee
chairs, the committees and individual
directors. The questions reflected matters
that were important to the Board as well as
best practice set out in the Code and other
guidance.
It was agreed that the performance of
the ESG Committee would not be
evaluated as it had been established only
in September 2021.
EVALUATION REPORT AND DISCUSSION
Lintstock issued the questionnaires to
Board members and other regular
attendees a few weeks ahead of the
interviews.
Participants in the evaluation of the Audit
and Risk Committee included the lead
external audit partner.
Responses to the questions informed the
discussions during the one-to-one
interviews, which took place virtually.
The anonymity of all feedback was
guaranteed throughout the process to
promote candid feedback.
The feedback from the evaluations
was captured in separate reports for
the Board, each committee and
individual directors, including the Chair.
The relevant report was presented to the
corresponding committee for discussion
between February and March 2022, and
subsequently shared with the Board.
Lintstock attended the Board meeting
held at the end of March 2022 to present
the findings of the Board’s evaluation
and answer questions. Following these
meetings, action plans were agreed with
each committee’s Chair to implement
and monitor the agreed opportunities
for improvement.
PROGRESS ON ADDRESSING THE FY21 BOARD EVALUATION FINDINGS
CORPORATE GOVERNANCE STATEMENT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT118
Board committees: The evaluation of the Board committees confirmed that each
committee continued to provide eective support to the Board. Further information
on the committees’ evaluations can be found in their respective reports.
Chair of the Board: All directors were asked to provide feedback on the performance
of the Chair, following the process outlined above. The SID also discussed the Chair’s
performance in one-to-one conversations with each of the directors. Lintstock’s report
was discussed by the SID and the Chair, and the SID provided feedback to the other non-
executive directors in the absence of the Chair after the May 2022 Board meeting.
Other directors: The individual performance of the other directors was also assessed and
the corresponding report was shared privately with the Chair by Lintstock. The Chair held
one-to-one meetings with each director to reflect on any personal development needs
and any other matters they wished to raise. The findings from this exercise formed a key
part of the basis for the Board’s recommendation that all current directors should be
elected/re-elected at the Company’s 2022 AGM ( see page 111).
The FY22 evaluation was structured around core aspects of eective Board oversight,
namely:
• Board composition and dynamics;
• support and meetings;
• strategic oversight;
• risk management and internal control;
• culture and stakeholder engagement; and
• people oversight.
In addition, the review addressed lessons that the Board could learn from the COVID-19
pandemic, and the Board’s priorities for re-engaging with the business following the
prolonged period of virtual meetings.
The results of the evaluation showed a high degree of satisfaction with the Board’s
overall performance and eectiveness, and identified some areas for increased focus
or improvement.
TABLE 5: AREAS OF ASSESSMENT AND FINDINGS
KEY PRIORITY/IES FOR FY23
Board composition and dynamics Focus on strengthening social capital
between Board members as well
as between Board members and
management – particularly for new
directors
Board support and meetings Continue to arrange regular external
expert briefings on topical subjects
Strategic oversight Develop a deeper understanding
of opportunities and risks relating
to digitalisation and data
Risk management and internal control • Monitor arrangements to attract
and retain doctors and nurses,
and to promote their wellbeing
and development
• As the Group expands along the
continuum of care, ensure development
and appropriate oversight of relevant
performance measures, eectiveness
of new or enhanced functions, and
identification, monitoring and mitigation
of new risks
Culture and stakeholder engagement Identify means of increasing the ‘voice
of the client’ in the boardroom and ways
of determining clients’ perspectives as
the Group expands along the continuum
of care
People oversight Continue to support management on
development of robust succession plans
for key senior leadership positions, as well
as investment in developing a strong and
diverse internal talent pipeline
Lessons learned from the pandemic Continue to foster collaboration between
divisions, joint problem-solving, and
introduction of minimum levels of
standardisation across the Group, while
making allowance for the necessary
cultural and regulatory dierences
KEY PRIORITY/IES FOR FY23
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 119
OTHER GOVERNANCE
MATTERS
FRAUD, CORRUPTION, ETHICS
AND COMPLIANCE
Conducting business in an honest, fair
and legal manner is one of Mediclinic’s
fundamental guiding principles. The Group
has zero tolerance for unethical business
conduct, in particular fraud and corruption.
Mediclinic’s commitment to high standards
of business conduct and ethics is set out
in the Code of Business Conduct and
Ethics, and the Anti-Bribery Policy, which
all directors, agency sta and contract
workers across the Group are required
to promote and enforce. Both policies
are actively endorsed by the Board and
management and communicated to new
directors and employees as part of their
onboarding.
See the ‘Governance’ section of the Company’s
website at www.mediclinic.com
An anti-bribery and ethics line awareness
campaign aimed at onboarding suppliers
was rolled out during the period. The
Audit and Risk, the ESG and the Clinical
Performance committees receive regular
reports on fraud and ethics matters
(including instances of whistleblowing) and
regular updates are provided to the Board.
The Audit and Risk Committee reviews
and reports to the Board annually on the
eectiveness of the ethics lines, which
employees and external parties can use
to report issues of concern, anonymously
if preferred.
Compliance with relevant legislation,
regulations and accepted standards/codes
is integral to the Group’s risk management
process and is monitored in accordance
with the Group’s Regulatory Compliance
Policy.
ICT GOVERNANCE
Mediclinic has an extensive ICT
environment that acts as an enabler of
business strategies and operations. ICT
governance is done in the context of the
Group’s overall governance, in general, and
of the Group’s risk management structures
and processes, specifically. The Group’s
risk management system is used to capture
and track all ICT risks, audit findings,
mitigating actions and responsibilities.
Information security and data protection
policies and controls are in place
throughout the Group regulating,
among others, the processing, use and
protection of own, personal and third-
party information. The flow of personal
data across country borders is managed
in accordance with country-specific
legislation.
There were no material information
security incidents during the year under
review.
CORPORATE GOVERNANCE STATEMENT CONTINUED
120
AUDIT AND RISK
COMMITTEE REPORT
We maintained a strong
focus on ensuring the
integrity of the Group’s
corporate reporting
and financial statements.
Tom Singer
Chair of the Audit
and Risk Committee
I am pleased to present my first report
on the activities of the Audit and Risk
Committee (the ‘Committee’) during
FY22 and up to the Last Practicable Date.
I would like to begin by welcoming Natalia
Barsegiyan to the Committee and thanking
Committee members, management and
the externl nd internl uditors for their
hrd work and support during the year.
Particular thanks go to my predecessor,
Alan Grieve, for his leadership as
Committee Chair and his supportive
handover when I assumed the role in
September 2021, and to Trevor Petersen,
who served dutifully on this Committee
for five years.
During another year disrupted by
COVID-19, the Committee continued to
play a key role in the Group’s corporate
governance framework by supporting
the Board on matters relating to financial
reporting, risk management and internal
controls. We maintained a strong focus
on ensuring the integrity of the Group’s
corporate reporting and financial
statements, and dedicated considerable
time towards reviewing and challenging
the underlying work associated with
the Group’s financial results. This included
the methodology, assumptions and
judgements relating to the goodwill
impairment testing, going concern and
viability assessments.
As part of this workstream, we held
a session with Wüest Partner AG, the
property consulting group, and received
an update on the Swiss property market.
We entered into a detailed discussion on
their valuation of the property portfolio in
Switzerland, which underpins some of the
significant estimates and key judgements
made in respect of the Group’s annual
financial statements. Another key focus
area was ensuring that the Group’s climate-
related financial disclosures align with TCFD
recommendations and reviewing related
carbon metrics reporting. Furthermore,
following review of our 2021 Annual Report
by the FRC, we have enhanced certain
disclosures in our annual report and annual
financial statements.
Concerning our work on risk management
and internal controls, the Committee
scrutinised and challenged the Group’s
risk appetite statement and review
of the emerging and principal risks, taking
into account the impact of the ongoing
COVID-19 pandemic, key trends in the
healthcare sector and the Group’s
strategy, prior to recommending them
for Board approval. We received a
presentation from an external expert on
the ever-evolving cyber threat landscape,
together with regular updates from
management on countermeasures to
protect Mediclinic from such risks and
respond to potential and actual breaches.
We also reviewed the Group’s internal
controls and risk management systems
and were satisfied that they continued to
be eective.
Following the publication of the UK
Government’s consultation on ‘Restoring
trust in audit and corporate governance’
(the ‘BEIS Consultation’), we had an expert
briefing session to explore particular
aspects and potential impacts of the
consultation in detail. We also encouraged
management to identify the practical
implications for Mediclinic and begin
early preparations for expected changes
to ensure the Group was well placed to
respond when the final outcome became
known.
The outcomes of these and other
Committee actions can be found in the
rest of this report or through the cross
references to other elements of the
Annual Report. The Committee has also
commenced the process to tender the
external audit contract in line with UK
statutory requirements and good practice.
This report contains a summary of the
timelines, and details of the process will
be included in next year’s report.
Tom Singer
Chair of the Audit and Risk Committee
24 May 2022
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 121
AUDIT AND RISK COMMITTEE REPORT CONTINUED
COMMITTEE ROLE AND
RESPONSIBILITIES
The Committee’s key responsibilities include:
• monitoring and reviewing the quality and
integrity of the Group’s annual financial
statements, narrative disclosures, related
announcements and other financial
information published by the Group;
• monitoring and reviewing the adequacy
and eectiveness of the Group’s risk
management and internal control systems,
including the work and eectiveness of
the Internal Audit function (in conjunction
with the Clinical Performance and the
ESG committees, as appropriate); and
• monitoring and reviewing the
eectiveness of the external audit and
making recommendations to the Board
regarding the reappointment of the
external auditors and tender of the
external audit contract.
See the Committee’s terms of reference, available
on the ‘Governance’ section of the Company’s
website at www.mediclinic.com, for further details
COMMITTEE MEMBERSHIP
AND ATTENDANCE
The Committee membership comprises
three independent non-executive directors,
all of whom have recent and relevant
financial experience due to the senior
positions they hold or have held in other
listed companies and/or similar large
organisations. In addition, the Committee
as a whole has competence relevant to the
sector through Tom’s previous role at BUPA
and Steve’s role as a non-executive director
of two leading NHS Foundation trusts.
See page 113 for full details of the Committee
membership and attendance records, and
pages 104–107 for Committee members’ skills
The Group CEO, Group CFO, Group Chief
Governance Ocer and Company Secretary
attend all meetings. The Chair of the Board,
Pieter Uys (alternate to Jannie Durand) and
the external and internal auditors are invited
to all meetings. Other executives and senior
managers from across the business also
attend meetings during the year, either as
regular attendees or to discuss particular
items of business. This direct Board-level
engagement with senior leadership and
managers augments the Committee’s
understanding of the issues facing the
business. It also helps to support the Board’s
oversight of succession planning for key
leadership roles and develop the talent
pipeline within the Group.
MEETINGS AND PRINCIPAL AREAS
OF FOCUS IN FY22
The Committee normally holds four
meetings during the financial year, with
one of these meetings dedicated primarily
to an extensive review of risk-related
matters. Three additional ad hoc
meetings were held during FY22 to
discuss underlying work relating to the
2021 Annual Report, the evaluation of the
Internal Audit function, and the Company’s
response to the FRC’s letter following its
review of the 2021 Annual Report. One
scheduled meeting was held between
the Company’s financial year end and the
Last Practicable Date to approve this
Annual Report as well as accounts and
related matters.
The Committee holds private meetings at
least once a year with the external auditors,
the Group General Manager: Internal Audit
and other regular management attendees
(including the Group CEO and Group CFO),
respectively, allowing each party to speak
candidly and raise any issues of concern.
TABLE 1: AT A GLANCE – FOCUS AREAS IN FY22
The Chair of the Committee meets
separately with the Group CFO, Group
General Manager: Internal Audit and the
external auditors during the financial year
to ensure that the work of the Committee
is focused on key and emerging issues.
Natalia and Steve took advantage of their
induction site visit to the Middle East
(delayed until January 2022 due to the
COVID-19 pandemic) to meet the divisional
finance team and discuss the particular
challenges facing the division.
ACTIONS CROSS REFERENCE
BUSINESS AS USUAL
FY21 and FY22 financial reporting
• Reviewed and discussed the FY22 interim results, the FY21
and FY22 preliminary statement of annual results and Annual
Report, and the supporting reports prepared by the financial
reporting team
• Considered the accounting policies applied, management’s
significant estimates, and accounting judgements and related
disclosures
• Considered the external auditors’ report on their review of the
interim results and audit report regarding the annual financial
statements and other elements of the Annual Report
See pages 122–127
See pages 172–179
• Reviewed the basis of preparation of the financial statements
as a going concern
• Reviewed the methodology and assumptions underpinning the
viability statement proposed by management, including the
five-year period adopted, the stress-testing scenarios applied
and their sensitivity to changes in key assumptions
See pages 89 and 101
• Considered whether the interim results, preliminary statement
of annual results and Annual Report were fair, balanced
and understandable (‘FBU’), as well as the use of alternative
performance measures (‘APMs’)
See page 126
The Committee membership
comprises three independent
non-executive directors,
all of whom have recent
financial experience.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT122
Internal audit
• Reviewed the implementation of the FY22 internal audit plan,
findings from specific audits and management’s implementation
of any resulting actions recommended by the Internal Audit
function
• Reviewed and approved the annual internal audit plan and focus
areas for FY23
• Assessed the eectiveness of the Internal Audit function
See page 127
Risk management and internal controls
• Reviewed the Group’s risk appetite statement
• Assessed the Group’s emerging and principal risks and how they
were being managed or mitigated
• Reviewed the eectiveness of the risk management and internal
control systems
• Reviewed the implications of COVID-19 on the financial reporting
and internal control environment
See pages 128–129
See pages 118, 121
and 128
External audit
• Reviewed the FY22 audit plan, including the level of materiality
applied in conducting the audit, and areas of audit focus
• Assessed the eectiveness of the FY21 and FY22 audits
• Reviewed the non-audit services provided by the auditors
and related fees in FY21 and FY22, the policy on the provision
of non-audit services by the auditors, and the auditors’
independence
See pages 129–130
Other
• Reviewed the Group Treasury Policy and monitored compliance
with its provisions
• Reviewed the Group Tax Strategy
ACTIONS CROSS REFERENCE
BUSINESS AS USUAL CONTINUED
ACTIONS CROSS REFERENCE
ADDITIONAL TOPICS IN FY22
• Received deep-dive reports on financial reporting, risk
and internal control-related matters
• Reviewed the governance processes and monitored the
implementation of the project to update the operating model
and technology architecture of the Finance function
See page 121
• Reviewed progress on aligning the Group’s reporting with
the TCFD reporting recommendations and the corresponding
TCFD report included in the Annual Report, and considered
management’s assessment of the impacts of climate change
on the financial statements
• Reviewed the assurance processes supporting certain aspects
of the Group’s TCFD reporting
See pages 47–56
• Assessed the proposals set out in the BEIS Consultation
and management’s plans for addressing the likely outcomes
• Assessed the impact of the OECD’s Pillar 2 proposals on the tax
profile of the Group
• Preparation for and launch of the external audit tender process
See page 130
• External evaluation of the Committee and key priorities for FY23
See page 131
OTHER REGULAR REPORTS
• Group tax positions covering adjusted underlying tax rate,
areas of potential tax exposure and provisioning
• Fraud and ethics (including whistleblowing) reports and
investigations
• Litigation reports
• UK accounting and corporate governance developments likely
to aect the work of the Committee
TABLE 1: AT A GLANCE – FOCUS AREAS IN FY22 CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 123
AUDIT AND RISK COMMITTEE REPORT CONTINUED
FY22 FINANCIAL REPORTING
SIGNIFICANT FINANCIAL
REPORTING MATTERS
Table 2 sets out the significant reporting
matters and areas of judgement
considered by the Committee, together
with details of how these items were
addressed. The Committee received
detailed reports from management and
the external auditors on these issues at the
time of their review of the FY22 interim
financial statements and again at the
conclusion of the audit of the FY22 annual
financial statements. The Committee
discussed with both parties the range of
possible treatments for each item, focusing
specifically on key assumptions, sensitivity
analyses and areas where judgement
was applied, to satisfy itself that the
conclusions drawn were reasonable and
supportable based on available information
at the time, and that the corresponding
disclosures in the Group’s reports were
appropriate. For all matters described
alongside, the Committee concluded that
the treatment adopted in the Group
financial statements was appropriate.
TABLE 2: SIGNIFICANT ISSUES CONSIDERED IN RELATION
TO THE FINANCIAL STATEMENTS
SIGNIFICANT ISSUE HOW IT WAS ADDRESSED BY THE COMMITTEE
Impairment reviews (1)
The Group carries
significant goodwill
and non-financial assets
on the Statement of
Financial Position.
The key issues
considered were:
• the impairment
assessment and test of
the Middle East and
Switzerland goodwill;
and
• whether any indication
existed that
non-financial assets
at an individual
cash-generating unit
(‘CGU’) level per
division may be
impaired.
The Committee evaluated the divisions’ five-year business
plans on which the impairment calculations were based.
The Committee reviewed the assumptions used in the
impairment tests, including free cash flows (from the
business plans described above), long-term growth rates
and discount rates. Long-term growth rates for periods not
covered by the forecast periods were challenged to ensure
they were appropriate in the countries relevant to the
divisions.
The Committee noted the judgements and assumptions
applied in business plans and was satisfied that
management had developed its forecasts based on the
best available evidence at this time. The Committee also
considered reasonably possible changes to assumptions
and associated sensitivities, the impacts of climate change
and the related disclosures required by IAS 36 ‘Impairment
of Assets’ and IAS 1 ‘Presentation of Financial Statements’.
The Committee reviewed reporting from the external
auditors and discussed their feedback and considered its
conclusion regarding the impairment assessments, including
Wüest Partner AG’s valuation of the property portfolio in
Switzerland.
Outcome: The goodwill impairment assessment of the
Middle East and Switzerland is no longer labelled as a key
estimate in the financial statement disclosure. Sensitivity
disclosure for the Middle East goodwill has been retained
given the impairment recognised in FY20.
Midstream, South Africa
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT124
SIGNIFICANT ISSUE HOW IT WAS ADDRESSED BY THE COMMITTEE
Impairment reviews (2)
The key issue
considered was:
• the carrying value of
the equity investment
in Spire at year end
and whether a reversal
of previously
recognised impairment
losses should be
recognised.
The Group’s equity investment in Spire was subjected to
impairment charges during FY20 and the two preceding
years. The Committee noted that Spire’s share price was
trading in excess of the carrying value of the equity
investment, and that this investment was equity accounted
and not carried at fair value. The Committee challenged the
assumptions underlying management’s valuation of Spire.
In particular, it considered whether the equity investment’s
business revenue growth forecasts and EBITDA margins
diered materially from the valuation assumptions applied
in the prior years when the impairments were booked.
Outcome:
The Committee was satisfied that an impairment reversal
should not be recognised.
Swiss pension fund
The key issue
considered was:
• the carrying value of
the Swiss pension fund.
The Committee reviewed the main assumptions underlying
the valuation of the pension obligations, as determined by
the external actuaries. These assumptions, such as discount
rates, mortality and inflation rate, were discussed with
management and the external auditors in the light of
prevailing economic indicators in Switzerland.
Outcomes:
• The Committee was satisfied with the carrying value of
the Swiss pension fund and the associated disclosures.
• The Committee was satisfied that an asset ceiling was
applied for the main Swiss pension fund.
Recoverability of the
Middle East receivables
The key issue
considered was:
• recoverability of the
Middle East trade
receivables and if
sucient impairment
for credit losses has
been recognised.
The Committee obtained an understanding of the
year-on-year increase in the outstanding receivable
balances and evaluated the provision for expected credit
losses and disallowances. The Committee took note of the
improvement in cash conversion compared with the half year
and of the collections received after the year end.
Outcome:
The Committee concluded that the Middle East receivables
were adequately provided for.
SIGNIFICANT ISSUE HOW IT WAS ADDRESSED BY THE COMMITTEE
The assessment of the
Group’s going concern
and viability assumption
The key issues
considered were:
• the Group’s long-term
viability assessment;
and
• the going concern
status of the Group
for a period of at least
12 months from the
date of this report.
The Committee reviewed the viability assessment and
sought support from management for the scenarios
selected and the key underlying assumptions.
The Committee examined the reverse stress testing that was
applied per division. It considered the external auditors’
views on the methodology and assumptions adopted by
management and the outcome of the external auditors’
conclusions.
As part of the year-end process, management performed
a monthly liquidity analysis per division extending to
September 2023 that included a base and downside case
scenario per division. The Committee evaluated the key
assumptions used in preparing these scenarios, including
risk scenarios and expected impact of further COVID-19
waves on the business.
The Committee reviewed and challenged future forecasts
and the risks to those forecasts.
The Committee noted that, in all scenarios, the Group had
sucient liquidity and sucient headroom against covenant
requirements.
Outcomes:
• The Committee was satisfied with the stress testing
performed and the severe but plausible scenario modelling.
• The Committee was satisfied with the actions the Group
has taken to protect liquidity.
• The Committee was satisfied that the Group was a going
concern, given the assessment of the Group’s viability and
the associated disclosures.
TABLE 2: SIGNIFICANT ISSUES CONSIDERED IN RELATION
TO THE FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 125
SIGNIFICANT ISSUE HOW IT WAS ADDRESSED BY THE COMMITTEE
Classification and
presentation of
adjusting items
The adjusting items for
FY22 amounted to £16m
after taking related tax
and deferred tax into
account (£20m before
tax), of which £19m
related to accelerated
depreciation and £11m
related to past service.
See the Group Chief
Financial Ocer’s Report
starting on page 72
for more
The key issue
considered was:
• the Group’s use of
non-IFRS measures
and the judgement
applied to determine
whether the items
were adjusting items.
The Committee reviewed the adjusting items for FY22 and
discussed these with management and the external auditors.
Particular consideration was given to the types of income
and expenses adjusted by management in arriving at the
Group’s adjusted earnings measure. The Committee received
confirmation from management and the external auditors
that the adjusting items and adjusted measures had been
evaluated, classified and presented in line with the Group’s
policy and guidance from the FRC, and that management’s
application of the Group’s policy was consistent with previous
accounting periods. It also examined whether the disclosures
within the Group Chief Financial Ocer’s Report and the
interim and preliminary results announcements provided
sucient details to understand the nature of these items.
Outcomes:
• The Committee was satisfied that the amounts classified as
adjusting items were reasonable, and the related disclosure
of these items in the Group Chief Financial Ocer’s
Report and results announcements was appropriate.
• The Committee was satisfied that all adjusted measures
were appropriately labelled and reconciled to the
equivalent statutory measures, and the related disclosures
were clear and transparent.
• The Committee was satisfied that there was consistent
application in determining the adjusting items.
• The Committee was satisfied that a comparable statutory
measure had been shown for each non-IFRS measure.
FBU REPORTING AND USE OF APMS
The Committee adopted the following
process in assessing whether the Group’s
2022 Annual Report was FBU and provided
the information necessary for shareholders
to assess the Group’s position:
• Factual content was verified by
management, and members of
senior management undertook a
comprehensive review of the document
to consider messaging and balance.
• The Committee reviewed a report from
management on the process adopted
for the preparation of the Annual Report
to support the FBU assessment.
• The Committee received a full draft of
the Annual Report in sucient time to
review and comment on the document
and consider the overall balance and
consistency prior to its circulation to the
Board. In carrying out its review, the
Committee had regard to whether:
- there was consistency between the
key messages in the document and the
Group’s position, performance and
strategy, and between the narrative
sections and the financial statements;
- all key events, both positive and
negative, reported to the Board
and its committees during the year
were adequately reflected;
- the significant issues considered as
a Committee were consistent with
those identified by the external
auditors in their report, and any
material inconsistencies reported by
the external auditors were addressed
in the Annual Report; and
-
the APMs used in the Annual Report were
appropriate, had been clearly explained,
and had not been given greater
prominence than the corresponding
statutory measures, as described above.
• Particular issues considered for the
2022 Annual Report included whether:
- the policy for non-IFRS adjusted
measures has been disclosed and
applied consistently;
- all non-IFRS adjusted measures
have been labelled and reconciled
suciently; and
- non-IFRS adjusted measures have not
been displayed with more prominence
as the reported measures.
Committee feedback on areas that would
benefit from further clarity was incorporated
into the document before circulating it to the
Board with the recommendation that the
Annual Report – taken as a whole – was FBU
and provided the information necessary for
shareholders to understand the Group’s
business model, strategy, position and
performance.
The same process was adopted for the
Committee’s review of the Group’s FY22
interim results and preliminary statement
of annual results announcements.
FINANCIAL REPORTING COUNCIL
In January 2022, the Group received a
letter from the FRC’s Corporate Reporting
Review Team following its review of the
Company’s 2021 Annual Report. The letter
requested further information on three
principal areas of disclosure in the
2021 Annual Report: (1) the recognition
of a defined benefit pension surplus in
Switzerland; (2) tari risk provisions and
variable consideration accruals; and
(3) the use of APMs. In addition, the Group
was encouraged to consider making
improvements in response to a number
of other observations made by the FRC,
if material and relevant.
TABLE 2: SIGNIFICANT ISSUES CONSIDERED IN RELATION
TO THE FINANCIAL STATEMENTS CONTINUED
AUDIT AND RISK COMMITTEE REPORT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT126
The Committee discussed the FRC’s
findings with PwC and in March 2022,
following our response to these queries,
the FRC Corporate Reporting Review Team
confirmed that they had closed all of their
enquiries. The suggested improvements
have been incorporated into the relevant
notes to the financial statements and
the explanation of the APMs used in this
Annual Report set out on pages 80–86
where material and relevant.
The FRC’s letter states that their review
is based on the 2021 Annual Report
and provides no assurance that the
2021 Annual Report is correct in all
material respects, noting that the FRC’s
role is not to verify the information but
to consider compliance with reporting
requirements. The FRC had last reviewed
and corresponded with the Group in
relation to its annual report for the year
ended 31 March 2016.
INTERNAL AUDIT
The Internal Audit function is a key
element of the Group’s internal control
environment. Its role is to provide
assurance that the Group’s risk
management and internal control systems
are well designed and operate eectively
and that any corrective action is taken in
a timely manner. Its audits cover internal
controls and risk management processes
relating to the financial, operational and
clinical performance, as well as IT and
compliance activities of the Group. The
function’s responsibilities also include
providing independent appraisal and
assurance to the Committee on the
eectiveness of the Group’s risk
management processes and internal
control system. Strong reliance is placed
on the Group’s Combined Assurance
Model, which uses control self-assessment
techniques to assure on key risk areas.
The purpose, scope and authority of the
Internal Audit function is defined within its
charter, which is reviewed and approved
annually by the Committee. The Group
General Manager: Internal Audit reports
functionally to the Committee and
administratively to the Group Chief
Governance Ocer. The team supplements
its in-house capacity by contracting in
specialist services as required to ensure
the optimisation of resources.
The internal audit plan is set on a
three-year rolling basis. Focus areas are
determined and updated annually using
a risk-based approach and ensuring the
work is appropriately aligned to and
coordinated with the activities of other
relevant assurance providers. The Internal
Audit function works closely with the
Risk Management function and engages
with the external auditors on at least a
quarterly basis.
An internal audit update is provided to the
Committee at each meeting, covering
progress against the internal audit plan,
an overview of audits completed during
the period, actions arising from those
audits and tracking of the implementation
of corrective actions. During FY22, the
Committee reviewed and provided
feedback on the internal audit plan to
ensure that key risk areas identified by the
Group’s ERM processes would be audited
with appropriate frequency and depth.
The Committee also monitored progress
on the closure of corrective actions and
noted the Internal Audit function’s
assurance that management prioritised
closing such actions timeously. The
Committee requested that additional
details be included in the internal audit
reports in this respect.
INTERNAL AUDIT EFFECTIVENESS
REVIEW
During the year, the Committee
conducted its annual assessment of the
eectiveness of the Internal Audit function.
A questionnaire was prepared based on
guidance outlined by the Chartered
Institute of Internal Auditors’ Internal
Audit Code and the FRC’s Guidance on
Audit Committees. The questionnaire
was approved by the Committee prior
to its circulation to Committee members.
Responses were collected by the
Company Secretariat and reported on
an anonymised basis to encourage open
and honest feedback. Based on the
findings of the assessment, the Committee
was satisfied with the eectiveness,
resourcing, independence and standing
of the Internal Audit function in terms
of delivering its current mandate. The
Committee noted the steps being taken
in response to the changes anticipated
to emerge from the BEIS Consultation.
Stellenbosch, South Africa
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 127
AUDIT AND RISK COMMITTEE REPORT CONTINUED
FIGURE 1: GROUP RISK MANAGEMENT
GOVERNANCE STRUCTURE
BOARD
Responsible for corporate
governance, strategy, risk
management and financial
performance
AUDIT AND RISK
COMMITTEE
Responsible for review
and approval of adequacy
and eectiveness of risk
management and internal
controls
GROUP EXECUTIVE
COMMITTEE
Supports Group CEO
in managing business
activities
DIVISIONS
Responsible for
identification, assessment
and management of
divisional risks
RESPONSIBILITY FOR
ACCOUNTABILITY FOR
RISK MANAGEMENT AND INTERNAL
CONTROLS
The Board retains overall responsibility for
determining the risk appetite of the Group,
assessing the Group’s principal and
emerging risks, and overseeing its risk
management processes and internal
controls, including those relating to the
financial reporting process. At the request
of the Board, the Committee plays an
important function in assisting the Board
to meet these responsibilities (together
with the Clinical Performance and the
ESG committees, in respect of clinical
and ESG risks, respectively).
The Committee reviews the Group’s
emerging and principal risks twice a year:
prior to the publication of the interim
results, to assess whether there have
been any changes since the publication
of the previous annual report, and a more
in-depth, detailed review prior to the
publication of the following annual report.
This includes a review of the Group’s ERM
Policy, framework and processes, the
Group’s risk appetite statement, any
changes in the emerging and principal
risks facing the Group, and action plans
designed to mitigate these risks in line with
the Group’s risk appetite. During the past
year, the Committee focused specifically
on the following categories of risk:
cybersecurity threats, ICT resilience
risks, the implementation of major IT
projects, financing and interest rate risks,
liquidity risk, and availability of medical
practitioners. Detailed oversight of other
principal risks was allocated to the Board,
and the Clinical Performance and ESG
committees, with deep dives into each risk
taking place at least annually. Feedback
and valuable insights flow back to the
Committee through the carefully planned
overlap in membership. The outcome
of the assessment of principal risks
and uncertainties facing the Group, the
procedures in place to identify emerging
risks and how these risks are being
managed or mitigated, as reviewed by the
Committee and approved by the Board in
May 2022, are described on pages 91–100
of this Annual Report.
The Committee considers the eectiveness
of these arrangements during its
discussions at every meeting. It also
receives regular reports from management
on issues requested by the Committee,
or identified from the Company’s risk
management, internal audit or compliance
processes or reports on fraud and ethical
matters (including any instances of
whistleblowing). These are supplemented
by feedback on the internal control
environment provided by the external
auditors as part of their half-year review
and in their formal report on the full-year
audit. Additionally, where appropriate,
the Group seeks assurance from external
experts. Recommendations arising from
the above processes are communicated
to the relevant business areas by the Risk
Management or Internal Audit functions, as
appropriate, and the Committee receives
regular progress reports on implementation
and further requirements identified.
Once a year, prior to the publication of the
annual report, the Committee conducts a
formal in-depth review of the eectiveness
of the Group’s risk management and
internal control system. This review covers
all material financial, operational and
regulatory compliance controls (including
climate-related and clinical controls, subject
to the separation of responsibilities agreed
upon with the Clinical Performance and
the ESG committees) in accordance with
the FRC’s Guidance on Risk Management,
Internal Control and related Financial and
Business Reporting. As part of this process,
the Committee considers reports from
the Risk Management, Internal Audit and
Compliance functions, which reflect the
outcomes of various peer reviews, control
self-assessments, the delivery of the ERM
and internal audit plans, and the status
of any corrective actions taken by
management in response to their findings.
The Committee’s review is also informed by
the feedback and recommendations from
the external auditors and other external
assurances commissioned, as well as its
own observations throughout the year
under review.
Following the review of the eectiveness
of the Group’s risk management and
internal control system concluded at its
May 2022 meeting, the Committee noted
the thoroughness of the processes followed
to identify, and the key controls designed to
mitigate, key risks, and the various levels of
internal and external assurance received to
confirm their eectiveness. It further noted
that no significant failings or weaknesses
had been identified and plans were in place
to address the minor issues flagged for
improvement.
The Board considered the work of the
Committee in these areas as part of its
annual robust assessment of the Group’s
principal and emerging risks and the
eectiveness of its risk management
and internal controls.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT128
their reports as well as during Committee
discussions, particularly on issues such as:
the goodwill impairment assessments
of the Middle East and Switzerland; the
carrying value of the equity investment
in Spire at year end; the recoverability
of receivables in the Middle East and
adequacy of provisions for credit losses
and disallowances; and the going concern
assessment.
The Committee also took note of the
FRC’s Audit Quality Practice Aid for Audit
Committees, published in December 2019,
and the Audit Quality Inspection report for
PwC, published by the FRC’s Audit Quality
Review team in July 2021. It was noted
that the firm had taken steps to address
the key findings of the FRC’s previous
review and the overall quality of its audits
had improved year on year. The main
recurring findings flagged by the FRC
were also considered. The matters raised
in the FRC’s report and the background
to the questions raised in the FRC’s letter
regarding the Company’s 2021 Annual
Report were discussed with PwC.
Following this review, the Committee was
satisfied that the statutory audit process
and services provided by PwC were
satisfactory and eective. Areas for further
improving the quality and eectiveness of
the audit were discussed with management
and the lead audit partner and his team.
management’s judgements and the
quality of disclosures as well as PwC’s
analysis and work to develop a clear
understanding of any contentious issues.
PwC also met regularly with management
during the audit process.
PwC provided an update on the audit
at the March 2022 meeting, allowing the
Committee to monitor progress against the
agreed scope and plan, raise questions and
challenge both PwC and management on
the matters covered.
As the FY22 external audit neared
finalisation, the Committee organised a
formal evaluation of the external auditors’
performance. Committee members,
senior management and others who had
regular contact with PwC during the
course of the audit were asked to complete
a questionnaire which focused on four
key areas: (1) the robustness of the audit
process; (2) the quality of delivery; (3) the
quality of reporting; and (4) the quality of
people and service. The feedback was
collated and considered by the Committee
at the meeting held in May 2022, together
with the feedback from separate
meetings with the external auditors and
management, and its own observations
and interactions.
Matters discussed included: areas of
discussion between the external auditors,
management and the Committee; the
external auditors’ robust but constructive
challenge to management’s assertions and
areas of significant judgement; and the
overall thoroughness of their work. A key
aspect considered by the Committee
was evidence of the external auditors’
professional scepticism and challenge in
Following this assessment, the Board
approved the disclosures in the Annual
Report about the Group’s emerging and
principal risks, and their management or
mitigation, and confirmed that it was
satisfied that throughout the year under
review and up to the Last Practicable
Date, the Group’s risk management and
internal control environment continued
to be eective.
Risk management and internal controls
relating to financial reporting
A description of the Group’s risk
management processes can be found
in the Risk management report on
pages 91–92.
Key features of the Group’s financial
reporting internal controls include:
• clearly defined delegations of authority
and lines of accountability;
• policies and procedures governing
financial resource management, financial
reporting, key ICT projects and security;
• annual self-assessments of the
eectiveness of controls by the relevant
management teams;
• assurance on key processes and IT audits
as part of the internal audit coverage;
• an annual IT general control assessment
conducted by the external auditors on
the business applications which support
the financial close process; and
• a detailed review by the Group Executive
Committee, the Committee and the Board
of the financial statements and disclosures
within the annual, interim and other
price-sensitive reports.
EXTERNAL AUDIT
PwC was appointed as the Company’s
external auditors in February 2016, as
approved by the Company’s shareholders
in December 2015. Neil Grimes became
the current lead audit engagement partner
from June 2020.
QUALITY AND EFFECTIVENESS
OF THE EXTERNAL AUDIT
The Committee, on behalf of the Board,
is responsible for ensuring that the Group
receives a high-quality and eective
statutory audit. The Committee monitored
the quality of the external auditors’ work
on a regular basis throughout the year and
conducted a formal assessment towards
the end of the audit.
PwC presented the strategy and
scope of the FY22 external audit at the
Committee meeting held in November 2021,
highlighting any areas of increased focus.
The Committee satisfied itself that its key
areas of interest would be appropriately
addressed and provided clear guidance
to PwC on its expectations in relation to
the audit.
Throughout the year, management
presented their current view of various
key accounting issues and judgements
to the Committee and PwC provided
their professional view on whether the
approach proposed or adopted by
management is appropriate. A number
of these issues manifested themselves as
the significant issues considered by the
Committee in relation to the interim and
annual financial statements, set out on
pages 124–126. The Committee held open
discussions on these matters with
management and PwC during Committee
meetings and with each group privately,
after meetings. This allowed Committee
members to scrutinise and challenge
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 129
AUDIT AND RISK COMMITTEE REPORT CONTINUED
EXTERNAL AUDITORS’ INDEPENDENCE
The fees paid to PwC for non-audit
services represent a key component of the
Committee’s annual assessment of the
independence and objectivity of the audit.
In line with best practice, the provision of
non-audit services by PwC to the Group
is governed by Mediclinic’s Non-audit
Services Policy. The policy incorporates
the restrictions on non-audit services
introduced by the FRC’s Revised Ethical
Standard 2019, designed to ensure that
the external auditors’ independence and
objectivity are not impaired or perceived
to be impaired. Consequently, PwC is
permitted to provide Mediclinic only
with certain non-audit services; these are
closely linked to the audit itself or required
by law or regulation, and the aggregate
fees for such services may not exceed 70%
of the average audit fee for the previous
three financial years. The Committee
reviews the policy at least annually and
recommends it to the Board for approval.
The policy was last approved by the Board
in March 2022.
Under the policy, at the beginning of each
financial year, the Committee determines
the pre-approved monetary thresholds
for each category of non-audit services
that may be provided by the external
auditors. Any individual assignment with
a fee exceeding £50 000 requires the
Committee’s prior approval. The nature
of the services, the individual fee levels
for each category and the aggregate
fee relative to the external audit fee are
taken into account in determining these
thresholds. PwC is engaged to provide
non-audit services only when it can be
clearly demonstrated that the firm is
best placed to perform the services in
a cost-eective and ecient manner
because it has the necessary expertise
and capabilities, and can leverage its
existing detailed knowledge of Mediclinic’s
business and understanding of the sector
and jurisdiction.
The Committee receives regular reports
on the non-audit services fees paid to
PwC. In FY22, the fees paid to PwC in
respect of non-audit services amounted
to approximately £0.7m or 27.6% of the
statutory audit fees. All non-audit services
provided were in line with the Non-audit
Services Policy. Approximately £0.2m of
the non-audit service fees was in respect
of reviews conducted in relation to the
financial statements for the six months
ended 30 September 2021. Therefore,
excluding the half-year reviews, non-audit
service fees as a percentage of statutory
audit fees amounted to 8.9%. In addition,
an amount of approximately £0.3 m or 11%
of the statutory audit fees was paid for
Swiss billing code audits. These audits
are required by Swiss law to ensure
that the codes used for the bills issued
by our Swiss division on invoices for
inpatient hospital services are entered
in accordance with the Swiss diagnostic-
related grouping taris.
See note 8 to the Group annual financial
statements on page 194 for more information on
the fees paid for audit and non-audit services
during the year under review
The Committee also reviews the
assurances provided in PwC’s external
audit report, in accordance with the FRC’s
Revised Ethical Standard for Auditors.
The Committee noted the letter included
in PwC’s FY22 external audit report,
confirming that PwC’s integrity,
objectivity and independence were
not compromised, together with the
information supporting this assessment.
The Committee also noted that the
quality review partner, who reviews the
judgements of the audit team, rotates
every seven years; the lead partner and
key audit partners at each division rotate
every five years.
Based on the above arrangements
and confirmations, feedback from
management and Committee members’
own observations of the external auditors’
conduct and judgement, the Committee
was satisfied that PwC continues to be
independent and free from any conflicting
interest with the Group.
REAPPOINTMENT OF THE EXTERNAL
AUDITORS AND EXTERNAL AUDIT
TENDER
As described above, the Committee
concluded that the external audit services
provided by PwC were of a high quality,
that the external audit process in respect
of FY22 was eective, and that the
auditors remained objective and
independent. Accordingly, the Committee
recommended to the Board that the
reappointment of PwC as the Company’s
external auditors be proposed to
shareholders at the Company’s 2022 AGM.
The Committee complied with the
provisions of the Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014 during FY22.
The Company must also comply with UK
Competition and Market Authority (‘CMA’)
rules, which require the external audit
contract to be put out to tender at least
every 10 years, with the proviso that no
single firm may serve as the Company’s
external auditors for a period exceeding
20 years. The planning for this retendering
has already commenced. The intention is
for the tender process to be completed
during the 2022 calendar year, with
the Board making the corresponding
recommendation to shareholders at the
Company’s 2023 AGM. This will allow the
external auditors selected from the process
to conduct the audit for the financial year
commencing 1 April 2023, 10 years after
the Company’s initial listing.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT130
PROGRESS ON KEY FY22 PRIORITIES
PRIORITIES STATUS
Monitoring and reviewing the eectiveness
of the Group’s risk management
framework
Clear plan being implemented for the
detailed oversight of the Group’s principal
risks and their mitigation, with responsibility
for each risk allocated to the Board or
a Board committee. Feedback and insights
flow back to the Committee through
planned overlaps in committee
membership.
Further improvements in the quality of
reporting to the Committee, including focus
on the impact of COVID-19.
See page 128
Continuing to monitor the impact of
COVID-19 on accounting, audit, risk
management and internal control matters
Monitoring the quality of reporting on
climate-related and other ESG matters
Reviewed the planned reporting
arrangements and levels of assurance
being obtained.
Received feedback regarding the ESG
Committee’s review of the proposed TCFD
reporting.
See pages 121 and 123
Reviewing and preparing to address the
relevant reforms that emerge from the UK
Government’s white paper on restoring
trust in audit and corporate governance
Expert briefing session on the BEIS
Consultation to explore particular aspects
and potential impacts in detail.
Reviewed management’s plans to start
preparing for the expected changes.
Introducing further regular expert training
on developments in accounting, audit and
reporting matters
Received expert briefing on the BEIS
Consultation and the valuation of the
property portfolio in Switzerland. Other
expert briefings received as part of Board-
wide sessions. Further briefings are planned
on an ongoing basis.
See page 121
COMMITTEE EVALUATION
The table alongside sets out the progress
made in relation to the key priorities
identified from the Committee’s previous
evaluation, concluded in March 2021.
In March 2022, the Committee considered
the outcome of the external evaluation
of its performance, conducted as part of
the annual evaluation process described
on pages 117–119 of the Corporate
Governance Statement. The composition
and performance of the Committee were
highly rated and no significant issues
requiring improvement had been identified.
FY23 PRIORITIES
The Committee’s main priorities for
FY23 are:
• conduct of the external audit tender
process in line with statutory
requirements and good practice;
• continue to monitor the implementation
of any changes required in the Finance,
Risk Management and Internal Audit
functions, processes and reporting to
the Committee and the Board in
response to the outcomes from the BEIS
Consultation;
• continue to monitor the implementation
of climate change-related reporting
requirements and best practice;
• continue to monitor the eciency of the
reporting process, information flows and
assurance; and
• continue to meet with members of the
divisional finance teams.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 131
CLINICAL PERFORMANCE
COMMITTEE REPORT
I am pleased to present the report on
the activities of the Clinical Performance
Committee (the ‘Committee’) during FY22.
The Committee’s focus was strengthened
in September 2021 through the creation of
a separate ESG Committee, which assumed
our responsibilities for overseeing
sustainable development matters. Dr Anja
Oswald’s appointment as an additional
Committee member has strengthened the
breadth of our expertise, while Professor
Wim de Villiers’s appointment as an expert
clinical adviser to the Committee will
provide valuable independent external
insights. Although COVID-19 continued to
be a clinical priority for the Group and the
Committee, we were also able to make
important progress in other areas such
as patient safety culture, the adoption of
new technology, improvement of clinical
performance and embedding of clinical
governance. The Committee continues
to be extremely grateful to the Clinical
Services teams and all employees across
the Group for their diligence and
dedication during the pandemic.
Dr Felicity Harvey
Chair of the Clinical Performance
Committee
24 May 2022
Although COVID-19
continued to be a clinical
priority, we were also able
to make progress in other
areas such as patient safety
culture and embedding of
clinical governance.
Dr Felicity Harvey
Chair of the Clinical
Performance Committee
See the ESG Committee Report
on pages 135–136 for details of our
activities relating to sustainable
development matters prior to
September 2021
COMMITTEE ROLE
AND RESPONSIBILITIES
The Committee’s key responsibilities
include promoting a culture of excellence
in patient safety, quality of care and client
experience by, among other things,
monitoring the clinical performance of
the Group.
See the Committee’s terms of reference,
available on the ‘Governance’ section of the
Company’s website at www.mediclinic.com,
for further details
COMMITTEE MEMBERSHIP
AND ATTENDANCE
The Committee membership comprises
the SID (who chairs the Committee),
three other independent non-executive
directors and the Group CEO. All
members have current or past clinical
and/or public healthcare experience.
See page 113 for details of Committee
membership and attendance and pages 104–107
for members’ biographies
Professor Wim de Villiers is invited
to attend all meetings. Under the
Ward-to-Board accountability framework,
the Group and divisional chief clinical
ocers and the Group General Manager:
Clinical Services also attend all meetings.
Other relevant members of management
are invited to attend meetings as required.
MEETINGS AND PRINCIPAL AREAS
OF FOCUS IN FY22
The Committee held five meetings during
the year under review, one of which was
dedicated to discussions on the Group’s
clinical strategy. One scheduled meeting
was held between the Company’s financial
year end and the Last Practicable Date to
approve this report, the Clinical services
overview and the standalone 2022 Clinical
Services Report.
The Committee also holds private meetings
twice a year with the external expert
advisers appointed to the divisional clinical
performance committees, the Group CEO
and the Group Chief Clinical Ocer, for an
open and transparent discussion of the
culture, clinical performance and key issues
observed during their interactions with the
clinical teams.
132
CLINICAL PERFORMANCE
The Group’s clinical management model is
based on a clinical performance framework
consisting of four components: patient
safety, clinical eectiveness, clinical cost
eciency and value-based care. During
the year, the Committee received regular
reports on the clinical services and
performance of each division. The
GOVERNANCE
The Committee supports and oversees
the operation of the Group-wide
Ward-to-Board accountability framework,
which includes the following elements:
• hospital-level clinical performance
committees chaired by independent
doctors and including hospital
management;
• divisional clinical performance
committees led by the Group Chief
Clinical Ocer (independent expert
advisers to each committee provide
an objective view on the clinical
performance of the division and
an expert opinion on clinical matters
when required);
• the Group Chief Clinical Ocer;
• the Committee; and
• the Board.
This accountability framework is integral to
the Group’s Patients First approach, the
achievement of its Group strategic goal to
improve the value proposition significantly
and, ultimately, to creating value for
shareholders by:
• aligning the interests of clients and
care providers;
• strengthening the culture of
performance reporting and
accountability;
• ensuring eective information flows up
and down the organisation;
FIGURE 1: MEDICLINIC CLINICAL GOVERNANCE FRAMEWORK
ACCOUNTABILITY
• Ethical principles
• Ward-to-Board accountability
• Accreditation of facilities, services and healthcare practitioners
LEADERSHIP
• Culture
• Credentialing and privileging of healthcare practitioners
• Clinical risk management and clinical internal audit
STAFF, EDUCATION AND
TRAINING
• Quality of sta and stang levels
• Academic aliations and teaching of sta and independent healthcare practitioners
• Continuous professional development training for sta and independent healthcare practitioners
BUILDINGS, EQUIPMENT
AND MATERIALS
• Procurement and maintenance of equipment
• Procurement and proper use of materials
• Safe, operationally ecient and environmentally sustainable facility design
dashboards reviewed by the Committee
continued to mature, providing a clear
indication of positive and negative outliers
for key indices, trends, potential areas of
concern that should be investigated and
opportunities to share knowledge across
the Group. Further areas of refinement
identified included client experience and
unfilled vacancy indicators. The Committee
encouraged management to continue
to evolve its reporting and the clinical
performance indicators tracked as the
Group expands into new areas across
the continuum of care.
Progress on digitalisation projects, the
implementation of new medical technology
and further opportunities in these areas
were key focal points during the
Committee’s annual clinical strategy
meeting. The Committee monitored
progress on these initiatives, including,
among others:
• the implementation of The Patient Safety
Company software across the Group,
which will strengthen the management
of safety events and uniformity of
reporting;
• the roll-out of EHRs, which is nearing
completion in the Middle East and
Switzerland, and options more
appropriate to the Southern Africa
operations being progressed; and
• new digital healthcare and virtual care
services for the Group’s clients and
healthcare professionals.
The Committee also provided guidance
and support with regard to other patient
safety initiatives such as the obstetrics
framework and safe surgery and
procedures framework that will be
introduced across the Group. These
frameworks address two of the Group’s
top five clinical risks by setting minimum
standards for Group-wide application, with
deviations permitted only if dictated by
local requirements.
This accountability
framework is integral
to the Group’s Patients
First approach.
• driving improvements in clinical quality
and eciency; and
• facilitating Group-wide alignment and
collaboration.
The application of the framework has
continued to mature during FY22, resulting
in further improvements in the quality
and consistency of clinical performance
reporting, and the understanding and
management of adverse events. It has also
facilitated collaboration across the Group,
through the sharing of lessons learned
and the development of joint solutions
to problems aecting all divisions.
See the 2022 Clinical Services Report at annualreport.mediclinic.com
STRATEGIC REPORT
GOVERNANCE AND
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 133
Other topical reports discussed by the
Committee with the clinical leadership
teams included:
• COVID-19 vaccination levels among
employees and aliated doctors;
• lessons learned from particular
developments and application of
those learnings in other parts of the
Group; and
• the development of patient-reported
outcome measures to evaluate
improvements in their quality-of-life
post-treatment, as well as the response
rate and scores from patient surveys.
See the Clinical services overview starting on
page 58 for more information on our clinical
performance
CLINICAL RISK MANAGEMENT
AND CONTROLS
The Committee’s responsibilities include
oversight of the Group’s clinical risks and
related controls, and liaising with the Audit
and Risk Committee on these matters.
During FY22, the Committee received a
detailed report on the Group’s top five
clinical risks, comprising:
• adverse obstetric outcomes;
• medication management;
• multidrug-resistant organisms;
• surgical and procedural adverse
events; and
• clinical care processes.
The Committee discussed the assessment
of these risks and the adequacy of the
mitigating actions being taken to ensure
their management within the Board’s
low risk appetite and tolerance limits for
clinical risks.
COMMITTEE EVALUATION
The table below sets out the progress made in relation to the key priorities identified from
the Committee’s previous evaluation, concluded in March 2021.
PROGRESS ON KEY FY22 PRIORITIES
PRIORITIES STATUS
Continuing to improve the
comparability of reporting
within and across all three
divisions
The Committee and the independent expert advisers
commended management for the improvements made
in the comparability of reporting across the Group.
Continuing to provide
appropriate patient safety
training to senior
management and the Board,
together with other relevant
training on health measures
and global trends
Discussions on patient safety and challenges were
included in the induction programme for new directors
and for the clinical expert adviser. Board and senior
management training was deferred to FY23, when travel
to divisions could resume.
Monitoring progress on
the implementation of a
software solution for the
management of clinical
adverse events
See the ‘Clinical performance’ section
Monitoring progress on the
implementation of EHRs
in Switzerland, Southern
Africa and the Middle East
Monitoring progress on
the clinical internal audits
See ‘Clinical risk management and controls’ section
Monitoring the Group’s
response to COVID-19
Monitoring of COVID-19’s impact on clinical services,
performance and employees was embedded into the
regular clinical performance reports discussed at
Committee meetings. The directors also continued
to receive daily reports on COVID-19 levels across
the Group.
In March 2022, the Committee considered
the outcome of the external evaluation of
its performance, conducted as part of the
annual evaluation process described on
pages 117–119 of the Corporate Governance
Statement. The composition and
performance of the Committee were highly
rated and no significant issues requiring
improvement had been identified.
FY23 PRIORITIES
Reflecting on the feedback from its
evaluation, the Committee’s main priorities
for FY23 are:
• continuing to support management
with the optimisation of reports and
information presented to the Committee
and the Board;
• ensuring clinical performance measures
and audits continue to evolve as the
Group expands across new areas in
the continuum of care;
• increasing focus on the clinical care
aspects of clients’ experience; and
• ensuring continued collaboration and
joint problem-solving across the Group.
CLINICAL PERFORMANCE COMMITTEE REPORT CONTINUED
The Committee also received regular reports from the Group’s Internal Audit function on
the findings from hospital and other clinical audits conducted. Despite the disruption
caused by COVID-19, the majority of the clinical audits planned for FY22 were completed
and showed compliance with most controls for high-risk areas. Action plans to correct any
non-compliance had been formulated, with the divisional clinical performance committees
ensuring their implementation and completion.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT134
The Committee has taken
on the well-established
processes developed by
the Clinical Performance
and Sustainability and the
Nomination committees.
Dame Inga Beale
Chair of the ESG Committee
See the Sustainable development overview
starting on page 34 for sustainable
development progress
See the 2022 Sustainable Development
Report at annualreport.mediclinic.com for
further details
COMMITTEE ROLE AND
RESPONSIBILITIES
The Committee’s key responsibilities
include:
• overseeing the Group’s conduct with
regard to its sustainable development
obligations as a responsible corporate
citizen;
• reviewing and approving the Group’s
Sustainable Development Strategy
and corresponding implementation plans
and measures; and
• monitoring the sustainable development
performance of the Group and progress
on the implementation of its Sustainable
Development Strategy.
See the Committee’s terms of reference, available
on the ‘Governance’ section of the Company’s
website at www.mediclinic.com, for further details
COMMITTEE MEMBERSHIP
AND ATTENDANCE
The Committee membership comprises
the Chair of the Board (who is also Chair
of the Committee), two other independent
non-executive directors, the designated
non-executive director responsible for
workforce engagement and the Group CEO.
See page 113 for details of Committee
membership and attendance and pages 104–107
for members’ biographies
The Group Chief Governance Ocer,
responsible for coordinating sustainable
development activities across the Group,
attends all Committee meetings. Other
I am pleased to present the first report
on the activities of our new ESG Committee
(the ‘Committee’) during FY22. Consideration
of ESG matters is embedded into the
Group’s business and the Clinical
Performance and Sustainability and the
Nomination committees previously provided
Board-level oversight. However, recognising
the significance of these matters, the Board
considered it important to establish a
dedicated forum for providing oversight
of the Group’s Sustainable Development
Strategy and corporate governance
framework, and supporting other Board
committees in areas of overlapping
interests. The Committee has taken on the
well-established processes developed by
the Clinical Performance and Sustainability
and the Nomination committees, and is
building upon them to respond to internal
developments and the evolution of external
reporting frameworks and regulatory
requirements, as set out in this report.
Dame Inga Beale
Chair of the ESG Committee
24 May 2022
relevant members of management are
invited to attend meetings as required.
MEETINGS AND PRINCIPAL AREAS
OF FOCUS IN FY22
The Committee normally holds two
scheduled meetings during a financial
year. During FY22, it held one additional
meeting to review and approve a first
draft of the TCFD report included in this
Annual Report for the first time, Southern
Africa’s roadmap to send zero waste
to landfill by 2030, and various Group
policies that fall within its remit. The key
activities covered by the Committee
(or, prior to 1 September 2021, the Clinical
Performance and Sustainability
Committee) are set out below.
SUSTAINABLE DEVELOPMENT
The Committee conducted a biannual
review of the Group’s significant
stakeholders and for each group, the
methods of engagement, their key areas
of concern and Mediclinic’s response,
noting the minor adjustments proposed
to reflect feedback from the business
and stakeholders. The Committee (and
subsequently the Board) approved the list
of significant stakeholders and confirmed
that the methods of engagement with
clients, workforce, shareholders and other
key stakeholders continued to be eective
in terms of enabling the flow of information
from stakeholders to management and
the Board, and the Group’s response back
to stakeholders.
ESG COMMITTEE
REPORT
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 135
The Committee also discussed and
approved the Group’s material sustainability
priorities, including the principles adopted
for determining materiality and the resulting
priorities proposed for 2022, which
remained consistent with those identified
for the prior year.
The Group’s Sustainable Development
Strategy was a key focus area for the
Committee. It examined the progress made
on achieving the objectives for the year
and was pleased to note that these were
either completed or progressing well,
although in a few cases, some adjustments
to deadlines for completion were required
due to resource constraints. A number of
new objectives were proposed to build on
existing achievements and ensure the
strategy remained relevant and continued
to address the Group’s ESG priorities.
The Committee also received detailed
reports on:
• diversity and inclusion across the wider
workforce and the talent pipeline
leading up to the Group Executive
Committee’s direct reports;
• labour relations, working conditions,
and employee training and skills
development;
• the Southern Africa operations’ standing
in terms of the goals and purposes of
the B-BBEE programme and compliance
with the Employment Equity Act,
No. 55 of 1998, and the UAE’s plans for
Emiratisation (increasing the number of
roles fulfilled by UAE nationals);
• feasibility studies being conducted with
Johnson & Johnson MedTech across
the Group’s operations to reduce waste
through the introduction of circular
economies, specifically in relation to
consumables such as single-use medical
devices and packaging not currently
captured by any recycling initiatives;
• the Southern Africa operations’
roadmap to achieving carbon neutrality
and sending zero waste to landfill by
2030, and related capital expenditures
required to deliver the initiatives
identified to date; and
• the results of Mediclinic’s participation
in various sustainability indices and
assessments.
ESG REPORTING
The Committee supports the Audit
and Risk Committee and the Board in
the review of existing and emerging
ESG-related risks and reporting. As part
of this, the Committee:
• considered and provided guidance on
ESG-related risks and their mitigation
during its meetings;
• reviewed and approved the climate-related
risks set out in the TCFD report and, going
forward, will be conducting regular deep
dives into environmental, climate-related
and other sustainability risks;
• conducted a review of the internal and
external assurance processes supporting
the Group’s assessment of material
sustainable development issues and
non-financial information reporting,
and the outcomes of the ISO 14001 gap
audits completed and corresponding
certifications obtained;
• considered and approved the Group’s
TCFD report and Sustainable
development overview included in
this Annual Report, this report by
the Committee and the standalone
2022 Sustainable Development
Report; and
• conducted its annual review of the
Group’s Modern Slavery and Human
Tracking Statement prepared in
accordance with the UK’s Modern
Slavery Act 2015, and recommended it
to the Board for approval.
The Group’s Modern Slavery and Human
Tracking Statement can be found on the
home page of the Company’s website at
www.mediclinic.com
GOVERNANCE MATTERS
The Committee discussed reports
received on:
• directors’ external appointments
and time commitments, conflicts of
interest and independence, following
which it made the corresponding
recommendations to the Board (see
sections in the Corporate Governance
Statement on ‘External appointments
and conflicts of interest’ and ‘Directors’
independence’ on pages 110–111);
• fraud and ethics matters;
• compliance, including the governance
of advertising and compliance with
consumer protection legislation; and
• charitable sponsorship and donations.
The Committee also reviewed and
approved the Group’s Sustainable
Development Policy and Group
Environmental Policy, ensuring their
continued alignment with the Group
Sustainable Development Strategy, and
reviewed and recommended to the Board
for approval the Group’s Code of Business
Conduct and Ethics and the Committee’s
terms of reference.
SA COMPANIES ACT REQUIREMENTS
The Committee performs the statutory
functions of a social and ethics committee
in respect of certain South African
subsidiaries of the Company, in accordance
with the South African Companies Act,
No. 71 of 2008, as amended. These include
the requirement to report to shareholders
at a company’s AGM on matters within
its mandate. The Committee fulfils this
responsibility by referring shareholders at
the Company’s 2022 AGM to this report,
which should be read in conjunction with the
2022 Sustainable Development Report,
available at annualreport.mediclinic.com.
Any questions for the Committee may be
sent to the Company Secretary prior to the
2022 shareholder engagement event or AGM.
COMMITTEE EVALUATION
The Committee was established in
September 2021 only; it was therefore
decided that the first evaluation of its
performance would take place in FY23.
The table below sets out the progress made
in relation to the key priorities regarding
sustainability matters that the Clinical
Performance and Sustainability Committee
had set itself for FY22, which the ESG
Committee assumed after it was established.
PROGRESS ON KEY FY22 PRIORITIES
PRIORITIES STATUS
Monitoring the
wellbeing of
employees
See the
Sustainable
development
overview starting
on page 34
Monitoring
progress on the
implementation
of the Group’s
Sustainable
Development
Strategy
See the section
on ‘Sustainable
development’
ESG COMMITTEE REPORT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT136
We focused on the
appointment of two new
directors, amending the
structure of the Board
committees and formalising
our Board gender and
ethnicity diversity targets.
Dame Inga Beale
Chair of the Nomination Committee
NOMINATION COMMITTEE
REPORT
I am pleased to report on the activities
of the Nomination Committee (the
‘Committee’) for FY22, together with its
priorities for FY23. The past year has been
busy as we focused on the appointment of
two new directors, amending the structure
of the Board committees and formalising
our Board gender and ethnicity diversity
targets. We also supported management
in restructuring the Group Executive
Committee, including appointing two
new members, and further developing
plans for senior leadership succession
and development. I look forward to further
progress in the period to come.
Dame Inga Beale
Chair of the Nomination Committee
24 May 2022
COMMITTEE ROLE AND
RESPONSIBILITIES
The Committee’s key responsibilities
include:
• formulating succession plans for
the Board and the Group Executive
Committee and overseeing the
development of a diverse talent pipeline;
• reviewing the structure, size and
composition of the Board and the Group
Executive Committee;
• identifying and nominating potential
candidates to fill vacancies on the Board
and its committees as required; and
• monitoring progress on increasing
diversity at Board and Group Executive
Committee level and in the talent
pipeline.
See the Committee’s terms of reference, available
on the ‘Governance’ section of the Company’s
website at www.mediclinic.com, for further details
COMMITTEE MEMBERSHIP
AND ATTENDANCE
The Committee membership comprises
the Chair of the Board (who is also Chair
of the Committee), two other independent
non-executive directors and one
non-executive director.
See page 113 for details of Committee
membership and attendance and pages 104–107
for members’ biographies
The Group CEO, the Group Chief
Strategy and Human Resources Ocer
and the Group General Manager: Talent
Management also attend Committee
meetings regularly, upon invitation.
MEETINGS AND PRINCIPAL AREAS
OF FOCUS IN FY22
The Committee normally holds two
scheduled meetings during a financial year.
During FY22, it held three additional ad
hoc meetings to consider non-executive
director appointments and the
restructuring of the Board committees.
NEW APPOINTMENTS
The Committee progressed its plans to fill
the vacancies created by the planned
retirement of Alan Grieve and Trevor
Petersen as directors. The executive search
firm Odgers Berndtson Limited was
appointed to conduct an extensive search
for suitably qualified individuals. The firm
had no connection with the Company or
any of the individual directors other than
the provision of search services for these
roles and is a signatory to the Voluntary
Code of Conduct for Executive Search
Firms. Based on a thorough and robust
process, the Committee was pleased to
recommend the appointment of Natalia
Barsegiyan and Zarina Bassa to the
Board. The Board subsequently appointed
Natalia and Zarina as directors with eect
1 September 2021 and 1 February 2022,
respectively.
See the Section 172 statement on pages 30–33 for
more information on the appointment of Natalia
and Zarina, one of the principal decisions
considered by the Board during the period
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 137
Following these changes, Mediclinic has:
• a gender-balanced Board;
• a female Chair of the Board and the
Committee, and a female SID and Chair
of the Clinical Performance Committee;
• two non-executive directors that meet
the ethnic diversity criteria set by the
Parker Review and the Company;
• a good mix of skills, knowledge,
professional background and tenure;
• good coverage of the Board committees
without placing undue demands on any
one director; and
• Board-level representation in the main
jurisdictions in which we operate.
DIRECTORS’ INDUCTION
AND ONGOING DEVELOPMENT
Directors receive a comprehensive
and tailored induction that takes account
of their existing expertise and Board
committee roles, and incorporates
feedback from recent appointees.
The programme is designed to ensure
they are fully equipped to meet their
statutory duties, understand our business
and strategic priorities, and establish
relationships with the senior leadership
team. It is normally structured as a series
of formal meetings in the first month
after appointment, with site visits to each
geography spaced out over the next
12–18 months. Subsequent follow-up
sessions are arranged on request.
The induction programmes for Natalia
and Zarina were also tailored to their
place of residence as well as restrictions
and preferences regarding international
travel at the time of their appointment
in light of COVID-19. A substantial part
of Natalia’s programme was delivered
virtually, whereas Zarina, appointed
six months later and being a resident of
South Africa, was able to attend more
meetings in person. Their site visits
were adjusted accordingly and to allow
Dame Inga Beale and Steve Weiner to join
them to continue their own inductions,
which had also been aected by the
pandemic.
The Company Secretary and the
Company’s external advisers monitor
legal, regulatory and governance
developments and inform the Board
and relevant committees accordingly.
The development needs of the Board
and its committees are periodically
discussed at meetings and expert briefing
sessions arranged accordingly. During
FY22, the Board received expert briefing
sessions on patient safety, political
developments in the Middle East and
the increased focus on ESG, as well as
an update session on directors’ duties
and other corporate governance-related
matters. Directors appointed to new
committees are oered training tailored
to their new responsibilities and other
development requirements are considered
at meetings between individual directors
and the Chair regarding the annual
evaluation of their performance.
BOARD COMMITTEES
With management’s increasing focus on
ESG matters and growing scrutiny from
investors and regulators, the Committee
considered dierent options for ensuring
appropriate Board-level oversight and
support, and recommended to the
Board the establishment of a separate
ESG Committee to take over and build
upon the sustainability responsibilities
previously undertaken by the Clinical
Performance and Sustainability
Committee. As part of this restructuring,
certain responsibilities previously
allocated to the Nomination Committee
were transferred to the ESG Committee.
These included the monitoring of the
outcomes of the Group’s Diversity and
Inclusion Policy below the Group
Executive Committee level, and the
Southern Africa operations’ standing
in terms of the goals and purposes of
the B-BBEE programme and compliance
with the Employment Equity Act, No. 55
of 1998.
The Committee also took the opportunity
to review and recommend changes to
the membership of all Board committees,
to accommodate the changes in its
composition and to ensure appropriate
links were created between committees
with common interests and shared
responsibilities through overlaps in
membership or, where not possible,
regular guest attendees.
Following the Board’s approval of the
Committee’s recommendations, the
following changes were implemented:
COMMITTEE CHANGES EFFECTIVE DATE
Audit and Risk • Alan Grieve retired as Chair and member;
Tom Singer (existing member) appointed
as Chair
• Natalia Barsegiyan appointed as member
• Zarina Bassa to be appointed as member
13 September 2021
1 August 2021
1 January 2023
Clinical
Performance and
Sustainability
Refocused as Clinical Performance
Committee (no changes in membership)
1 September 2021
ESG Established as new committee with
Dame Inga Beale as Chair and Natalia
Barsegiyan, Dr Felicity Harvey, Danie
Meintjes and Dr Ronnie van der Merwe
as members
1 September 2021
Investment Tom Singer appointed as member 13 September 2021
Nomination Alan Grieve retired as member 13 September 2021
Remuneration • Trevor Petersen retired as Chair and
member; Steve Weiner (existing member)
appointed as Chair
• Dr Muhadditha Al Hashimi appointed
as member
• Zarina Bassa appointed as member
13 September 2021
13 September 2021
1 February 2022
TABLE 1: BOARD COMMITTEE CHANGES DURING FY22
NOMINATION COMMITEE REPORT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT138
BOARD COMPOSITION AND
SUCCESSION PLANNING
The Committee reviews the composition
of the Board and its committees against
the current and future requirements of
the business:
• before starting a search for a new
director;
• before recommending the extension
of the appointment of any existing
directors; and
• annually, when considering Board
short-, mid- and long-term succession
planning and the election or re-election
of directors.
The Committee’s reviews are based on
a comprehensive report which includes
a Board skills matrix reflecting the current
and future needs of the business and an
analysis of various diversity factors such as
gender, ethnicity, geographical background,
age and tenure. It also takes into account
the directors’ independence and other
external time commitments, as well as
feedback from the latest Board evaluation.
This process informed the candidate briefs
prepared for the appointment of two new
directors described earlier in this report.
Following its FY22 review of the Board’s
composition and succession plans, and
taking into account the recent changes to
the Board and its committees in response to
the findings from the FY21 Board evaluation,
the Committee concluded that their
composition was adequate for the short
to medium term and there was merit in
providing a period of stability to allow the
newly appointed directors to settle and
bring their experience to bear. Nevertheless,
the Committee would continue to keep the
matter under close review.
The terms and conditions of appointment
of the non-executive directors, which
include their expected time commitment,
are available for inspection at the
Company’s registered oce and at the
2022 AGM.
BOARD DIVERSITY POLICY
The Board firmly supports the principle of
diversity and inclusion in general and takes
the need for boardroom diversity seriously,
believing that a diverse and inclusive
Board will result in better debates and
decisions, to the benefit of the Company, its
shareholders, other key stakeholders and
society at large. Accordingly, the Committee
recommended the adoption of an updated
diversity policy that sets out this position
more explicitly and introduces specific
gender and ethnic diversity targets for the
Board. The gender target is consistent with
that set for middle, senior and executive
management in the Group Diversity and
Inclusion Policy. Recognising that the
geographical spread of the Group’s
operations means that an ethnic minority in
one jurisdiction may not be a minority in
another, the Board has adapted the Parker
Review definition and set itself a higher
ethnic diversity target.
The revised policy, adopted by the Board in
March 2022, states that:
• diversity encompasses a range of factors
including gender and ethnicity, nationality,
social and educational background, skills,
industry and geographical experience,
age and tenure, cognitive strengths and
a variety of other personal attributes that
are less readily visible but no less valuable;
• inclusion means all Board members,
regardless of background, are valued
and respected and have the opportunity
to contribute to the Board’s discussions
and decision-making;
• appointments to the Board will be made
on merit and based on objective criteria,
taking into account the composition of
the Board and its committees in terms
of the required mix of skills, experience,
knowledge and tenure and, within this
context, the benefits of promoting
diversity in its broadest sense;
• the Board will instruct any search
consultant engaged to advise on new
appointments to review candidates
from a variety of backgrounds and
perspectives; and
• the Board will engage only executive
search consultants who have signed up
to the Executive Search Voluntary Code
of Conduct.
The Board is committed to the following
objectives:
• maintaining a balance of at least
40% female directors and at least
40% male directors, and at least two
directors from an African, Asian, Middle
Eastern, Central and South American
background or from other historically
disadvantaged ethnic groups (while
recognising that during changes in the
composition of the Board, there may be
temporary periods when this balance is
not achieved);
• in reviewing the composition of the Board,
considering the diversity of the directors’
skills, knowledge, experience, gender,
ethnicity and other diversity factors set
out in the policy, non-executive directors’
length of service, the balance of
independence on the Board and the
Group’s future requirements;
• in identifying suitable candidates for
appointment to the Board, considering
candidates from a variety of backgrounds
and perspectives, and assessing all
candidates on merit against objective
criteria, with due regard to the benefits
of Board diversity;
• annually assessing and making any
necessary amendments to the Board’s
diversity objectives; and
• supporting and monitoring management’s
actions to develop an internal pipeline of
diverse, high-calibre candidates for senior
leadership roles within the Group, in line
with Group and divisional diversity and
inclusion policies, practices and initiatives.
The Board Diversity Policy applies to the
Board only, but sits alongside Mediclinic’s
Group Diversity and Inclusion Policy and
other Group and divisional policies, which,
as a whole, set out Mediclinic’s commitment
to diversity and inclusion throughout the
business. The Board is committed to
ensuring the development of a diverse
internal pipeline qualified and capable
of taking up senior leadership positions,
including at Board and Group Executive
Committee level.
The Board takes the need
for boardroom diversity
seriously, believing that a
diverse and inclusive Board
will result in better debates
and decisions.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 139
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
The Committee is pleased to note that the composition of the Board already exceeds the
diversity targets set by the FCA in the changes to the Listing Rules announced in April 2022
and will work with management and the ESG Committee to address the other requirements
and recommendations set out in the new rules and related guidance.
The table below sets out the progress made against the objectives outlined in the previous
Board Diversity Policy, which applied during FY22.
PROGRESS AGAINST OBJECTIVES
OBJECTIVE STATUS
The Board will remain committed to
achieving a diverse Board and executive
management including aspects such
as age, gender, ethnicity, education
and professional background.
See sections on ‘New director appointments’
and ‘Group Executive Committee and talent
management’
The Committee will annually consider
and make recommendations, if
applicable, to the Board on its diversity
objectives.
Refreshed Board Diversity Policy with
specific gender and ethnic diversity
targets, as described in this ‘Board
Diversity Policy’ section
In reviewing the composition of the
Board and executive management,
the Committee will consider diversity,
in addition to considering the balance
of skills, experience, independence
and knowledge.
See sections on ‘Board composition and
succession planning’ and ‘Group Executive
Committee and talent management’
In identifying suitable candidates
for appointment to the Board, the
Committee will assess candidates on
merit against objective criteria and with
due regard to the benefits of a diverse
Board.
See the Section 172 statement on pages 30–33
for a description of the process adopted for the
appointment of Natalia and Zarina
NOMINATION COMMITEE REPORT CONTINUED
See the Board Diversity Policy, available on the ‘Governance’ section of the Company’s website
at www.mediclinic.com
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT140
TABLE 2: RACE, GENDER AND AGE REPRESENTATION ON GOVERNANCE BODIES
TABLE 3: RACE, GENDER AND AGE REPRESENTATION OF DIRECT REPORTS TO GOVERNANCE BODIES
RACE (ONLY IN RESPECT
OF SOUTHERN AFRICA)
GENDER
AGE (YEARS)
AT 31/03/2022
BLACK
2
WHITE MALE FEMALE 30–50 > 50
TOTAL NO
OF DIRECT
REPORTS
1
NO % NO % NO % NO % NO % NO %
Group Executive Committee 32 n/a 18 56% 14 44% 19 59% 13 41%
Swiss Executive Committee
81 n/a 40 49% 41 51% 51 63% 30 37%
Southern Africa
Executive Committee
68 21 31%
2
47 69% 30 44% 38 56% 28 41% 40 59%
Middle East
Executive Committee
65 n/a 20 31% 45 69% 50 77% 15 23%
Notes
1
Total membership shown at 31 March 2022.
2
In the South African context, the term ‘black people’ is a generic term which means African, Coloureds and Indians who: (a) are citizens of the Republic of South Africa by birth
or descent; or (b) became citizens by naturalisation before 27 April 1994 or on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation
prior to that date.
3
Diverse ethnicity refers to individuals with evident heritage from African, Asian, Middle Eastern, Central and South American regions, or from another diverse ethnic group, as
defined by the Parker Review.
FIGURE 1: GENDER REPRESENTATION
– GROUP EMPLOYEES
AND SENIOR MANAGERS
Group employees (%)
Senior managers (%)
Female 22 769
Female 464
Male 7 901
Male 797
26%74%
63%37%
Note
1
Senior managers are employees who are responsible
for planning, directing or controlling the activities of
the Group or a strategically significant part of the
Group and direct undertakings included in the Group
consolidation (excluding the executive directors of
the Company).
RACE (ONLY IN RESPECT
OF SOUTHERN AFRICA)
GENDER
AGE (YEARS)
AT 31/03/2022
BLACK
2
WHITE MALE FEMALE 30–50 > 50
TOTAL
MEMBERS
1
NO % NO % NO % NO % NO % NO %
Group Board 12
2 Board members of diverse
ethnicity (17%)
3
6 50% 6 50% 1 8% 11 92%
Group Executive Committee 10 n/a 9 90% 1 10% 4 40% 6 60%
Swiss Executive Committee 7 n/a 6 86% 1 14% 3 43% 4 57%
Southern Africa
Executive Committee
10 3 30%
2
7 70% 8 80% 2 20% 1 10% 9 90%
Middle East
Executive Committee
10 n/a 9 90% 1 10% 6 60% 4 40%
ORGANISATIONAL DIVERSITY
Details of race, gender and age representation on the Group’s governance bodies, including the Board, the Group Executive Committee,
the divisional executive committees and senior managers, can be found below.
See page 110 for more details on other diversity aspects for the Board
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 141
PROGRESS ON KEY FY22 PRIORITIES
PRIORITIES STATUS
Continuing the development of
succession plans and the talent pipeline
towards key Group and divisional roles
See section on ‘Group Executive Committee and
talent management’
Continuing the review of the composition
of the Board and its committees in respect
of skills, diversity, tenure and commitments
See sections on ‘New director appointments’,
‘Board committees’ and ‘Board composition
and succession planning’
Continuing the implementation of the
Group Diversity and Inclusion Strategy
See sections on ‘Board Diversity Policy’
and ‘Group Executive Committee and talent
management’
COMMITTEE EVALUATION
The table below sets out the progress made in relation to the key priorities identified from
the Committee’s previous evaluation, concluded in March 2021.
In March 2022, the Committee considered
the outcome of the external evaluation of
its performance, conducted as part of the
annual evaluation process described on
pages 117–119 of the Corporate Governance
Statement. The composition and
performance of the Committee were highly
rated and no significant issues requiring
improvement had been identified.
FY23 PRIORITIES
Reflecting on the feedback from its
evaluation, the Committee’s main priorities
for FY23 are:
• monitoring progress of the Group
Executive Committee’s restructuring
and its impact on the business;
• monitoring progress of the implementation
of strategies and interventions to
strengthen executive management
succession plans and the talent pipeline,
and to increase diversity; and
• continuing to consider the Group’s likely
future leadership needs and how new
requirements might be addressed.
The Board and executive
management remain
committed to making
appointments based
on merit.
NOMINATION COMMITEE REPORT CONTINUED
GROUP EXECUTIVE COMMITTEE
AND TALENT MANAGEMENT
Another key leadership change supported
by the Committee during FY22 was the
restructuring of the Group Executive
Committee to ensure it better reflected
the operational and strategic needs of
the business. The Committee reviewed
and discussed the proposals with the
Group CEO and the Group Chief Strategy
and Human Resources Ocer, oering
its guidance and support and
recommending the proposals to the
Board. The Chair of the Committee was
also actively involved in the process for
appointing a Group Chief Operating
Ocer and his successor as CEO of
Southern Africa.
See the Section 172 statement on pages 30–33
for a description of the process adopted for the
restructuring of the Group Executive Committee
The Committee conducts an annual
review of succession and development
plans for the Group Executive Committee
as well as the strength and diversity of
the talent pipeline leading up to it. Areas
of concern identified in the FY22 review
were discussed in detail with management
and subsequently with the Board,
together with the proactive strategies
and interventions being implemented
or planned to address them.
There was some progress made on
increasing gender and ethnic diversity
at the Group Executive Committee and
direct reports level in FY22 due to limited
or no sta turnover; however, changes in
the structure of the Group Executive
Committee have brought about some
subsequent changes. In addition, there
were small improvements in the senior
and middle management levels below,
supported by interventions implemented
during recent years such as:
• applying data analytics in human
resources to provide valuable insights,
such as patterns in appointments
and resignations;
• introducing focused conversations and
initiatives with key employee stakeholder
groups;
• introducing town hall meetings
featuring direct conversation with
executive leadership at Group and
divisional level;
• producing and sharing employee
experience videos;
• sharing employee success stories in
social media, showing the benefit of
joining a diverse workforce;
• supporting accelerated growth of
diverse talent in pipelines;
• improving the B-BBEE standing of
Mediclinic and its subsidiaries in
Southern Africa;
• promoting Emiratisation in the UAE;
• ensuring the candidate brief for any
vacancy to be filled through internal
promotion or external recruitment
considers diversity;
• testing workforce perceptions on
diversity and inclusion and
benchmarking against Gallup®;
• introducing an ESG index to the
annual employee engagement survey
to test workforce perceptions on
the progress of the organisation’s
ESG goals;
• establishing diversity and inclusion
standards for all talent processes in
the employee lifecycle to ensure the
elimination of any potential barriers; and
• continuing diversity and inclusion
training.
The Board and executive management
remain committed to making appointments
based on merit, measured against
objective criteria, and with regard to the
aims and targets set out in the Group
Diversity and Inclusion Policy. Further
interventions are planned in FY23 in
support of this commitment, bearing in
mind the recommendations of the FTSE
Women Leaders Review.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT142
REMUNERATION
COMMITTEE REPORT
We remain committed to
a responsible approach to
executive pay, as I trust
this report demonstrates.
Steve Weiner
Chair of the Remuneration Committee
LETTER FROM THE CHAIR
This is my first report since becoming
Chair of the Remuneration Committee (the
‘Committee’). I would like to thank my
predecessor, Trevor Petersen, for his
service, and welcome Dr Muhadditha Al
Hashimi and Zarina Bassa, who joined the
Committee during the period. I also wish to
thank the shareholders I met since taking
on this role and look forward to future
engagement on this important matter.
This report contains:
• the revised directors’ remuneration
policy (the ‘Policy’), which will be put
to a binding shareholder vote at the
2022 AGM ( see pages 148–156); and
• the Chair’s letter and the Annual
Remuneration Report ( see pages 157–167),
which describe how the current
remuneration policy was applied
during FY22 and how we intend to
apply the Policy in FY23, both of which
will be put to an advisory shareholder
vote at the 2022 AGM.
FY21 STI UPDATE
As previously reported, the FY21 STI vested
in full last year with the Group delivering a
robust performance during an extremely
challenging and uncertain COVID-19-
impacted period. Given the significant
impact of the COVID-19 pandemic on
clinical quality and client experience
assessments, the FY21 STI was based
on Group adjusted operating profit
performance targets only. The Committee
then reviewed the overall performance of
the business, including underlying financial
performance, clinical quality and client
experience (with input from the Clinical
Performance and Sustainability Committee),
and employee engagement. The Committee
determined that the cash proportion of
the STI (50%) be deferred until the Group
dividend had been reinstated. That
condition was met when the Board
proposed a final dividend of 3.00 pence in
line with the dividend policy. Therefore, the
cash proportion of the STI will be released
with the remaining 50% of the STI deferred
into shares vesting after two years subject
to continued employment.
FY22 PERFORMANCE CONTEXT
The Group delivered a strong operational
and financial performance this year,
in line with the improved outlook we
indicated at the half-year results, driven
by increased client activity. This resulted
in revenue and earnings in all three divisions
exceeding pre-pandemic FY20 levels.
Group revenue was up 8%, adjusted
EBITDA increased by 22%, adjusted EBITDA
margin improved to 16.1% (FY21: 14.2%)
and adjusted operating profit was up 41%
compared with FY21. Compared with
pre-pandemic FY20 levels and in constant
currency terms, Group revenue was up 9%,
adjusted EBITDA was up 1% and adjusted
operating profit was flat. Recovery in
profitability and strong cash conversion at
127% (FY21: 77%) significantly reduced the
Group’s leverage ratio to 3.9x (FY21: 5.1x),
below pre-pandemic levels (FY20: 4.3x).
PERFORMANCE OUTCOMES IN FY22
The FY22 STI was based on Group
adjusted operating profit and subject to
adjustments based on performance
against financial and non-financial subset
indicators for each of the three divisions.
The Group achieved adjusted operating
profit of £312m for FY22, which was above
stretch performance levels. This resulted
in an initial STI outcome percentage of
100% of the maximum. While the Group
exhibited strong financial performance, the
STI outcome percentage was reduced by
12.2% taking into account performance
against the subset indicators, resulting in
an STI outcome of 87.8% of maximum.
Note
1
The Company has chosen to adopt the term
operating profit as opposed to earnings before
interest and taxes (‘EBIT’); they are, however, the
same measures.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 143
REMUNERATION COMMITTEE REPORT CONTINUED
SHORT-TERM INCENTIVE
Current • Based on Group adjusted operating profit performance and subject to
adjustments based on performance against financial and non-financial
subset indicators per division
Proposed • More conventional approach, whereby STI outcome is determined by
a combination of financial and strategic measures
• Adjusted operating profit retained as principal financial metric;
financial measures taken together make up no less than 75% of
performance measures
• Remainder based on non-financial strategic and/or personal measures
that reflect Group core priorities and KPIs
Application
for FY23
MEASURE WEIGHTING RATIONALE
Adjusted operating
profit
70% Widely used internal
and external measure
provides a clear
indicator of annual
growth
Cash conversion 10% Liquidity management
is key in the Group’s
ability to invest in
strategy delivery
NPS® 10% Client satisfaction and
clinical performance
are considered
fundamental to the
Group’s long-term
sustainability and form
part of the Group’s
ESG measures
Clinical
performance/
functional KPIs
10%
A summary of the proposed refinements and application for FY23 is set out below:
The Committee reviewed the formulaic
outcome of the STI against broader
perspectives – including overall business
performance and the experience of
shareholders, employees and clients – and,
taking these into account, considers the
formulaic outcome fair.
See pages 158–160 for more
The June 2019 LTI was based on EPS
performance (60% of the award) and relative
TSR performance (40% of the award). The
Group’s TSR performance was positioned
above the median of the TSR comparator
group, resulting in a vesting outcome of
30.2% of the TSR element. The EPS threshold
performance target was not met, largely
due to the impact of the pandemic, which
unfolded after the targets were set, and
the EPS element therefore lapsed in full.
The Committee is satisfied that appropriate
ROIC has been achieved, recovering towards
pre-pandemic levels despite the ongoing
impact COVID-19 had on the Group in
FY22, and that underlying operational and
economic performance has been satisfactory
over the performance period to support the
vesting outcome. Reflecting the level of
performance delivered, 12.1% of the LTI will
vest, the first vesting under the scheme since
inception in 2016.
See page 160 for more
REMUNERATION POLICY
AND INCENTIVE REVIEW
During FY22, the Committee reviewed
the remuneration policy and incentive
framework for the executive directors and
senior management, ahead of the schedule
Policy renewal time frames, to ensure that:
• these employees are appropriately
incentivised to deliver on the Group’s
strategy and create long-term
shareholder value;
• the incentive framework is appropriately
aligned with the Group’s strategic goals
and financial KPIs;
• the arrangements are market competitive
in line with the Group’s size, geographical
diversity and operational complexity; and
• the policy continues to align with UK
corporate governance best practice.
In its review, the Committee considered
a range of incentive frameworks and
concluded that the current approach
comprising an STI and LTI was appropriate
to drive delivery of the Group’s strategic
priorities. Refinements have been proposed
to the performance measures in order to
simplify the current structure, provide closer
alignment with the Group’s strategic
priorities, and ensure better visibility.
After consulting with 20 shareholders
(representing approximately 77% of the
Group’s issued share capital) and four
proxy voting agencies, we are pleased with
the level of support received. We value the
feedback, which was considered carefully
in finalising the proposed weightings of
the STI and LTI performance measures.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT144
LONG-TERM INCENTIVE
Current • FY21 and FY22 LTI awards subject to EPS (40%), relative TSR (25%),
ROIC (25%) and client experience (10%)
Proposed Reflecting on the Group’s strategic priorities and to create sustainable
long-term value and pursue the Group’s purpose to enhance the quality
of life, the Committee has proposed a new balance of LTI metrics. The
Committee considers that the introduction of a revenue growth metric
alongside EPS and ROIC incentivises the delivery of long-term profitable
growth and market share gains across the continuum of care within
the Group’s divisions. The introduction of ESG metrics is especially
important and rewards delivery aligned with the Group’s purpose,
vision, values and sustainable development strategy.
See page 147 for proposed targets in respect of the FY23 awards
MEASURE
1
WEIGHTING RATIONALE
EPS 30% Ensures strategy
delivers profitable
growth
ROIC 30% Rewards ecient use
of capital
Revenue 20% Rewards delivery of
long-term sustainable
growth
Strategic priorities 20% Rewards delivery of
wider strategic
non-financial
priorities, including
ESG commitments
Note
1
The Committee will adjust for the financial impact resulting from significant
mergers and acquisitions during the performance period.
REMUNERATION OPPORTUNITY FOR
THE GROUP CEO AND GROUP CFO
As part of the policy review, the
Committee reviewed the remuneration
levels of the Group CEO and Group CFO
for market competitiveness.
The Group CEO will receive a salary
increase of 4.7%, below that of the
wider workforce within South Africa
(where the average increase was 5.2%).
The Committee is mindful that the Group
CEO continues to grow in calibre and
experience and will therefore keep his
salary under review over the three-year
policy period, taking into account the
performance of both the Group and the
Group CEO, the Group CEO’s salary and
total compensation positioning against
the market, and the wider economic
environment.
The Group CFO has grown in experience
and performed exceptionally well since his
appointment in 2016 and the Committee is
conscious that, together with the Group
CEO, the Group CFO will be instrumental in
executing the Group’s long-term strategy.
The Group CFO’s incentive opportunity
(STI of 133% of salary and LTI of 150% of
salary) has not been reviewed since his
appointment. As part of the policy review,
benchmarking against similar-sized FTSE
250 companies showed that the Group
CFO’s overall remuneration opportunity
had fallen behind the market, driven
by the overall incentive opportunity.
The Committee, therefore, considers it
appropriate to marginally increase the
Group CFO’s LTI opportunity to 175% of
salary with eect from FY23. The increase
means that the STI and LTI ratio for the
Group CFO (1:1.32) is similar to that of the
Group CEO (1:1.33). It also transitions
the Group CFO’s overall remuneration
opportunity from the lower end of the
market when compared with peers
towards the median. The Group CFO will
receive a salary increase of 4.4%.
CONCLUSION
We remain committed to a responsible
approach to executive pay, as I trust this
report demonstrates. The Committee
believes that the remuneration policy
operated as intended during FY22, and it
considers that the remuneration received by
executive directors was appropriate in terms
of Group and personal performance, and the
experience of shareholders, employees and
clients.
On behalf of the Committee, I would like to
thank our shareholders for their engagement
and hope that the Group continues to
receive your support on all remuneration-
related resolutions at the 2022 AGM.
Steve Weiner
Chair of the Remuneration Committee
24 May 2022
As the current LTI plan rules are due to expire, new plan rules are being proposed for
shareholder approval at the 2022 AGM. The proposed rules, further details of which
are set out in the Notice of AGM, have been drafted with sucient flexibility to ensure
that they can be operated for a 10-year period, including allowing for dierent types of
awards (both deferred bonuses and LTI awards). While flexibility has been introduced,
any awards for executive directors will continue to be subject to the terms of the
shareholder-approved remuneration policy in place at the time.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 145
REMUNERATION COMMITTEE REPORT CONTINUED
FIXED PAY VARIABLE PAY
SALARY &
FEES
£’000
BENEFITS
£’000
PENSION
£’000
SUBTOTAL
£’000
STI
1
£’000
LTI
£’000
2
SUBTOTAL
£’000
TOTAL
£’000
EXECUTIVE DIRECTORS
Dr Ronnie van der Merwe FY22 569 2 46 617 750 152 902 1 519
FY21 497 7 39 543 742 0 742 1285
Jurgens Myburgh FY22 407 4 31 442 476 84 560 1 002
FY21 369 6 27 402 488 0 488 890
TABLE 1: SINGLE TOTAL FIGURES OF DIRECTORS’ REMUNERATION
Notes
1
The formulaic outcome of the FY21 STI was 100% of the maximum, however, the Committee determined that the
cash proportion of the STI (50%) be deferred until the Group dividend had been reinstated. That condition was
met when the Board proposed a final dividend of 3.00 pence in line with the dividend policy. Therefore, the cash
proportion of the STI will be released with the remaining 50% of the STI deferred into shares vesting after two
years subject to continued employment.
2
The value of the vesting awards is based on the average share price over the last three months of FY22, being £3.34.
FY22 PERFORMANCE OUTCOMES
STI: The Group CEO and Group CFO earned 87.8% of a maximum bonus based on
performance against adjusted operating profit targets and financial and non-financial
subset indicators for each of the three divisions. This is equivalent to 132% and 117% of
base compensation, respectively. Of the amount earned, 50% will be deferred into
Company shares for two years subject to continued employment.
THRESHOLD TARGET MAXIMUM ACTUAL
AMOUNT
EARNED
(% MAXIMUM)
Adjusted
operating
profit (£’m)
246 276 297 312 100%
Reduction based on performance against financial and non-financial
subset indicators
(12.2)%
GROUP ACHIEVEMENT (GROUP ADJUSTED OPERATING PROFIT
LESS SUBSET OUTCOME):
87. 8%
TABLE 2: STI FY22 PERFORMANCE OUTCOMES
The Committee reviewed the formulaic outcome of the STI against broader perspectives
– including overall business performance and aordability, and the experience of
shareholders, employees and clients – and, taking these into account, considers the
formulaic outcome fair.
LTI: The June 2019 LTI was based on EPS performance (60% of the award) and relative
TSR performance (40% of the award). The Group’s TSR performance was positioned
above the median of the TSR comparator group, resulting in a vesting outcome of 30.2%
of the TSR element. The EPS threshold performance target was not met, largely due to
the impact of the pandemic, which unfolded after the targets were set, and the EPS
element therefore lapsed in full. The Committee is satisfied that appropriate ROIC has
been achieved, recovering towards pre-pandemic levels despite the ongoing impact
COVID-19 had on the Group in FY22, and that underlying operational and economic
performance has been satisfactory over the performance period to support the vesting
outcome. Reflecting the level of performance delivered, 12.1% of the LTI will vest, the first
vesting under the scheme since inception in 2016.
See page 160 for more
AT A GLANCE
Throughout this section, South African rand remuneration was translated into sterling at a rate of £1:ZAR19.23 at 31 March 2022 and £1:ZAR21.30 at 31 March 2021.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT146
IMPLEMENTATION OF POLICY FOR FY23
As noted on pages 144–145, refinements have been proposed to the performance measures
in order to simplify the current structure, provide closer alignment with the Group’s strategic
priorities, and ensure better visibility.
GROUP CEO GROUP CFO
Base salary
(April 2022)
£595 788 (+4.7%) £424 704 (+4.4%)
Pension
1
9.0% 9.0%
Benefits Private medical insurance, life insurance of between 5–7 times
annual base salary, as selected
STI
2
150% of salary 133% of salary
Performance measures for FY23 awards:
The underlying targets are considered commercially sensitive
and will be disclosed on a retrospective basis in the FY23 Directors’
Remuneration Report.
GROUP CEO GROUP CFO
LTI
2
200% of salary 175% of salary
Performance measures and targets for FY23 awards:
MEASURE
1
WEIGHT
Adjusted operating profit 70%
Cash conversion 10%
NPS® 10%
Clinical performance/functional KPIs 10%
MEASURE
1
WEIGHT THRESHOLD TARGET MAXIMUM
EPS (p) 30% 29 36 43
ROIC
2
(%) 30% 5.0 5.5 6.5
Revenue (£’bn) 20% 3.45 3.6 3.75
Carbon
emission
reduction
(tCO
2
e)
3
10%
192 446
(15%
reduction)
181 417
(20%
reduction)
169 805
(25%
reduction)
Female
representation
(%)
4
10% 39 40 41
Notes
1
The Committee will adjust for the financial impact resulting from significant
mergers and acquisitions during the performance period and use adjusted
income statement measures.
2
Cash conversion defined as ‘cash from operations/adjusted EBITDA x 100’.
Notes
1
The Committee will adjust for the financial impact resulting from significant
mergers and acquisitions during the performance period and use FY25 adjusted
income statement measures.
2
ROIC defined as ‘net operating profit less adjusted tax expressed as a percentage
of average invested capital’.
3
Carbon emission reduction will be measured at the end of the 2024 calendar year.
4
Measures the percentage of females in senior management positions.
Notes
1
Base salary, excluding Board fee, in line with the pension contribution levels provided across the Southern Africa
operations.
2
The Committee retains the discretion to adjust STI and LTI award outcomes at the end of the performance period
to ensure that the outcome is fair in the context of overall performance and the experience of key stakeholders.
Share
ownership
guideline
225% of salary 200% of salary
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 147
REMUNERATION COMMITTEE REPORT CONTINUED
Notes
1
The ESG Committee was established on 1 September 2021.
2
The ESG and Nomination committees are currently chaired by the Board Chair, who receives an all-inclusive fee.
Should this change, the fee would be £10 000 for chairing each of the committees.
NON-EXECUTIVE DIRECTOR FEE INCREASES
Fees for the Chair of the Board are determined by the Committee, with the Chair of the
Board exempting herself from the decision. The other non-executive directors’ fees are
determined by the Chair of the Board and executive directors. In setting the fees, advice
is sought from external remuneration advisors on the appropriate level of fees, taking
into account the responsibilities of non-executive directors in dealing with the complexity
and global nature of the Company and the level of fees paid to non-executive directors
in comparable companies. No changes are proposed to the remuneration policy for
non-executive directors.
TABLE 3: NON-EXECUTIVE DIRECTORS’ FEES IN FY23
BASE FEES
FROM
1 APRIL 2021
FROM
1 APRIL 2022 INCREASE
Chair of the Board £280 000 £280 000 0%
Base Board fee £63 000 £63 000 0%
COMMITTEE CHAIR/SENIOR INDEPENDENT DIRECTOR FEES
Audit and Risk Committee £16 000 £16 000 0%
Clinical Performance Committee £12 000 £12 000 0%
ESG Committee
1
n/a
1
n/a
2
0%
Investment Committee £10 000 £10 000 0%
Nomination Committee
2
n/a
2
n/a
2
0%
Remuneration Committee £16 000 £16 000 0%
Senior Independent Director £11 000 £11 000 0%
COMMITTEE MEMBER FEES
Audit and Risk Committee £10 000 £10 000 0%
Clinical Performance Committee £8 000 £8 000 0%
ESG Committee n/a
1
£7 000 0%
Investment Committee £7 000 £7 000 0%
Nomination Committee £7 000 £7 000 0%
Remuneration Committee £10 000 £10 000 0%
DIRECTORS’
REMUNERATION POLICY
INTRODUCTION
This section of the report sets out the revised Policy on the remuneration of executive
and non-executive directors, which is subject to shareholder approval at the 2022 AGM.
If approved, the Policy will be binding and take eect from this date and will operate for
up to three years.
Directors do not participate in discussions or deliberations involving their own
remuneration.
The key changes to the current remuneration policy are outlined in Table 4.
In determining the Policy, the Committee followed a robust decision-making process,
taking into account the views of our major shareholders and proxy voting agencies,
UK corporate governance best practice, the Group’s core reward principles, the factors
in Provision 40 of the Code (see end of this section), and the views of management and
the Committee’s independent advisors.
THE GROUP’S CORE REWARD PRINCIPLES
Simple and transparent Participants and shareholders understand remuneration
arrangements and these can be readily cascaded to the
wider workforce
Line of sight Executives and senior management have appropriate line
of sight and genuine ability to impact performance against
targets
Alignment to annual and
long-term priorities
Performance metrics are appropriately aligned with
financial, operational, clinical, client and ESG objectives
Stewardship and
alignment with
shareholders
A significant element of the total package should be
delivered through shares to encourage long-term share
ownership
Fairness and equity Market-competitive base salaries and total compensation
should reflect the size and complexity of the business,
and calibre and experience of individuals, while incentive
arrangements should be valued by participants and serve to
attract, retain and motivate key talent
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT148
TABLE 4: REMUNERATION POLICY FOR EXECUTIVE DIRECTORS
ELEMENT OF PAY
PURPOSE AND LINK
TO STRATEGY OPERATION MAXIMUM OPPORTUNITY
PERFORMANCE
CRITERIA
Base compensation To attract, retain and motivate
key talent
• Normally reviewed annually or with
change in individual’s position or
responsibilities
• Typically eective from 1 April
• Set to reflect experience and capabilities
of individual and scope and scale of role
• Increases reflect individual performance,
and pay and conditions of wider
workforce
• No prescribed maximum annual increase
• Committee takes into account
remuneration levels in comparable
organisations in geographies in which
the Company operates and in which it
competes for talent
• Ordinarily, annual salary increases would
be no more than average annual increase
of workforce in same geographical
location in which executive director is
based
• In exceptional circumstances, a higher
increase may be awarded (e.g. assumed
additional responsibility; or, an increase in
the scale or scope of the role; or, in the
case of a new executive director, a move
towards desired rate over a period of time
where salary was initially set below
intended positioning)
n/a
Pension/retirement
benefits
To provide employees with
long-term savings via pension
provisions
• Participation in a defined contribution
pension scheme
• In appropriate circumstances, cash
allowances may be paid in lieu of
contribution to pension scheme
A Company contribution (or cash allowance
in lieu of a contribution) in line with
maximum contribution level available for
majority of employees across Southern
Africa (currently at 9% of base salary)
n/a
Benefits To provide market-competitive
benefits to ensure wellbeing
• May include, but are not limited to, private
medical insurance, and death and
disability insurance
• Other ancillary benefits, including
relocation and allowance towards
reasonable fees for professional services
such as legal, tax and financial advice
• Reasonable business expenses (e.g. travel,
accommodation and subsistence) will
be reimbursed and, in some instances,
associated tax borne by the Company
Actual value of benefits provided n/a
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 149
REMUNERATION COMMITTEE REPORT CONTINUED
ELEMENT OF PAY
PURPOSE AND LINK
TO STRATEGY OPERATION MAXIMUM OPPORTUNITY
PERFORMANCE
CRITERIA
Annual STI • To encourage and reward
delivery of the Group’s annual
financial and operational
objectives
• To encourage share ownership
and align with shareholder risk
and reward
• Performance targets, normally set
annually by the Committee, are linked to
financial and strategic goals
• Proportion of bonus earned (normally
no less than half) is deferred into shares
for two years, subject to continued
employment
• Deferred awards are ordinarily settled in
shares
• Dividends that accrue on deferred awards
are paid in shares or cash at the time of
vesting
• Awards subject to malus and clawback
provisions (see below)
• Discretion retained to adjust award
outcomes at end of performance period to
ensure fair outcome in context of overall
performance and experience of key
stakeholders
Maximum opportunity of 150% of base
compensation in respect of any financial
year
• Outcome determined
based on combination
of financial and
non-financial measures
• At least 75% will be
based on Group
financial measures,
with remainder based
on non-financial
strategic and/or
personal measures that
reflect Group core
priorities and KPIs
• For each performance
measure, performance
below threshold target
results in zero vesting;
vesting then increases
from 0% to 100% of
maximum opportunity
for performance
between threshold
and maximum targets
• FY23 STI awards
expected to be based
on adjusted operating
profit (70%), cash
conversion (10%),
NPS® (10%) and
clinical/functional
targets (10%)
KEY CHANGES TO THE POLICY – STI
• More conventional approach, whereby STI outcome is determined by a combination of financial and strategic measures
• Adjusted operating profit retained as principal financial metric; financial measures taken together make up no less than 75% of performance measures
• Remainder based on non-financial strategic and/or personal measures that reflect Group core priorities and KPIs
TABLE 4: REMUNERATION POLICY FOR EXECUTIVE DIRECTORS CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT150
ELEMENT OF PAY
PURPOSE AND LINK
TO STRATEGY OPERATION MAXIMUM OPPORTUNITY
PERFORMANCE
CRITERIA
LTI • To balance performance pay
between achieving financial
and strategic performance
objectives and delivering
sustainable outperformance
• To encourage share ownership
and align with shareholders’
interests
• Annual awards denominated in shares
with vesting dependent on the
achievement of performance conditions
normally measured over three-year period
• Executive directors normally required to
hold vested awards for two years
following end of performance period
• Awards ordinarily settled in shares
• Performance targets normally set annually
by the Committee according to prevalent
economic outlook and risk factors,
ensuring such targets remain challenging
and realistic enough to motivate and
incentivise
• Dividends that accrue during vesting
and holding periods paid in shares or cash,
to extent that awards have vested
• Awards subject to malus and clawback
provisions (see below)
• Discretion retained to adjust award
outcomes at end of performance period to
ensure fair outcome in context of overall
performance and experience of key
stakeholders
Maximum opportunity of 200% of base
compensation in respect of any financial
year
• Performance measures
set by Committee and
linked to appropriate
mix of capital
eciency, profitable
growth, and strategic
milestones including
ESG targets (which will
account for not more
than 20% of the award)
• For each performance
measure, no more than
25% will vest for
achieving threshold
target, increasing
to full vesting for
achieving maximum
performance target
• FY23 LTI awards
expected to be based
on adjusted EPS (30%),
ROIC (30%), revenue
(20%) and strategic/
ESG targets (20%)
KEY CHANGES TO THE POLICY – LTI
Reflecting on the Group’s strategic priorities and to create sustainable long-term value and pursue the Group’s purpose to enhance the quality of life, the Committee has proposed
a new balance of LTI metrics. The Committee considers that the introduction of a revenue growth metric alongside EPS and ROIC incentivises the delivery of long-term profitable
growth and market share gains across the continuum of care within the Group’s divisions. The introduction of ESG metrics is especially important and rewards delivery aligned with the
Group’s purpose, vision, values and sustainable development strategy.
Shareholding guidelines To align executive directors’
interests with those of
shareholders
Within employment
• Group CEO and Group CFO expected to build up and maintain a Company shareholding equal to 225% and 200% of
salary, respectively
Post-employment
• Executive directors required to hold Company shares equal to: (1) 100% of their within-employment requirement (or
their actual shareholding at the point of departure, if lower) for first 12 months post-employment; and (2) 50% of the
above level for the subsequent 12 months
TABLE 4: REMUNERATION POLICY FOR EXECUTIVE DIRECTORS CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 151
REMUNERATION COMMITTEE REPORT CONTINUED
COMMITTEE DISCRETION IN RELATION
TO EXISTING COMMITMENTS
The Committee reserves the right to make
any remuneration payment and payment
for loss of oce, notwithstanding that
they are not in line with the Policy set
out in this report, where the terms were
agreed:
• before the Policy set out in this report
comes into eect;
• at a time when a previous remuneration
policy approved by shareholders was in
place, provided that the payment is in
line with the terms of that policy; or
• at a time when the individual was not
a director of the Company and the
payment was not in consideration
of them becoming a director of the
Company.
This includes awards granted prior to the
introduction of the revised Policy that are
still to vest i.e. the FY21 and FY22 LTI, and
the FY20, FY21 and FY22 STI.
INCENTIVE DISCRETIONS
The Committee operates the STI and the
LTI in accordance with their respective
rules, the Listing Rules and the rules of
relevant tax authorities, where relevant.
The Committee, consistent with market
practice, retains discretion over a number
of areas relating to the operation and
administration of the plans. These include
(but are not limited to):
• participants in the plans;
• timing of the grant and/or vesting of
award;
• size of an award (up to plan and Policy
limits) and/or vesting;
• choice of performance measures,
weightings and targets;
• ability, in exceptional circumstances,
to settle share-based awards in cash
(e.g. where share settlement is not
feasible due to regulatory restrictions);
• discretion to review the level of vesting
in the context of overall performance
and the experience of stakeholders;
• discretion relating to the measurement
of performance and/or adjustments to
awards required in certain circumstances
(e.g. rights issues, corporate
restructuring and special dividends);
• ability to adjust existing performance
conditions for exceptional events to fulfil
their original purpose; and
• whether (and to what extent) malus/
clawback provisions shall apply to an
award (see recovery provisions below).
RECOVERY PROVISIONS
At the discretion of the Committee, awards
may be adjusted before delivery (malus) or
reclaimed after delivery (clawback) if an
adjustment event occurs. Such events may
include a material misstatement of the
Group’s audited financial results; a material
miscalculation of any relevant performance
measure; a material failure of risk
management or regulatory compliance by
a relevant entity; material reputational
damage to the Group; corporate failure; or
the participant’s material misconduct.
CHOICE OF PERFORMANCE MEASURES
AND APPROACH TO SETTING TARGETS
The performance measures used for the
STI and LTI awards reflect the Group’s
annual and long-term financial and
strategic priorities. The STI is focused
predominantly on the Group’s financial
KPIs to reflect the Group’s success in
managing its operations. Balance is
provided through the use of non-financial
strategic and clinical performance
measures.
Stretching targets are set on sliding scales
annually, taking into account multiple
internal and external reference points,
including internal budgets and market
expectations. Modest rewards are
available for achieving threshold
performance with maximum rewards
requiring substantial outperformance of
challenging strategic plans.
TABLE 5: STI AND LTI RECOVERY PROVISIONS
MALUS CLAWBACK
STI (cash)
To such time as
payment is made
Up to two years following payment
STI (deferred
share award)
To such time as
award vests
n/a
LTI
To such time as
award vests
Up to two years following vesting
CONSIDERATION OF
SHAREHOLDER VIEWS
The Company is committed to maintaining
an open and transparent dialogue with its
shareholders and the Committee engages
regularly in a process of investor consultation
.
As part of the development of the Policy,
the Committee sought input from major
shareholders and proxy voting agencies,
and reviewed their feedback. Shareholders
were supportive of the Policy in principle.
Reflecting on feedback received, the
Committee adjusted the weightings of the
LTI metrics to increase the proportion of
the ROIC metric over revenue growth.
The Committee considers the AGM to be
an opportunity to engage further with
shareholders, giving them the opportunity
to provide feedback in advance on the way
in which the Policy operates and the way in
which it is implemented. In addition, the
Committee will continue to engage directly
with major shareholders and their
representative bodies should any material
changes be made to the Policy or its
implementation in the future.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT152
FIGURE 1: EXECUTIVE DIRECTORS’ REMUNERATION SCENARIOS FOR FY23
The basis of calculation for these scenarios is as follows:
FIXED PAY
Salary from 1 April 2022
9% of salary pension contribution
Value of benefits as shown in the total single figure table for FY22
Remuneration is earned in sterling (GBP) and South African rand (ZAR)
The ZAR portion of the remuneration package is translated into GBP
at a rate of £1:ZAR20.27
MINIMUM TARGET MAXIMUM
MAXIMUM WITH 50% SHARE
PRICE GROWTH
STI (PAYOUT AS
% OF MAXIMUM)
0% 50% 100% 100%
LTI (VESTING AS
% OF MAXIMUM)
0% 50% 100%
100% plus 50% share price
growth
TABLE 6: REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS
ELEMENTS AND
LINK TO
STRATEGY OPERATION MAXIMUM OPPORTUNITY
Set to attract,
retain and
motivate talented
individuals
through the
provision of
market-
competitive fees
• Board Chair receives an
all-inclusive fee
• Other non-executive director roles
receive Board fee with additional
fees for: (1) chairing a committee;
(2) SID role; and (3) committee
membership, taking into account
additional responsibilities and time
commitments of these roles
• Additional fees may be introduced
where deemed appropriate to
reflect additional responsibilities
and time commitments
• In consultation with executive
directors, the Board Chair (or in the
case of the Board Chair’s fee, the
Remuneration Committee) will
review fees periodically or in the
event of a change in an individual’s
position or responsibilities (as
appropriate)
• Fee levels are set at market rates,
taking into consideration
responsibility and time
commitments, and pay and
conditions in the workplace
• Fees are paid in cash; the Board
retains the discretion to pay a
proportion in shares where
appropriate
• Reasonable business expenses
(e.g. travel, accommodation and
subsistence) will be reimbursed
and, in some instances, associated
tax borne by the Company
• Benefits may be provided as
appropriate to the role
• Aggregate Board fees
are subject to maximum
cap as stated in Group’s
Articles
• No prescribed maximum
annual increase for
non-executive directors
– changes are guided by
general increase for
broader workforce
Fixed pay STI LTI Share price growth
Minimum
On-target
Maximum
Maximum wth
50% share
price increase
Minimum
Maximum
Maximum with
50% share
price increase
On-target
100%
35% 24% 41%
24% 32% 44%
19% 27% 36% 18%
100%
38% 38%24%
26% 32% 42%
22% 26% 35% 17%
£646K
£1 838K
£2 731K
£3 327K
£461K
£1 208K
£1 769K
£2 140K
REMUNERATION SCENARIOS FOR THE EXECUTIVE DIRECTORS
The total remuneration for each executive director that could result from the Policy in
FY23 is shown below under four dierent performance scenarios.
The chart highlights how the performance-related elements of the package comprise a
significant portion of total remuneration at on-target and maximum performance.
Group
CEO
Group
CFO
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 153
REMUNERATION COMMITTEE REPORT CONTINUED
DIRECTORS’ RECRUITMENT AND PROMOTIONS
The policy on the recruitment or promotion of an executive director takes into account
the need to attract, retain and motivate the best person for each position, while ensuring
close alignment between the interests of shareholders and management.
If a new executive director is appointed, the Committee will align the remuneration
package with the Policy approved by shareholders. Outlined in the table below are all
components that would be considered for inclusion in the remuneration package for a
new executive director appointment.
TABLE 7: DIRECTORS’ RECRUITMENT AND PROMOTIONS
COMPONENT APPROACH
Fixed pay • Base salary will reflect individual’s role, calibre and experience,
and will be set in context of market practice
• Future increases up to market rate may be agreed, in line with
increased experience and/or responsibilities, subject to strong
performance, where considered appropriate
• Pension contribution (or cash allowance) will be no more than
maximum contribution available to majority of workforce across the
geographical location in which individual is based
Benefits • Provided in line with the Policy
• The Committee may agree that the Company will meet certain
relocation and incidental expenses as appropriate
STI and LTI • New appointments will be eligible to be considered for incentive
awards consisting of anSTI and/or LTI award (or any other element
which the Committee considers appropriate given the particular
circumstances but not exceeding the maximum level of variable
remuneration set out below)
• In line with the limits as set out in the Policy, the maximum level of
variable pay for a new executive director is 350% of salary (excluding
buy-out awards)
Buy-out
awards
• To facilitate recruitment, the Committee may make an award to buy
out remuneration terms forfeited on leaving a previous employer
• The Committee will look to replicate arrangements being forfeited as
closely as possible and, in doing so, will take account of relevant
factors including the nature of the remuneration being forfeited; any
performance conditions; and the time over which they would have
vested or been paid
• Where appropriate, the Committee retains the discretion to utilise
the Listing Rules exemption (Listing Rule 9.4.2) to facilitate the
recruitment of an executive director
Other
elements of
remuneration
May be included in the following circumstances:
• An interim appointment being made to fill an executive director role
on a short-term basis
• If exceptional circumstances require that the Chair or a non-executive
director takes on an executive function on a short-term basis
COMPONENT APPROACH
For an internal appointment, any incentive amount awarded in respect of a prior role may
be allowed to vest on its original terms or be adjusted as relevant to take into account the
appointment. Any other ongoing remuneration obligations existing prior to appointment
may continue. For the appointment of a new Chair or non-executive director, the fee
arrangement will be set in accordance with the Policy approved by shareholders.
DIRECTORS’ SERVICE AGREEMENTS AND LETTERS OF APPOINTMENT
The Committee seeks to ensure that contractual terms of the executive directors’ service
agreements reflect best practice. It is the Company’s policy that all executive directors
have rolling contracts that can be terminated by the employee in line with his/her service
agreement. Executive directors’ service agreements are terminable on six months’ notice
on either side.
Executive directors may, on nomination from the Company, take on outside appointments;
however, all fees will normally be retained by Mediclinic.
EXECUTIVE DIRECTOR
COMMENCEMENT DATE OF
SERVICE AGREEMENT
Dr Ronnie van der Merwe 1 June 2018
(joined Mediclinic on 1 July 1999)
Jurgens Myburgh 1 August 2016
TABLE 8: EXECUTIVE DIRECTORS’ SERVICE CONTRACT COMMENCEMENT DATES
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT154
TABLE 9: NON-EXECUTIVE DIRECTORS’ APPOINTMENT DATE AND EXPIRY
OF CURRENT TERM
NON-EXECUTIVE DIRECTOR DATE OF APPOINTMENT EXPIRY OF CURRENT TERM
Dame Inga Beale 26 March 2020 25 March 2023
Dr Felicity Harvey 3 October 2017 2 October 2023
Dr Muhadditha Al Hashimi 1 November 2017 30 October 2023
Natalia Barsegiyan 1 August 2021 30 September 2024
Zarina Bassa 1 February 2022 31 January 2025
Jannie Durand 15 February 2016 10 February 2025
Danie Meintjes 15 February 2016 14 February 2025
Dr Anja Oswald 25 July 2018 31 July 2024
Tom Singer 24 July 2019 31 July 2025
Steve Weiner 22 July 2020 21 July 2023
In accordance with the Code, all directors are subject to annual election or re-election by
shareholders at the Company’s AGM.
PAYMENT FOR LOSS OF OFFICE
In circumstances of termination on notice, the Committee will determine an equitable
compensation package, having regard to the particular circumstances of the case.
The Committee may require notice to be worked, or to make payment in lieu of notice,
or to place the director on garden leave for the notice period. Such a decision is made
to protect the Company’s and shareholders’ interests.
In case of payment in lieu of notice or garden leave, the salary, benefits and pension will
be paid for the period of notice served on garden leave or paid in lieu of notice. If the
Committee feels it would be in shareholders’ interests, payments will be made in phased
instalments. In the case of payment in lieu of notice, payments will be subject to mitigation.
Subject to the circumstances on cessation of employment, an STI may be payable in
respect of the period of the incentive year worked by the executive director. There is no
TABLE 10: STI AND LTI LEAVER’S ARRANGEMENTS
AWARD
GOOD LEAVER
DEFINITION GOOD LEAVER TREATMENT
BAD LEAVER
TREATMENT
STI (deferred
share award)
• Death
• Retirement with
agreement of
Company
• Injury or disability
• Employing entity
ceasing to be a
member of the
Group
• Any other reason
as decided by the
Committee
• Awards normally vest on
normal vesting date
• The Committee retains
discretion to allow awards to
vest on date of cessation
Award lapses
on date of
cessation
Unvested LTI
award
• Upon death, award will normally
vest and be released on the
date of cessation subject to the
achievement of performance
measures at that date
• Award will normally vest on the
normal vesting date, subject to
performance achieved over
performance period and time
proration as a proportion of
vesting period served; any
vested awards will then
normally be released following
two-year holding period
• The Committee retains
discretion to allow awards to
vest on the date of cessation
and/or waive holding period
and/or disapply time prorating
Vested LTI
award subject
to holding
period
• Any circumstance
other than
cessation due
to dismissal or
misconduct
• Award is released following
two-year holding period
• The Committee retains
discretion to waive holding
period
Non-executive directors have letters of appointment setting out the terms under which
they provide their services to the Company. Non-executive directors are normally
appointed for an initial period of three years that, subject to review, may be subsequently
extended for further such terms. Non-executive directors’ appointment is terminable by
three months’ notice on either side.
The dates of the non-executive directors’ original appointment and expiry of their current
three-year term are shown below.
provision for an amount in lieu of any STI to be payable for any part of the notice period
not worked. Such payout would, unless the Committee determines otherwise, be scaled
back pro rata for the period of the incentive year worked by the director, and would vest
at the normal date and be subject to performance.
Awards held under the deferred STI and LTI arrangements are subject to the rules
containing provisions setting out the treatment of awards where a participant leaves.
The table below sets out the relevant provisions for each award.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 155
REMUNERATION COMMITTEE REPORT CONTINUED
The Committee may make any other payments determined by a court of law in respect
of the termination of a director’s service agreement or may pay any statutory entitlements
or any sums to settle or compromise claims in connection with the termination (including,
at the discretion of the Committee, reimbursement for legal advice and provision of
outplacement services) as necessary.
In the event of a change of control, STI awards will be payable to participants subject to
the extent to which the performance conditions have been achieved at that time (taking
into account any factors considered appropriate by the Committee). Unvested awards
under the deferred STI and LTI arrangements will normally vest, taking into account the
extent that any performance conditions attached to the relevant awards have been
achieved. Unless the Committee determines otherwise, LTI awards will be scaled back
pro rata for the period of the performance period worked by the director.
CONSIDERATION OF EMPLOYEE PAY AND CONDITIONS
Pay and employment conditions are considered when setting remuneration for executive
directors. Given the size and scale of the Group’s operations, which include multiple
jurisdictions, the Committee currently does not formally consult with employees in
respect of the design of the Policy and its implementation. However, the Committee
receives information on workforce pay and employment conditions as part of the annual
Committee calendar and oversees the operation of share plans across the Group.
While not specifically consulted on executive remuneration, feedback from employees is
gathered through a wide range of electronic and in-person channels, including the annual
Gallup® employee engagement survey, focus groups, performance reviews, leadership
video conferences, internal campaigns and employee wellness programmes. In FY22,
the Board received and discussed biannual reports from the designated non-executive
director for workforce engagement, outlining the outcomes from the annual employee
engagement survey and feedback and insight from all levels within the Group,
supplemented by feedback from management.
When determining executive director remuneration arrangements, including base
compensation increases, the Committee takes account of appropriate information on
the approach to such issues within the wider workforce to permit informed comparison
of relevant metrics.
The structure of the executive directors’ pay policy on the STI is generally in line with the
policy for remuneration of management within the Group. The performance measures
that apply to management are based on the respective division’s financial performance
and division-specific operational targets, including measures of clinical excellence.
A proportion of the award for all senior management roles is based on Group-wide
performance indicators.
Similarly, the structure of the executive directors’ pay policy on the LTI is in line with
the policy for remuneration of key senior management within the Group, with awards
for all participants subject to the achievement of the same performance conditions over
a three-year period.
CONSIDERATION OF PROVISION 40 OF THE CODE
In developing the Remuneration Policy set out above, the Committee was mindful of the
following factors set out in the Code:
Clarity Incentive arrangements are based on clearly defined financial and
non-financial metrics which are aligned with Mediclinic’s strategy.
Simplicity • Remuneration arrangements have been simplified and now comprise:
- Fixed pay: base salary, benefits and pension.
- STI: simplified structure based on financial and non-financial KPIs
(subset indicators removed). A proportion of the bonus is delivered
in cash, with the balance deferred into shares.
- LTI: drives performance over a three-year period, promoting
sustainable value creation. Awards are subject to a two-year
holding period.
Risk • The Committee considers that the structure of incentive
arrangements does not encourage inappropriate risk-taking.
• Under the incentive arrangements, discretion may be applied
to ensure formulaic outturns are fair in context of the overall
performance and experience of key stakeholders.
Predictability The remuneration scenario charts, set out on page 153, provide
estimates on the potential future reward opportunity in a range of
scenarios – including below threshold, on target and maximum
performance – and with share price appreciation included.
Proportionality • The incentive arrangements are directly aligned to Mediclinic’s
strategic priorities (which have been further developed as part
of the policy review undertaken this year), and payments are
calibrated to ensure that payments are only made where strong
performance is delivered.
• As set out above, all incentive arrangements are subject to
discretion to ensure formulaic outturns are fair in context of the
overall performance and experience of key stakeholders.
Culture • The remuneration policy at Mediclinic has been set to be appropriate
for the nature, size and complexity of the Group
and is designed to drive delivery of its strategic priorities.
• This is recognised through alignment of the remuneration policy
with the wider workforce whenever possible.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT156
ANNUAL REMUNERATION REPORT
This section includes the implementation of the Policy for FY23. See pages 147–148
Throughout the Annual Remuneration Report, South African rand remuneration was translated into sterling at a rate of £
1:Z
AR19.23 at 31 March 2022 and £
1:Z
AR21.30 at 31 March 2021.
TABLE 11: SINGLE TOTAL FIGURES OF DIRECTORS’ REMUNERATION (AUDITED)
FIXED PAY VARIABLE PAY
SALARY & FEES
£’000
BENEFITS
£’000
PENSION
£’000
SUBTOTAL
£’000
STI
1
£’000
LTI
£’000
2
SUBTOTAL
£’000
TOTAL
£’000
EXECUTIVE DIRECTORS
Dr Ronnie van der Merwe
FY22 569 2 46 617 750 152 902 1 519
FY21 497 7 39 543 742 0 742 1285
Jurgens Myburgh
FY22 407 4 31 442 476 84 560 1 002
FY21 369 6 27 402 488 0 488 890
FIXED PAY
FEES
£’000
BENEFITS
3
£’000
TOTAL
£’000
NON-EXECUTIVE CHAIR
Dame Inga
Beale
FY22 280 0 280
FY21 219 0 219
NON-EXECUTIVE DIRECTORS
Dr Muhadditha
Al Hashimi
FY22 77 0 77
FY21 70 1 71
Natalia
Barsegiyan
4
FY22 53 0 53
FY21 n/a n/a n/a
Zarina Bassa
5
FY22 12 0 12
FY21 n/a n/a n/a
Jannie
Durand
6
FY22 80 0 80
FY21 79 3 82
Alan Grieve
7
FY22 80 0 80
FY21 118 0 118
Notes
1
The formulaic outcome of the FY21 STI was 100% of maximum, however,
the Committee determined that the cash proportion of the STI (50%) be
deferred until the Group dividend had been reinstated. That condition was
met when the Board proposed a final dividend of 3.00 pence in line with
the dividend policy. Therefore, the cash proportion of the STI will be
released with the remaining 50% of the STI deferred into shares vesting
after two years subject to continued employment.
2
The value of the vesting awards is based on the average share price over
the last three months of FY22, being £3.34.
3
Benefits to non-executive directors include reimbursement of reasonable
travel, accommodation and subsistence expenses plus the associated tax.
4
Natalia Barsegiyan was appointed as a non-executive director of the
Company on 1 August 2021.
5
Zarina Bassa was appointed as a non-executive director of the Company
on 1 February 2022.
6
Jannie Durand’s fees are paid to Remgro and include services rendered by
him or his alternate, Pieter Uys.
7
Alan Grieve and Trevor Petersen resigned from all committee
responsibilities and Alan Grieve resigned as SID on 13 September 2021;
both contin
ued to serve the Board in a non-independent capacity from
13 September 2021 until 14 February 2022.
8
Dr Felicity Harvey succeeded Alan Grieve as SID of the Company on
13 September 2021.
9
T
om Singer succeeded Alan Grieve as Chair of the Audit and Risk
Committee on 13 September 2021.
10
Steve Weiner succeeded Trevor Petersen as Chair of the Remuneration
Committee on 13 September 2021.
Dr Felicity
Harvey
8
FY22 92 0 92
FY21 80 0 80
Danie Meintjes
FY22 74 0 74
FY21 70 2 72
Dr Anja
Oswald
FY22 78 0 78
FY21 80 2 82
Trevor
Petersen
7
FY22 67 0 67
FY21 89 3 92
Tom Singer
9
FY22 90 0 90
FY21 83 0 83
Steve Weiner
10
FY22 94 0 94
FY21 60 0 60
FIXED PAY
FEES
£’000
BENEFITS
3
£’000
TOTAL
£’000
NON-EXECUTIVE DIRECTORS
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 157
TABLE 13: FY22 STI AWARDS
SWITZERLAND SOUTHERN AFRICA THE MIDDLE EAST
FINANCIAL PERFORMANCE INDICATORS
Debtors’ days n/a n/a
Threshold: > 110 days
Maximum:
<= 100 days
Achievement:
110 days
Reduction:
(7% / 10%)
Cash conversion
Threshold: 85%
Maximum: 95%
Achievement:
128.6%
Reduction:
(0% / 10%)
n/a n/a
REMUNERATION COMMITTEE REPORT CONTINUED
Notes
1
Subject to employment conditions only and settled in Company shares.
2
Number of shares granted, and face value, was based on the five-day average middle market quotation prior
to grant of an LSE share (£3.35) and converted from sterling to ZAR64.41 using the spot exchange rate on
4 June 2021 (£1:ZAR19.23).
BENEFITS AND PENSION (AUDITED)
The benefits that form part of Dr Ronnie van der Merwe and Jurgens Myburgh’s
remuneration include private medical insurance, life insurance and reimbursements for
reasonable business-related expenses (e.g. travel, accommodation subsistence, including,
where appropriate, any associated taxes).
The executive directors participated in the Southern Africa-defined contribution fund and
received a company pension contribution equal to 9% of base salary in line with the rate
allocated to all Southern Africa and Group Services employees.
PRIOR YEAR AWARDS (AUDITED)
FY21 STI AWARDS
Given the significant impact of the COVID-19 pandemic on clinical quality and client
experience assessments, the FY21 STI was based on Group adjusted operating profit
performance targets only. The Committee then reviewed the overall performance of the
business, including underlying financial performance, clinical quality and client experience
(with input from the Clinical Performance and Sustainability Committee), and employee
engagement. Further details of performance achieved are set out in the 2021 Annual Report.
As explained in the 2021 Annual Report, release of the FY21 STI was conditional on the
resumption of the Group’s dividend. That condition was met when the Board proposed a final
dividend of 3.00 pence in line with the dividend policy. Therefore, the cash proportion of the
STI will be released with the remaining 50% of the STI deferred into shares vesting after two
years subject to continued employement.
TABLE 12: FY21 STI AWARDS
EXECUTIVE DIRECTORS
ACTUAL
BONUS (£)
ACTUAL BONUS
AS A % OF
ANNUAL BASE
COMPENSATION
MAXIMUM BONUS
OPPORTUNITY AS A
% OF ANNUAL BASE
COMPENSATION
Dr Ronnie van der Merwe 741 596 150 150
Jurgens Myburgh 487 821 133 133
EXECUTIVE DIRECTOR DATE OF GRANT
NATURE OF
AWARD
NUMBER
OF SHARES
2
FACE VALUE
(£)
Dr Ronnie van der Merwe
04/06/2021
Conditional
Share
Awards
122 614 410 757
Jurgens Myburgh 80 655 270194
FY22 STI (AUDITED)
The FY22 STI was based on Group adjusted operating profit performance and financial
and strategic subset performance indicators for each division. Whereas adjusted
operating profit performance determines the initial STI outcome percentage, any
non-achievement of subset performance indicators results in a reduction to the initial
STI outcome percentage.
FIGURE 2: SUMMARY OF THE PERFORMANCE CONDITIONS AND ACHIEVEMENT
AGAINST TARGETS
For the purposes of the STI, Group adjusted operating profit, based on budgeted
foreign exchange rates, was £312m. In line with the targets set, this excludes bonus
accruals (£27m) and was adjusted for one-o items in the year (less £10m impact on
adjusted operating profit used for the purpose of the bonus).
Group achieved adjusted operation profit (£’m)
Maximum adjusted operation profit (£’m)
Threshold adjusted operation profit (£’m)
312
297
246
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT158
Diversity and
inclusion
n/a
Diversity
appointments
(skilled/qualified job
levels and above)
Target >= 50%
diverse
appointments
Achievement: 53%
Reduction:
(0% / 2.5%)
n/a
Reduction (10.0)% (12.5)% (15.3)%
Weighting of
division
37.2% 40.9% 21.9%
Weighted reduction (3.7)% (5.1)% (3.4)%
Total reduction (12.2)%
GROUP ACHIEVEMENT (GROUP ADJUSTED OPERATING PROFIT LESS SUBSET
OUTCOME): 87.8%
TABLE 13: FY22 STI AWARDS CONTINUED
SWITZERLAND SOUTHERN AFRICA THE MIDDLE EAST
OPERATIONAL, CLINICAL AND PATIENT QUALITY PERFORMANCE INDICATORS
Clinical care
quality
1
Partial achievement
– see note 2
Reduction:
(10% / 15%)
Partial achievement
against mortality
index targets
Threshold
performance not
achieved against
never events
and aggregated
antimicrobial index
value indicators
Reduction:
(12.5% / 15%)
Partial achievement
Maximum
performance
delivered on
surgical site
infection and
medication errors
Threshold
performance not
achieved on never
events
Reduction:
(3.3% / 10%)
Employee
engagement
n/a
Measures Gallup®
Employee
Engagement
Accountability Index
Threshold: < 3.75
Maximum: >= 3.79
Achievement: 3.79
Reduction:
(0% / 2.5%}
n/a
Client experience n/a
Measures overall
mean Press Ganey®
client experience
indicator score
Threshold: < 82.7
Maximum: >= 82.9
Achievement: 83.1
Reduction:
(0% / 2.5%)
Measures Press
Ganey® client
experience
indicator score
Inpatient:
Threshold: < 85.8
Maximum: >= 86.8
Achievement: 84.8
Outpatient:
Threshold: < 82.1
Maximum: >= 83.1
Achievement: 81.1
Reduction:
(5% / 5%)
SWITZERLAND SOUTHERN AFRICA THE MIDDLE EAST
OPERATIONAL, CLINICAL AND PATIENT QUALITY PERFORMANCE INDICATORS
CONTINUED
Notes
1
Disclosure of clinical care quality measures and weightings only, because we regard the target and maximum as
commercially sensitive. Over the performance period, COVID-19 continued to have a significant impact on the
business and distorts clinical quality and client experience assessments versus pre-pandemic baseline data.
The business continues to take each of these areas seriously given their importance to long-term sustainable
performance and, as such, Mediclinic sets exceptionally high clinical targets to maintain the current standards we
deliver and expect to deliver in the future, regardless of the eects of a pandemic.
2
As in FY21, COVID-19 impacted availability of data on clinical performance in Switzerland in FY22. In assessing
performance, the Committee considered partial vesting (with a negative adjustment of 10% out of 15% applied) to
be reflective of performance delivered in the year. This is based on: (i) the mortality rate of patients admitted to
intensive care units, with the Simplified Acute Physiology Score (SAPS)II of 0.37 being within the Swiss benchmark
of 0.40; (ii) a low inpatient mortality rate of 1% having been maintained despite the COVID-19 pandemic; (iii) safe
surgical checklist performance; and (iv) the unadjusted readmission rate across the division remaining low at 2.3%.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 159
REMUNERATION COMMITTEE REPORT CONTINUED
Notes
1
The value of the vesting awards is based on the average share price over the last three months of FY22, being £3.34.
2
The Company’s share price has increased by £0.33 from grant (£3.01) and average share price over the last three months of FY22 (£3.34). The proportion of the value attributable to share price growth is therefore 9.8%, equivalent to
£14 748 for Dr Ronnie van der Merwe and £8 154 for Jurgens Myburgh. The Committee did not consider it necessary to exercise discretion inrespect of share price fluctuations since grant.
The Committee reviewed the formulaic outcome of the STI against broader perspectives, including overall business performance and aordability, and the experience of shareholders,
employees and clients. The Committee considers that the formulaic outcome is fair taking into account these broader perspectives.
TABLE 14: FY22 STI AWARDS
EXECUTIVE DIRECTOR ACTUAL BONUS (£)
ACTUAL BONUS
AS % OF ANNUAL BASE COMPENSATION
MAXIMUM BONUS OPPORTUNITY
AS % OF ANNUAL BASE COMPENSATION
Dr Ronnie van der Merwe 749 713 132 150
Jurgens Myburgh 476 488 117 133
In line with the Policy, 50% of the amount earned will be deferred into Company shares for two years subject to continued employment.
LTI AWARDS VESTED TO EXECUTIVE DIRECTORS (AUDITED)
In June 2019, an LTI award equal to 200% and 150% of base compensation was granted to Dr Ronnie van der Merwe and Jurgens Myburgh, respectively. The awards were based on
adjusted EPS performance (60% of award) and relative TSR performance versus the FTSE 250 (excluding Financial Services and Extraction companies) (40% of award) over the three
financial years to 31 March 2022. Reflecting the level of performance delivered, 12.1% of the LTI will vest, the first vesting under the scheme since inception in 2016.
The Committee is satisfied that appropriate ROIC has been achieved, recovering towards pre-pandemic levels despite the ongoing impact COVID-19 had on the Group in FY22, and that
underlying operational and economic performance has been satisfactory over the performance period to support the vesting outcome.
TABLE 15: FY20 LTI PERFORMANCE TARGETS, ACTUAL PERFORMANCE AND LTI VESTING
PERFORMANCE CONDITION WEIGHTING
THRESHOLD TARGET
(25% VESTING)
MAXIMUM TARGET
(100% VESTING)
ACTUAL
PERFORMANCE
VESTING
(% OF MAXIMUM)
Adjusted EPS growth 60% 4% per annum
compounded
11% per annum
compounded
(5.6)% per annum 0
TSR ranked relative to constituents of the FTSE 250
(excluding Financial Services and Extraction companies)
40% Median of peers
(50
th
percentile)
Upper quartile of peers
(75
th
percentile)
52
nd
percentile 30.2
Overall award 12.1%
EXECUTIVE DIRECTOR
NUMBER OF SHARES
GRANTED
NUMBER OF SHARES
VESTING BASED ON
PERFORMANCE (12.1%)
ESTIMATED VALUE OF
SHARES ON VESTING
£
ESTIMATED VALUE OF
DIVIDEND
EQUIVALENTS £
TOTAL ESTIMATED
VALUE OF AWARD ON
VESTING £
VALUE ON VESTING
ATTRIBUTABLE TO
SHARE PRICE
GROWTH
Dr Ronnie van der Merwe 373 437 45 185 150 918 1 446 152 364 14 748
Jurgens Myburgh 206 456 24 981 83 437 799 84 236 8 154
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT160
LTI AWARDS GRANTED TO EXECUTIVE DIRECTORS (AUDITED)
An FY22 LTI award equal to 200% and 150% of base compensation was granted to Dr Ronnie van der Merwe and Jurgens Myburgh, respectively. When determining vesting, the
Committee will consider whether there have been any ‘windfall gains’ in line with the framework set out last year.
TABLE 16: FY22 LTI AWARDS GRANTED TO EXECUTIVE DIRECTORS
EXECUTIVE DIRECTOR DATE OF GRANT NATURE OF AWARD NUMBER OF SHARES FACE VALUE £
FACE VALUE
AS A % OF ANNUAL
BASE COMPENSATION
END OF
PERFORMANCE
PERIOD
Dr Ronnie van der Merwe
04/06/2021
Conditional Share
Awards
356 181 1 193 206 200
31/03/2024
Jurgens Myburgh 190 569 638 406 150
Notes
1
Number of shares granted, and face value, based on the five-day average middle market quotation prior to grant of an LSE share (£3.35) and translat
ed into sterling at a rate of £1:ZAR19.23 on 3 June 2021.
2
Annual base salary translated into sterling at a rate of £1:ZAR19.23 on 3 June 2021.
TABLE 17: FY22 LTI PERFORMANCE CONDITIONS
PERFORMANCE CONDITION WEIGHTING
THRESHOLD
(25% VESTING)
TARGET
(62.5% VESTING)
MAXIMUM
(100% VESTING)
Adjusted EPS for FY24 (measured on a constant currency basis) (p) 40% 28 35 42
TSR ranked relative to constituents of the FTSE 250 (excluding Financial
Services and Extraction companies) (measured over the three financial
years to 31 March 2024)
25%
Median
(50
th
percentile)
(62.5
th
percentile)
Upper quartile
(75
th
percentile)
ROIC for FY24 (%) 25% 5.0 5.5 6.25
Group patient experience index (measured over the three financial years to
31 March 2024) (%)
10% 82.85 85.85 88.85
The awards are subject to clawback and malus provisions.
Awards are subject to a two-year holding period after vesting, thus settled only at the end of a five-year period from the grant date.
PAYMENTS TO PAST DIRECTORS AND PAYMENTS FOR LOSS OF OFFICE (AUDITED)
No payments that have not been reported previously or in this report were made to past directors, and no loss of oce payments were made during FY22.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 161
REMUNERATION COMMITTEE REPORT CONTINUED
TABLE 18: DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS
EXECUTIVE DIRECTOR
SHAREHOLDING
GUIDELINES AS
A % OF
ANNUAL BASE
COMPENSATION
SHARES HELD
AT 31 MARCH
2021
SHARES HELD
AT 31 MARCH
2022
DEFERRED STI
SHARES
OUTSTANDING
UNVESTED LTI
AWARDS
WITHOUT
PERFORMANCE
CONDITIONS
% OF
ANNUAL BASE
COMPENSATION
2
OUTSTANDING
UNVESTED LTI
AWARDS WITH
PERFORMANCE
CONDITIONS
SHAREHOLDING
REQUIREMENT MET
Dr Ronnie van der Merwe 225 51 630 61 630 143 005 45 185 103 746 842 Progress being made
Jurgens Myburgh 200 90 500 94 500 94 038 24 981 140 406 980 Progress being made
Notes
1
As noted on page 160, the 2019 LTI awards will vest at 12.1% of maximum based on the achievement against performance targets. This equates to 45 185 and 24 981 shares for Dr Ronnie van der Merwe and Jurgens Myburgh, respectively.
2
In calculating if an executive director has met the minimum shareholding requirement, the following values are included: shares held at 31 March 2022 and the estimated after-tax value (not subject to performance conditions) of deferred
STI and LTI awards.
Dr Ronnie van der Merwe and Jurgens Myburgh will use 50% of the net of tax value of any
cash-settled share awards paid to them under the LTI, deferred bonus plan or other
awards, to purchase shares in the Company until they meet their shareholding guideline.
TABLE 19: NON-EXECUTIVE DIRECTORS’ SHAREHOLDINGS
NON-EXECUTIVE DIRECTOR AT 31 MARCH 2021 AT 31 MARCH 2022
Dame Inga Beale - -
Dr Felicity Harvey - -
Dr Muhadditha Al Hashimi - -
Natalia Barsegiyan
2
n/a -
Zarina Bassa
3
n/a -
Jannie Durand - -
Alan Grieve
5
7 500 7 500
Danie Meintjes 123 900 123 900
Dr Anja Oswald - -
Trevor Petersen
5
- -
Tom Singer - -
Pieter Uys
6
417 417
Steve Weiner - -
Notes
1
Or, if earlier, the date of retirement as a non-executive director of the Company.
Natalia Barsegiyan was appointed as a non-executive director of the Company on 1 August 2021.
Zarina Bassa was appointed as a non-executive director of the Company on 1 February 2022.
Jannie Durand is the CEO/Executive Director of Remgro Ltd and board representative of Remgro, which holds
44.56% interest in the Company.
Alan Grieve and Trevor Petersen resigned from all committee responsibilities and Alan Grieve resigned as SID on
13 September 2021; both continued to serve the Board in a non-independent capacity from 13 September 2021 until
14 February 2022.
Pieter Uys is the alternate to Jannie Durand.
There were no changes in the directors’ shareholdings between the financial year end
and the Last Practicable Date. The Company’s Register of Directors’ Interests, which is
open for inspection at the Company’s registered oce during business hours, contains full
details of the directors’ shareholdings and share allocations.
SHARE DILUTION LIMITS
The Company is committed to protecting investors’ interests and ensuring that the
dilution of shares remains within a reasonable limit. In line with guidelines by the
Investment Association, the Company limits equity-based awards under its employee
share plans to 10% of the Company’s issued share capital over a 10-year calendar period
and equity-based awards under executive share plans to 5% of issued share capital over
the same period.
DIRECTORS’ SHAREHOLDING AND SHARE INTERESTS (AUDITED)
Executive directors are required to build and maintain a minimum shareholding in Mediclinic linked to their base compensation. Shares are valued for these purposes at the year-end
price, which was £3.56 per share at 31 March 2022.
Until the shareholding guideline is achieved, Dr Ronnie van der Merwe and Jurgens Myburgh are normally required to retain at least 50% of the net of tax shares from vested LTI,
deferred bonus plan or other share awards.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT162
Notes
1
As previously reported, the FY21 annual salary increases, ordinarily eective 1 April, were delayed and only
implemented 1 October 2020, excluding back-pay for the period April–September 2020. As such, the percentage
increase is overinflated. The monthly change equates to 7.1% for Dr Ronnie van der Merwe and 3.6% for Jurgens
Myburgh. Percentage change between the executive directors’ base compensation, benefits and STI between FY20 to
FY21 and FY21 to FY22 paid in ZAR.
2
Benefits include private medical insurance, life insurance and reimbursements for reasonable business-related
expenses. Large percentage variance as travel was restricted due to COVID-19 and, as such, business-related
expenses were not incurred.
3
Dame Inga Beale was appointed as non-executive director and Chair Designate of the Company on 26 March 2020,
and Chair on 22 July 2020.
4
Dr Muhadditha Al Hashimi joined the Committee on 13 September 2021.
5
Dr Felicity Harvey succeeded Alan Grieve as SID of the Company on 13 September 2021. Dr Felicity Harvey joined
the ESG Committee on 1 September 2021.
6
Natalia Barsegiyan was appointed as a non-executive director of the Company on 1 August 2021.
7
Zarina Bassa was appointed as a non-executive director of the Company on 1 February 2022.
8
J
annie Durand’s fees are paid to Remgro and include services rendered by him or his alternate, Pieter
Uys.
9
Alan Grieve and Trevor Petersen resigned from all committee responsibilities and Alan Grieve resigned as SID on
13 September 2021; both continued to serve the Board in a non-independent capacity from 13 September 2021 until
14 February 2022.
10
Danie Meintjes joined the ESG Committee on 1 September 2021.
11
Tom Singer succeeded Alan Grieve as Chair of the Audit and Risk Committee on 13 September 2021.
12
Steve Weiner was appointed as non-executive director of the Company on 22 July 2020. He succeeded Trevor
Petersen as Chair of the Committee on 13 September 2021.
TABLE 20: COMPARATIVE PERCENTAGE CHANGE IN REMUNERATION: EXECUTIVE DIRECTORS AND EMPLOYEES
FY21 TO FY22 FY20 TO FY21
SALARY AND FEES BENEFITS STI SALARY AND FEES BENEFITS STI
EXECUTIVE DIRECTORS
Dr Ronnie van der Merwe
9.6%
1
(70.1)%
2
(3.8)% 2.4% (49. 2)%
2
508.4%
Jurgens Myburgh
5.9%
1
(45.0)%
2
(7.0)% 2.3% (41.7)%
2
509.8%
NON-EXECUTIVE CHAIR
Dame Inga Beale
3
27.7% 0.0% - n/a n/a -
NON-EXECUTIVE DIRECTORS
Dr Muhadditha Al Hashimi
4
9.3% (100.0)% - 0.0% (69.7)% -
Dr Felicity Harvey
5
14.9% 0.0% - 0.0% 0.0% -
Natalia Barsegiyan
6
n/a n/a - n/a n/a -
Zarina Bassa
7
n/a n/a - n/a n/a -
Jannie Durand
8
1.6% (100.0)% - 2.3% (52.7)% -
Alan Grieve
9
(32.6)% (100.0)% - 11.3% (61.3)% -
Danie Meintjes
10
5.8% (100.0)% - 0.0% (64.9)% -
Dr Anja Oswald
(2.2)% (100.0)% - (0.3)% (47.2)% -
Trevor Petersen
9
(25.4)% (100.0)% - (7.1)% (55.1)% -
Tom Singer
11
8.7% 0.0% - 0.0% 0.0% -
Steve Weiner
12
58.0% 0.0% - n/a n/a -
AVERAGE INCREASE
PER EMPLOYEE
3.8% 3.9% - 5.5% 3.9% 118%
CHANGE IN REMUNERATION LEVELS
The table below shows the average percentage change in remuneration from FY20 to FY21, and FY21 to FY22 for each of the directors compared with that of the Southern Africa
workforce. Given that both the executive directors reside in South Africa, the Southern Africa workforce has been used as a comparator group (currently, there is only one employee
employed by Mediclinic International plc based in the UK).
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 163
REMUNERATION COMMITTEE REPORT CONTINUED
CEO-PAY RATIO
While the Company has fewer than 250 UK-based employees and therefore is not
required to disclose a ratio, the Committee felt that it was appropriate to voluntarily
disclose the CEO-to-all-employee-pay ratio, given the Company’s commitment to high
standards of transparency and good governance.
TABLE 21: FY22 CEO-PAY RATIO AND RESTATED FY21 CEO-PAY RATIO
CEO
25
TH
PERCENTILE
50
TH
PERCENTILE
75
TH
PERCENTILE
FY22
Ratio 65:1 37:1 24:1
Total pay
and benefits
£1 518 970 £23 357 £40 941 £63 325
Salary £569 149 £10 099 £20 447 £57 495
FY21
Ratio 67:1 37:1 21:1
Total pay
and benefits
£1283 532 £19 201 £34 341 £62 509
Salary £497157 £9 577 £20 665 £59 298
The Company chose to adopt Option A methodology in calculating the ratio on the basis
that it is a robust approach and is preferred by investors and proxy voting agencies.
The Group CEO’s single figure of remuneration for the relevant financial year was used for
the calculation ratio. All employees’ pay (excluding the Group CEO, non-executive directors,
interns and students) was annualised for the relevant financial year and translated into
sterling (at a rate of £1:ZAR19.23, AED4.82 and CHF1.21 at 31 March 2022, in respect of
employees’ pay for FY22).
The Committee anticipates that there are likely to be changes in the ratio in future years and
disclosures as the Group CEO’s total remuneration has a greater portion of pay delivered as
variable remuneration, which is consistent with the Company’s remuneration principles.
PERFORMANCE AND PAY PERFORMANCE
The figure below shows the value at 31 March 2022 of £100 invested in the Company upon
inception on 21 June 2013, compared with the value of £100 invested in the FTSE 100 Index
and FTSE 250 Index on the same date. The intervening points are the financial year ends
prior to the date of the combination with Al Noor Hospitals Group plc on 15 February 2016
and the financial year ends since.
The FTSE 100 and FTSE 250 were used as comparators as the Company has been a
member of each of these indices during the relevant period.
FIGURE 3: MEDICLINIC TSR COMPARED WITH FTSE 100 AND FTSE 250
Mediclinic FTSE 100
FTSE 250
Jun
19
Jun
13
Dec
19
Dec
13
Jun
20
Jun
14
Dec
20
Dec
14
Jun
21
Jun
15
Dec
21
Dec
15
Jun
16
Dec
16
Jun
17
Dec
17
Jun
18
Dec
18
50
100
150
200
250
Note
1
The FY21 CEO-pay ratio has been updated to remove fixed-term contractors and students from the all-employee
population.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT164
The table below shows the remuneration for the Group CEO over the past 10 years.
TABLE 22: TOTAL GROUP CEO REMUNERATION SINCE INCEPTION
YEAR ENDED 31 DECEMBER
YEAR ENDED 31 MARCH
2013 2014 2014 2015
1 Jan–
15 Feb
2016
15 Feb–
31 Mar
2016 2017 2018
1 Apr–
31 May
2018
1 Jun
2018–
31 Mar
2019 2020 2021 2022
GROUP CEO
Kassem Alom
Ronald Lavater Danie Meintjes
1
Dr Ronnie van der Merwe
2
Total
remuneration
£’000
361 290 170 702 2 165 79 1 029 1 126 138 600 739 1 285 1 519
STI outturn
(% of maximum)
n/a n/a 11.8 20.0 n/a 79.7 55.9 61.4 16.5 16.5 17.0 100.0
3
87. 8
Deferred STI
portion (%)
n/a n/a 100.0 n/a n/a n/a 50.0 50.0 n/a n/a 50.0 50.0 50.0
LTI vesting
(% of maximum)
n/a n/a 65.4 69.9 n/a 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12.1
Notes
1
Danie Meintjes retired as Group CEO on 31 May 2018.
2
Dr Ronnie van der Merwe was appointed as Group CEO on 1 June 2018.
3
The Board reinstated the Group dividend during FY23, therefore, the cash proportion of the STI will be released, with the remaining 50% of the STI deferred into shares vesting after two years subject to continued employment.
Consistent with the calculation methodology for the single figure for total remuneration,
the total remuneration figure includes the total STI award based on that year’s
performance and the LTI award based on the three-year performance period ending
in the relevant year.
TABLE 23: RELATIVE IMPORTANCE OF SPEND ON PAY
FY22 £’M FY21 £’M CHANGE %
Employee costs 1 448 1 381 4.9
Dividends paid - - 0
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 165
REMUNERATION COMMITTEE REPORT CONTINUED
INVESTOR VOTING
The Directors’ Remuneration Report for FY21 was approved by investors at the Company’s 2021 AGM with 97.18% of votes cast in favour. The Directors’ Remuneration Policy was
approved by investors at the Company’s 2020 AGM with 97.31% of votes cast in favour.
TABLE 24: INVESTOR VOTING
FOR % AGAINST % WITHHELD
TOTAL SHARES
VOTED
% OF ISSUED
SHARES VOTED
FY21 Directors’ Remuneration Report 649 003 589 97.18 18 826 482 2.82 234 674 667 830 071 90.58
Directors’ Remuneration Policy 633 886 281 97.31 17 494 687 2.69 414 198 651 380 968 88.35
COMMITTEE ROLE AND RESPONSIBILITIES
The Committee’s key responsibilities include to assist the Board in:
• determining the Group’s remuneration strategy and policy, having regard to the
alignment of incentives and rewards with the Group’s culture;
• reviewing remuneration and related policies for the workforce across the Group, taking
these into account when setting the remuneration policy for directors;
• establishing the operation of appropriate parameters for the Group’s performance-
related pay schemes; and
• determining the total remuneration package for the Chair of the Board and each
element of the total individual remuneration package for each executive director, other
members of the Group Executive Committee and certain other executives (including
the Group Company Secretary), and ensuring these support and are linked to the Group
strategy, and promote its long-term success.
See the Committee’s terms of reference, available on the ‘Governance’ section of the Company’s website at
www.mediclinic.com, for further details
COMMITTEE MEMBERSHIP AND ATTENDANCE
The Committee is chaired by an independent non-executive director and its members
comprise three other independent non-executive directors (including the Chair of the
Board) who have no involvement with the Company at an operational level or any
personal financial interest in the matters considered at meetings. The Committee
recommends the compensation of the Chair of the Board, but the Chair of the Board, in
consultation with the executive directors, determines the non-executive directors’ fees.
See page 113 for details of Committee membership and attendance and pages 104–107 for
members’ biographies
Jannie Durand and/or his alternate, Pieter Uys, attend meetings by invitation but are
not voting members. Other attendees, also by invitation only, include the Group CEO,
the Group Chief Strategy and Human Resources Ocer, the Group Executive: Reward,
the Group Manager: Reward and representatives from Deloitte LLP, all of whom provide
significant support to the Committee. None of the aforementioned attend as a right,
nor do they attend when their own remuneration is under discussion.
MEETINGS AND PRINCIPAL AREAS OF FOCUS IN FY22
The Committee held five scheduled meetings during the financial year and one scheduled
meeting after the year end, in line with its usual schedule. Including routine monitoring
and approval activities, the material issues discussed by the Committee during the year
under review and between the financial year end and the Last Practicable Date are
summarised on pages 143–145.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT166
COMMITTEE EVALUATION
In March 2022, the Committee considered the outcome of the external evaluation of
its performance, conducted as part of the annual evaluation process described on
pages 117–119 of the Corporate Governance Statement. The composition and performance
of the Committee were highly rated and no significant issues requiring improvement had
been identified.
FY23 PRIORITIES
Reflecting the feedback from its evaluation, the Committee’s main priorities for FY23 are:
• continuing to drive strategically based targets and ensure a strong link between
executive remuneration and shareholders’ experience; and
• ensuring all members receive regular training on remuneration developments
and trends.
EXTERNAL ADVISER TO THE COMMITTEE
During the year under review, the Committee and the Company retained an independent
external adviser to assist with various aspects of the Company’s remuneration.
ADVISER
APPOINTED/
SELECTED BY
SERVICES
PROVIDED
TO THE
COMMITTEE
DURING THE
REPORTING
PERIOD
FEES PAID BY
THE COMPANY
FOR THESE
SERVICES
OTHER
SERVICES
PROVIDED TO
THE COMPANY
IN THE
REPORTING
PERIOD
Deloitte LLP
Founding
member of
Remuneration
Consultants
Group and
adheres to
Voluntary Code
of Conduct in
relation to
executive
remuneration
consulting
in UK
Appointed by
Committee
following
robust selection
process and
reviewed
annually by
Committee
• Support with
review of
directors’
remuneration
policy and
incentive
framework
• General
advice on
remuneration
matters
• Advice on UK
market
practice and
UK investor
perspectives
£126 050
based on
time charges
for work
completed
Tax advisory,
share plan
advisory and
share-based
payment
valuation
support
TABLE 26: EXTERNAL ADVISER TO THE COMMITTEE
The Committee reviewed the independence and objectivity of Deloitte LLP, taking into
consideration its experience and management’s feedback, together with the assurances
provided by Deloitte LLP that it has eective internal processes to ensure it is able to
provide remuneration consultancy services that meet these two critical requirements.
Following this review, the Committee is satisfied that Deloitte LLP has maintained
independence and objectivity and has no conflicts of interest with the Company that may
impact on such.
This report has been prepared on behalf of the Board by the Committee, in accordance
with the Code, the Listing Rules, the Act, and Schedule 8 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 (as amended).
Signed on behalf of the Committee.
Steve Weiner
Chair of the Remuneration Committee
24 May 2022
TABLE 25: MATERIAL ISSUES DISCUSSED BY THE COMMITTEE
AREA DISCUSSIONS
Policy • Reviewed and approved the revised directors’ remuneration policy
and incentive framework
• Consulted extensively with shareholders on proposals
Awards • Considered and approved STI payment for FY21
• Considered and approved the quantum, performance metrics and
targets for FY22 STI and LTI awards
Remuneration
levels
• Considered and approved FY23 salary increases for executive
directors and Group Executive Committee
• Reviewed and approved overall FY23 salary increases of all employee
groups of each division
• Reviewed and approved FY23 fee of Board Chair
Regulatory
and
governance
review
• Reviewed regulatory and corporate governance developments, and
reviewed and recommended to Board for approval ensuing changes
to its terms of reference
• Reviewed and confirmed the independence and objectivity of its
remuneration consultant, Deloitte LLP
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 167
ARTICLES OF ASSOCIATION
The Company’s Articles may be amended
by way of a special resolution of the
shareholders.
See the ‘Governance’ section of the Company’s
website at www.mediclinic.com for the current
Articles, approved by shareholders at the
Company’s AGM held on 22 July 2020
DIRECTORS’ APPOINTMENT
AND REMOVAL
The rules relating to the appointment
and removal of directors are set out in
the Company’s Articles. Non-executive
directors are appointed for a term of
three years, subject to earlier termination,
including provision for early termination by
either the Company or the non-executive
director on three months’ notice. All
non-executive directors serve on the basis
of letters of appointment, which are
available for inspection at the Company’s
registered oce and at the AGM. The
letters of appointment set out the time
commitment expected of non-executive
directors who, on appointment, undertake
that they will have sucient time to meet
their responsibilities.
DIRECTORS’ POWERS
The general powers of the directors are
contained within relevant UK legislation and
the Company’s Articles. The directors are
entitled to exercise all powers of the
Company, subject to any limitations imposed
by the Articles or applicable legislation.
DIRECTORS’ INDEMNIFICATION
The Company has entered into a deed of
indemnity with each director who served
during the reporting period under identical
terms. These qualifying third-party
indemnity provisions (as defined in the
Act) were in force for the benefit of all
directors who held oce during FY22
and up to the approval of the Annual
Report. The deeds indemnify the directors
in accordance with the applicable laws
of England against liability incurred as
a director or employee of the Group.
In addition, the Company has provided
directors and ocers with indemnity
insurance and insurance in connection with
their duties and responsibilities.
COMPENSATION FOR LOSS OF OFFICE
There are no agreements in place with any
director or employee for compensation for
loss of oce or employment resulting from
a takeover, except that provisions of the
Company’s share plans may cause options
and awards granted under such plans to
vest on a takeover.
SIGNIFICANT AGREEMENTS
The following facilities and finance
agreements are considered significant
in terms of their potential impact on the
business of the Group as a whole and
could alter or terminate on the change
of control of the Company:
• South African senior secured borrowings
totalling ZAR7 950m and ZAR500m
revolving credit facility (‘RCF’), bearing
interest at three-month Johannesburg
Interbank Average Rate (‘JIBAR’) plus
a margin of 1.54% and 1.60% respectively,
expiring in September 2026. The
achievement of pre-agreed sustainability
performance targets will reduce the
facility margin through an incentive-
based pricing mechanism.
OTHER DISCLOSURES
168
PRINCIPAL SHAREHOLDER AND
RELATIONSHIP AGREEMENT
Due to Remgro (through subsidiary
undertakings) holding 44.56% of the issued
ordinary shares of the Company and
consequently being regarded as a
controlling shareholder of the Company
for the purposes of the Listing Rules,
Mediclinic entered into a Relationship
Agreement with Remgro on 14 October 2015
with an eective date of 15 February 2016.
This agreement does not include a change
of control provision but does terminate if:
(a) the Company’s ordinary shares cease to
be listed on the premium segment of the
Ocial List and admitted to trading on the
LSE’s main market for listed securities; or
(b) Remgro and its subsidiary undertakings
,
taken together, cease to hold a minimum
interest of 10% of the Company’s issued
ordinary share capital (or 10% of the
aggregate voting rights in the Company
from time to time).
Under the Relationship Agreement, in
accordance with the Listing Rules, Remgro
undertakes to comply with the following
provisions to safeguard Mediclinic’s
independence:
• Transactions and arrangements between
the Company and Remgro (and/or its
associates) will be conducted at arm’s
length and on normal commercial terms.
• Neither Remgro nor any of its associates
will take any action that would have the
eect of preventing the Company from
complying with its obligations under the
Listing Rules.
• Neither Remgro nor any of its associates
will propose or procure the proposal of a
shareholder resolution which is intended
or appears to be intended to circumvent
the proper application of the Listing
Rules.
The Relationship Agreement also provides
that, for every 10% of the issued ordinary
share capital of the Company (or an
interest which carries 10% or more of the
aggregate voting rights in the Company
from time to time) held, Remgro is entitled
to appoint one director to the Board, up to
a maximum of three directors, provided
that the right to appoint a third director is
subject to the requirement that the Board
will, following such appointment, comprise
a majority of independent non-executive
directors. The ordinary shares owned by
Remgro rank pari passu with the other
ordinary shares in all respects.
The Board confirms that during the
period under review: (a) the Company has
complied with the provisions set out in
the Relationship Agreement and with the
rules on the election and re-election of
independent directors set out in the Listing
Rules; and (b) so far as the Company is
aware, Remgro and its associates have
also complied with the terms of the
Relationship Agreement.
Note
1
Correction notice: In the 2021 Annual Report, we
stated CHF3 000 was allocated for political
donations, but no payments made. We, however,
confirm that the CHF3 000 was allocated and paid
during FY21.
POLITICAL DONATIONS
Political donations are generally prohibited
in terms of the Company’s Code of Business
Conduct and Ethics and Anti-bribery Policy,
unless pre-approved by the executive
committee of the division and reported to
the Group Executive Committee. It is not
the policy of the Company to make political
donations as contemplated in the Act.
The Group made no such payments during
FY22 and has no intention of doing so
during FY23. However, as a result of broad
definitions used in the Act, normal business
activities of the Company, which might
not be considered political donations or
expenditure in the usual sense, may possibly
be construed as political expenditure or
as a donation to a political party or other
political organisation and fall within the
restrictions of the Act. This could include
sponsorships, subscriptions, payment of
expenses, paid leave for employees fulfilling
public duties and support for bodies
representing the business community in
policy review or reform. The Board has
therefore resolved to propose a resolution
for shareholder consideration at the AGM,
as in previous years and in line with best
practice, to authorise the Company to make
political payments up to an aggregate
amount of £100 000.
As is customary in Switzerland, our Swiss
division maintains a proper and constructive
dialogue with political decision-makers and
stakeholders to represent its perspective
and support informed decision-making that
contributes to improving patient outcomes
and the long-term sustainability of the
business. Under the Swiss political system,
citizens are active in political bodies at
federal, cantonal and municipal levels in
addition to their regular occupations.
Parliamentarians are not professional
politicians in this system and the parties
do not receive state support. Therefore,
in line with common and ocial practice
in Switzerland, we have traditionally
supported the country’s political system
by making third-party contributions to a
number of political parties, institutions and
associations involved in campaigns which
are of interest to the business. Payments
of this nature made by our Swiss division
during FY22 amounted to CHF21 000
(FY21: CHF3 000). Annual fluctuations
in spend are mostly due to the timing of
national and cantonal renewal elections.
These contributions are not considered
political payments as contemplated in
Part 14 of the Act, as they are not made
to the political parties within the scope of
the Act.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 169
For and on behalf of the Board.
Dame Inga Beale
Non-executive Chair
24 May 2022
GOING CONCERN
The directors confirm that they considered it appropriate to adopt the going concern
basis of accounting in preparing the Company’s consolidated and parent company
financial statements.
See the Group Chief Financial Ocer’s Report and the Audit and Risk Committee Report on pages 89
and 126, respectively, as well as note 2.7 to the Group annual financial statements on pages 186–187
OVERSEAS BRANCHES
The Company has no overseas branches.
LISTING RULES REQUIREMENTS
Information required to be disclosed in terms of Listing Rule 9.8.4R, as applicable, is
referenced below. There are no other disclosures to be made under that rule.
DIRECTORS’ REPORT
Pages 102–171 of this Annual Report constitute the Directors’ Report of the Company for
FY22, as contemplated in the Act. The Company has chosen, in accordance with the Act,
to include certain information in the Strategic Report that would otherwise be required to
be included in this Directors’ Report, as follows:
Other information incorporated by reference into the Directors’ Report can be located as
follows:
DETAIL LOCATION IN ANNUAL REPORT
Relationship agreement with a controlling
shareholder and compliance with independence
provisions and independent directors’
election/re-election
See ‘Principal shareholder and
relationship agreement’ on page 169
Contracts of significance with a controlling
shareholder
None other than the relationship
agreement referred to above
Provision of services by a controlling shareholder
See note 37 to the Group annual
financial statements on page 243
Capitalised interest
See notes 10 and 14 to the Group
annual financial statements on
pages 194 and 197
DETAIL LOCATION IN ANNUAL REPORT
Dividend recommendation Page 89
Likely future developments in the business Pages 14–22
Research and development activities Pages 58–71
GHG emissions and energy consumption
and eciency
Pages 47–56
DETAIL LOCATION IN ANNUAL REPORT
Stakeholder engagement by the Board Pages 26–29
Financial risk management objectives and policies Note 32 to the Group annual
financial statements on
pages 235–237
Events after the reporting date Note 38 to the Group annual
financial statements on page 244
Share capital, voting rights and significant
shareholders
Page 263
OTHER DISCLOSURES CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT170
The directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
law and regulation.
Company law requires the directors to
prepare financial statements for each
financial year. Under that law the
directors have prepared the Group and
the Company financial statements in
accordance with UK-adopted international
accounting standards.
Under company law, directors must not
approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of aairs of the Group
and Company and of the profit or loss of
the Group and Company for that period.
In preparing the financial statements, the
directors are required to:
• select suitable accounting policies and
then apply them consistently;
• state whether applicable UK-adopted
international accounting standards have
been followed, subject to any material
departures disclosed and explained in
the financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and Company will continue in business.
The directors are responsible for
safeguarding the assets of the Group and
Company and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities.
The directors are also responsible for
keeping adequate accounting records that
are sucient to show and explain the
Group’s and Company’s transactions and
disclose with reasonable accuracy at any
time the financial position of the Group and
Company and enable them to ensure that
the financial statements and the Directors’
Remuneration Report comply with the
Companies Act 2006.
The directors are responsible for the
maintenance and integrity of the
Company’s website. Legislation in
the UK governing the preparation and
dissemination of financial statements may
dier from legislation in other jurisdictions.
DIRECTORS’ CONFIRMATIONS
The directors consider that the Annual
Report and accounts, taken as a whole,
is FBU and provides the information
necessary for shareholders to assess
the Group’s and Company’s position
and performance, business model and
strategy.
Each of the directors, whose names and
functions are listed on pages 104–107 of
this Annual Report, confirm that, to the
best of their knowledge:
• the Group and Company financial
statements, which have been prepared
in accordance with UK-adopted
international accounting standards,
give a true and fair view of the assets,
liabilities and financial position of the
Group and Company, and of the profit
of the Group; and
• the Directors’ Report includes a fair
review of the development and
performance of the business and the
position of the Group and Company,
together with a description of the
principal risks and uncertainties that
it faces.
In the case of each director in oce at the
date the Directors’ Report is approved:
• so far as the director is aware, there is
no relevant audit information of which
the Group’s and Company’s auditors are
unaware; and
• they have taken all the steps that they
ought to have taken as a director in
order to make themselves aware of
any relevant audit information and
to establish that the Group’s and
Company’s auditors are aware of that
information.
Dr Ronnie van der Merwe
Group Chief Executive Ocer
24 May 2022
Jurgens Myburgh
Group Chief Financial Ocer
24 May 2022
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
IN RESPECT OF THE FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 171
CONTENTS
172 Independent Auditors’ Report
GROUP ANNUAL FINANCIAL STATEMENTS
180 Consolidated income statement
181 Consolidated statement of
comprehensive income
182 Consolidated statement of financial
position
183 Consolidated statement of changes
in equity
184 Consolidated statement of cash flows
185 Notes to the Group annual financial
statements
COMPANY ANNUAL FINANCIAL STATEMENTS
258 Company statement of financial
position
258 Company statement of changes
in equity
259 Company statement of cash flows
259 Notes to the Company annual
financial statements
INDEPENDENT AUDITORS’
REPORT TO THE MEMBERS OF
MEDICLINIC INTERNATIONAL PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
OPINION
In our opinion, Mediclinic International plc’s
group financial statements and company
financial statements (the “financial
statements”):
• give a true and fair view of the state of
the group’s and of the company’s aairs
as at 31March2022 and of the group’s
profit and the group’s and company’s
cash flows for the year then ended;
• have been properly prepared in
accordance with UK-adopted
international accounting standards; and
• have been prepared in accordance with
the requirements of the Companies Act
2006.
We have audited the financial statements,
included within the Annual Report, which
comprise: the consolidated and company
statements of financial position as at
31March2022; the consolidated income
statement, the consolidated statement of
comprehensive income, the consolidated
and company statements of changes in
equity and the consolidated and company
statements of cash flows for the year
then ended; and the notes to the financial
statements, which include a description of
the significant accounting policies.
Our opinion is consistent with our
reporting to the Audit and Risk
Committee.
BASIS FOR OPINION
We conducted our audit in accordance
with International Standards on Auditing
(UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK)
are further described in the Auditors’
responsibilities for the audit of the
financial statements section of our report.
We believe that the audit evidence we
have obtained is sucient and appropriate
to provide a basis for our opinion.
INDEPENDENCE
We remained independent of the group in
accordance with the ethical requirements
that are relevant to our audit of the financial
statements in the UK, which includes the
FRC’s Ethical Standard, as applicable to
listed public interest entities, and we have
fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief,
we declare that non-audit services
prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note 8, we
have provided no non-audit services to the
company or its controlled undertakings in
the period under audit.
172
OUR AUDIT APPROACH
OVERVIEW
AUDIT SCOPE
•
Our Group audit included full scope audits
at three reporting units. We performed
centralised audit procedures on the equity
accounted results of Spire Healthcare Group
plc (‘Spire’) based on its audited financial
statements at 31 December 2021. We have
also audited the financial statement line
items Cash and cash equivalents, Share
Capital and Share premium of the Company
to support the Group audit.
• The above procedures accounted for
94% of consolidated revenue, 93% of
consolidated profit before tax and 93% of
consolidated adjusted profit before tax.
• For the purposes of the Company audit,
we performed a full scope audit in the UK
of all material financial statement line items.
KEY AUDIT MATTERS
• Impairment of goodwill and non-current
assets (group)
• Carrying value of associate investment
in Spire (group)
• Impairment assessment of the
Company’s investment in subsidiaries
(company)
MATERIALITY
• Overall group materiality: £11.5 million
(2021: £10.8 million) based on 5% of
the consolidated adjusted profit before
tax (2021: 5% of the average three year
consolidated adjusted profit before tax).
• Overall company materiality:
£33.8 million (2021: £33.0 million)
based on 1% of total assets.
• Performance materiality: £8.6 million
(2021: £8.1 million) (group) and
£25.3 million (2021: £24.7 million)
(company).
THE SCOPE OF OUR AUDIT
As part of designing our audit, we
determined materiality and assessed
the risks of material misstatement in the
financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that,
in the auditors’ professional judgement,
were of most significance in the audit of the
financial statements of the current period
and include the most significant assessed
risks of material misstatement (whether or
not due to fraud) identified by the auditors,
including those which had the greatest
eect on: the overall audit strategy; the
allocation of resources in the audit; and
directing the eorts of the engagement
team. These matters, and any comments
we make on the results of our procedures
thereon, were addressed in the context of
our audit of the financial statements as a
whole, and in forming our opinion thereon,
and we do not provide a separate opinion
on these matters.
This is not a complete list of all risks
identified by our audit.
Carrying value of associate investment in
Spire (group) is a new key audit matter
this year. Going concern assessment in
response to the economic uncertainties
from COVID-19 (group), and impact of
COVID-19 (group and company), which
were key audit matters last year, are no
longer included because of the market
recovery from the impact of COVID-19
resulting in the Group’s improved trading
performance during 2022. Where relevant,
the ongoing impact of COVID-19 has been
assessed as part of our audit in 2022.
Otherwise, the key audit matters below
are consistent with last year.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 173
KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Impairment of goodwill and non-current assets (group)
The Group has £1 126 million (2021: £1 061 million) of intangible assets. This balance
consists mainly of goodwill relating to the Mediclinic Middle East operations amounting
to £887 million (2021: £834 million).
The Group is required to perform annual impairment tests on goodwill. These impairment
tests are generally undertaken at the operating division level being the level at which
management monitors goodwill for impairment. The Group also performed separate
impairment assessments, where appropriate, of individual CGUs which form part of these
operating divisions.
Goodwill is generally assessed for impairment at the operating division level on the basis
that the commercial rationale for the transactions giving rise to goodwill is to realise
synergies across the entire operating division and not just within the acquired business. The
two exceptions are the acquisition of Les Grangettes completed in 2018 whose goodwill is
assessed for impairment at the CGU level given the existence of a significant non-controlling
interest and discrete acquisitions at Mediclinic Southern Africa in which case the goodwill is
allocated to that CGU. Other assets subject to impairment assessment at the CGU level
primarily comprise land and buildings.
In the current year, an impairment loss of £7 million was recorded to partially impair
property and equipment at Hirslanden due to a fire that caused significant damage to one
of the building wings at Klinik Hirslanden Zurich.
We focused on the impairment assessments of goodwill at Mediclinic Middle East and
Hirslanden and non-financial assets at two CGUs of Hirslanden as the impairment reviews
carried out by the Group contain a number of significant judgements, including the level
at which goodwill is monitored for impairment, and estimates, including future cash flow
projections, growth rates and discount rates. Changes in these assumptions might lead
to a significant change in the recoverable values of the related assets and therefore to
impairment losses recognised.
We used our valuation experts to assist us in our assessment of management’s impairment
calculations and we tested the reasonableness of key assumptions, including cash flow
forecasts and the determination of growth rates and discount rates. We challenged
management to substantiate its assumptions, including comparing relevant assumptions
to industry benchmarks and economic forecasts. We substantively tested the integrity of
supporting calculations and we corroborated certain information with third party sources.
We agreed the underlying cash flows to approved budgets and we assessed growth rates
and discount rates by comparison to third party growth forecasts, the Group’s cost of
capital and relevant risk factors. Future cash flow assumptions were evaluated in the
context of current trading performance against budget and forecasts, considering the
historical accuracy of budgeting and forecasting and understanding the reasons for the
growth profiles used. We validated the carrying amounts of the net assets subject to
impairment testing to the underlying accounting records, making sure that there was
appropriate consistency between the assets and liabilities that were included in
management’s assessment and the related cash flows.
In addition, we performed independent sensitivity analyses to ascertain the impact of
reasonably possible changes to key assumptions on the available headroom or the level
of impairment required.
We evaluated management’s judgement regarding the levels at which goodwill arising
from the Swiss and Middle East acquisitions are monitored for impairment review
purposes.
We tested management’s estimate of disposal costs for each division and we evaluated
management’s assessment of whether market participant adjustments were required to be
made to the valuations.
We assessed the appropriateness of management’s disclosures about sensitivities in
note 14 and 15 of the consolidated financial statements in relation to the Swiss and Middle
East operations.
Based on the procedures performed, we noted no material issues arising from our work.
INDEPENDENT AUDITORS’ REPORT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT174
Carrying value of associate investment in Spire (group)
In previous years, significant impairment losses were recognised against the Group’s
associate investment in Spire. However, at 31 March 2022, the listed market value exceeded
the carrying value of the investment. Management therefore considered whether any of
the previously recognised impairment losses should be reversed, but concluded that no
reversal was justified.
We focused on this area because of the magnitude of the dierence between the carrying
value and the listed market value of the investment and the judgement involved in
determining whether there were significant favourable changes to the circumstances that
resulted in the initial impairment charge.
We obtained management’s updated impairment assessment and with the assistance of
our valuation experts, we tested the reasonableness of key assumptions underpinning
management’s value-in-use valuation of the Group’s investment, including cash flow
forecasts and the selection of growth rates and discount rates. We compared the result of
the valuation at 31 March 2022 with the valuation performed at 31 March 2020 when the
last impairment charge was recognised and noted that the values were broadly aligned.
We compared Spire’s actual trading for the year ended 31 December 2021 to the estimates
included in the Group’s impairment assessment performed at 31 March 2020 and noted that
the actual results were broadly in line with these estimates. We considered other factors
such as Spire’s recent history of losses and market developments in the UK health sector.
We assessed the appropriateness of management’s disclosures about the judgement in
note 16.1 of the consolidated financial statements.
Based on the procedures performed, we noted no material issues arising from our work.
Impairment assessment of the Company’s investment in subsidiaries (company)
Investments in subsidiaries are accounted for at cost less impairment in the Company
balance sheet. At 31 March 2022, the Company held investments in subsidiaries with a
carrying value of £3,311 million.
In the current financial year, while no specific impairment triggers were identified for
any of the investments, the market capitalisation of the Group is below the carrying
value of the investments in subsidiaries. Management therefore performed an impairment
assessment of these investments.
The impairment assessment performed by management was considered a key audit
matter given the size of the underlying investment carrying values and the application
of management judgement in determining the key valuation assumptions for each
investment.
Management’s analysis resulted in no further impairment charges.
We independently evaluated management’s assessment whether any indicators of
impairment existed by comparing the Company’s carrying value of investments in
subsidiaries to the Group’s market capitalisation at 31 March 2022 and to the valuations
implied by other models, including valuation models prepared for impairment review
purposes at divisions which were subject to audit procedures as part of our Group audit.
The key assumptions used in the impairment models were consistent with those used for
impairment testing as described in the key audit matter “Impairment of goodwill and
non-current assets (group)”.
We evaluated management’s sensitivity analyses to ascertain the impact of reasonably
possible changes to key assumptions on the level of impairment required. We separately
evaluated the dierence between the investment carrying values and the Group’s market
capitalisation.
We considered the appropriateness of the related disclosures in the Company financial
statements.
Based on the procedures performed, we noted no material issues arising from our work.
KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 175
HOW WE TAILORED THE AUDIT SCOPE
We tailored the scope of our audit to ensure
that we performed enough work to be
able to give an opinion on the financial
statements as a whole, taking into account
the structure of the group and the company,
the accounting processes and controls, and
the industry in which they operate.
The Group financial statements involve a
consolidation of 16 reporting units, certain
of which are sub-consolidations of the
operations in each of the Group’s key
markets. The sub-consolidations were
deemed to be components for our audit
and comprise the Group’s three main
divisions: Southern Africa, Switzerland and
the Middle East. These components
required an audit of their complete
financial information due to their size.
In establishing the overall approach to the
Group audit, we determined the type of
work that needed to be performed at the
reporting units by us, as the Group audit
team, or by component auditors from other
PwC network firms. Where the work was
performed by component auditors, we
determined the level of involvement we
needed to have in the audit work at those
components to be able to conclude whether
sucient appropriate audit evidence had
been obtained as a basis for our opinion on
the Group financial statements as a whole.
We instructed, supervised and reviewed
the audit work of each of our component
audit teams in South Africa, Switzerland
and the Middle East, which included audit
work paper reviews, participation in key
audit discussions and in-person site visits
with local management and participation
in audit clearance meetings at each
component. We also maintained regular
dialogue with our component audit teams
at each key reporting unit.
Further specific audit procedures over the
Group consolidation, selected financial
statement line items reported by the
Company and over the Group’s associate
interest in Spire, and procedures over the
Annual Report and audit of the financial
statement disclosures were directly led by the
Group audit team.
Taken together, the component audit work,
together with work performed at the Group
level, accounted for 94% of consolidated
revenue, 93% of consolidated profit before
tax and 93% of consolidated adjusted profit
before tax calculated on an absolute basis.
As part of the audit, we inquired of
management to understand and evaluate the
Group’s risk assessment process in relation to
climate change. We used our knowledge of
the Group, and we engaged with our divisional
component teams and our climate change
experts to support our evaluation of the risk
assessment performed by management.
We further challenged management on
how they considered the Group’s 2030
carbon neutrality and zero waste to landfill
commitments in their assessment. We
assessed that the key financial statement line
items and estimates which are more likely to
be materially impacted by climate change are
those areas that are based on future cash
flows. As a result, we particularly considered
how climate change risks and the impact of
climate commitments made by the Group
would impact the assumptions made in the
forecasts prepared by management that are
used in the Company’s impairment analysis.
Our procedures did not identify any material
impacts on our key audit matters for the year
ended 31 March 2022. We also reviewed the
disclosures included in the TCFD Report of
the Annual Report and we considered the
consistency of these disclosures with the
relevant financial statement disclosures,
including in note 14, and with our
understanding of the business.
MATERIALITY
The scope of our audit was influenced
by our application of materiality. We set
certain quantitative thresholds for
FINANCIAL STATEMENTS
- GROUP
FINANCIAL STATEMENTS
- COMPANY
Overall
materiality
£11.5 million (2021: £10.8 million). £33.8 million (2021: £33.0 million).
How we
determined
it
5% of the consolidated adjusted
profit before tax (2021: 5% of the
average three year consolidated
adjusted profit before tax)
1% of total assets
Rationale for
benchmark
applied
We believe that adjusted profit
before tax is the primary
measure used by the
shareholders in assessing the
performance of the Group.
The adjusted profit before tax
measure removes the impact of
significant items which do not
recur from year to year or which
otherwise significantly aect the
underlying trend of performance
from continuing operations.
This is the metric against which
the performance of the Group
is most commonly assessed by
management and reported to
shareholders. We chose 5%,
which is consistent with the
quantitative materiality
thresholds used for profit-
oriented companies in this sector.
ultimate parent company which holds
the Group’s investments. Therefore,
the entity is not in itself profit oriented.
The strength of the balance sheet is
the key measure of financial health
that is important to shareholders, since
the primary concern for the Company
is the payment of dividends. Using a
benchmark of total assets is therefore
most appropriate. For 2022 and 2021,
selected financial statement line items
related to cash and equity of the
Company are included in the scope
of the Group audit and were audited
to a lower capped materiality of
£10.3 million (2021: £9.7 million).
However, we determined that the
Company did not require a full scope
audit of its complete financial information
for the purposes of the Group audit.
INDEPENDENT AUDITORS’ REPORT CONTINUED
materiality. These, together with
qualitative considerations, helped us to
determine the scope of our audit and the
nature, timing and extent of our audit
procedures on the individual financial
statement line items and disclosures and
in evaluating the eect of misstatements,
both individually and in aggregate on the
financial statements as a whole.
Based on our professional judgement, we
determined materiality for the financial
statements as a whole as follows:
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT176
For each component in the scope of our
group audit, we allocated a materiality that
is less than our overall group materiality.
The range of materiality allocated across
components was between £6.5 million
and £10.3 million. Certain components
were audited to a local statutory audit
materiality that was also less than our
overall group materiality.
We use performance materiality to reduce
to an appropriately low level the probability
that the aggregate of uncorrected and
undetected misstatements exceeds
overall materiality. Specifically, we use
performance materiality in determining
the scope of our audit and the nature and
extent of our testing of account balances,
classes of transactions and disclosures,
for example in determining sample sizes.
Our performance materiality was 75%
(2021: 75%) of overall materiality, amounting
to £8.6 million (2021: £8.1 million) for
the group financial statements and
£25.3 million (2021: £24.7 million) for the
company financial statements.
In determining the performance materiality,
we considered a number of factors - the
history of misstatements, risk assessment
and aggregation risk and the eectiveness
of controls - and concluded that an amount
at the upper end of our normal range was
appropriate.
We agreed with the Audit and Risk
Committee that we would report to them
misstatements identified during our audit
above £1.0 million (group audit) (2021:
£1.0 million) and £1.0 million (company audit)
(2021: £1.0 million) as well as misstatements
below those amounts that, in our view,
warranted reporting for qualitative reasons.
CONCLUSIONS RELATING TO
GOING CONCERN
Our evaluation of the directors’ assessment
of the group’s and the company’s ability to
continue to adopt the going concern basis
of accounting included:
• We assessed the appropriateness
of the cash flow forecasts in the context
of the group’s 2022 financial results and
evaluated the directors’ downside
sensitivities against these forecasts;
• We considered the key assumptions
made in preparing the forecasts and
considered whether these were
supported by the audit evidence we
obtained;
• We examined the headroom under the
base case cash flow forecasts, as well as
the directors’ and our own severe but
plausible downside sensitised cases,
and evaluated whether the directors’
conclusion that headroom remained in
all events was supported by the evidence
we obtained;
• We obtained the group’s covenant
calculations (which are separately
managed at three divisions) and
re-performed the calculation including
applying sensitivities to assess the
potential impact of downside sensitivities
on covenant compliance; and
• We also reviewed the disclosures
provided relating to the going concern
basis of preparation and found that
these provided an explanation
of the directors’ assessment that
was consistent with the audit evidence
we obtained.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or
conditions that, individually or collectively,
may cast significant doubt on the group’s
and the company’s ability to continue as
a going concern for a period of at least
twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we
have concluded that the directors’ use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate.
However, because not all future events
or conditions can be predicted, this
conclusion is not a guarantee as to the
group’s and the company’s ability to
continue as a going concern.
In relation to the directors’ reporting on
how they have applied the UK Corporate
Governance Code, we have nothing
material to add or draw attention to in
relation to the directors’ statement in
the financial statements about whether
the directors considered it appropriate
to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities
of the directors with respect to going
concern are described in the relevant
sections of this report.
REPORTING ON OTHER INFORMATION
The other information comprises all of
the information in the Annual Report other
than the financial statements and our
auditors’ report thereon. The directors
are responsible for the other information,
which includes reporting based on the
Task Force on Climate-related Financial
Disclosures (TCFD) recommendations. Our
opinion on the financial statements does
not cover the other information and,
accordingly, we do not express an audit
opinion or, except to the extent otherwise
explicitly stated in this report, any form of
assurance 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 we identify an
apparent material inconsistency or material
misstatement, we are required to perform
procedures to conclude whether there is
a material misstatement of the financial
statements or a material misstatement of
the other information. If, based on the work
we have performed, we conclude that
there is a material misstatement of this
other information, we are required to
report that fact. We have nothing to report
based on these responsibilities.
With respect to the Strategic Report and
Directors’ Report, we also considered
whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the
course of the audit, the Companies Act
2006 requires us also to report certain
opinions and matters as described below.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 177
STRATEGIC REPORT
AND DIRECTORS’ REPORT
In our opinion, based on the work undertaken
in the course of the audit, the information
given in the Strategic Report and Directors’
Report for the year ended 31March2022
is consistent with the financial statements
and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and
understanding of the group and company
and their environment obtained in the
course of the audit, we did not identify any
material misstatements in the Strategic
Report and Directors’ Report.
DIRECTORS’ REMUNERATION
In our opinion, the part of the Remuneration
Committee Report to be audited has been
properly prepared in accordance with the
Companies Act 2006.
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the
directors’ statements in relation to going
concern, longer-term viability and that part
of the corporate governance statement
relating to the company’s compliance
with the provisions of the UK Corporate
Governance Code specified for our review.
Our additional responsibilities with respect
to the corporate governance statement as
other information are described in the
Reporting on other information section of
this report.
Based on the work undertaken as part of
our audit, we have concluded that each
of the following elements of the corporate
governance statement is materially
consistent with the financial statements
and our knowledge obtained during the
audit, and we have nothing material to add
or draw attention to in relation to:
• The directors’ confirmation that they have
carried out a robust assessment of the
emerging and principal risks;
• The disclosures in the Annual Report
that describe those principal risks,
what procedures are in place to identify
emerging risks and an explanation of how
these are being managed or mitigated;
• The directors’ statement in the financial
statements about whether they
considered it appropriate to adopt the
going concern basis of accounting in
preparing them, and their identification of
any material uncertainties to the group’s
and company’s ability to continue to do so
over a period of at least twelve months
from the date of approval of the financial
statements;
• The directors’ explanation as to their
assessment of the group’s and company’s
prospects, the period this assessment
covers and why the period is appropriate;
and
• The directors’ statement as to whether
they have a reasonable expectation that
the company will be able to continue in
operation and meet its liabilities as they
fall due over the period of its assessment,
including any related disclosures drawing
attention to any necessary qualifications
or assumptions.
Our review of the directors’ statement
regarding the longer-term viability of the
group was substantially less in scope than
an audit and only consisted of making
inquiries and considering the directors’
process supporting their statement;
checking that the statement is in alignment
with the relevant provisions of the UK
Corporate Governance Code; and
considering whether the statement is
consistent with the financial statements and
our knowledge and understanding of the
group and company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken
as part of our audit, we have concluded
that each of the following elements of
the corporate governance statement is
materially consistent with the financial
statements and our knowledge obtained
during the audit:
•
The directors’ statement that they
consider the Annual Report, taken
as a whole, is fair, balanced and
understandable, and provides
the information necessary for
the members to assess the group’s
and company’s position, performance,
business model and strategy;
• The section of the Annual Report that
describes the review of eectiveness of
risk management and internal control
systems; and
• The section of the Annual Report
describing the work of the Audit and Risk
Committee.
We have nothing to report in respect of our
responsibility to report when the directors’
statement relating to the company’s
compliance with the Code does not properly
disclose a departure from a relevant
provision of the Code specified under the
Listing Rules for review by the auditors.
RESPONSIBILITIES FOR THE FINANCIAL
STATEMENTS AND THE AUDIT
RESPONSIBILITIES OF THE DIRECTORS
FOR THE FINANCIAL STATEMENTS
As explained more fully in the Statement of
directors’ responsibilities, the directors
are responsible for the preparation of
the financial statements in accordance with
the applicable framework and for being
satisfied that they give a true and fair view.
The directors are also responsible for
such internal control as they determine is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error.
In preparing the financial statements,
the directors are responsible for assessing
the group’s and 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 directors either
intend to liquidate the group or the
company or to cease operations, or have
no realistic alternative but to do so.
AUDITORS’ RESPONSIBILITIES
FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditors’
report that includes our opinion.
Reasonable assurance is a high level of
assurance, but is not a guarantee that
an audit conducted in accordance with
ISAs (UK) will always detect a material
misstatement when it exists. Misstatements
can arise from fraud or error and are
considered material if, individually or in
the aggregate, they could reasonably be
expected to influence the economic
decisions of users taken on the basis of
these financial statements.
INDEPENDENT AUDITORS’ REPORT CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT178
Irregularities, including fraud, are instances
of non-compliance with laws and
regulations. We design procedures in line
with our responsibilities, outlined above, to
detect material misstatements in respect
of irregularities, including fraud. The extent
to which our procedures are capable of
detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the group
and industry, we identified that the principal
risks of non-compliance with laws and
regulations related to healthcare regulations
in the Group’s markets, and UK and
international tax regulations, and we
considered the extent to which non-
compliance might have a material eect on
the financial statements. We also considered
those laws and regulations that have a direct
impact on the financial statements such as
the Companies Act 2006. We evaluated
management’s incentives and opportunities
for fraudulent manipulation of the financial
statements (including the risk of override of
controls) and determined that the principal
risks were related to posting inappropriate
journal entries to increase revenue or reduce
expenditure, accounting for large or unusual
transactions outside the normal course of
business and management bias in key
accounting estimates. The group
engagement team shared this risk
assessment with the component auditors so
that they could include appropriate audit
procedures in response to such risks in their
work. Audit procedures performed by the
group engagement team and/or component
auditors included:
• Enquires with finance and non-finance
management, internal audit and the
Audit and Risk Committee including
consideration of known or suspected
instances of non-compliance with laws
and regulation and fraud;
• Review of internal audit reports;
• Inspection of reporting from the
Group’s whistleblowing Helpline and, if
applicable, the results of management’s
further investigations;
• Challenging assumptions and judgements
made by management in relation to the
Group’s accounting estimates;
• Identifying and testing journal entries
based on our risk assessment; and
• Instruction, supervision and review of
related work performed by component
auditors, including the responses to
risks related to management override
of controls and to fraud in revenue
recognition.
There are inherent limitations in the audit
procedures described above. We are less
likely to become aware of instances of
non-compliance with laws and regulations
that are not closely related to events and
transactions reflected in the financial
statements. Also, the risk of not detecting
a material misstatement due to fraud is
higher than the risk of not detecting one
resulting from error, as fraud may involve
deliberate concealment by, for example,
forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing
complete populations of certain transactions
and balances, possibly using data auditing
techniques. However, it typically involves
selecting a limited number of items for
testing, rather than testing complete
populations. We will often seek to target
particular items for testing based on their
size or risk characteristics. In other cases, we
will use audit sampling to enable us to draw a
conclusion about the population from which
the sample is selected.
A further description of our responsibilities
for the audit of the financial statements
is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditors’
report.
USE OF THIS REPORT
This report, including the opinions,
has been prepared for and only for
the company’s members as a body in
accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other
purpose. We do not, in giving these
opinions, accept or assume responsibility for
any other purpose or to any other person to
whom this report is shown or into whose
hands it may come save where expressly
agreed by our prior consent in writing.
OTHER REQUIRED
REPORTING
COMPANIES ACT 2006 EXCEPTION
REPORTING
Under the Companies Act 2006 we are
required to report to you if, in our opinion:
•
we have not obtained all the information
and explanations we require for our
audit; or
• adequate accounting records have
not been kept by the company, or
returns adequate for our audit have
not been received from branches not
visited by us; or
• certain disclosures of directors’
remuneration specified by law are not
made; or
• the company financial statements
and the part of the Remuneration
Committee Report to be audited are
not in agreement with the accounting
records and returns.
We have no exceptions to report arising
from this responsibility.
APPOINTMENT
Following the recommendation of
the Audit and Risk Committee, we
were appointed by the members on
18March2016 to audit the financial
statements for the year ended 31March2016
and subsequent financial periods. The period
of total uninterrupted engagement is seven
years, covering the years ended
31March2016 to 31March2022.
OTHER MATTER
As required by the Financial Conduct
Authority Disclosure Guidance and
Transparency Rule 4.1.14R, these financial
statements form part of the ESEF-prepared
annual financial report filed on the National
Storage Mechanism of the Financial
Conduct Authority in accordance with the
ESEF Regulatory Technical Standard (‘ESEF
RTS’). This auditors’ report provides no
assurance over whether the annual financial
report has been prepared using the single
electronic format specified in the ESEF RTS.
Neil Grimes
(Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory
Auditors
London
24May2022
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 179
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2022
2022 2021
Notes £’m £’m
Revenue 4 3 233 2 995
Other income 5 25 13
Employee benefit and contractor costs 6 (1 522 ) (1 448 )
Consumables and supplies 19 (770 ) (719 )
Care-related costs (146 ) (145 )
Infrastructure-related costs 7 (121 ) (110 )
Service costs (169 ) (147 )
Provision for expected credit losses 20 (12 ) (11 )
Depreciation and amortisation 14 & 15 (228 ) (217 )
Impairment of property, equipment
and vehicles 14 (7 ) (3 )
Impairment of intangible assets 15 – (1 )
Other gains and losses 9 (3 ) 2
Operating profit 280 209
Finance income 6 4
Finance cost 10 (7 4 ) (99 )
Share of net loss of equity-accounted
investments 16 (1 ) (70 )
Reversal of impairment of equity-accounted
investments 16 – 60
Profit before tax 211 104
Income tax expense 11 (41 ) (25 )
Profit for the year 170 79
The notes on pages 185–257 form an integral part of these financial statements.
Attributable to:
Equity holders of the Company 151 68
Non-controlling interests 23 19 11
Profit per ordinary share attributable to the
equity holders of the Company – pence
Basic 12 20.5 9.2
Diluted 12 20.5 9.2
2022 2021
(Continued) Notes £’m £’m
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT180
2022 2021
(Continued) Notes £’m £’m
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2022
(Re-presented)
1
2022 2021
Notes £’m £’m
Profit for the year 170 79
Other comprehensive income/(loss)
Items that may be reclassified to the income
statement in future periods 188 (235 )
Currency translation dierences 22 182 (235 )
Fair value adjustment on cash flow hedges
– gross 22 1 (2 )
Cash flow hedges reclassified to profit or
loss – gross 22 6 2
Tax on items relating to cash flow hedges 22 (2 ) –
Share of other comprehsive income of
equity-accounted investments 22 1 –
Items that may not be reclassified to the
income statement in future periods (70 ) 127
Remeasurements of retirement benefit
obligations – gross (90 ) 153
Tax on remeasurement of retirement
benefit obligations 16 (26 )
Changes in the fair value of equity
investments at fair value through other
comprehensive income – gross 22 4 –
Other comprehensive income/(loss),
net of tax 118 (108 )
Total comprehensive income/(loss)
for the year 288 (29 )
The notes on pages 185–257 form an integral part of these financial statements.
Attributable to:
Equity holders of the Company 258 (45 )
Non-controlling interests 23 30 16
Note
1
Comparatives have been re-presented to present other comprehensive income on a gross basis, with
the tax impact presented separately. In the previously reported financial statements for the year ended
31 March 2021, this information was presented in a separate note.
(Re-presented)
1
2022 2021
(Continued) Notes £’m £’m
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 181
LIABILITIES
Non-current liabilities 3 138 3 021
Borrowings 25 1 688 1 686
Lease liabilities 26 73 0 621
Deferred income tax liabilities 18 432 425
Retirement benefit obligations 27 119 127
Provisions 28 37 37
Derivative financial instruments 29 128 124
Cash-settled share-based payment liabilities 24 4 1
Current liabilities 823 684
Trade and other payables 30 586 49 8
Borrowings 25 115 91
Lease liabilities 26 56 55
Provisions 28 38 19
Retirement benefit obligations 27 20 14
Derivative financial instruments 29 1 2
Current income tax liabilities 7 5
Total liabilities 3 961 3 705
Total equity and liabilities 7 207 6 672
2022 2021
(Continued) Notes £’m £’m
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2022
2022 2021
Notes £’m £’m
ASSETS
Non-current assets 5 733 5 440
Property, equipment and vehicles 14 4 385 4 052
Intangible assets 15 1 126 1 061
Equity-accounted investments 16 165 171
Retirement benefit asset 27 1 110
Other investments and loans 17 24 12
Deferred income tax assets 18 32 34
Current assets 1 474 1 232
Inventories 19 97 109
Trade and other receivables 20 834 826
Other investments and loans 17 6 2
Current income tax assets 3 1
Cash and cash equivalents 33.7 534 294
Total assets 7 207 6 672
EQUITY
Capital and reserves
Share capital 21 74 74
Share premium reserve 21 690 69 0
Retained earnings 4 597 4 523
Other reserves 22 (2 254 ) (2 438 )
Attributable to equity holders of the Company 3 107 2 849
Non-controlling interests 23 139 118
Total equity 3 246 2 967
These financial statements and the accompanying notes as set out on pages
180–257
were
approved for issue by the Board of Directors on 24 May 2022 and were signed on its behalf by:
Ronnie van der Merwe Jurgens Myburgh
Group Chief Executive Ocer Group Chief Financial Ocer
Mediclinic International plc (Company no 08338604)
The notes on pages 185–257 form an integral part of these financial statements.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT182
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022
The notes on pages 185–257 form an integral part of these financial statements.
Notes
1
Fair value through other comprehensive income.
2
Less than £0.5m for the year ended 31 March 2021.
Profit for the year – – – – – – – 151 151 19 170
Other comprehensive income/(loss)
for the year – – – – 4 1 74 6 (77 ) 107 11 118
Total comprehensive income/(loss)
for the year – – – – 4 1 74 6 74 258 30 288
Equity-settled share-based payment – – – – – – – 1 1 – 1
Transactions with non-controlling
shareholders – – – – – – – (1 ) (1 ) 3 2
Dividends paid – – – – – – – – – (12 ) (12 )
Balance at 31 March 2022 74 6 690 (3 014 ) 4 752 (2 ) 4 597 3 107 139 3 246
Balance at 1 April 2020 74 6 690 (3 014 ) – 815 (8 ) 4 327 2 890 113 3 003
Profit for the year – – – – – – – 68 68 11 79
Other comprehensive income/(loss)
for the year – – – – – (237 ) – 1 24 (113 ) 5 (108 )
Total comprehensive income/(loss)
for the year – – – – – (237 ) – 192 (45 ) 16 (29 )
Equity-settled share-based payment – – – – – – – – – – –
Transactions with non-controlling
shareholders – – – – – – – 4 4 (3 ) 1
Dividends paid – – – – – – – – – (8 ) (8 )
Balance at 31 March 2021 74 6 690 (3 014 ) – 578 (8 ) 4 523 2 849 118 2 967
Share
capital
(note 21)
£’m
Capital
redemption
reserve
(note 22)
£’m
Share
premium
reserve
(note 21)
£’m
Reverse
acquisition
reserve
(note 22)
£’m
Financial
assets at
FVOCI
reserve
(note 22)
£’m
Foreign
currency
translation
reserve
(note 22)
£’m
Hedging
reserve
(note 22)
£’m
Retained
earnings
£’m
Attributable
to equity
holders
of the
Company
£’m
Non-
controlling
interests
(note 23)
£’m
Total
equity
£’m
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 183
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022
2022 2021
£’m £’m
Notes Inflow/(outflow) Inflow/(outflow)
CASH FLOW FROM OPERATING
ACTIVITIES
Cash generated from operations 33.1 663 330
Interest received 6 4
Interest paid 33.2 (69 ) (70 )
Tax paid 33.3 (46 ) (29 )
Net cash generated from operating
activities 554 235
CASH FLOW FROM INVESTMENT
ACTIVITIES (189 ) (137 )
Capital expenditure to maintain
operations 33.4 (96 ) (56 )
Capital expenditure to expand
operations 33.5 (83 ) (80 )
Acquisition of subsidiaries 34 (7 ) (2 )
Disposal of subsidiaries 35 – 4
Acquisition of investment in associate 16 – (1 )
Dividends received from
equity-accounted investment 16 2 –
Proceeds from other investments
and loans 3 1
Acquisition of investments 17 (12 ) (4 )
Loans granted (3 ) –
Proceeds from insurance claim 6 1
Proceeds on disposal of property,
equipment and vehicles 1 –
Net cash generated before financing
activities 365 98
The notes on pages 185–257 form an integral part of these financial statements.
CASH FLOW FROM FINANCING
ACTIVITIES (14 9 ) (130 )
Distributions to non-controlling interests 23 (12 ) (8 )
Distributions to shareholders 13 – –
Transaction with non-controlling interest 23 2 1
Proceeds from borrowings 33.6 89 115
Repayment of borrowings 33.6 (183 ) (196 )
Refinancing transaction costs 33.6 (3 ) (3 )
Repayment of lease liabilities 33.6 (42 ) (39 )
Net increase/(decrease) in cash and
cash equivalents 216 (32 )
Opening balance of cash and cash
equivalents 294 329
Exchange rate movements on
foreign cash 24 (3 )
Closing balance of cash and
cash equivalents 33.7 534 294
2022 2021
£’m £’m
(Continued)
Notes Inflow/(outflow) Inflow/(outflow)
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT184
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
1. GENERAL INFORMATION
These financial statements are consolidated financial statements for Mediclinic
joint ventures (collectively, the ‘Group’). A list of subsidiaries, associates and joint
ventures is included in note 39.
Mediclinic is a public limited company , with a primary listing on the London Stock
Exchange (‘LSE’), and incorporated and domiciled in England and Wales
address is 6
Company has secondary listings on the JSE and the Namibian Stock Exchange (‘NSX’).
A wholly owned subsidiary, Hirslanden AG, issued bonds listed on the SIX Swiss Exchange.
2. ACCOUNTING INFORMATION AND POLICIES
2.1. Basis of preparation
The Group annual financial statements have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of
the Companies Act 2006 as applicable to companies reporting under those
standards. There are no dierences for the Group in applying IFRS as issued by the
IASB and UK-adopted IFRS. For the year ended 31 March 2022, the Group annual
financial statements have been prepared in accordance with IFRS as adopted by
the UK Endorsement Board, as required by UK company law for the purposes of
financial reporting as a result of the UK’s exit from the EU on 31 January 2020 and
the cessation of the transition period on 31 December 2020. This change does
not constitute a change in accounting policy but rather a change in framework
which is required to ground the use of IFRS in company law. There is no impact on
recognition, measurement or disclosure between the two frameworks for the year
ended 31 March 2022. The financial statements are prepared on a going concern
basis on the historical cost convention, except for the following items, which are
carried at fair value or valued using another measurement basis:
• Derivative financial assets and liabilities, financial instruments measured at fair value
through profit or loss (‘FVPL’) and financial instruments measured at fair value
through other comprehensive income (‘FVOCI’) are measured at fair value;
• Retirement benefit obligations calculated in terms of the projected unit credit
method and corresponding plan assets are measured at fair value; and
• Liabilities for cash-settled share-based payments are measured at fair value.
Critical accounting estimates and judgements
The preparation of financial statements requires the use of accounting estimates,
which, by definition, will seldom equal the actual results. Management also needs to
exercise certain judgements in applying the Group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of
judgement or estimates that are more likely to be materially adjusted in the next
12 months where assumptions vary. Detailed information about each of these
estimates and judgements is included in the notes as listed below.
Critical accounting judgements
• Level at which management monitors goodwill for impairment testing
(see note 15)
• Impairment/impairment reversals of equity-accounted investments
(see note 16)
• Determination of lease term (see note 26)
Key estimates
• Impairment of non-financial assets, excluding goodwill (see note 14)
• Impairment/impairment reversals of equity-accounted investments
(see note 16)
• Measurement of retirement benefit obligations (see note 27)
• Remeasurement of redemption liability (written put option) (see note 29)
2.2. Accounting policies
Accounting policies are included in the relevant notes to the Group financial
statements. Unless otherwise disclosed, the accounting policies adopted are the
same as those which were applied for the previous financial year. The accounting
policies below are applied throughout the financial statements.
2.3. Functional and presentation currency
The consolidated financial statements and financial information are presented in
sterling (the presentation currency), rounded to the nearest million. The functional
currencies of the majority of the Group's entities, and the currencies of the primary
economic environments in which they operate, are the Swiss franc, South African
rand and UAE dirham. The UAE dirham is pegged against the United States (‘US’)
dollar at a rate of 3.6725 per US dollar.
2.4. Exchange rates
The Group uses the average of exchange rates prevailing during the year to translate
the results and cash flows of foreign subsidiaries and equity-accounted investments
into sterling and year-end rates to translate the net assets of those undertakings.
The following exchange rates were applicable for the year:
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 185
2. ACCOUNTING INFORMATION AND POLICIES CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
2.5. Foreign currency transactions
Transactions and balances
Foreign currency transactions are translated into the respective Group entities’
functional currencies at exchange rates prevailing at the date of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation of monetary assets and liabilities denominated in foreign
currencies at year-end exchange rates are recognised in the income statement
(except when recognised in other comprehensive income as part of qualifying cash
flow hedges).
Non-monetary assets and liabilities denominated in foreign currencies that are
measured at historical cost are translated using the exchange rate at the transaction
date, and those measured at fair value are translated at the exchange rate at the
date that the fair value was determined. Exchange rate dierences on non-monetary
items are accounted for based on the classification of the underlying items.
Translation dierences on non-monetary financial assets measured at FVOCI are
included in other comprehensive income. Foreign exchange gains and losses are
presented in the income statement in other gains and losses.
2.4. Exchange rates continued
2022 2021
Average rates with reference to sterling
Swiss franc 1.25 1.21
South African rand 20.27 21.30
UAE dirham 5.02 4.80
Year-end rates with reference to sterling
Swiss franc 1.21 1.30
South African rand 19.23 20.37
UAE dirham 4.82 5.07
Group entities
The results and financial position of all foreign operations that have a functional
currency dierent from the Group’s presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities are translated at the closing rate at the reporting date;
• Income and expenses for each income statement are translated at average
exchange rates during the year; and
• All resulting exchange dierences are recognised in other comprehensive income.
On consolidation, exchange dierences arising from the translation of net
investments in foreign operations are taken directly to other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of foreign operations
are treated as assets and liabilities of the foreign operation and translated at closing
rates at the reporting date.
2.6. Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the Group has
control. The Group controls an entity when the Group is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to aect
those returns through its power over the entity.
The results of subsidiaries are included in the Group financial statements from the
eective date of acquisition until control is relinquished. Adjustments to the financial
statements of subsidiaries are made when necessary to bring their accounting
policies in line with those of the Group. All intra-company transactions, balances,
income and expenses are eliminated in full on consolidation.
Non-controlling interests (‘NCI’) in the net assets of consolidated subsidiaries are
identified and recognised separately from the Group’s interest therein, and are
recognised within equity. Losses of subsidiaries attributable to NCI are allocated to
the NCI even if this results in a debit balance being recognised.
2.7. Going concern
For the purposes of assessing liquidity specifically and going concern broadly at
31 March 2022, the Group modelled a combination of severe but plausible downside
scenarios on a month-by-month basis and also applied appropriate mitigation
actions which would be within the Group’s control. The eect of the downside
scenarios was informed by knowledge and insight gained during the COVID-19
pandemic.
Due to the mostly fixed employee cost base across the business, lower revenue due
to either a reduction in taris or volumes will most likely have the most pronounced
impact on EBITDA.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT186
Compared with the business plan, in modelling the severe but plausible scenarios,
the combined adverse eect of reduction of taris and volumes after mitigation
amounts to an aggregate decline of 18% of EBITDA over the 18-month period to 30
September 2023 compared with the base case. On a monthly basis, the EBITDA
eect ranges from 12% to 29% compared with the base case.
Based on the assumptions applied and the eect of mitigating actions, most within
the control of the Group, the analyses demonstrate that the divisions will continue
to be able to meet their obligations for the 18-month period to 30 September 2023.
While recognising that there remains risk to the Group’s financial performance for at
least the next 12 months, the directors have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as they fall due for a
period of at least 12 months from the date of approving the financial statements.
2.8. Operating expenses presentation
The Group presents its operating expenses in the Consolidated Income Statement by
nature. The expense categories are described in the table below:
Category
Employee benefit and
contractor costs
Consumables and supplies
Care-related costs
Infrastructure-related costs
Service costs
Provision for expected
credit losses
Depreciation and
amortisation
2. ACCOUNTING INFORMATION AND POLICIES CONTINUED
2.7. Going concern continued
Description
Includes employee benefit expenses for all sta,
contractor costs and other employee-related costs.
Includes the cost of all inventories, including obsolete
stock, which have been expensed during the year.
Includes costs closely linked to providing a service or
care to patients and enhancing patient experience, and
includes catering, laundry, cleaning, security services
and other patient-related costs.
Includes repairs and maintenance, rates and taxes,
utilities, rent expensed in terms of IFRS 16 and other
infrastructure-related costs.
Includes all other administrative and operating expenses
and non-specific service costs rendered, including, but
not limited to, consulting, marketing, travel and audits.
Consists of the movement in the allowance for
expected credit losses recognised in terms of IFRS 9.
Includes depreciation on property, equipment
and vehicles and right-of-use assets, as well as
amortisation of intangible assets.
2.9. Standards, interpretations and amendments
Published standards, amendments and interpretations eective for the
31 March 2022 financial period:
The following published amendment is mandatory for the accounting period
beginning on or after 1 April 2021, but was early adopted for the 31 March 2021
financial period:
• COVID-19-related Rent Concessions – Amendments to IFRS 16 (1 April 2021)
The following published standards, amendments and interpretations are mandatory
for the accounting period beginning on or after 1 April 2021 and have been adopted:
• Interest Rate Benchmark Reform Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7,
IFRS 4 and IFRS 16 (1 January 2021). See note 25 for a description of the impact of
the implementation of this amendment.
The implementation of these standards and amendments had no material financial
impact on the reported results or financial position of the Group.
Published standards, amendments and interpretations not yet eective and not
early adopted:
The following new accounting standards, interpretations and amendments will have
no material impact on the financial statements:
• Annual improvements 2018–2020 cycle – Amendments and clarifications to existing
IFRS standards (1 January 2022)
• IAS 16 Property, Plant and Equipment: Proceeds before Intended Use amendments
(1 January 2022)
• IAS 37 Onerous Contracts – Cost of Fulfilling a Contract amendments
(1 January 2022)
• Reference to the Conceptual Framework – Amendments to IFRS 3 (1 January 2022)
• IAS 1 Classification of Liabilities as Current or Non-current amendments
(1 January 2023)
• IFRS 17 Insurance Contracts (1 January 2023)
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice
Statement 2 (1 January 2023)
• Definition of Accounting Estimates – Amendments to IAS 8 (1 January 2023)
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction –
Amendments to IAS 12 (1 January 2023)
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 187
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
3. SEGMENTAL REPORT
Consistent with internal reporting, the Group’s reportable segments are identified
as the three geographical operating segments in Switzerland, Southern Africa
and the Middle East. United Kingdom and Corporate are not reportable operating
segments, as they are not separately included in the reports provided to the chief
operating decision-maker. The ‘United Kingdom’ column includes results from the
equity-accounted investment in Spire Healthcare Group plc (‘Spire’). The ‘Corporate’
column includes head oce and group services. The chief operating decision-
maker, who is responsible for allocating resources and assessing performance of
the segments, has been identified as the Group Executive Committee. The Group
Executive Committee comprises the executive directors and senior management as
disclosed in the Annual Report on pages 104 and 108.
Intersegment transactions are eliminated and shown separately in the segmental
report.
Reportable operating segments Other
Year ended 31 March 2022
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
United
Kingdom
£’m
Corporate
£’m
Revenue 3 233 1 503 909 820 – 1
Inpatient 2 037 1 094 747 196 – –
Day cases 250 82 71 97 – –
Outpatient
804 225 62 517 – –
Rental income 34 22 12 – – –
Other 108 80 17 10 – 1
EBITDA 518 234 170 121 – (7)
EBITDA before
management fee 518 241 177 125 – (25)
Group Services fees
included in EBITDA
2
– (7) (7) (4) – 18
Other gains and losses (3) – – (2) – (1)
Depreciation and
amortisation (228) (134) (39) (54) – (1)
Impairment of property,
equipment and vehicles (7) (7) – – – –
Operating profit/(loss) 280 93 131 65 – (9)
Operating profit/(loss) 280 93 131 65 – (9)
Loss from associate (1) 2 – – (3) –
Finance income 6 – 5 – – 1
Finance cost (excluding
intersegment loan
interest
) (74) (30) (27) (17) – –
Total finance cost (74) (47) (27) (17) – 17
Elimination of
intersegment loan
interest – 17 – – – (17)
Taxation (41) (11) (30) – – –
Segment result 170 54 79 48 (3) (8)
At 31 March 2022
Investments in
associates 161 2 3 – 156 –
Investments in joint
ventures
4 – 4 – – –
Capital expenditure
for the year
3
178 103 47 28 – –
Total segment assets
7 207 4 164 860 1 896 156 131
Total segment
liabilities (excluding
intersegment loan) 3 961 2 586 640 718 – 17
Total liabilities from
reportable segment 4 976 3 601 640 718 – 17
Elimination of
intersegment loan (1 015) (1 015) – – – –
(Continued) Reportable operating segments Other
Year ended 31 March 2022
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
United
Kingdom
£’m
Corporate
£’m
Notes
1
The Middle East segment refers to our UAE operations.
2
Intersegment transactions’ pricing is determined on an arm’s length basis.
3
Relates to additions to non-current assets other than financial instruments, deferred tax assets
and net defined benefit assets.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT188
Operating profit/(loss) 209 97 69 51 – (8)
Loss from associate (70) – – – (70) –
Reversal of impairment
of associate 60 – – – 60 –
Finance income 4 – 3 – – 1
Finance cost (excluding
intersegment loan
interest)
(99) (54) (29) (16) – –
Total finance cost
(99) (72) (29) (16) – 18
Elimination of
intersegment loan
interest – 18 – – – (18)
Taxation (25) (11) (14) – – –
Segment result 79 32 29 35 (10) (7)
At 31 March 2021
Investments in
associates 167 3 2 5 157 –
Investments in joint
ventures 4 – 4 – – –
Capital expenditure
for the year 126 67 33 26 – –
Total segment assets 6 672 3 972 740 1 701 157 102
Total segment
liabilities (excluding
intersegment loan) 3 705 2 470 602 624 – 9
Total liabilities from
reportable segment 4 635 3 400 602 624 – 9
Elimination of
intersegment loan (930) (930) – – – –
3. SEGMENTAL REPORT CONTINUED
Reportable operating segments Other
Year ended 31 March 2021
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
United
Kingdom
£’m
Corporate
£’m
Revenue 2 995 1 478 734 781 – 2
Inpatient 1 926 1 102 618 206 – –
Day cases 220 85 50 85 – –
Outpatient
732 216 43 473 – –
Rental income 31 21 9 1 – –
Other 86 54 14 16 – 2
EBITDA 428 225 108 102 – (7)
EBITDA before
management fee 428 231 114 105 – (22)
Group Services fees
included in EBITDA
1
– (6) (6) (3) – 15
Other gains and losses 2 – 1 1 – –
Depreciation and
amortisation (217) (128) (36) (52) – (1)
Impairment of
property, equipment
and vehicles (3) – (3) – – –
Impairment of
intangible assets (1) – (1) – – –
Operating profit/(loss) 209 97 69 51 – (8)
(Continued) Reportable operating segments Other
Year ended 31 March 2022
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
United
Kingdom
£’m
Corporate
£’m
(Continued) Reportable operating segments Other
Year ended 31 March 2021
Total
£’m
Switzerland
£’m
Southern
Africa
£’m
Middle
East
£’m
United
Kingdom
£’m
Corporate
£’m
Notes
1
Intersegment transactions’ pricing is determined on an arm’s length basis.
2
Relates to additions to non-current assets other than financial instruments, deferred tax assets and net
defined benefit assets.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 189
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
A performance obligation is a promise to transfer distinct goods and services to
a customer. Hospital services provided to patients are regarded as a bundle of
services which comprises accommodation, meals, theatre time, use of equipment,
pharmacy stock and nursing services. This is considered to be a single performance
obligation as the medical procedures cannot be performed without one of the
above elements.
Revenue is recorded during the period in which the hospital service is provided and
is based on the amounts due from patients and/or medical funding entities. Unbilled
revenue is accrued at period ends based on the number of days that the patient has
been admitted for and received services.
Other revenue comprises non-medical services rendered to patients and third
parties, including the rendering of restaurant services at the hospitals, provisioning
of agency sta, corporate and site-based emergency service contracts and other
third-party revenues, including retail pharmacy sales. Other revenue is recognised
when performance obligations are satisfied and the control of goods or services is
transferred. Rental income is recognised on a straight-line basis over the term of
the lease.
The Group does not expect to have any contracts where the period between the
transfer of the promised service to the patient and the payment by the patient
exceeds one year. Consequently, the Group does not adjust any of the transaction
prices for time value of money.
Disaggregation of revenue
3. SEGMENTAL REPORT CONTINUED
2022 2021
£’m £’m
The total non-current assets, excluding financial
instruments and deferred tax assets, per
geographical location are:
Switzerland 3 424 3 330
Southern Africa 559 518
Middle East 1 538 1 389
United Kingdom 156 157
ENTITY-WIDE DISCLOSURES
Revenue
From UK – –
From foreign countries 3 233 2 995
2022 2021
£’m £’m
Major service lines
Inpatient 2 037 1 926
Day cases 250 220
Outpatient 804 732
Other 108 86
Revenue from contracts with customers 3 199 2 964
Rental income 34 31
Total revenue 3 233 2 995
4. REVENUE
Revenue primarily comprises fees charged for inpatient, day case and outpatient
medical services. Services include charges for accommodation, theatre, medical
professional services, equipment, radiology, laboratory and pharmaceutical goods
used. Inpatient and day case revenue is recognised as services are provided to
patients. These services are typically provided over a short time frame. Outpatient
cases do not involve surgical procedures and revenue is recognised on an individual
component basis when performance obligations are satisfied.
Revenues are measured at the transaction price which is the amount of
consideration that the Group expects to be entitled to in exchange for the services
provided. Fees charged for medical services are calculated and billed based on
various tari agreements with funders. In determining the transaction price, variable
consideration in terms of IFRS 15 exists in the form of discounts, tari adjustments
and claims disallowances. Refer to the sections related to the revenue of Southern
Africa and Middle East for the treatment of discounts. Refer to the section related
to the revenue of Switzerland for the treatment of tari adjustments. Refer to the
section related to the revenue of Middle East for the treatment of disallowances.
Revenues from external customers are primarily from hospital services.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT190
4. REVENUE CONTINUED
Switzerland healthcare services revenue
In Switzerland, the cost of treating inpatients with basic health insurance is fixed
by the government. The pricing model is based on Swiss diagnostic-related groups
(‘DRGs’) for inpatients and can be seen as a fixed-fee arrangement. Invoicing occurs
when the patient is discharged. Revenue is recognised over the length of stay of the
patient. In some cases, the pricing model for DRGs is based on provisional taris
as delays occur in the agreement of the taris between the healthcare providers
and the funders. Revenue is then billed to the funders based on provisional taris
and recognised to the extent that it is highly probable that the revenue will not be
reversed. If the provisional taris are disputed by the funders, tari provisions are
recognised for the dierence between the provisional taris and the estimated
final taris. Once the taris are finalised, the dierence between the agreed taris
and the provisional taris is settled between the healthcare providers and the
funders. Tari provisions represent refund liabilities in terms of IFRS 15 and result
in a reduction in revenue with a corresponding entry to provisions in the statement
of financial position. These tari provisions are not recorded within trade and
other receivables but presented as provisions as the original invoices are settled
before the finalisation of the taris and balances due to funders are not settled
on a net basis. The tari provisions are calculated based on historical experience
of outcomes to negotiations between healthcare providers and funders. This is
regularly reassessed based on the actual outcome of tari negotiations. Tari
provisions are also recognised for other in- and outpatient treatments.
Swiss private and semi-private patients enter into supplementary insurance contracts
for costs not covered by basic health insurance. The pricing model is based on
fee-for-service principles and the contract with the Swiss division includes technical
medical services (such as the nursing and infrastructure). The medical practitioner
fees are agreed directly between the insurer and the relevant medical practitioner.
The revenue is recognised as the services are rendered over the period of stay of
the patient.
For inpatient cases open over year end, revenue is accrued by taking into account
the average case mix index (‘CMI’) of the respective medical field, the base rate
according to the respective category (accident, illness, inner-cantonal, external,
self-payer, etc.) as well as the pro rata length of stay. The complexity of procedures
during the open period plays a role in determining the average CMI.
For outpatient cases, the pricing model is based on TARMED rates. The applicable
TARMED rate varies depending on the canton, procedure and patient and is
calculated based on tax points for the dierent outpatient treatments which are
multiplied with an individual tax point value. Specific medicaments and other
material are added to determine the hospital fee. Invoicing occurs directly
after treatment when the patient is discharged and revenue is recognised at the
same time.
The Group’s hospitals have aliated doctors who are partners cooperating
with the Swiss division on a contractual agreement. The contracts with these
aliated doctors allow them to use the division’s infrastructure, nurses, theatre
etc. The doctors are responsible for the treatment of the patient and the division
is responsible for the technical services such as the medical equipment, nursing
care etc. Swiss regulatory requirements compel the division to provide statistics to
the government based on all the costs incurred for patient procedures, including
doctors’ fees. It therefore invoices its own technical services together with the
doctors’ fees to the insurer and subsequently refunds the amount of the doctors’
services to the aliated doctors.
The division acts as an agent for those aliated doctors based on the following
considerations:
• The aliated doctors are responsible for fulfilling the contract of treating the
patient. Every aliated doctor needs their own liability insurance for any claim
against any human error of the doctor. The hospital is responsible for any process
failures at the hospital.
• The Group does not have discretion in establishing prices, this is determined by
contracts in place between the doctor and the insurer or the relevant percentage of
the total revenue for DRG procedures.
• An administrative cost contribution (a form of commission) is deducted from the
doctors’ fees before the transfer of these fees to the doctors.
• Credit risk is considered to be insignificant, but if the insurer does not accept
an invoice after the amount has been refunded to the doctor, the doctor is
contractually obliged to repay the amount to the hospital.
As a result, the refund paid to the doctor is deducted from revenue and thus
revenue is shown on a net basis. For DRG procedures, the refund is calculated using
a contractually agreed-upon percentage for doctors’ services and deducted from
revenue.
Revenue from other sources is based on a fixed-fee arrangement and recognised
when the control of goods and services is transferred.
Southern Africa healthcare services revenue
In Southern Africa, a fee-for-service model is predominantly used with funders.
Mediclinic invoices funders for technical medical services (such as nursing,
infrastructure, pharmaceutical goods, etc.). The revenue is recognised as the services
are rendered over the length of the stay of the patient.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 191
4. REVENUE CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
For certain procedures, a fixed-fee contract model is used. In these scenarios, the
transaction price is fixed and no adjustments can be made to the amount invoiced
to the funder. Invoicing occurs when the patient is discharged. Revenue is recognised
over the length of stay of the patient. Excess costs or savings are not charged to the
funder and are absorbed by the division.
Services rendered by aliated doctors are excluded from revenue.
Discounts comprise retrospective volume discounts granted to certain funders on
attainment of certain admission levels. These volume discounts are negotiated with
funders on an annual basis. The retrospective volume discounts give rise to variable
consideration. Variable consideration is recognised as revenue to the extent that it is
highly probable it will not reverse. Discounts are accrued over the course of the year
based on the estimates of the level of business expected. This is adjusted at the end
of the year to reflect actual volumes. Volume discounts are determined according to
the most likely amount method in terms of IFRS 15 and are recorded as a reduction
in revenue with a corresponding entry against refund liabilities (included in trade and
other payables). Volume discounts are not settled on a net basis with funders.
Middle East healthcare services revenue
In Dubai, a fee-for-service model is used with funders. Mediclinic invoices the funders
for technical medical services (such as nursing, infrastructure, pharmaceutical goods,
etc.). The revenue is recognised as the services are rendered over the period of stay
of the patient. From September 2020, the fixed-fee contract model is used with
funders for inpatient procedures and will be extended to day case procedures in the
next financial year.
For certain procedures in Abu Dhabi, the fixed-fee contract model is used with
funders. In these scenarios, the transaction price is fixed and no adjustments can
be made to the amount invoiced to the funder. Invoicing occurs when the patient
is discharged. Revenue is recognised over the length of stay of the patient. Excess
costs or savings are not charged to the funder and are absorbed by the division.
Middle East acts as a principal in respect of tari negotiations and takes the risk for
disallowances and bad debts related to doctors’ services. As a result, services rendered
by employed doctors and independent doctors are included in revenue.
Discounts comprise retrospective volume discounts granted to certain funders on
attainment of certain admission levels. These volume discounts are negotiated with
funders on an annual basis. The retrospective volume discounts give rise to variable
Southern Africa healthcare services revenue continued
consideration. Variable consideration is recognised as revenue to the extent that it is
highly probable it will not reverse. Discounts are accrued over the course of the year
based on the estimates of the level of business expected. This is adjusted at the end
of the year to reflect actual volumes. Volume discounts are determined according to
the most likely amount method in terms of IFRS 15 and are recorded as a reduction
in revenue with a corresponding entry against refund liabilities (included in trade and
other payables). Volume discounts are not settled on a net basis with funders.
In the Middle East, the business practice with insurers includes claims rejected for
various technical or medical reasons. Accordingly, Middle East expects an amount
of consideration that is less than what was originally invoiced. These write-os
constitute variable consideration under IFRS 15. Variable consideration is recognised
as revenue to the extent that it is highly probable that a reversal of revenue will
not occur. The disallowed claims are calculated based on historical experience
of outcomes to negotiations with insurers. This is regularly reassessed based on
the actual outcome of negotiations. In terms of IFRS 15, these rejected claims are
recognised as a reduction of revenue with a corresponding entry against trade
receivables.
For the year ended 31 March 2022, disallowed claims recognised as a reduction of
revenue relating to performance obligations that were satisfied in previous periods
amounted to £11m (2021: £3m). The increase in the disallowed claims for the year
ended 31 March 2022 compared with the prior year mainly relates to a settlement
with an insurer for claims covering three years, partly impacted by disruptions
caused by COVID-19, as typically this is an annual settlement process. Based on
experience from recent negotiations with insurers, the increased amount recognised
in the current year as a reduction in revenue relating to prior periods is not expected
to reoccur to the same extent in the next financial period.
Rental income
The rental income received from external parties during the year from the letting of
consulting rooms, parking, etc. was £34m (2021: £31m). Rental income is based on
a high number of individual lease agreements with outstanding committed terms of
between one and three years and standard pricing linked to inflation.
5. OTHER INCOME
Other income is recognised on the following basis:
• Government grants are recognised in profit or loss when they become receivable;
• Insurance proceeds are recognised at fair value when it is virtually certain that the
proceeds will be received from the insurer; and
• Other other income is recognised in profit or loss when it becomes receivable.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT192
Government grants
Hirslanden engaged extensively with Swiss cantonal authorities in planning for
and navigating the pandemic and, as part of this, provided hospital bed and sta
capacity. In recognition and reimbursement of the support and capacity provided,
several Swiss cantonal authorities introduced appropriate financial contributions
for hospitals to oset certain costs and disruptions to operations. As a result, total
government grants of £16m (2021: £10m) were recognised as other income.
Insurance proceeds
During the year ended 31 March 2022, insurance proceeds of £7m were received
for the damage of buildings and equipment and £1m for business interruption due
to a fire at Klinik Hirslanden. In addition, Southern Africa and Middle East received
insurance proceeds of £1m for business interruption as a result of the COVID-19
pandemic. During the prior year ended 31 March 2021, insurance proceeds of £2m
were received for the damage of equipment due to a fire at one of the facilities in
South Africa.
6. EMPLOYEE BENEFIT AND CONTRACTOR COSTS
Retirement benefit costs
The Group provides defined benefit and defined contribution plans for the benefit
of employees, the assets of which are held in separate trustee-administered funds.
These plans are funded by payments from the employees and the Group, taking into
account recommendations of independent qualified actuaries.
A defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. Each member’s fund value is directly linked
to the contributions and the related investment returns. The Group has no legal or
constructive obligations to make further contributions if the fund does not hold
sucient assets to pay all employees the benefits relating to employee service in
the current and prior period/(s). The contributions are recognised as employee
benefit expenses when they are due.
5. OTHER INCOME CONTINUED
Defined benefit plans and post-retirement medical benefits
Note 27 provides further information on how the Group accounts for defined benefit
plans and post-retirement medical benefits.
Profit sharing and bonus plans
Note 30 provides further information on how the Group accounts for profit sharing
and bonus plans.
Share-based payment compensation
Note 24 provides further information on how the Group accounts for share-based
payment compensation.
2022 2021
£’m £’m
Government grants 16 10
Insurance proceeds 9 2
Other – 1
25 13
2022 2021
£’m £’m
Wages and salaries
1
1 293 1 242
Swiss social security costs 71 71
Retirement benefit costs – defined contribution
plans 15 14
Retirement benefit costs – defined benefit
obligations (see note 27) 65 54
Share-based payment expense (see note 24) 4 –
Aliated and independent doctor costs 56 53
Other sta-related costs 18 14
1 522 1 448
Average number of employees 34 278 32 865
Notes
1
In the prior year, the Swiss government introduced a wage subsidy programme in response to the
COVID-19 pandemic. The Group was entitled to a wage subsidy of £6m from the Swiss Unemployment
Insurance because it had to stop elective procedures until 27 April 2020. The wage subsidy was
recognised as a credit against employee benefit and contractor costs. No wage subsidies were
received during the year ended 31 March 2022.
2
The comparative has been re-presented to reflect the average number of employees.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 193
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
7. INFRASTRUCTURE-RELATED COSTS 9. OTHER GAINS AND LOSSES
2022 2021
£’m £’m
Maintenance costs 66 61
Short-term leases and leases of low-value assets 9 8
Other
1
46 41
121 110
2022 2021
£’m £’m
Foreign exchange dierences (1) –
Other losses (1) –
Fair value adjustment on remeasurement of
investment in associate (see note 16) (1) –
Remission of debt – 1
COVID-19-related rent concessions – 1
(3) 2
2022 2021
£’m £’m
Interest expense on financial liabilities not at FVPL 41 42
Interest on lease liabilities 21 20
Interest rate swaps 6 7
Amortisation of capitalised financing costs 3 3
Remeasurement of redemption liability
(written put option) 1 23
Unwinding of discount on redemption liability 1 1
Preference share dividend 2 4
Less: amounts included in cost of qualifying assets (1) (1)
74 99
2022 2021
£’m £’m
Fees paid to the Group's auditors for the
following services:
Audit of the Company and consolidated
financial statements 0.8 0.7
Audit of Company subsidiaries 1.8 2.4
Audit services 2.6 3.1
Audit-related services
1
0.3 0.4
Other assurance services
1
0.3 0.2
3.2 3.7
Note
1
Other infrastructure-related costs include costs incurred for utilities, including water, electricity
and waste removal, and property rates and taxes.
Note
1
A description of the non-audit services is included in the Audit and Risk Committee Report.
8. AUDITORS’ REMUNERATION
Auditors’ remuneration, which is presented as part of Service cost in the income
statement, included the following fees paid to the Group’s auditors:
10. FINANCE COST
Capitalised borrowing costs
The capitalisation rate used to determine the amount of borrowing costs to be
capitalised is the weighted average interest rate applicable to the entity’s general
borrowings during the year, in this case between 5.7% and 6.4% (2021: between 4.8%
and 8.0%).
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT194
11. INCOME TAX EXPENSE
The Group is subject to taxes in the countries where the Group and its subsidiaries
operate and generate taxable income. Taxes and fiscal risks recognised reflect the
Group’s best estimate of the outcome based on the facts known at the balance
sheet date in each individual country. These facts may include but are not limited to
change in tax laws and interpretation thereof in the jurisdictions where the Group
operates. They may have an impact on the income tax as well as the resulting assets
and liabilities. Any dierences between tax estimates and final tax assessments are
charged to the income statement in the period in which they are incurred, unless
anticipated.
Taxes include current and deferred taxes on profit and tax adjustments relating to
prior years. Income tax is recognised in the income statement, except to the extent
that it relates to items directly taken to equity or other comprehensive income, in
which case it is recognised against equity or other comprehensive income.
For more information on the calculation of the deferred tax charge/(credit), see
note 18.
Reconciliation of taxation per income statement:
2022 2021
£’m £’m
Current tax
Current year 46 31
Deferred tax credit (see note 18) (5) (6)
Taxation per income statement 41 25
Composition
UK tax – –
Foreign tax 41 25
41 25
2022
(Re-presented)
1
2021
£’m £’m
Expected tax expense at weighted average
applicable tax rate
2
37 13
Adjusted for:
Non-taxable income (1) (1)
Share of net profit of equity-accounted
investments
3
– 1
Non-deductible expenses
4
4 9
Non-controlling interests' share of profit before tax
3
– (1)
Eect of dierent tax rates
5
(4) (2)
Income tax rate changes 1 (1)
Non-recognition of tax losses in current year 6 7
Recognition of tax losses relating to prior years (1) (1)
Previous year adjustment (1) 1
Income tax expense 41 25
Eective tax rate
6
19.5% 24.4%
Notes
1
The basis for calculating the applicable tax rate has been changed from using the UK statutory rate
of taxation to the weighted average tax rate (see note 2 below) as this provides the most meaningful
information. As a result, the comparatives have been re-presented.
2
The weighted average applicable tax rate is the result from applying the domestic statutory tax rates to
profits before taxes of each entity in the country where it operates. For the Group, the weighted
average applicable tax rate varies from one year to the next depending on the relative weight of the
profit of each individual entity in the Group’s profit as well as the changes in the statutory tax rates.
The weighted average applicable tax rate for the year ended 31 March 2022 was 17.3% (2021: 12.9%).
3
Less than £0.5m for the year ended 31 March 2022.
4
Non-deductible expenses reflect the tax eect of items which, in management’s judgement, are
potentially disallowable for the purposes of determining local taxable profits. This includes the tax
eect of non-tax deductible remeasurement of the redemption liability of £1m (2021: £4m).
5
The eect of dierent tax rates arises because of the eect of profits of the Group being subject to tax
at rates dierent from the weighted average applicable rate.
6
If adjusting items and their related tax eect, as explained in the Group Chief Financial Ocer’s
Report, are excluded from the eective tax rate calculation, the adjusted eective tax rate would be
19.5% (2021: 19.3%).
STRATEGIC REPORT
GOVERNANCE AND
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 195
11. INCOME TAX EXPENSE CONTINUED
Note
1
Headline earnings and the related adjustments are presented net of related tax and NCI.
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Expected amendments to tax legislation
During 2021, agreement was reached between a number of countries for a two-pillar
approach to international tax reform. This includes a proposal to apply a global
minimum eective tax rate of 15% and is likely to result in changes in corporate
tax rates in a number of countries in the next few years. Once amendments to the
laws in any jurisdiction in which the Group operates are enacted or substantively
enacted, the Group may be subject to additional tax charges. The impact of changes
in corporate tax rates on the measurement of tax assets and liabilities will depend
on the nature and timing of the legislative amendments in each country but is
expected to result in additional tax charges on profits generated in Jersey and
the UAE. For the year ended 31 March 2022, the tax impact cannot be measured
reliably. An assessment of the potential impact will be performed once the legislative
amendments have been substantively enacted.
Tax rate changes
In South Africa, the corporate income tax rate has been reduced from 28% to 27% for
years of assessments starting on or after 1 April 2022. For the year ended 31 March
2022, the rate change has been substantively enacted and, as a result, deferred tax
has been provided at 27%. The rate change resulted in an increase in the Group’s net
deferred tax liability of £1m. The rate change had no impact on current tax.
The increase in the UK tax rate from 19% to 25%, which is eective from April 2023,
had no impact on the Group’s current or deferred tax.
Uncertain tax positions
The Group is subject to income taxes in numerous jurisdictions. Due to this, there is
an inherent risk that tax authorities may interpret legislation dierently and therefore
judgement is required in determining the estimates in relation to the worldwide
provision for income taxes. At 31 March 2022, no significant uncertain tax positions
had been identified and, as a result, no provision was raised.
12. EARNINGS PER ORDINARY SHARE
2022 2021
Earnings per share (in pence) for year ended
31 March 2022 were as follows:
Basic earnings per share 20.5 9.2
Diluted earnings per share 20.5 9.2
Headline earnings per share 19.0 9.6
Diluted headline earnings per share 19.0 9.6
2022 2021
Earnings reconciliation £’m £’m
Profit attributable to equity holders of the Company 151 68
Earnings for basic and diluted EPS 151 68
Adjusted for:
Insurance proceeds, net of tax (6) (1)
Impairment of property, equipment and vehicles,
net of tax 6 3
Impairment of intangible assets, net of tax – 1
Fair value adjustment on remeasurement
of investment in associate 1 –
Associate's impairment of goodwill – 60
Reversal of impairment of equity-accounted
investment – (60)
Associate's gain on sale and leaseback transaction (7) –
Associate's tax impact of gain on sale and
leaseback transaction (5) –
Headline earnings used for headline EPS
1
140 71
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT196
Headline earnings per ordinary share
The Group is required to calculate headline earnings per share (‘HEPS’) in accordance
with the JSE Listings Requirements, determined by reference to the South African
Institute of Chartered Accountants’ circular 01/2021 (Revised) Headline Earnings. The
table above sets out a reconciliation of basic EPS and HEPS in accordance with that
circular. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used
measure of earnings in South Africa.
Number of ordinary shares
At 31 March 2022, the weighted average number of ordinary shares in issue was
737 243 810 (2021: 737 243 810).
Equity-settled LTI awards
Equity-settled LTI awards granted to employees are considered to be potential
ordinary shares. They have been included in the determination of diluted earnings
per share where the required performance conditions have been met at the reporting
date, and to the extent to which they are dilutive. The awards have not been included
in the determination of basic earnings per share. Details relating to the LTI awards
are set out in note 24.
The 546 750 awards granted in June 2021 have been included in the calculation of
diluted earnings per share for the year ended 31 March 2022. The 607 072 awards
granted in December 2020 are not included in the calculation of diluted earnings
per share because the required performance conditions were not met for the year
ended 31 March 2022. These options could potentially dilute basic earnings per share
in the future.
12. EARNINGS PER ORDINARY SHARE CONTINUED
13. DIVIDENDS
Final dividends are recorded in the Group’s financial statements in the period in
which they are approved by the Company’s shareholders. Interim dividends are
recorded in the period in which they are approved by the directors and paid.
As part of the Group’s response to maintain its liquidity position through the
COVID-19 pandemic, the Board took the decision to suspend dividend payments
and, as a result, no dividends were declared during the years ended 31 March 2021
and 2022.
On 24 May 2022, after the balance sheet date, a final dividend of 3.00 pence per
share was proposed by the directors in respect of the year ended 31 March 2022.
This results in a total final proposed dividend of £22m. Subject to shareholders’
approval at the annual general meeting, the dividend will be paid on 26 August 2022
to the shareholders on the register at 2 August 2022. The proposed final dividend
has not been included as a liability at 31 March 2022.
14. PROPERTY, EQUIPMENT AND VEHICLES
Land and buildings comprise mainly hospitals and oces. All property, equipment
and vehicles are shown at cost less accumulated depreciation and impairment,
except for land, which is shown at cost less impairment. Cost includes expenditure
that is directly attributable to the acquisition of the items. Subsequent costs to
enhance an asset are included in the asset’s carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance costs are charged to the
income statement during the financial period in which they are incurred. See note 26
for the accounting treatment of right-of-use assets.
Land and capital expenditure in progress are not depreciated. Depreciation on the
other assets is calculated using the straight-line method to allocate the cost less its
residual value over its estimated useful life as follows:
• Buildings 10–100 years
• Equipment 3–10 years
• Furniture and vehicles 3–8 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate,
at each statement of financial position date.
When commissioned, capital expenditure in progress is transferred to the relevant
category of property and equipment and depreciated in accordance with the
Group’s policies.
Weighted average number of ordinary shares in issue
for diluted earnings per share
2022
Number of
shares
2021
Number of
shares
Weighted average number of ordinary shares
in issue used for the purpose of basic earnings
per share 737 243 810 737 243 810
Eect of dilutive potential ordinary shares
Equity-settled LTI awards 44 075 –
737 287 885 737 243 810
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 197
14. PROPERTY, EQUIPMENT AND VEHICLES CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Property, equipment and vehicles are tested for impairment whenever events or changes
in circumstances indicate a potential impairment. An impairment loss is recognised for
the amount by which the asset’s carrying value exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair-value-less-cost-of-disposal (‘FVLCOD’)
and value-in-use. The recoverable amount is calculated by estimating future cash benefits
that will result from each asset and discounting those cash benefits at an appropriate
discount rate. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable and independent cash flows
– cash-generating units (‘CGUs’). Assets that suered an impairment are reviewed for
possible reversal of the impairment at each reporting date.
An asset is derecognised on disposal or when no future economic benefits are
expected from its use. Profit or loss on disposals is determined by comparing fair value
of proceeds with carrying amounts. These are included in the income statement.
Land and
buildings
£’m
Capital
expenditure
in progress
£’m
Right-
of-use
assets
£’m
Equipment
£’m
Furniture
and
vehicles
£’m
Total
£’m
Net book value at
1 April 2021 3 067 85 625 237 38 4 052
Additions 22 63 119 61 11 276
Disposals (1) – (5) – (1) (7)
Depreciation (69) – (49) (71) (14) (203)
Business
combinations 1 – – 1 – 2
Prior-year capital
expenditure
completed 45 (68) – 20 3 –
Impairment (7) – – – – (7)
Borrowing cost
capitalised 1 – – – – 1
Lease
remeasurements – – (9) – – (9)
Exchange dierences
214 5 43 15 3 280
Net book value at
31 March 2022 3 273 85 724 263 40 4 385
Cost 4 066 85 885 1 059 236 6 331
Accumulated
depreciation and
impairment (793) – (161) (796) (196) (1 946)
Net book value at
1 April 2020 3 295 81 675 264 43 4 358
Additions 13 49 59 35 8 164
Disposals – – (1) – – (1)
Depreciation (60) – (49) (72) (15) (196)
Transfer between
asset classes 4 – (12) 7 1 –
Prior-year capital
expenditure
completed 34 (44) – 9 1 –
Impairment (3) – – – – (3)
Borrowing cost
capitalised 1 – – – – 1
Lease
remeasurements – – 8 – – 8
Exchange dierences
(217) (1) (55) (6) – (279)
Net book value at
31 March 2021 3 067 85 625 237 38 4 052
Cost 3 731 85 739 931 213 5 699
Accumulated
depreciation and
impairment (664) – (114) (694) (175) (1 647)
(Continued)
Land and
buildings
£’m
Capital
expenditure
in progress
£’m
Right-
of-use
assets
£’m
Equipment
£’m
Furniture
and
vehicles
£’m
Total
£’m
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT198
Property, equipment and vehicles with a book value of £2 886m (2021: £2 696m) are
encumbered as security for borrowings (see note 25).
On 10 May 2021, a fire broke out at Klinik Hirslanden, Zurich, and caused significant
damage to one of the building wings. The property damage covered by the insurance
was impaired accordingly (£7m). For income from insurance proceeds, see note 5.
Determination of CGUs for impairment testing
Property, equipment and vehicles are considered for impairment if impairment
indicators are identified at an individual CGU level. A CGU is the smallest identifiable
group of assets that generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets. The Group defines CGUs as combined
inter-dependent hospitals and/or clinics or as individual hospitals depending on the
geographical location or the degree of integration. In Switzerland, inter-dependent
hospitals are considered to have centralised organisational structures and operations
and are divided into dierent geographical care regions, each of which forms a
network of central hospitals, basic care hospitals, specialist hospitals and outpatient
centres. In Southern Africa, CGUs are defined as individual hospitals, except where
a group of hospitals are located within close proximity of each other, they have the
same management teams and similar shareholders. In the Middle East, each city
in which the division operates hospitals, day care centres and clinics across the
emirates of Dubai and Abu Dhabi has been identified as a CGU.
The impairment assessment is performed at CGU level and any impairment charge
that arises would be allocated to the CGU’s goodwill first, followed by other assets
(such as property, equipment and vehicles, and other intangible assets).
Key accounting estimates
Impairment assessment
The Group performed an analysis to determine if impairment indicators exist at
individual CGU level.
14. PROPERTY, EQUIPMENT AND VEHICLES CONTINUED
Impairment indicators were identified at two CGUs in Switzerland. The recoverable
amounts of these CGUs were based on FVLCOD calculations. In determining
the FVLCOD, the cash flows were discounted at rates between 4.9% and 5.2%
(2021: 4.9% and 5.2%). Beyond five years a growth rate of 1.6% (2021: 1.6%) was
used. The carrying value of CGUs where indicators were identified was determined
to be lower than its recoverable amount of £1 767m and, as a result, no impairment
charge was recognised in the income statement relating to property, equipment
and vehicles.
Two CGUs have limited headroom and remain sensitive to reasonably possible
changes in the discount rate and the terminal growth rate in the FVLCOD
calculations, which could give rise to material impairment charges in future periods.
For the first CGU, an increase in the discount rate by 0.2% would reduce the
headroom to £nil. A decrease in the terminal growth rate by 0.4% would reduce
the headroom to £nil. A decrease in forecast cash flows by 2.1% would also reduce
headroom to £nil. For the other CGU, an increase in the discount rate by 0.7% would
reduce the headroom to £nil. A decrease in the terminal growth rate by 2.1% would
reduce the headroom to £nil. A decrease in forecast cash flows by 7.2% would also
reduce headroom to £nil.
Impairment indicators were identified at two CGUs in Southern Africa. The
recoverable amounts of these CGUs were based on FVLCOD calculations. In
determining the FVLCOD, the cash flows were discounted at a rate of 12.8%
(2021: 12.7%). Beyond five years a growth rate of 4.5% (2021: 4.5%) was used. The
carrying value of CGUs where indicators were identified was determined to be lower
than its recoverable amount of £9m and, as a result, no impairment charge was
recognised in the income statement relating to property, equipment and vehicles.
In the prior year, the recoverable amounts of three CGUs in the Southern Africa
segment were determined to be lower than their individual carrying values and,
as a result, an impairment charge of £3m was recognised in the income statement
relating to property, equipment and vehicles.
No impairment indicators were identified for the Middle East CGUs on 31 March 2022.
Climate change
Climate-related regulations, technological advances, changes in the market and
potential reputational damage were considered when assessing the validity of the
useful lives and residual values of assets. There is currently no known objective
evidence that suggests that the assets will be utilised in a shorter period or become
obsolete and therefore no adjustments were made to the useful lives or the residual
value of assets.
2022 2021
£’m £’m
Total additions
(excluding additions on right-of-use assets) 157 105
To maintain operations 84 46
To expand operations 73 59
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 199
14. PROPERTY, EQUIPMENT AND VEHICLES CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Change in accounting estimate
During the prior year, an expansion project, which includes the construction of
new hospital wings at a hospital in Switzerland, was approved. The existing hospital
wings will be dismantled at the end of the financial year ending 31 March 2023
and will be replaced by a new construction as part of the expansion project. As a
result, the estimated useful life of the existing hospital wings has been reduced and
the depreciation of these assets’ carrying value accelerated. For the year ended
31 March 2022, the accelerated depreciation included in the depreciation charge
amounts to £19m. The accelerated depreciation for the financial year ending
31 March 2023 will amount to £19m.
15. INTANGIBLE ASSETS
Goodwill
Goodwill is determined as the consideration paid, plus the fair value of any
shareholding held prior to obtaining control, plus NCI, less the fair value of the
identifiable assets and liabilities of the acquiree. Goodwill on acquisition of
subsidiaries is included in intangible assets. Goodwill on acquisition of associates
and joint ventures is included in investments in associates and joint ventures.
Goodwill is tested annually for impairment or more frequently if events or changes
in circumstances indicate a potential impairment. Goodwill is carried at cost less
accumulated impairment. Impairments on goodwill are not reversed. Gains and
losses on the disposal of an entity include the carrying amount of goodwill relating
to the entity sold.
Goodwill is allocated to CGUs for the purpose of impairment testing. The allocation
is made to those CGUs or groups of CGUs that are expected to benefit from
business combinations in which goodwill arose. Management monitors goodwill for
impairment at a CGU level, except for the Middle East goodwill, which is monitored at
an operating segment level. Any impairment losses that are recognised are allocated
first to reduce the carrying amount of any goodwill allocated to the CGU and then to
reduce the carrying amount of other assets in the CGU where the carrying amount is
greater than the recoverable amount.
Trade names
Trade names have been recognised by the Group as part of business combinations.
No value is placed on internally developed trade names. Trade names are capitalised
at the cost to the Group and amortised on a straight-line basis over their estimated
useful lives of 2–25 years. Trade names are carried at cost less accumulated
amortisation and accumulated impairment. Expenditure to maintain trade names
is accounted for against income as incurred.
Computer software
Acquired computer software licences, configuration and implementation costs
are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised over their estimated useful lives of
2–10 years using the straight-line method. Configuration costs for cloud-based
business applications are capitalised where it is probable that economic benefits
that are attributable to the asset will flow to the Group and it has the power to
control access to those benefits. Any cloud-solution costs incurred as part of a
service agreement are expensed when incurred.
Costs associated with maintaining computer software are expensed as incurred.
Goodwill
£’m
Trade
names
£’m
Computer
software
£’m
Total
£’m
Net book value at 1 April 2021 946 45 70 1 061
Additions – – 21 21
Amortisation – (4) (21) (25)
Business combinations 10 1 – 11
Exchange dierences 51 3 4 58
Net book value at 31 March 2022 1 007 45 74 1 126
Cost 1 794 453 193 2 440
Accumulated amortisation
and impairment (787) (408) (119) (1 314)
Goodwill
£’m
Trade
names
£’m
Computer
software
£’m
Total
£’m
Net book value at 1 April 2020 1 047 54 70 1 171
Additions – – 21 21
Amortisation – (4) (17) (21)
Business combinations 3 – – 3
Impairment (1) – – (1)
Exchange dierences (103) (5) (4) (112)
Net book value at 31 March 2021 946 45 70 1 061
Cost 1 689 424 162 2 275
Accumulated amortisation
and impairment (743) (379) (92) (1 214)
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT200
Critical accounting judgement
Level at which management monitors goodwill for impairment testing
The Group tests annually whether goodwill, resulting from acquisitions, has suered
any impairment. The recoverable amounts of CGUs have been determined based on
FVLCOD calculations. These calculations require the use of estimates in respect of
cash flow projections and long-term growth and discount rates, and assume a stable
regulatory environment. Regulatory environments are subject to uncertainties that
can have an impact on goodwill and the intangible assets’ carrying value.
IFRS requires the impairment assessment to be performed at the level at which
goodwill and trade names are monitored for impairment by management, provided
that this level cannot be bigger than an operating segment. Management assesses
goodwill at a CGU level, except for the Middle East goodwill, which is monitored
at an operating segment level. This means that for the Middle East division,
recoverability of goodwill is assessed by reference to the aggregated cash flows of
the legacy Middle East and Al Noor businesses. The Middle East goodwill originated
mainly from the Al Noor business combination with a portion originating from other
UAE business combinations. The initial commercial rationale for the acquisition of
Al Noor included expected synergies from integrating the legacy Al Noor business
with the legacy Middle East business that would be realised across the combined
Middle East division. In accordance with IFRS, goodwill shall be allocated to all CGUs,
or groups of CGUs, that are expected to benefit from the expected synergies.
Impairment testing of significant goodwill balances
The Group tests goodwill for impairment on an annual basis or more frequently if
there are indications that these assets may be impaired. The annual impairment
assessment is performed at year end when the annual financial planning process
is finalised. The Group’s impairment assessment compares the carrying value of the
group of CGUs with its recoverable amount.
15. INTANGIBLE ASSETS CONTINUED
Computer software continued
The recoverable amount of a group of CGUs is determined by its FVLCOD, regarded
as the more appropriate reflection of the value of the business, which is derived from
discounted cash flow calculations.
The key inputs to its calculations are described below:
As part of the annual financial planning process, the Group’s
divisions are required to submit budgets for the next financial year
and forecasts for the following four years, which are approved by
the Board. Future earnings in the FVLCOD calculation are based on
these budgets and forecasts that are calculated on a per hospital
basis and consider both internal and external market information.
These budgets and forecasts represent management’s best view
of future revenues and cash flows and encompass a best estimate
of the short- and long-term impact of the COVID-19 pandemic.
The cash flow forecast includes the purchase of environmentally
friendly equipment.
Growth rates are determined from budgeted and forecast revenue.
Terminal year growth rates are country specific and determined
based on the forecast market growth rates and considering long-
term medical inflation. The regulatory environment and impact on
taris are considered. Growth rates have been benchmarked against
external data for the relevant markets.
The weighted average cost of capital (‘WACC’) was determined
by considering the respective debt and equity costs and ratios.
The discount rate is based on the risk-free rate for government
bonds adjusted for a risk premium to reflect the increased risk of
investing in equities. Discount rates are lower for the divisions which
operate in more mature markets with low inflation and higher for
those operating in markets with a higher inflation. Discount rates
reflect the time value and the risks associated with the segmental
or divisional cash flows. The long-term data inputs used in the
calculation of the discount rate are benchmarked to externally
available data.
Impairment testing of Middle East goodwill
The Middle East goodwill with a carrying amount of £887m (2021: £834m) originated
mainly from the Al Noor business combination, with a portion originating from other
UAE business combinations. Key assumptions used for the FVLCOD calculations for
the annual impairment testing were as follows:
Forecasts
Growth rates
Discount rates
2022 2021
£’m £’m
Total additions 21 21
To maintain operations 10 8
To expand operations 11 13
STRATEGIC REPORT
GOVERNANCE AND
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 201
15. INTANGIBLE ASSETS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
The discount rate applied to cash flow projections is 8.5% for the
first year and thereafter 8.1% (2021: 8.7%).
The terminal growth rate beyond five years is 3.0% (2021: 3.0%).
Represents management’s best view of future revenues and cash
flows over a five-year period and is comparable with the forecast
used in the prior year. Due to international tax reform and expected
amendments to tax legislation (note 11), income tax has been
included from April 2023 at a rate of 15%. Cash flows after the
discrete period (five years) were adjusted to reflect increased direct
cost (utility costs) caused by climate change which may not be
compensated by funders.
The recoverable amount was determined to be higher than the carrying value
and, consequently, no impairment was recognised against goodwill during the year
under review.
Sensitivity analysis
An increase in the discount rate by 1% combined with a decrease in the terminal
growth rate by 0.9% would reduce the headroom to £nil. A decrease in forecast cash
flows by 16% would also reduce headroom to £nil.
These changes are not considered reasonably possible to occur within the next
12 months. However, these key assumptions have the potential to vary over time.
Impairment testing of goodwill and trade names in Switzerland
Switzerland goodwill with a carrying amount of £107m (2021: £100m) that originated
from the business combinations of OPERA Zumikon AG and Clinique des Grangettes
in previous years has been tested for impairment.
The recoverable amount has been determined based on FVLCOD discounted cash
flow calculations.
The discount rate applied to cash flow projections is 5.1%
(2021: 5.1%).
The terminal growth rate beyond five years is 1.6% (2021: 1.6%).
Impairment testing of Middle East goodwill continued
Represents management’s best view of future revenues and cash
flows over a five-year period and is comparable with the forecast
used in the prior year.
The recoverable amount was determined to be higher than the carrying value
and, as a result, no impairment charge was recognised. The recoverable amount is
not sensitive to reasonably possible changes in the discount rate and the terminal
growth rate.
Impairment testing of Southern Africa goodwill
Southern Africa goodwill with a carrying amount of £13m (2021: £12m) has been
tested for impairment. The recoverable amount has been determined based on
FVLCOD discounted cash flow calculations by applying a discount rate of 12.8%
(2021: 12.7%) and a terminal year growth rate beyond five years of 4.5% (2021: 4.5%).
The recoverable amount was determined to be higher than the carrying value
and, as a result, no impairment charge was recognised. The recoverable amount is
not sensitive to reasonably possible changes in the discount rate and the terminal
growth rate.
In the prior year, the carrying amount of the goodwill of five CGUs was determined
to be higher than its recoverable amount, resulting in the recognition of an
impairment charge of £1m against goodwill.
16. EQUITY-ACCOUNTED INVESTMENTS
Investments accounted for using the equity method consist of associates (entities in
which the Group has significant influence, but not control; normally accompanying a
shareholding of between 20% and 50% of voting rights in the investment) and joint
ventures (entities or arrangements over which the Group has joint control stemming
from contractual rights).
Under the equity method, the equity-accounted investments are initially recognised
at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition
profits or losses and movements in other comprehensive income. Dividends received
or receivable from equity-accounted investments are recognised as a reduction
in the carrying amount of the investment. The Group’s investments in associates
and joint ventures include goodwill identified on acquisition. When the Group’s
share of losses in an associate or joint venture equals or exceeds its interests in the
investment (which includes any long-term interests that, in substance, form part of
the Group’s net investment), the Group does not recognise further losses, unless it
has incurred obligations or made payments on behalf of the entity.
Discount rates
Growth rates
Forecasts
Discount rates
Growth rates
Forecasts
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT202
Unrealised gains on transactions between the Group and its equity-accounted
investments are eliminated to the extent of the Group’s interest in these
investments. Unrealised losses are eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of the
equity-accounted investments have been changed where necessary to ensure
consistency with the policies adopted by the Group.
If the ownership interest in an equity-accounted investment is reduced but
significant influence or joint control is retained, only a proportionate share of the
amounts previously recognised in other comprehensive income is reclassified to
profit or loss where appropriate. The Group’s share of post-acquisition profit or
loss is recognised in the income statement, and its share of post-acquisition
movements in other comprehensive income is recognised in other comprehensive
income with a corresponding adjustment to the carrying amount of the investment.
The Group determines at each reporting date whether there is any objective
evidence that the equity-accounted investment is impaired. If this is the case,
the Group calculates the amount of impairment as the dierence between the
recoverable amount of the investment and its carrying value and recognises the
amount adjacent to share of profit or loss of the investment in the income statement.
The recoverable amount is the higher of an asset’s FVLCOD and value-in-use. The
value-in-use is calculated by estimating future cash benefits that will result from the
investment and discounting those cash benefits at an appropriate discount rate.
16. EQUITY-ACCOUNTED INVESTMENTS CONTINUED
Note
1
During the year, the Group acquired a controlling interest in Bourn Hall International MENA Limited
(‘Bourn Hall’), which was previously accounted for as an investment in an associate. The investment in
Bourn Hall was accounted for using the equity-accounting basis until the acquisition date of the
transaction, being 11 November 2021. From that date onwards, it is treated as an investment in subsidiary
and is subject to consolidation. The acquisition of the controlling interest resulted in the recognition of
a loss on the remeasurement of the existing interest in the associate of £1m, which has been included in
‘Other gains and losses’ (see note 9), and the recognition of an investment in subsidiary of £3m, being
the fair value of the investment at that date. The details of the acquisition are disclosed in note 34.
2022 2021
£’m £’m
Investment in associates 161 167
Investment in joint venture 4 4
165 171
2022 2021
£’m £’m
Listed investment 156 157
Unlisted investments 5 10
161 167
16.1. Investment in associates
Country of incorporation and place of business % ownership
Spire Healthcare Group plc (Spire) United Kingdom 29.9
Set out below are details of the associate material to the Group:
Reconciliation of carrying value at the beginning
and end of the year
Opening balance 167 177
Additional investment in unlisted associate – 1
Share of net loss of associated companies (1) (70)
Reversal of impairment of listed associate – 60
Share of other comprehensive income
of associated companies 1 –
Dividends received from associated companies (2) –
Remeasurement of investment at fair value (1) –
Derecognition on undertaking of business
combination
1
(3) –
Exchange dierences – (1)
161 167
2022 2021
(Continued) £’m £’m
Spire is listed on the LSE. It does not issue publicly available quarterly financial
information at a detailed level and has a December year end. The investment
in associate was equity accounted for the 12 months to 31 December 2021
(2021: 31 December 2020). No significant events occurred between 1 January 2022
and the reporting date.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 203
16. EQUITY-ACCOUNTED INVESTMENTS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Summarised financial information in respect of the Group’s material associate is set
out below:
16.1. Investment in associates continued
Key accounting estimates and critical accounting judgement
Impairment/(reversal of impairment) of equity-accounted investments
The Group assesses whether any indicators of impairment reversals are identified. At
31 March 2022, an indicator of impairment reversal was identified as the market value
of the investment in Spire was £293m, which exceeded the carrying value of £156m.
Management updated the internal value-in-use projections, which resulted
in a recoverable amount that is broadly in line with the value determined at
31 March 2020 when the last impairment charge against the investment was
recognised. The internal value-in-use projections are supported by the fact that
Spire’s actual results were in line with the estimates used in the 31 March 2020
value-in-use calculation and that Spire was still making a loss during 2021.
Consequently, no impairment reversal has been recognised.
A key driver of the valuation would be the realisation of significant and sustained
revenue growth and cost savings after the COVID-19 pandemic.
If Spire’s share price at 31 March 2022 was used as the equity investment’s fair value,
then the impairment reversal would amount to £137m. If the average closing share price
for the period between 16 to 20 May 2022 was used, the impairment reversal would
amount to £96m.
In the prior year, Spire’s loss included a goodwill impairment charge of £200m.
The equity-accounted portion of this impairment amounts to £60m. Accumulated
impairment charges recognised by the Group in prior periods amount to £283m.
Following Spire’s goodwill impairment charge, the Group’s interest in the net asset
value of Spire was higher than the carrying value of the equity investment at
30 September 2020. As a result, an impairment reversal equal to the Group’s share
of the goodwill impairment of £60m was recognised.
16.2. Investment in joint venture
At 31 Dec 2021 At 31 Dec 2020
£’m £’m
Summarised statement of financial position
Non-current assets 2 033 1 992
Current assets 347 250
Total assets 2 380 2 242
Non-current liabilities (1 372) (1 295)
Current liabilities (302) (254)
Net assets 706 693
Mediclinic's eective interest 29.9% 29.9%
Mediclinic's eective interest in net assets 211 207
Dierence in accounting treatment on
adoption of IFRS 16 (1) 4
Accumulated impairment of listed associate (54) (54)
Total carrying value of equity investment 156 157
Market value of listed investment at 31 March 293 201
Summarised statement of comprehensive income
Revenue 1 106 920
Profit from continuing operations (16) (237)
Other comprehensive income 3 (1)
Total comprehensive income (13) (238)
Dividends received from associate – –
See note 39 for further details of investments in associates.
2022 2021
£’m £’m
Reconciliation of carrying value at the beginning
and end of the year
Opening balance 4 4
4 4
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT204
The Group has a 49.9% interest in Wits University Donald Gordon Medical Centre
(Pty) Ltd. The unlisted joint venture is accounted for by using its financial information
for the 12 months ended 31 December 2021 (2021: 31 December 2020) since it has a
dierent year end.
Details of the joint venture appear in note 39.
17. OTHER INVESTMENTS AND LOANS
16. EQUITY-ACCOUNTED INVESTMENTS CONTINUED
16.2. Investment in joint venture continued
Loans receivable inherently expose the Company to credit risk, being the risk that
the Company will incur financial loss if counterparties fail to make payments as
they fall due. For the accounting policy of other investments and loans, see note 31
‘Financial Instruments’.
Unlisted equity instruments
Unlisted equity instruments at FVOCI comprise securities which are not held
for trading and which the Group has irrevocably elected at initial recognition to
recognise in this category. These are strategic investments and the Group considers
this classification to be more relevant. On disposal of these equity investments, any
related balance within the FVOCI reserve is reclassified to retained earnings.
The fair value of unlisted equity instruments at FVOCI is not based on observable
market data and, as a result, these financial assets are grouped as level 3. The
following table presents the changes in these level 3 instruments for the period
ended 31 March 2022:
2022 2021
£’m £’m
Debt instruments at amortised cost 9 9
Equity instruments at FVOCI (listed shares) 1 1
Equity instruments at FVOCI (unlisted shares) 14 2
Investments in money market funds at FVPL 6 2
30 14
Non-current 24 12
Current 6 2
Total other investments and loans 30 14
Other investments and loans are held in the
following currencies:
Swiss franc 14 5
South African rand 10 5
UAE dirham – 2
US dollar 6 2
30 14
2022 2021
Unlisted equity instruments at FVOCI £’m £’m
Opening balance 2 2
Acquisitions 8 –
Gains recognised in other comprehensive income 4 –
14 2
Debt instruments at amortised cost
Debt instruments at amortised cost include loans receivable from doctors and other
parties. For details on loans to related parties, see note 37. Credit losses of less than
£0.5m were recognised on the loans receivable (2021: nil).
Information about the methods and assumptions used to determine the fair value of
unlisted equity instruments, and the sensitivity of the assets to price, is provided in
note 31.
18. DEFERRED TAX
Deferred income tax is recognised, using the liability method, on temporary
dierences arising between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. However, deferred tax liabilities
are not recognised if they arise from the initial recognition of goodwill. Deferred
income tax is determined using tax rates (and legislation) that have been enacted
or substantially enacted by the reporting date and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability
is settled.
Deferred income tax assets are recognised only to the extent that it is probable that
future taxable profit will be available against which the temporary dierences can
be utilised.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 205
18. DEFERRED TAX CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Deferred income tax is provided on temporary dierences arising on investments
in subsidiaries and associates, except for deferred income tax liabilities where the
timing of the reversal of the temporary dierence is controlled by the Group and it
is probable that the temporary dierence will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are oset when there is a legally
enforceable right to oset current tax assets against current tax liabilities, and
when the deferred income tax assets and liabilities relate to income taxes levied by
the same taxation authority on either the same taxable entity or dierent taxable
entities where there is an intention to settle the balances on a net basis.
2022 2021
£’m £’m
Opening balance 391 405
Income statement credit for the year (6) (6)
Eect of change in tax rate on income statement 1 –
(Credited)/charged to other comprehensive income (14) 26
Exchange dierences 28 (34)
Balance at year end 400 391
Deferred income tax assets (32) (34)
Deferred income tax liabilities 432 425
400 391
The movement on the deferred tax account is as follows:
The deferred tax relating to current assets and current liabilities contains temporary
dierences that are likely to be realised in the next 12 months. The deferred tax
balance comprises temporary dierences arising in separate legal entities. Osetting
has been applied on a legal entity basis. The table below shows the deferred tax
balances and movements in the various categories before osetting was applied:
Tangible
assets
£’m
Intangible
assets
£’m
Current
assets
£’m
Provisions
and other
£’m
Financial
assets and
retirement
benefit
asset
£'m
Total
£’m
Deferred tax liabilities
At 1 April 2020 407 13 7 19 – 446
Charged to the income
statement 3 – 1 – 1 5
Charged to other
comprehensive income – – – – 20 20
Exchange dierences (29) (1) – (2) (1) (33)
At 31 March 2021 381 12 8 17 20 438
Set-o of deferred tax
liabilities pursuant to
set-o provisions (13)
Net deferred tax
liabilities at year end 425
At 1 April 2021 381 12 8 17 20 438
Credited to the income
statement (3) – (1) – (1) (5)
Credited to other
comprehensive income – – – – (20) (20)
Eect of change in tax rate
on income statement (1) – – – – (1)
Exchange dierences 28 1 1 2 1 33
At 31 March 2022 405 13 8 19 – 445
Set-o of deferred tax
liabilities pursuant to
set-o provisions (13)
Net deferred tax liabilities
at year end 432
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT206
18. DEFERRED TAX CONTINUED
At 31 March 2022, the Group had unutilised tax losses of approximately £204m
(2021: £172m) potentially available for oset against future profits. A deferred tax
asset of £12m (2021: £12m) has been recognised in respect of tax losses in some of
the underlying subsidiaries. The Group has concluded that the deferred assets will
be recoverable using the estimated future taxable income based on the approved
business plans and budgets of the underlying subsidiaries. Tax losses that resulted
in the recognition of deferred tax assets of £7m can be carried forward indefinitely
and have no expiry date. Tax losses that resulted in the recognition of deferred
tax assets of £5m expire between one and seven years. No deferred tax asset has
Current
liabilities
£’m
Provisions
and other
£’m
Retirement
benefit
obligations
£’m
Derivatives
£’m
Leases
£’m
Tangible
assets
£'m
Tax losses
carried
forward
£’m
Total
£’m
Deferred tax assets
At 1 April 2020 (2) (7) (20) (3) (2) – (7) (41)
Credited to the income statement
– (2) (1) – – (3) (5) (11)
Charged to other comprehensive income
– – 6 – – – – 6
Exchange dierences – (1) – 1 (1) – – (1)
At 31 March 2021 (2) (10) (15) (2) (3) (3) (12) (47)
Set-o of deferred tax assets pursuant
to set-o provisions 13
Net deferred tax assets at year end (34)
At 1 April 2021 (2) (10) (15) (2) (3) (3) (12) (47)
(Credited)/charged to the income statement – (1) (2) – – 1 1 (1)
Charged to other comprehensive income
– – 4 2 – – – 6
Eect of change in tax rate on income statement
– 1 1 – – – – 2
Exchange dierences
– (1) (2) – – (1) (1) (5)
At 31 March 2022 (2) (11) (14) – (3) (3) (12) (45)
Set-o of deferred tax assets pursuant
to set-o provisions 13
Net deferred tax assets at year end (32)
been recognised in respect of the remaining losses due to the unpredictability and
availability of future profit streams in the relevant jurisdictions. The majority of
the unrecognised losses, which relate to Mediclinic International plc in the United
Kingdom, have no expiry, and the remainder, which relate to Switzerland, expire after
seven years. Their utilisation is dependent on the profitability of the related entities.
The financial projections used in assessing the future profitability are consistent
with those used in assessing the carrying value of goodwill as set out in note 15. The
rate of utilisation of these losses will depend on the incidence and timing of profits
within each entity, which consequently aect their recognition as deferred tax assets.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 207
18. DEFERRED TAX CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Unused tax losses not recognised as deferred tax assets for the Group are as follows:
19. INVENTORIES
Inventories are measured at the lower of cost, determined on the weighted average
method, or net realisable value. Net realisable value is the estimated selling price in
the ordinary course of business, less applicable variable selling expenses.
Consumables and supplies consist of the cost of inventories, including obsolete
stock, which have been expensed during the year. Rebates received from suppliers
are recognised when all the conditions agreed with the suppliers are met, the
amount of cost of supplies can be measured reliably and it is probable that the
economic benefits associated with the transaction will flow to the entity.
Deferred tax on unremitted earnings
The Group recognised a deferred tax liability of £1m (2021: £1m) in respect of
temporary dierences relating to unremitted earnings. This liability relates to
non-resident shareholder tax of the Group’s Namibian subsidiaries and the amount
is included in the ‘Provisions and other’ category of deferred tax liabilities. No
deferred tax liability has been recognised for the other foreign subsidiaries and
equity-accounted investments of the Group where the Group is able to control the
timing of any distributions and it is not probable that any distributions will be made
in the foreseeable future. Similarly, tax is not provided where it is expected at the
reporting date that such distributions will not give rise to a tax liability. The gross
temporary dierence in this regard amounts to £1 552m (2021: £1 293m). There are
no significant expected income tax consequences of earnings being distributed
from Switzerland and the UAE, as there is no dividend withholding tax applicable to
earnings being distributed from these operations, neither should there be any tax
liability on the receipt of these dividends. Although South African distributions to
the UK are typically subject to dividend withholding taxes, distributions from South
Africa are not expected to have income tax consequences in the foreseeable future
as the operations in South Africa have a significant contributed tax capital balance
from which may be paid dividends free from withholding tax. In line with the South
African Reserve Bank requirement, it is intended that dividends to the South African
resident shareholders on the South African share register will be paid from the
Dividend Access Scheme (‘DAS’). See note 21 for details on the DAS.
2022 2021
£’m £’m
Unused tax losses not recognised as
deferred tax assets
Expiry in 1 year 2 4
Expiry in 2 years 2 –
Expiry in 3–7 years 72 52
No expiry 71 54
147 110
2022 2021
£’m £’m
Inventories consist of:
Pharmaceutical products 86 97
Consumables 10 11
Finished goods and work in progress 1 1
97 109
The cost of inventories recognised as an expense and included in consumables
and supplies amounted to £770m (2021: £719m). Write-downs of inventories to net
realisable value amounted to £5m (2021: £6m). These were recognised as an expense
during the year and included in consumables and supplies in the income statement.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT208
20. TRADE AND OTHER RECEIVABLES
For the accounting policies of trade and other receivables, see note 31 ‘Financial
Instruments’.
The Group applies the simplified approach for providing for expected credit losses
prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all
trade receivables. The loss allowance is determined as follows:
Note
Loss allowance is less than £0.5m.
Note
Loss allowance is less than £0.5m.
2022 2021
£’m £’m
Financial instruments
Trade receivables 749 740
Loss allowance (27) (22)
722 718
Other receivables 46 56
768 774
Non-financial instruments
Prepayments and deposits 59 47
Other receivables 7 5
66 52
Total trade and other receivables 834 826
2022 2021
£’m £’m
Swiss franc 516 489
South African rand 80 81
UAE dirham 238 255
US dollar – 1
834 826
2022 2021
£’m £’m
Movement in the loss allowance
Opening balance 22 19
Loss allowance 13 12
Amounts written o as uncollectable (9) (8)
Unused amounts reversed (1) (1)
Exchange dierences 2 –
Balance at year end 27 22
Trade and other receivables are categorised as debt instruments at amortised cost.
The carrying amounts of the Group’s trade and other receivables are denominated
in the following currencies:
2022
Current
£’m
1–30 days
past due
£’m
31–60 days
past due
£’m
61–90 days
past due
£’m
More than
90 days
past due
£'m
Total
£’m
Gross carrying amount 441 66 32 28 182 749
Loss allowance (2) (1) – (1) (23) (27)
Net carrying amount 439 65 32 27 159 722
Expected loss rate 0.39% 0.79% 1.05% 4.87% 12.68%
2021
Current
£’m
1–30 days
past due
£’m
31–60 days
past due
£’m
61–90 days
past due
£’m
More than
90 days
past due
£'m
Total
£’m
Gross carrying amount 436 55 41 27 181 740
Loss allowance (2) – (1) (1) (18) (22)
Net carrying amount 434 55 40 26 163 718
Expected loss rate 0.36% 0.95% 1.82% 4.34% 9.93%
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 209
20. TRADE AND OTHER RECEIVABLES CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
A loss allowance is recognised for all receivables, in accordance with IFRS 9 Financial
Instruments, and is monitored at the end of each reporting period. In addition to the
loss allowance, receivables are written o when there is no reasonable expectation of
recovery, for example, when a debtor has been placed under liquidation. Receivables
that have been written o are not subject to enforcement activities.
Other receivables include Swiss unbilled doctors’ fees and advance payments to
aliated doctors, and other amounts owed by third parties. Other receivables are
considered to have low credit risk, and the loss allowance provision recognised
during the period was therefore limited to 12 months’ expected credit losses.
Other receivables are considered to have low credit risk where they have a low
risk of default and the issuer has a strong capacity to meet its contractual cash
flow obligations in the near term. The expected credit losses for other receivables
are insignificant.
Management considers the credit quality of the trade receivables that have not
been credit impaired to be high in light of the nature of these trade receivables as
described in note 32.
Trade receivables to the value of £288m (2021: £295m) have been ceded as security
for banking facilities.
Movement in provision for expected credit losses recognised in profit or loss
During the year, the following losses/(gains) were recognised in profit or loss in
relation to impaired receivables:
21. SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to
the issue of new shares or options are shown in equity as a deduction from the
proceeds, net of tax.
2022 2021
£’m £’m
Movement in loss allowance for trade receivables 13 12
Reversal of previously recognised loss allowance (1) (1)
Movement in provision for expected credit losses 12 11
2022 2021
£’m £’m
Issued share capital
Share capital 74 74
Share premium 690 690
764 764
Ordinary shares 2022 2021
Number of shares in issue and fully paid 737 243 810 737 243 810
Nominal value 10p 10p
Dividend Access Scheme
A wholly owned subsidiary of the Company, Mediclinic International (RF) (Pty) Ltd,
formed a Dividend Access Trust to comply with a South African Reserve Bank
requirement that dividends from a South African source due to South African
shareholders on the South African share register must be paid locally to avoid
an outflow of funds from South Africa.
The beneficiaries of the trust are the South African shareholders of the Company
who hold their shares via the South African share register on the relevant record
date in respect of each distribution paid through the DAS. The Dividend Access Trust
does not participate in any profits.
When a dividend is declared by the Company, the Dividend Access Trust would
receive a dividend from Mediclinic International (RF) (Pty) Ltd, which in turn is paid
over to the Company’s transfer secretaries in South Africa, who arrange for the
payment of the relevant amount to the South African shareholders (the beneficiaries
of the trust) through the usual dividend payment procedures, as if this was a
dividend received from Mediclinic International plc. To the extent that dividends due
to South African shareholders are not ultimately funded from Mediclinic International
(RF) (Pty) Ltd, they receive those dividends as normal dividends from Mediclinic
International plc. The South African shareholders’ entitlement to receive dividends
declared by Mediclinic International plc is reduced by any amounts they receive via
the trust.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT210
22. OTHER RESERVES Foreign currency translation reserve
The foreign currency translation reserve consists of exchange rate dierences
that occur when translating the foreign subsidiaries’ financial statements from
their functional currency into the Group’s presentation currency. On disposal of
the net investment, the reserve for currency translation of that foreign subsidiary
is recognised in the income statement. Reduction of a net investment in a foreign
operation which does not result in loss of control is not treated as a disposal.
Hedging reserve
The hedging reserve consists of the eective portion of gains and losses on hedging
instruments designated as cash flow hedges.
Financial assets at FVOCI reserve
The Group has elected to recognise changes in the fair value of certain investments
in equity securities in other comprehensive income, as explained in note 17. These
changes are accumulated within the FVOCI reserve within equity. The Group
transfers amounts from this reserve to retained earnings when the relevant equity
securities are derecognised.
Reverse acquisition reserve
During February 2016, Mediclinic completed the combination between Al Noor and
Mediclinic International Ltd. The combination was classified as a reverse acquisition.
The reverse acquisition reserve represents the net of the following adjustments
resulting from the Al Noor reverse acquisition:
• adjustment of the capital structure (share capital and share premium) of the Group
to that of the legal parent;
• adjustment to account for the premium on shares issued to the Mediclinic
International Ltd shareholders; and
• the share value component of the total consideration.
Capital redemption reserve
The UK Companies Act 2006 provides that where shares of a company are
repurchased and funded by a new issue of shares, the amount by which the
company’s issued share capital is diminished on cancellation of the shares is
transferred to a capital redemption reserve to maintain capital. The reduction
of the company’s share capital shall be treated as if the capital redemption reserve
was paid-up capital of the company.
Note
1
Tax impact is less than £0.5m.
Capital
redemption
reserve
£’m
Reverse
acquisition
reserve
£’m
Financial
assets at
FVOCI
reserve
£’m
Foreign
currency
translation
reserve
£’m
Hedging
reserve
£'m
Total
other
reserves
£’m
At 1 April 2020 6 (3 014) – 815 (8) (2 201)
Cash flow hedges
reclassified to profit
or loss – gross – – – – 2 2
Revaluation – gross – – – – (2) (2)
Currency translation
dierences – – – (235) – (235)
Currency translation
dierences attributable
to NCI – – – (2) – (2)
At 31 March 2021 6 (3 014) – 578 (8) (2 438)
Cash flow hedges
reclassified to profit
or loss – gross – – – – 6 6
Deferred tax – – – – (2) (2)
Revaluation – gross
1
– – 4 – 1 5
Share of other
comprehensive income
of equity-accounted
investments – – – – 1 1
Currency translation
dierences – – – 182 – 182
Currency translation
dierences attributable
to NCI – – – (8) – (8)
At 31 March 2022 6 (3 014) 4 752 (2) (2 254)
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 211
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Summarised financial information in respect of the Group’s subsidiaries that have
material NCI is set out below. The summarised financial information below represents
amounts before inter-group eliminations.
2022 2021
£’m £’m
Opening balance 118 113
Transactions with non-controlling shareholders 3 (3)
Dividends to non-controlling shareholders (12) (8)
Share of total comprehensive income 30 16
Share of profit 19 11
Currency translation dierences 8 2
Share of other comprehensive income 3 3
139 118
23. NON-CONTROLLING INTERESTS
Country of business 2022 2021
Curamed Holdings (Pty) Ltd
(group) South Africa 26.6% 26.6%
Grangettes Group Switzerland 40.0% 40.0%
Mediclinic Limpopo Trust South Africa 49.1% 50.0%
See note 39 for a list of investments in subsidiaries.
31 March 2022
Mediclinic
Limpopo
Trust
£'m
Curamed
Holdings (Pty)
Ltd (group)
£'m
Grangettes
Group
£'m
Summarised balance sheet
Non-current assets 11 49 348
Current assets 33 47 94
Non-current liabilities – (4) (165)
Current liabilities (2) (7) (66)
Net assets 42 85 211
Accumulated NCI in statement
of financial position 20 21 47
Summarised statement of
comprehensive income
Revenue 25 67 165
Profit for the year 7 12 19
Other comprehensive income – – 7
Total comprehensive income 7 12 26
Profit allocated to NCI 4 3 8
Dividends paid to NCI 2 2 5
Summarised cash flows
Cash flows from operating activities 6 20 44
Cash flows from investing activities (1) (4) (3)
Cash flows from financing activities (4) (7) (31)
Net increase/(decrease) in cash
and cash equivalents 1 9 10
Details of the ownership interest held by material NCI are as follows:
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT212
23. NON-CONTROLLING INTERESTS CONTINUED
31 March 2021
Mediclinic
Limpopo
Trust
£'m
Curamed
Holdings (Pty)
Ltd (group)
£'m
Grangettes
Group
£'m
Summarised balance sheet
Non-current assets 11 51 337
Current assets 29 38 78
Non-current liabilities – (4) (185)
Current liabilities (4) (10) (51)
Net assets 36 75 179
Accumulated NCI in statement of
financial position 18 19 36
Summarised statement of
comprehensive income
Revenue 21 57 160
Profit for the year 6 9 15
Other comprehensive income – – 8
Total comprehensive income 6 9 23
Profit allocated to NCI 3 1 6
Dividends paid to NCI 2 1 5
Summarised cash flows
Cash flows from operating activities 7 5 23
Cash flows from investing activities (1) (3) (5)
Cash flows from financing activities (4) (2) (34)
Net increase/(decrease) in cash
and cash equivalents 2 – (16)
Transactions with NCI
During the period under review, the Group entered into various transactions where
it acquired additional interests in NCI and disposed of NCI without losing control.
The eect on the equity attributable to the owners during the year is summarised as
follows:
2022 2021
£’m £’m
Carrying amount of NCI acquired/(disposed of) (3) 3
Consideration received from/(paid to) NCI 2 1
Increase in equity attributable to owners
of the Company (1) 4
24. SHARE-BASED PAYMENTS
Long-term incentive (‘LTI’) awards
Under the LTI, conditional phantom shares are awarded to selected senior
management (including executive directors). The LTI awards share-based
payment arrangement that will be settled in cash is accounted for as a cash-settled
share-based payment transaction in terms of IFRS 2 and the LTI awards that will be
settled in shares will be accounted for as an equity-settled share-based payment
transaction.
Cash-settled share-based payment arrangements
For cash-settled share-based compensation plans, the Group recognises the value
of the services received (expense), and the liabilities to pay for those services, as
the employees render service. The liabilities are measured, initially, and at each
reporting date until settled, at the fair value appropriate to the scheme, taking into
account the terms and conditions on which the rights were granted, and the extent
to which the employees have rendered service to date, excluding the impact of any
non-market-related vesting conditions. Non-market-related vesting conditions are
included in the assumptions regarding the number of units expected to vest. These
assumptions are revised at the end of each reporting period. All changes to the fair
value of the liability are recognised in the income statement.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 213
2021
24. SHARE-BASED PAYMENTS CONTINUED
Note
1
Less than £0.5m in the prior year.
Note
1
Less than £0.5m in the prior year.
Note
1
The 2019 allocation is at the end of the performance period and, as a result, was valued against the
performance conditions and not in terms of the Black-Scholes option pricing model.
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Equity-settled share-based payment arrangements
Under equity-settled share-based compensation plans, the entity receives services
from employees as consideration for equity instruments (options) of the Company.
The fair value of the employee services received in exchange for the grant of
the options is recognised as an expense. The total amount to be expensed is
determined by reference to the fair value of the options granted, including any
market performance conditions and the impact of any non-vesting conditions,
but excluding the impact of any service and non-market performance vesting
conditions.
At the end of each reporting period, the Group revises its estimates of the number
of options that are expected to vest based on the non-market vesting conditions
and service conditions. It recognises the impact of the revision to original estimates,
if any, in the income statement, with a corresponding adjustment to equity.
Valuation assumptions relating to the outstanding units:
2022
£’m £’m
Cash-settled share-based payment liability 4 1
Equity-settled share-based payment reserve
(included in retained earnings)
1
1 –
Total share-based payment reserves and liabilities 5 1
Expenses arising from equity-settled share-based
payment transactions
1
1 –
Expenses arising from cash-settled share-based
payment transactions
1
3 –
Total expense (see note 6) 4 –
2022 2021
£’m £’m
Opening balance 1 1
Share-based payment expense
1
3 –
Closing balance 4 1
Cash-settled share-based payment arrangements
The vesting of these shares is subject to continued employment, and is conditional
upon achievement of performance targets, measured over a three-year period.
The performance conditions for the year under review constitute a combination of
absolute total shareholder return (‘TSR’) (40% weighting of the 2018 and 2019 LTI
awards; 25% weighting of the 2020 LTI awards), earnings per share (60% weighting
of the 2018 and 2019 LTI awards; 40% weighting of the 2020 LTI awards), return
on invested capital (‘ROIC’) (25% weighting of the 2020 LTI awards) and patient
experience index (10% weighting of the 2020 LTI awards).
A reconciliation of the movement in the cash-settled LTI award units is detailed below:
2022
Number of units
2021
Number of units
Opening balance 5 108 093 3 877 820
Granted 1 591 269 1 852 340
Lapsed (1 191 777) (622 067)
Closing balance 5 507 585 5 108 093
2021 LTI
allocation
2020 LTI
allocation
2019 LTI
allocation
Grant date 4 June 2021 13 December 2020 19 June 2019
Vesting date 4 June 2024 13 December 2023 1 June 2022/2024
Outstanding units 1 579 645 1 839 127 2 088 813
Closing share price 356 356 356
Risk-free interest rate 1.23% 1.18% n/a
Expected dividend
yield 0.00% 0.00% n/a
Volatility 34.40% 30.00% n/a
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT214
Note
1
The vesting date is the fifth anniversary of the grant date, allowing for a three-year performance period
plus a two-year holding period.
Equity-settled share-based payment arrangements
The vesting of these shares is subject to continued employment and is conditional
upon achievement of four performance targets, measured over a three-year period,
with an additional two-year holding period. The performance conditions for the
year under review constitute a combination of TSR (25% weighting), adjusted EPS
(40% weighting), ROIC (25% weighting) and the Group’s consolidated patient
experience index score (10% weighting).
The share-based payment expense relating to equity-settled share-based payment
arrangements was £1m during the year (2021: less than £0.5m).
A reconciliation of the movement in the equity-settled LTI award units is detailed
below:
24. SHARE-BASED PAYMENTS CONTINUED 25. BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost. Any dierence between the
proceeds (net of transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the eective interest
rate method. Borrowings are classified as current liabilities unless the Group has
an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date.
Borrowing costs are expensed when incurred, except for borrowing costs directly
attributable to the construction or acquisition of qualifying assets. Borrowing cost
directly attributable to the construction or acquisition of qualifying assets is added
to the cost of those assets, until such time as the assets are substantially ready for
their intended use. A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use.
2022 2021
£’m £’m
Bank loans 1 609 1 507
Preference shares – 89
Listed bonds 194 181
1 803 1 777
Non-current borrowings 1 688 1 686
Current borrowings 115 91
Total borrowings 1 803 1 777
2022
Number of units
2021
Number of units
Opening balance 607 072 –
Granted 546 750 607 072
Closing balance 1 153 822 607 072
2021 LTI
allocation
2020 LTI
allocation
Grant date 4 June 2021 13 December 2020
Vesting date 4 June 2026 13 December 2025
Outstanding units 546 750 607 072
Share price of Mediclinic International plc share
on grant date (denominated in sterling pence) 341 270
Risk-free interest rate 0.23% (0.13)%
Expected dividend yield 0% 0%
Volatility 41.10% 43.80%
Valuation assumptions relating to the outstanding units:
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 215
2022 2022 2021 2021
£’m £’m £’m £’m
Non-current Current Non-current Current
Swiss operations (denominated in Swiss franc)
Secured bank
loan one
1
This loan bears interest at variable rates linked to the SARON plus 1.25%. CHF50m is redeemable annually on 30 September
with the final outstanding balance redeemable on 30 September 2027. The repayment in September 2021 was suspended,
to be resumed in September 2022, but management decided to make a voluntary repayment in November 2021.
The non-current portion includes capitalised financing costs of £14m (2021: £13m).
1 018 41 986 38
Secured bank
loan two
2
These loans bear interest at a fixed rate of 1.12%. CHF0.5m is repayable on 30 June and 31 December every year.
The remaining balances are repayable during May 2023.
13 1 13 1
Secured bank
loan three
2
This fixed interest mortgage loan bears interest at 0.90% compounded quarterly. The loan is repayable by December 2023.
8 – 8 –
Listed bonds The listed bonds consist of CHF90m at 2.00% and CHF145m at 1.25% Swiss franc bonds. The bonds are repayable on
25 February 2025 and 25 February 2026, respectively.
194 – 181 –
Southern African operations (denominated in South African rand)
Secured bank
loan one
The loan bore interest at the 3M JIBAR variable rate plus a margin of 1.49% (2021: 1.71%) compounded quarterly.
The loan was extinguished on 17 September 2021 as part of the refinancing arrangement.
– – 126 1
Secured bank
loan two
The loan bore interest at the 3M JIBAR variable rate plus a margin of 1.59% (2021: 1.81%) compounded quarterly.
The loan was extinguished on 17 September 2021 as part of the refinancing arrangement.
– – 176 1
Secured bank
loan three
3
The loans bear interest at the 3M JIBAR variable rate plus a variable margin that is linked to predefined sustainability
measures. The sustainability measures are assessed in calendar years, starting in January 2022. At 31 March 2022, a margin
of 1.54% was applied. The loans are repayable on 17 September 2026. £207m of the loan has been hedged.
414 2 – –
Other secured
bank loans
4
These loans bear interest at variable rates linked to the prime overdraft rate and are repayable in periods ranging
between one and 12 years.
2 1 3 1
Preference
shares
Dividends were payable quarterly at a rate of 72% of 3M JIBAR plus a margin of 1.65% (2021: 1.77%).
The outstanding balance was redeemed on 1 September 2021.
– – 89 –
Middle East operations (denominated in US dollar)
Secured bank
loan one
5
The loan bears interest at variable rates linked to the 3M LIBOR and a margin of 1.85% with five-year amortising terms,
expiring in August 2023. £36m (2021: £51m) of the loan has been hedged. 39 70 104 49
1 688 115 1 686 91
25. BORROWINGS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Notes
1
The loan is secured by mortgage notes on Swiss properties and buildings to the value of £2 547m
(2021: £2 382m) and Swiss bank accounts with a book value of £72m (2021: £60m).
2
These loans are secured by mortgage notes on the properties and buildings of the Linde Group.
3
Property and equipment with a book value of £325m (2021: £296m) are encumbered as security for these
loans. Cash and cash equivalents of £58m (2021: £5m) and trade receivables of £60m (2021: £53m) have also
been ceded as security for these borrowings.
4
Property, equipment and vehicles with a book value of £14m (2021: £18m) are encumbered as security
for these loans. Net trade receivables of less than £0.5m (2021: £1m) have also been ceded as security for
these loans.
5
Shares of investments in Emirates Healthcare Holdings Ltd and Emirates Healthcare Ltd are encumbered
as security for these loans as well as an account pledge on receivable collection accounts.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT216
25. BORROWINGS CONTINUED
Interest Rate Benchmark Reform
For the period ended 31 March 2022, the Group has adopted the amendments
to IFRS 9, IAS 39, IFRS 7 and IFRS 16 Interest Rate Benchmark Reform – Phase 2.
Phase 2 of the amendments requires that, for financial instruments measured using
amortised cost measurement, changes to the basis for determining the contractual
cash flows required by interest rate benchmark reform are reflected by adjusting
their eective interest rate. No immediate gain or loss is recognised. This expedient is
applicable only to changes that are a direct consequence of interest rate benchmark
reform and the new basis for determining the contractual cash flows is economically
equivalent to the previous basis.
The Swiss bank loan one bears interest at variable rates that were previously linked
to the three-month Swiss franc London Interbank Oered Rate (‘CHF LIBOR’).
At 31 December 2021, the CHF LIBOR rate was replaced by Swiss Average Rate
Overnight (‘SARON’) as the new reference rate. As a result of the discontinuance of
the CHF LIBOR reference rate, the loan facility agreement was amended to reflect
the change in reference rate to SARON. As the Swiss bank loans are unhedged, the
change in reference rates did not have any impact on hedge relationships (including
hedge designation, amounts accumulated in the cash flow hedge reserve or risk
components).
Following the replacement of the CHF LIBOR with the SARON, the Group has
applied the practical expedient provided under Interest Rate Benchmark Reform –
Phase 2 to £1 073m of its borrowings.
The Middle East bank loan bears interest at variable rates linked to the three-month
US dollar (‘USD’) LIBOR. It is expected that the USD LIBOR will be replaced with the
Secured Overnight Financing Rate (‘SOFR’) on its discontinuance. The USD LIBOR
is expected to be discontinued on 30 June 2023. The replacement of the USD LIBOR
with SOFR has no impact on the borrowings of the Middle East operations for the
period ended 31 March 2022.
The Southern African bank loan bears interest at variable rates linked to the
three-month Johannesburg Interbank Average Rate (‘JIBAR’). The interest rate
benchmark reform has not had any impact on the JIBAR and, as a result, has no
impact on the borrowings of the Southern African operations.
26. LEASES
The Group leases various buildings, equipment, vehicles and other assets. Lease
terms are negotiated on an individual basis and contain a wide range of dierent
terms and conditions. The lease agreements do not impose any covenants other
than the security interests in the leased assets that are held by the lessor.
Leases are recognised as a right-of-use asset and a corresponding liability at the
date at which the leased asset is available for use by the Group. Assets and liabilities
arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives
receivable;
• the exercise price of a purchase option if the Group is reasonably certain to
exercise that option;
• payments of penalties for terminating the lease, if the lease term reflects the
Group exercising that option; and
• lease payments to be made under reasonably certain extension options.
The lease payments are discounted using the interest rate implicit in the lease. If
that rate cannot be readily determined, which is generally the case for leases in
the Group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset in a similar economic environment
with similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based
on an index or rate, which are not included in the lease liability until they take eect.
When adjustments to lease payments based on an index or rate take eect, the
lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost
is charged to profit or loss over the lease period to produce a constant periodic rate
of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease
incentives;
• any initial direct costs; and
• restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful
life and the lease term on a straight-line basis. If the Group is reasonably certain to
exercise a purchase option, the right-of-use asset is depreciated over the underlying
asset’s useful life.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 217
26. LEASES CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Payments associated with short-term leases and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss. Short-term leases
are leases with a lease term of 12 months or less. Low-value assets comprise small
items of medical and other equipment. Low-value assets contribute an insignificant
portion of the Group’s rental payments expensed in terms of IFRS 16.
To determine the incremental borrowing rate, the Group uses recent third-party
financing received by the lessee as a starting point and adjusts the rate to reflect
changes in financing conditions since the third-party financing was received.
The Group also makes adjustments to the rate relating to the specific lease based
on the term, country, currency and security.
Some property leases contain variable payment terms that are linked to revenue
generated from a hospital. Variable lease payments that depend on revenue are
recognised in profit or loss in the period in which the condition that triggers those
payments occur.
Extension and termination options are included in a number of leases across the
Group. The majority of the extension and termination options held are exercisable
only by the Group and not by the respective lessor. In determining the lease term, all
facts and circumstances that create an economic incentive to exercise an extension
option, or not to exercise a termination option, are considered.
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. Rent concessions are included in other gains and losses.
During the year ended 31 March 2021, the Group negotiated rent concessions
with its landlords at a number of buildings in the Middle East as a result of the severe
impact of the COVID-19 pandemic. The Group applied the practical expedient for
COVID-19-related rent concessions consistently to eligible rent concessions. The
amount of £1m recognised in profit or loss in the prior period reflects changes in
lease payments arising from rent concessions to which the Group has applied the
practical expedient for COVID-19-related rent concessions. The COVID-19-related rent
concessions for the year ended 31 March 2022 were less than £0.5m.
Critical accounting judgement
Determination of lease term
In determining the lease term, management considers all facts and circumstances
that create an economic incentive to exercise an extension option. Extension options
are included in the lease term only if the lease is reasonably certain to be extended.
For leases of hospitals, the Group considers their past practice in exercising renewal
options and the cost of business disruption required to replace the leased asset.
Most extension options in respect of hospitals have not been included in the lease
liability due to the long duration of existing lease contracts and the low probability
of exercising renewal options based on the contractual renewal terms.
The lease term is reassessed if an option is actually exercised (or not exercised)
or the Group becomes obliged to exercise (or not exercise) it. The assessment of
reasonable certainty is revised only if a significant event or a significant change in
circumstances occurs, which aects this assessment, and which is within the control
of the lessee.
Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
2022 2021
£’m £’m
Right-of-use assets
Buildings 721 621
Equipment 3 4
724 625
Right-of-use assets per geographical market
Switzerland 397 390
Southern Africa 26 27
Middle East 301 208
724 625
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT218
Amounts recognised in the income statement
The income statement includes the following amounts relating to leases:
26. LEASES CONTINUED
Amounts recognised in the statement of financial position continued
27. RETIREMENT BENEFIT OBLIGATIONS
Retirement benefit costs
The Group provides defined benefit and defined contribution plans for the benefit
of employees, the assets of which are held in separate trustee-administered funds.
These plans are funded by payments from the employees and the Group, taking into
account recommendations of independent qualified actuaries.
Defined benefit plans
This plan defines an amount of pension benefit an employee will receive on
retirement, dependent on one or more factors such as age, years of service and
compensation. The liability recognised in the statement of financial position in
respect of defined benefit pension plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan assets. The
defined benefit obligation is calculated annually by independent actuaries using the
projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest rates
of high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid, and that have terms to maturity approximating to the terms of
the related pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in
actuarial assumptions are charged or credited to equity in other comprehensive
income in the period in which they arise. Past service costs are recognised
immediately in the income statement. The annual pension costs of the Group’s
benefit plans are charged to the income statement.
A net pension asset is recorded only to the extent that it does not exceed the
present value of any economic benefit available in the form of reductions in
future contributions to the plan. If there is a minimum funding requirement for
contributions relating to future service, the economic benefit available is calculated
as the amount that reduces future minimum funding requirement contributions for
future service because the entity made a prepayment, and the estimated future
service cost in each period, less the estimated minimum funding requirement
contributions that would be required for future service in those periods if there were
no prepayment.
Incurred interest costs/income on the defined benefit obligations are recognised as
wages and salaries.
See note 6 for the accounting policy in respect of defined contribution plans.
2022 2021
£’m £’m
Lease liabilities
Switzerland 417 408
Southern Africa 37 38
Middle East 332 230
786 676
Of which are:
- Non-current lease liabilities 730 621
- Current lease liabilities 56 55
786 676
2022 2021
£’m £’m
Depreciation charge of right-of-use assets
Buildings 48 48
Equipment 1 1
49 49
Interest expense (included in finance cost) 21 20
Expense relating to short-term leases and leases
of low-value assets (included in infrastructure-
related costs) 9 8
COVID-19-related rent concessions
(included in other gains and losses) – (1)
The total cash outflow for leases, excluding short-term leases and leases of low-value
assets, was £62m (2021: £56m).
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 219
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Post-retirement medical benefits
Some Group companies provide for post-retirement medical contributions in
relation to current and retired employees. The expected costs of these benefits
are accounted for by using the projected unit credit method. Under this method,
the expected costs of these benefits are accumulated over the service lives of
the employees. Valuation of these obligations is carried out by independent
qualified actuaries. All actuarial gains and losses are charged or credited to other
comprehensive income in the period in which they arise.
Key accounting estimates
Measurement of retirement benefit (assets)/obligations
The cost of defined benefit pension plans, post-retirement medical benefit liability
obligations and the Middle East end-of-service obligations is determined using
actuarial valuations. The actuarial valuation involves making assumptions about
discount rates, expected rates of return on assets, future salary increases, mortality
rates and future pension increases. Due to the long-term nature of these plans, such
estimates are subject to significant uncertainty and can have a material impact on
the valuations. Details of the key assumptions for each relevant obligation, together
with the sensitivities of the carrying value of the obligations, are disclosed.
The sensitivity analyses presented in each section below are based on a change
in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur and changes in some of the assumptions may be correlated. When
calculating the sensitivity of the defined benefit obligation to significant actuarial
assumptions, the same method (present value of the defined benefit obligation
calculated with the projected unit credit method at the end of the reporting period)
has been applied as when calculating the defined benefit obligation recognised
within the statement of financial position.
2022 2021
£’m £’m
Statement of financial position for:
Swiss pension benefit asset (1) (110)
Total retirement benefit assets (1) (110)
Short-term portion of retirement benefit assets – –
Non-current retirement benefit assets (1) (110)
Swiss pension benefit obligation 7 27
Southern Africa post-retirement medical benefit
obligation 44 37
Middle East end-of-service benefit obligation 88 77
139 141
Total retirement benefit obligations 139 141
Short-term portion of retirement benefit obligations (20) (14)
Non-current retirement benefit obligations 119 127
Total amount charged to the income statement:
Swiss pension benefit (asset)/obligation 45 38
Southern Africa post-retirement medical benefit
obligation 7 5
Middle East end-of-service benefit obligation 13 11
65 54
Total amount charged/(credited) to other
comprehensive income:
Swiss pension benefit obligation 92 (152)
Southern Africa post-retirement medical benefit
obligation (2) 2
Middle East end-of-service benefit obligation – (3)
90 (153)
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT220
(a) Swiss pension benefit (asset)/obligation
The Group’s Swiss defined benefit pension plans are as follows:
• Pensionskasse Hirslanden
• Vorsorgestiftung VSAO (Association for Swiss Assistant and Senior Doctors)
• Hirslanden Clinique La Colline SA
• Hirslanden Klinik Linde AG
• Clinique des Grangettes SA
• Hirslanden OPERA Zumikon AG
At 31 March 2022, the Clinique des Grangettes SA pension plan was in surplus by
£1m due to the increase in the discount rate in the current year. At 31 March 2021,
Pensionskasse Hirslanden was in surplus by £110m due to the positive asset return.
As the Swiss pension plans operate independently from each other, the net pension
asset attributable to Pensionskasse Hirslanden was presented separately from the
net pension liabilities attributable to the other pension plans. The net pension asset
of Clinique des Grangettes SA at 31 March 2022 has been included with the other
Swiss pension plans.
The economic benefit available (‘EBA’) in the form of a reduction in future
contributions was calculated by deducting the present value of the employer’s
future minimum funding requirements according to the rules of the pension plans
from the future service cost. The increase of the discount rate used under IAS 19
from 0.20% at 31 March 2021 to 1.10% at 31 March 2022 resulted in a reduced carrying
value of the gross pension fund obligation and consequently a reduction in expected
future service cost. Since the expected future service cost is lower than the expected
employer contributions, the EBA of the Pensionskasse Hirslanden pension plan
was reduced to zero. As a result, an asset restriction was applied and £194m has
been recognised in other comprehensive income for the asset restriction. The EBA
of the Clinique des Grangettes SA pension plan has been limited to the employer
contribution reserve. However, as the EBA was in excess of the surplus at 31 March 2022,
no asset restriction was applied.
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED Statement of financial position
Amounts recognised in the statement of financial position are as follows:
Pensions-
kasse
Hirslanden
2022
£’m
Other
Swiss
pension
plans
2022
£’m
Total
2022
£’m
Pensions-
kasse
Hirslanden
2021
£’m
Other
Swiss
pension
plans
2021
£'m
2
Total
2021
£’m
Present value of funded
obligations 1 061 273 1 334 1 010 251 1 261
Fair value of plan assets (1 061) (267) (1 328) (1 120) (224) (1 344)
Net pension liability – 6 6 (110) 27 (83)
Presented as:
Net pension asset – (1) (1) (110) – (110)
Net pension liability – 7 7 – 27 27
– 6 6 (110) 27 (83)
Opening balance 1 010 251 1 261 1 051 270 1 321
Current service cost 29 7 36 30 7 37
Interest cost 2 – 2 4 2 6
Employee contributions 31 8 39 31 8 39
Actuarial (gain)/loss (64) (9) (73) 11 (1) 10
Benefits paid (32) (4) (36) (33) (13) (46)
Business combinations – – – 2 – 2
Past service cost 9 – 9 – – –
Exchange dierences 76 20 96 (86) (22) (108)
Balance at year end 1 061 273 1 334 1 010 251 1 261
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 221
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Net pension (asset)/liability reconciliation
The movement of the fair value of plan assets over the year is as follows:
(a) Swiss pension benefit (asset)/obligation continued
Statement of financial position continued
Pensions-
kasse
Hirslanden
2022
£’m
Other
Swiss
pension
plans
2022
£’m
Total
2022
£’m
Pensions-
kasse
Hirslanden
2021
£’m
Other
Swiss
pension
plans
2021
£'m
Total
2021
£’m
Opening balance 1 120 224 1 344 1 036 214 1 250
Interest income on
plan assets 2 1 3 4 2 6
Employer
contributions 35 8 43 35 8 43
Plan participants'
contributions 31 8 39 31 8 39
Return on plan
assets greater than
discount rate 16 13 29 141 21 162
Business
combinations – – – 1 – 1
Benefits paid from
fund (32) (4) (36) (33) (13) (46)
Administration costs (1) – (1) (1) – (1)
Exchange dierences 82 17 99 – – –
Balance at year end
before eect of
asset ceiling 1 253 267 1 520 1 214 240 1 454
Eect of asset ceiling (194) – (194) – – –
Exchange dierences 2 – 2 (94) (16) (110)
Balance at year end 1 061 267 1 328 1 120 224 1 344
Pensions-
kasse
Hirslanden
2022
£’m
Other
Swiss
pension
plans
2022
£’m
Total
2022
£’m
Pensions-
kasse
Hirslanden
2021
£’m
Other
Swiss
pension
plans
2021
£'m
Total
2021
£’m
Opening net
(asset)/liability (110) 27 (83) 15 56 71
Expenses recognised in
the income statement 39 6 45 31 7 38
Contributions paid by
employer (35) (8) (43) (35) (8) (43)
Actuarial (gain)/loss 114 (22) 92 (130) (22) (152)
Business combinations – – – 1 – 1
Exchange dierences (8) 3 (5) 8 (6) 2
Closing net
(asset)/liability – 6 6 (110) 27 (83)
Pensions-
kasse
Hirslanden
2022
£’m
Other
Swiss
pension
plans
2022
£’m
Total
2022
£’m
Pensions-
kasse
Hirslanden
2021
£’m
Other
Swiss
pension
plans
2021
£'m
Total
2021
£’m
Return on plan assets
greater than discount rate 16 13 29 141 21 162
Eect of asset ceiling (194) – (194) – – –
Actuarial loss – experience (40) (19) (59) (19) (6) (25)
Actuarial gain/(loss)
due to demographic
assumption changes – – – 49 18 67
Actuarial gain/(loss) due
to financial assumption
changes 104 28 132 (41) (11) (52)
Total other comprehensive
(loss)/
income (114) 22 (92) 130 22 152
Statement of other comprehensive income
Amounts recognised in other comprehensive income are as follows:
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT222
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Income statement
Amounts recognised in the income statement are as follows:
(a) Swiss pension benefit (asset)/obligation continued
Pensions-
kasse
Hirslanden
2022
£’m
Other
Swiss
pension
plans
2022
£’m
Total
2022
£’m
Pensions-
kasse
Hirslanden
2021
£’m
Other
Swiss
pension
plans
2021
£'m
Total
2021
£’m
Current service cost 29 7 36 30 7 37
Past service cost 9 – 9 – – –
Interest on liability 2 – 2 4 2 6
Interest on plan assets (2) (1) (3) (4) (2) (6)
Administration cost 1 – 1 1 – 1
39 6 45 31 7 38
Actual return on plan
assets, net of asset
ceiling restriction (176) 14 (162) 145 23 168
Pensions-
kasse
Hirslanden
2022
Other
Swiss
pension
plans
2022
Total
2022
Pensions-
kasse
Hirslanden
2021
Other
Swiss
pension
plans
2021
Total
2021
Active members 8 364 1 857 10 221 8 296 1 779 10 075
Pensioners 1 150 136 1 286 1 047 124 1 171
9 514 1 993 11 507 9 343 1 903 11 246
The number of plan members are as follows:
2022 2022 2021
2021
Asset allocation £’m % £'m %
Quoted investments
Fixed income investments 478 31.4% 437 32.5%
Equity investments 455 29.9% 418 31.1%
Real estate 19 1.3% 20 1.5%
Other 111 7.3% 109 8.1%
1 063 69.9% 984 73.2%
Non-quoted investments
Fixed income investments 35 2.3% 28 2.1%
Equity investments 1 0.1% 1 0.1%
Real estate 305 20.1% 237 17.6%
Other 116 7.6% 94 7.0%
457 30.1% 360 26.8%
1 520 100.0% 1 344 100.0%
Risk exposure
Through its defined benefit pension plans, the Group is exposed to a number of risks,
the most significant of which are detailed below:
Asset volatility The plan liabilities are calculated using a discount rate
set with reference to corporate bond yields; if plan assets
underperform this yield, this will create a deficit.
Principal actuarial assumptions on statement of financial position
(all Swiss pension plans) 2022 2021
Discount rate 1.10% 0.20%
Future salary increases 1.50% 1.50%
Future pension increases 0.00% 0.00%
Inflation rate 1.00% 1.00%
Interest crediting rate 1.10% 1.00%
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 223
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Changes in bond yields A decrease in corporate bond yields will increase plan
liabilities, although this will be partially oset by an increase
in the value of the plans’ bond holdings.
Inflation risks The pension obligations are linked to salary and pension
inflation, and higher inflation will lead to higher liabilities.
The majority of the plan’s assets are either unaected by
(fixed interest bonds) or loosely correlated with (equities)
inflation, meaning that an increase in inflation will also
increase the deficit.
Life expectancy The majority of the plans’ obligations are to provide
benefits for the life of the member, so increases in life
expectancy will result in an increase in the plans’ liabilities.
Assumptions and sensitivity analysis
(a) Swiss pension benefit (asset)/obligation continued
Risk exposure continued
The Group accounts for actuarially determined future pension benefits and provides
for the expected liability in the statement of financial position. The assumptions
used to calculate the expected liability are based on actuarial advice. The discount
rate is based on market yields obtained on high-quality corporate bonds that have
durations consistent with the term of the obligation.
The methods and types of assumptions used in preparing the sensitivity analysis did
not change compared with the previous year.
Expected employer contributions to be paid to the pension plans for the year ending
31 March 2023 amount to £36m and it is anticipated that these contributions will
remain at a similar level in the foreseeable future, subject to change in financial
conditions.
The weighted average duration of the defined benefit obligation is 9.9 years
(2021: 11.5 years). The maturity profile of the defined benefit obligation is as follows:
Impact on defined benefit obligation
Base
assumption
Change in
assumption
% Increase/
(decrease) in
obligation on
increase in
assumption
% Increase/
(decrease) in
obligation on
decrease in
assumption
Pensionskasse Hirslanden
Discount rate 1.10% 0.25% (1.9)% 2.3%
Salary growth rate 1.50% 0.50% 0.6% (0.6)%
Pension growth rate 0.00% 0.25% 1.5% 0.0%
Other Swiss pension plans
Discount rate 1.10% 0.25% (1.8)% 2.4%
Salary growth rate 1.50% 0.50% 0.4% (0.3)%
Pension growth rate 0.00% 0.25% 1.6% 0.0%
Base
assumption
(BVG 2020
with CMI
improvements)
Change in
assumption
% Increase/
(decrease) in
obligation on
increase in
assumption
% Increase/
(decrease) in
obligation on
decrease in
assumption
Life expectancy for a
65-year-old male (mortality) 21.77 years
1 year in
expected
lifetime
of plan
participants
1.5% (1.9)%
Life expectancy for a
65-year-old female (mortality) 23.54 years
</= 1 year
£’m
1–5 years
£’m
> 5 years
£’m
Total
£’m
At 31 March 2022
Defined benefit obligation
138
388 988 1 514
At 31 March 2021
Defined benefit obligation
119
325 848 1 292
Note
1
The Federal Law on Occupational Old-age, Survivors’ and Disability Insurance (German: BVG).
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT224
Additional information on Swiss defined benefit pension plans
Pension plan results
The following assumptions have changed since the previous valuation:
• The discount rate used to value plan obligations has changed from 0.20% to 1.10%.
• The interest credit rate on total account balance has changed from 1.00% to 1.10%.
• The interest credit rate on the BVG shadow account balance has changed from
1.00% to 1.10%.
Pensionskasse Hirslanden
For our employees in Switzerland, the Pensionskasse Hirslanden (‘PH’) Fund provides
post-employment, death-in-service and disability benefits in accordance with the
Federal Law on Occupational Old-age, Survivors’ and Disability Insurance. The
PH Fund is a foundation and an entity legally separate from the Swiss operations.
The PH Fund’s governing body is composed of an equal number of employer and
employee representatives. This governing body determines the level of benefits
and the investment strategy for the plan assets based on asset-liability analyses
performed periodically. The basis for these asset-liability analyses are the statutory
pension obligations as these largely determine the cash flows of the PH Fund. In
addition, the investment of the plan assets is based on regulations developed by
the governing body in accordance with the legal investment guidelines (BVV2). The
Investment Committee of the governing body is responsible for their implementation.
The governing body has mandated the investment activity to Complementa
Investment Controlling AG, as the global custodian.
The investment strategy complies with the legal guidelines and is relatively
conservative. Alternative investments and unhedged foreign currency positions
are rare.
The benefits of the pension plan are substantially higher than the legal minimum.
They are determined by the employer’s and employees’ contributions and interest
granted on the plan members’ accumulated savings; the interest rate is determined
annually by the governing body in accordance with the legal framework (defined
contribution, as defined by the occupational pension law). The employees’ and the
employer’s contributions are determined based on the insured salary and range from
1.25–15% of the insured salary depending on the age of the beneficiary.
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
The pension law requires adjusting pension annuities for inflation depending on the
financial condition of the pension fund. Although the pension plan is fully funded at
present in accordance with the pension law, the financial situation of the PH Fund
will not allow for inflation adjustments.
VSAO
For our employed physicians in Switzerland, the VSAO Pension Fund provides
post-employment, death-in-service and disability benefits in accordance with the
Federal Law on Occupational Old-age, Survivors’ and Disability Insurance. The VSAO
Fund is a foundation and an entity legally separate from the Swiss division. The
fund’s governing body is composed of an equal number of employer and employee
representatives. The investment of the plan assets is in accordance with the legal
investment guidelines (BVV2).
The benefits of the pension plan are substantially higher than the legal minimum.
They are determined by the employer’s and employees’ contributions and interest
granted on the plan members’ accumulated savings; the interest rate is determined
by the governing body in accordance with the legal framework (defined contribution,
as defined by the occupational pension law).
The employees’ and the employer’s contributions are 14% of the insured salary.
Other pension plans
Other pension plans exist for the latest acquired subsidiaries (Hirslanden Clinique
La Colline SA, Hirslanden Klinik Linde AG, Clinique des Grangettes and Hirslanden
OPERA Zumikon AG) which are not yet integrated into PH, the main pension plan
of the Swiss division. These pension funds are legally separate from the division.
The investment of the plan assets is in accordance with the legal investment
guidelines (BVV2).
The employees’ and the employer’s contributions are determined based on the
insured salary and range from 1.78–15% of the insured salary depending on the age
of the beneficiary.
General information on all pension plans
If an employee leaves the division or the pension plan, respectively, before reaching
retirement age, the law provides for the transfer of the vested benefits to the new
pension plan. These vested benefits comprise the employee’s and the employer’s
contributions plus interest and, the money originally brought in to the pension
plan by the beneficiary. Upon reaching retirement age, the plan participant may
decide whether to withdraw the benefits in the form of an annuity or (partly) as a
lump-sum payment. The pension law requires adjusting pension annuities for inflation
depending on the financial condition of the pension fund.
(a) Swiss pension benefit (asset)/obligation continued
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 225
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
The pension law in Switzerland envisages that benefits provided by a pension fund
are fully financed through the annual contributions defined by the regulations. If
insucient investment returns or actuarial losses lead to a plan deficit as defined
by the pension law, the governing body is legally obliged to take actions to close
the funding gap within a period of 5–7 years. Besides adjustments to the level of
benefits, such actions could also include additional contributions from respective
Group companies and the beneficiaries. The current financial situation of the
PH Fund does not require such restructuring actions. None of the Group companies
benefit from any plan surpluses.
(b) Southern Africa post-retirement medical benefit obligation
The Group’s Southern African operations have a post-retirement medical benefit
obligation for employees who joined before 1 July 2012. The Southern African
operations subsidise the contributions payable to the Group medical aid in respect
of certain eligible retired employees. The subsidy obligations are unfunded and the
benefit payment obligations are met as they fall due.
The Group accounts for actuarially determined future medical benefits and provides
for the expected liability in the statement of financial position. The assumptions
used to calculate the expected liability are based on actuarial advice. The discount
rate is based on market yields obtained on high-quality corporate bonds which
have durations consistent with the term of the obligation. It has been assumed that
medical inflation will take place at a rate of 2.9% in excess of consumer price inflation.
In the last valuation on 31 March 2022, a 9.60% (2021: 11.40%) medical inflation rate
and an 11.80% (2021: 13.70%) discount rate were assumed. The average retirement
age was set at 63 years (2021: 63 years).
The assumed rates of mortality are as follows:
• During employment: SA 85/90 tables of mortality
• Post-employment: PA(90) tables
Amounts recognised in the statement of financial position are as follows:27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
(a) Swiss pension benefit (asset)/obligation continued
Additional information on Swiss defined benefit pension plans continued
General information on all pension plans (continued)
2022 2021
£’m £’m
Opening balance 37 28
Amounts recognised in the income statement 7 5
Current service cost 2 1
Interest cost 5 4
Benefits paid (1) (1)
Actuarial loss/(gain) recognised in other
comprehensive income (2) 2
Exchange dierences 3 3
Present value of unfunded obligations 44 37
Risk exposure
Through its defined benefit post-retirement medical benefit obligation, the Group
is exposed to a number of risks, the most significant of which are detailed below:
Changes in bond yields A decrease in corporate bond yields will increase medical
benefit obligations.
Inflation risks The medical benefit obligations are linked to medical
inflation, and higher inflation will lead to higher liabilities.
Assumptions and sensitivity analysis
Impact on defined benefit obligation
Base
assumption
Change in
assumption
% Increase/
(decrease) in
obligation on
increase in
assumption
% Increase/
(decrease) in
obligation on
decrease in
assumption
Discount rate 11.80% 0.50% (6.4)% 7.1%
Medical inflation rate 9.60% 1.00% 14.9% (12.3)%
The expected post-employment medical benefits payable for the year ending
31 March 2023 amount to £2m.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT226
The weighted average duration of the defined benefit obligation is 15 years
(2021: 15 years). The maturity profile of the defined benefit obligation is as follows:
Amounts recognised in the statement of financial position are as follows:
2022 2021
Discount rate 2.40% 1.98%
Future salary increases 2.00% 2.10%
Average retirement age 60 years 60 years
Annual turnover rate 14.14% 8.53%
Impact on defined benefit obligation
Base
assumption
Change in
assumption
% Increase/
(decrease) in
obligation on
increase in
assumption
% Increase/
(decrease) in
obligation on
decrease in
assumption
Discount rate 2.40% 1.00% (4.9)% 5.2%
Future salary increases 2.00% 1.00% 5.1% (4.9)%
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
(b) Southern Africa post-retirement medical benefit obligation continued
Assumptions and sensitivity analysis continued
</= 1 year
£’m
1–5 years
£’m
> 5–10 years
£’m
Total
£’m
At 31 March 2022
Defined benefit obligation
2
10
25 37
At 31 March 2021
Defined benefit obligation
1
9
24 34
(c) Middle East end-of-service benefit obligation
In terms of UAE labour law, employees are entitled to severance pay at the end of
employment. Severance pay is calculated as follows: for the first five years of service,
between seven and 30 days’ wage per year of service and thereafter 30 days per
additional year. The employee benefit was actuarially determined. The severance
pay obligations are unfunded and the benefit payment obligations are met as they
fall due.
The Group accounts for actuarially determined future end-of-service benefits
and provides for the expected liability in the statement of financial position. The
assumptions used to calculate the expected liability are based on actuarial advice.
The discount rate is based on market yields obtained on high-quality corporate
bonds which have durations consistent with the term of the obligation.
The following are the principal actuarial assumptions:
2022 2021
£’m £’m
Opening balance 77 83
Amounts recognised in the income statement 13 11
Current service cost 11 10
Interest cost 2 1
Benefits paid (6) (5)
Actuarial (gain)/loss recognised in other
comprehensive income – (3)
Exchange dierences 4 (9)
Present value of unfunded obligations 88 77
Current portion of retirement benefit obligations 20 14
Non-current retirement benefit obligations 68 63
88 77
Assumptions and sensitivity analysis
The expected employer contributions to be paid to the Middle East end-of-service
benefit obligation for the year ending 31 March 2023 amount to £20m.
STRATEGIC REPORT
GOVERNANCE AND
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FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 227
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
The weighted average duration of the defined benefit obligation is 7 years
(2021: 7 years). The maturity profile of the defined benefit obligation is as follows:
Employee benefits
This provision is for benefits granted to employees for long service. The provision
is calculated based on the employee’s cost to the Group as well as the estimated
expected utilisation of the employee benefits.
Legal cases and other
This provision relates to payments for malpractice claims and other costs for
legal claims. The recognised provision reflects the best estimate of the most likely
outcome.
Tari risks
In Switzerland, the cost of treating inpatients with basic health insurance is fixed by
the government. The pricing model is based on Swiss DRGs for inpatients and can
be seen as a fixed-fee arrangement. In some cases, the pricing model for DRGs is
based on provisional taris as delays occur in the agreement of the taris between
the healthcare providers and the funders. Tari provisions are recognised when the
pricing model for DRGs is based on provisional taris and the taris are disputed by
the funders. Due to the high level of uncertainty in respect of the expected time it
will take to settle the dispute, tari adjustments are classified as provisions. The tari
provision is calculated based on historical experience of outcomes to negotiations
between healthcare providers and funders. This is regularly reassessed based on the
actual outcome of tari negotiations. See note 4 for additional information in respect
of provisional taris and the impact on recognition of the tari risk provision.
27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
(c) Middle East end-of-service benefit obligation continued
Assumptions and sensitivity analysis continued
</= 1 year
£’m
1–5 years
£’m
> 5–10 years
£’m
Total
£’m
At 31 March 2022
Defined benefit obligation 20
49
50 119
At 31 March 2021
Defined benefit obligation 14
32
47 93
Post-employment benefits for key management personnel
One non-executive director participates in the Southern Africa post-retirement
medical benefit obligation. Of the key management personnel, which comprise the
Group Executive Committee, two participate in the Swiss pension benefits, four in
the Southern Africa post-retirement medical benefit obligation and one in the Middle
East end-of-service benefit.
28. PROVISIONS
Provisions are recognised when the Group has a present legal or constructive
obligation, as a result of past events, and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable
estimate of the amount of the obligation can be made.
Provisions are determined by discounting the expected future cash flows using
a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the liability.
Provision for malpractice claims is made at the year end for the estimated cost of
claims incurred but not settled at the end of each reporting period, including the cost
of claims incurred but not yet reported to the Group. The estimated cost of claims
includes expenses to be incurred in settling claims. The Group takes all reasonable
steps to ensure that it has appropriate information regarding its claims exposures.
The Group does not discount its liabilities for unpaid claims. Liabilities for unpaid
claims are estimated using the input of assessments for individual cases reported
to the Group and statistical analysis for the claims incurred but not reported.
2022 2021
£’m £’m
Non-current 37 37
Employee benefits 13 13
Legal cases and other 5 2
Tari risks 19 22
Current 38 19
Employee benefits 3 3
Legal cases and other 9 8
Tari risks 26 8
75 56
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT228
Provisions are expected to be payable during the following financial years:
28. PROVISIONS CONTINUED
2022 2021
£’m £’m
Within one year 38 19
After one year but not more than five years 32 32
More than five years 5 5
75 56
Employee
benefits
£’m
Legal cases
and other
£’m
Tari risks
£’m
Total
£’m
Opening balance at 1 April 2020 19
6
28 53
Charged to the income statement 2
7
10 19
Utilised during the year (3)
(1)
(2) (6)
Unused amounts reversed (1)
(1)
(4) (6)
Exchange dierences (1)
(1)
(2) (4)
Closing balance at 31 March 2021 16
10
30 56
Charged to the income statement 3
9
16 28
Utilised during the year (3)
(3)
– (6)
Unused amounts reversed –
(3)
(4) (7)
Exchange dierences –
1
3 4
Closing balance at 31 March 2022 16
14
45 75
29. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments comprise interest rate swaps, put/call agreements
and forward contracts.
Derivatives are initially recognised at fair value on the date a derivative contract
is entered into and are subsequently measured at fair value. The method of
recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument and, if so, the nature of the item being hedged.
Hedges of a particular risk associated with a recognised liability or a highly probable
forecast transaction are designated as cash flow hedges. The Group uses interest
rate swaps as cash flow hedges.
At inception of a hedge relationship, the Group formally designates and documents
the hedge relationship to which it applies hedge accounting and the risk
management objective and strategy for undertaking the hedge.
The documentation includes the identification of the hedging instrument; the
hedged item; the nature of the risk being hedged; and how the Group will assess
whether the hedging relationship meets the hedge eectiveness requirements.
A hedging relationship qualifies for hedge accounting if it meets all of the following
eectiveness requirements:
• There is an economic relationship between the hedged item and the hedging
instrument.
• The eect of credit risk does not dominate the value changes that result from that
economic relationship.
• The hedge ratio of the hedging relationship is the same as that resulting from the
quantity of the hedged item that the Group actually hedges and the quantity of
the hedging instrument that the Group actually uses to hedge that quantity of
hedged item.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for,
as described below under ‘Cash flow hedges’.
The hedging reserve in shareholders’ equity is shown in note 22. On the statement
of financial position, hedging derivatives are not classified based on whether the
amount is expected to be recovered or settled within, or after, 12 months. The full
fair value of a hedging derivative is classified as a non-current asset or liability
when the remaining maturity of the hedge relationship is more than 12 months; it is
classified as a current asset or liability when the remaining maturity of the hedge
relationship is less than 12 months.
Cash flow hedges
The eective portion of changes in the fair value of derivatives that is designated
and qualifies as a cash flow hedge is recognised in other comprehensive income.
The gain or loss relating to the ineective portion is recognised immediately in the
income statement.
Amounts accumulated in other comprehensive income are reclassified to the income
statement in the periods when the hedged item aects profit or loss (for example,
when the interest expense on hedged variable rate borrowings is recognised in
profit or loss).
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 229
29. DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
Notes
1
The fair value gain/(loss) includes the portion that has been reclassified to profit or loss.
2
The Southern Africa interest rate swap agreement resets every three months on 1 June, 1 September,
1 December and 1 March with a final reset on 1 September 2023 for £50m, 1 December 2023 for £54m,
1 June 2024 for £25m and 3 June 2024 for £78m. There is no ineective portion recognised in the profit
or loss that arises from the cash flow hedges.
3
The Middle East interest rate swap agreement resets in August 2023. There is no ineective portion
recognised in the profit or loss that arises from the cash flow hedges.
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
When a hedging instrument expires or is sold, or when a hedge no longer meets
the criteria for hedge accounting, any cumulative gain or loss existing in equity
at that time remains in equity and is recognised when the forecast transaction is
ultimately recognised in the income statement. When a forecast transaction is no
longer expected to occur, the cumulative gain or loss that was reported in equity is
immediately transferred to the income statement.
Non-hedging derivatives
Certain derivative instruments do not qualify for hedge accounting. Changes in the
fair value of any derivative instrument that does not qualify for hedge accounting
are recognised at fair value through profit or loss.
Cash flow hedges continued
Eective interest rate swaps
In order to hedge specific exposures in the interest rate repricing profile of existing
borrowings, the Group uses interest rate derivatives to generate the desired interest
profile. At 31 March 2022, the Group had 16 (2021: 16) eective interest rate swap
contracts for borrowings specifically in Southern Africa and one in Middle East.
The value of borrowings hedged by the interest rate derivatives and the rates applicable
to these contracts are as follows:
2022
£’m
Assets
2022
£’m
Liabilities
2021
£’m
Assets
2021
£’m
Liabilities
Non-current
Interest rate swaps – cash flow hedges – 2 – 9
Written put option
(redemption liability) – 126 – 115
– 128 – 124
Current
Interest rate swaps – cash flow hedges – 1 – 1
Forward contracts – – – 1
– 1 – 2
– 129 – 126
Key accounting estimate
Remeasurement of redemption liability (written put option)
Through the acquisition of the Grangettes Group, the Group entered into a put/call
agreement over the remaining 40% interest in the combined company of Clinique
des Grangettes and Clinique La Colline. The option is exercisable after four years and
potentially eective no earlier than 30 June 2023, and the consideration on exercise
will be determined based on the profitability of Clinique des Grangettes and Clinique
La Colline at that time. The exercise price is formula based.
Borrowings
hedged
£’m
Fixed
interest
payable
Interest
receivable
Fair value gain/
(loss) for the year
£’m
As at 31 March 2022
1–3 years
2
207
5.93%–
7.00%
3 month
JIBAR
5
1–2 years
3
36 3.14%
3 month
LIBOR
2
As at 31 March 2021
1–3 years
2
195 6.20–7.20%
3 month
JIBAR/69%
of prime
interest rate
(2)
1–3 years
3
51 3.14%
3 month
LIBOR
–
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT230
Key accounting estimate continued
Remeasurement of redemption liability (written put option) (continued)
The amount that may become payable under the option on exercise is initially
recognised at the present value of the redemption amount with a corresponding
charge directly to equity and included in retained earnings. The charge to equity is
recognised separately as written put options over NCI.
The liability is subsequently adjusted for changes in the estimated performance and
increased through finance charges up to the redemption amount that is payable at the
date at which the option first becomes exercisable. In the event that the option expires
unexercised, the liability is derecognised with a corresponding adjustment to equity.
The key inputs to its calculations are described below:
Forecasts
As part of the annual financial planning process, Clinique des
Grangettes and Clinique La Colline are required to submit
budgets for the next financial year and forecasts for the following
four years. Future earnings and profitability are based on these
budgets and forecasts.
Discount rates The discount rate of 0.78% was determined when the put/call
agreement was entered into and was based on swap curve
analytics. The discount rate reflects the time value of future
expected cash flows.
A reasonably possible change of 10% in the projected earnings will change the
liability and profit before tax by £13m (2021: £12m).
29. DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
30. TRADE AND OTHER PAYABLES
Trade and other payables are recognised initially at fair value and subsequently
measured at amortised cost using the eective interest rate method. Accounts
payable are classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). If not, they are presented
as non-current liabilities.
In respect of profit sharing and bonus plans, the Group recognises a liability and
a corresponding expense where a contractual obligation exists for short-term
incentives. The amounts payable to employees in respect of the STI schemes are
determined based on annual business performance targets and are presented as
part of ‘Other payables and accrued expenses’.
2022 2021
£’m £’m
Movement in the redemption liability
Opening balance at 1 April 115 101
Charged to the income statement
Remeasurement of redemption liability 1 23
Unwinding of discount 1 1
Exchange dierences 9 (10)
Closing balance at 31 March 126 115
Notes
1
The comparatives have been re-presented by presenting refund liabilities separately from other payables
and accrued expenses.
2
No significant amounts of revenue were recognised during the year ended 31 March 2022 that were
included in the refund liability balance at the beginning of the period or from performance obligations
satisfied in previous periods.
2022 2021
£’m £’m
Financial instruments
Trade payables 263 235
Other payables and accrued expenses 200 158
Refund liabilities
2
59 48
522 441
Non-financial instruments
Other payables and accrued expenses 5 –
Social insurance and accrued leave pay 45 46
Value added tax 14 11
64 57
586 498
(Re-presented)
1
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 231
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
31. FINANCIAL INSTRUMENTS
Financial assets
The Group classifies its financial assets in the following measurement categories:
• Financial assets measured subsequently at fair value (either through FVOCI
or FVPL)
• Financial assets measured at amortised cost
The classification depends on the business model for managing the financial
assets and the contractual term of the cash flows. Management determines the
classification of its investment at initial recognition.
For assets measured at fair value, gains and losses will either be recorded in profit
or loss or other comprehensive income. For investments in debt instruments,
this will depend on the business model in which the investment is held. For
investments in equity instruments, this will depend on whether the Group has made
an irrevocable election at the time of initial recognition to account for the equity
investment at FVOCI.
At initial recognition, the Group measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs
that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets are derecognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has transferred
substantially all risks and rewards of ownership.
Equity instruments and instruments managed on a portfolio basis
The Group subsequently measures all equity investments and instruments managed
on a portfolio basis at fair value. Changes in the fair value of financial assets at FVPL
are recognised in other gains and losses in the income statement.
Where management has elected to present fair value gains and losses on these
investments in other comprehensive income, there is no subsequent reclassification
of fair value gains and losses to profit and loss. Upon derecognition of these
investments, any balance within the FVOCI reserve is reclassified to retained
earnings. Dividends from such investments are recognised in profit or loss as other
gains and losses when the Group’s right to receive payments is established.
Impairment losses on these investments measured at FVOCI or FVPL are not
reported separately from other changes in fair value.
Instruments managed on a portfolio basis (other than equity instruments) consist
of highly liquid investments in money market funds that do not meet the maturity
criteria of IAS 7 Statement of Cash Flows and therefore cannot be classified as cash
and cash equivalents.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business
model for managing the asset and the cash flow characteristics of the asset.
There are two measurement categories into which the Group classifies its debt
instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows
representing solely payments of principal and interest are measured at amortised
cost. Interest income from these financial assets is included in finance income
using the eective interest rate method. Trade receivables and loans receivable
are classified as debt instruments measured at amortised cost.
• FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are
measured at FVPL. A gain or loss is recognised in profit or loss and presented in
the income statement as part of other gains and losses in the period in which it
arises. Interest income from these financial assets is included in finance income.
Interest income for credit-impaired financial assets is measured by applying the
eective interest rate method to amortised cost. For all other financial assets,
the interest income is measured by applying the eective interest rate method
to the gross carrying amount.
Debt instruments are included in current assets, except for maturities greater than
12 months after the reporting date, which are classified as non-current assets.
Impairment
The Group recognises an allowance for expected credit losses for all debt
instruments not held at FVPL. Expected credit losses are based on the dierence
between the contractual cash flows due in accordance with the contract and all the
cash flows that the Group expects to receive, discounted at an approximation of
the original eective interest rate.
Expected credit losses are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk since initial recognition,
expected credit losses are provided for credit losses that result from default events
that are possible within the next 12 months. For those credit exposures for which
there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT232
For trade receivables only, the Group applies the simplified approach permitted
by IFRS 9, which requires lifetime expected credit losses to be recognised from
initial recognition of the receivables. The Group has established a provision matrix
that is based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment. Trade receivables
have been grouped based on shared credit risk characteristics, such as the
counterparty (insurer or individual, etc.) or geographical region, and the days
past due. The expected loss rates are based on the payment profiles of debtors
and the corresponding historical credit losses experienced within this period. The
historical loss rates are adjusted to reflect current and forward-looking information
on macroeconomic factors aecting the ability of the customers to settle the
receivables.
For debt instruments at FVOCI and debt instruments at amortised cost, the
Group applies the low credit risk simplification. At every reporting date, the Group
evaluates whether the debt instrument is considered to have low credit risk using
all reasonable and supportable information that is available without undue cost or
eort. In addition, the Group considers that there has been a significant increase in
credit risk when contractual payments are more than 30 days past due.
The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a financial
asset to be in default when internal or external information indicates that the Group
is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group. A financial asset is written o
when there is no reasonable expectation of recovering the contractual cash flows.
Osetting of financial assets and liabilities
Financial assets and liabilities are oset and the net amount reported in the
statement of financial position when there is a legally enforceable right to oset
the recognised amounts; the legally enforceable right is not contingent on a future
event and is enforceable in the normal course of business even in the event of
default, bankruptcy or insolvency; and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously.
Financial liabilities
The accounting policies for financial liabilities are provided in notes 25, 26, 29 and 30.
31. FINANCIAL INSTRUMENTS CONTINUED
Impairment continued
The Group holds the following financial instruments:
Notes
1
Due to the short-term nature of the majority of these financial assets, their carrying amounts are
considered to be the same as their fair value. For the non-current financial assets, the fair values are
also not significantly dierent from their carrying amounts. The fair values were calculated based on
cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair
value hierarchy due to the inclusion of unobservable inputs.
2
Excluding non-financial instruments.
3
For financial liabilities, the fair values are not significantly dierent from their carrying amounts, since
the interest payable on these liabilities is either close to current market rates or the liabilities are of a
short-term nature. The value of the redemption liability (written put option) is determined based on
the profitability of Clinique des Grangettes and Clinique La Colline. The exercise price is formula based
and the financial liability is recognised at amortised cost at the present value of the estimated future
contractual cash flows of the redemption amount.
2022 2021
Notes £’m £’m
Financial assets
Financial assets at amortised cost
1
Other investments and loans 17 9 9
Trade and other receivables
2
20 768 774
Cash and cash equivalents 33 534 294
Financial assets at FVPL 17 6 2
Financial assets at FVOCI 17 15 3
1 332 1 082
Financial liabilities
Liabilities at amortised cost
3
Borrowings 25 1 803 1 777
Lease liabilities 26 786 676
Tari risk provisions 28 45 30
Trade and other payables
2
30 522 441
Derivative financial instruments – written put
option (redemption liability) 29 126 115
Derivative financial instruments 29 3 11
3 285 3 050
The Group’s exposure to various risks associated with the financial instruments is
discussed in note 32. The maximum exposure to credit risk at the end of the reporting
period is the carrying amount of each class of financial assets mentioned above.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 233
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Fair value measurements
Financial instruments measured at fair value in the statement of financial position are
classified using a fair-value hierarchy that reflects the significance of the inputs used
in the valuation. The fair-value hierarchy has the following levels:
• Level 1 – The fair value of financial instruments traded in active markets (such as
publicly traded equity securities and investments in money market funds) is based
on quoted market prices at the end of the reporting period. The quoted market
price used for financial assets held by the Group is the current bid price. These
instruments are included in level 1.
• Level 2 – The fair value of financial instruments that are not traded in an active
market (e.g. interest rate swaps) is determined using valuation techniques that
maximise the use of observable market data and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument
are observable, the instrument is included in level 2.
• Level 3 – If one or more of the significant inputs is not based on observable market
data, the instrument is included in level 3. This is the case for unlisted equity
securities, put/call agreements and forward contracts.
To provide an indication about the reliability of the inputs used in determining fair
value, the Group has classified its financial instruments into the three levels as follows:
31. FINANCIAL INSTRUMENTS CONTINUED
At 31 March 2022 Notes
Level 1
£’m
Level 2
£’m
Level 3
£’m
Total
£’m
Financial assets
Financial assets at FVPL
Investments in money market funds 17 6 – – 6
Financial assets at FVOCI
Listed equity securities 17 1 – – 1
Unlisted equity securities 17 – – 14 14
Total financial assets 7 – 14 21
Financial liabilities
Hedging derivatives – interest rate swaps 29 – 3 – 3
Total financial liabilities – 3 – 3
At 31 March 2021 Notes
Level 1
£’m
Level 2
£’m
Level 3
£’m
Total
£’m
Financial assets
Financial assets at FVPL
Investments in money market funds 17 2 – – 2
Financial assets at FVOCI
Listed equity securities 17 1 – – 1
Unlisted equity securities 17 – – 2 2
Total financial assets 3 – 2 5
Financial liabilities
Hedging derivatives – interest rate swaps 29 – 10 – 10
Derivatives – forward contracts 29 – – 1 1
Total financial liabilities – 10 1 11
Changes in financial assets classified into level 3 for the periods ended 31 March 2022
and 31 March 2021 are presented in note 17.
Valuation techniques, inputs and processes
Specific valuation techniques used to value financial instruments include:
• the use of quoted market prices or dealer quotes for similar instruments;
• for interest rate swaps – the present value of the estimated future cash flows based
on observable yield curves; and
• for other financial instruments – discounted cash flow analysis.
The fair market value of unlisted shares of £5m is based on valuations performed
using the net asset value. A 10% increase/decrease in the market value of the
underlying investments in collective investment schemes will increase/decrease
the asset and other comprehensive income by £1m (2021: £1m), respectively.
A 10% increase/decrease in the liability for outstanding claims will decrease/increase
the asset and other comprehensive income by £1m (2021: £1m), respectively.
The fair market value of the unlisted shares acquired during the year ended
31 March 2022 of £8m approximates the acquisition price of the investment.
As a result, the investment was not revalued at 31 March 2022.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT234
The fair value of unlisted equity instruments is performed by the finance departments
of the operating segments for financial reporting purposes. Valuation processes
relevant to financial instruments with significant fair values are discussed every six
months, in line with the Group’s half-year reporting periods. Significant valuations are
also discussed with the Audit and Risk Committee.
32. FINANCIAL RISK MANAGEMENT
32.1. Financial risk factors
Normal business activities expose the Group to a variety of financial risks: market risk
(including currency risk, interest rate risk and other price risk), credit risk and liquidity
risk. The Group’s overall risk management programme seeks to minimise the eect of
potential adverse events on the Group’s financial performance.
Market risk
i) Currency risk
Investments in foreign operations
The Group has investments in foreign operations whose net assets are exposed to
foreign currency translation risk. Changes in the sterling/Swiss franc, sterling/South
African rand and sterling/UAE dirham exchange rates over a period of time result
in increased/decreased earnings. Other than the Group’s earnings and payment of
dividends, which are presented and declared in sterling and thus exposed to currency
risk, the Group is not significantly exposed to currency risk since the divisions
predominantly operate and are funded in their local currency.
In the case of corporate oshore transactions and/or cross-border business
combinations, generally forward cover contracts are considered or taken out to
minimise foreign currency risk.
31. FINANCIAL INSTRUMENTS CONTINUED
Valuation techniques, inputs and processes continued
The impact of a change in the sterling/Swiss franc, sterling/South African rand and
sterling/UAE dirham exchange rates for a sustained period of one year would result in
an increase/decrease in post-tax profit for the period and foreign currency translation
reserve as indicated in the table below:
Impact on post-tax profit
for the period
Impact on foreign currency
translation reserve
2022
£’m
2021
£’m
2022
£’m
2021
£’m
10% change in the sterling/Swiss
franc exchange rate 4 1 152 162
10% change in the sterling/South
African rand exchange rate
8 3 21 13
10% change in the sterling/UAE
dirham exchange rate 5 4 113 114
ii) Interest rate risk
The Group’s interest rate risk arises from long-term borrowings as well as short-term
deposits. Borrowings and short-term deposits issued at variable rates expose the
Group to cash flow interest rate risk. Interest rate derivatives and assets issued at
fixed interest rates expose the Group to fair value interest rate risk. Group policy is to
maintain an appropriate mix between fixed and floating rate borrowings and placings.
The Group’s interest rate risk arises from bank borrowings at variable interest rates.
The Group manages its interest rate risk by using floating-to-fixed interest rate
swaps. Such interest rate swaps have the economic eect of converting borrowings
from floating rates to fixed rates. Under the interest rate swaps, the Group agrees
with other parties to exchange, at specified intervals, the dierence between fixed
contract rates and floating-rate interest amounts calculated by reference to the
agreed notional amounts. The interest rate hedges entered into match key contractual
terms of the borrowings to enable an economic relationship between hedged item
and hedging instrument. At year end, a portion of the South African borrowings and
Middle East borrowings were hedged and the Swiss borrowings were unhedged (see
note 25). The unhedged borrowings are evaluated on a regular basis.
With the interest rate swap agreements the Group entered into to mitigate interest
rate risk, the Group did not consider there to be a significant concentration of interest
rate risk.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 235
32. FINANCIAL RISK MANAGEMENT CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Financial instruments issued at fixed rates expose the Group to fair value interest
rate risk. The Group’s exposure to fair value interest rate risk is not considered to be
significant due to the short-term nature of the investments.
Interest rate sensitivity
The sensitivity analyses below were determined based on the exposure to interest
rates of net debt at the reporting date and the stipulated change taking place at the
beginning of the financial year, and held constant throughout the reporting period in
the case of instruments that have floating rates. The sensitivity of interest rates can be
summarised as follows:
• Switzerland: At 31 March 2022, the SARON was -0.70% (2021: -0.75%). Interest rates
would have to increase by 70 basis points to have an impact on post-tax profit for
the period with all other variables held constant. An increase in the interest rate of
25 basis points would have no impact on post-tax profit for the period (2021: no
impact).
• Southern Africa: Post-tax profit for the period would decrease/increase by £0.4m
(2021: decrease/increase by £0.7m) if the interest rates had been 100 basis points
higher/lower in Southern Africa with all other variables held constant; and
• Middle East: Post-tax profit for the period would decrease/increase by £0.1m
(2021: decrease/increase by £0.4m) if the interest rates had been 50 basis points
higher/lower in the Middle East with all other variables held constant.
Credit risk
Financial assets that potentially subject the Group to concentrations of credit risk
consist principally of cash, short-term deposits, trade and other receivables and
derivative financial contracts. The Group’s cash equivalents and short-term deposits
are placed with reputable financial institutions with a high credit rating (see note 33.7).
Trade receivables are represented net of the allowance for expected credit losses.
Credit risk with respect to trade receivables is limited due to the large number of
customers comprising the Group’s customer base, which consists mainly of medical
schemes and insurance companies. The financial condition of these customers in
relation to their credit standing is evaluated on an ongoing basis. Medical schemes
and insurance companies are required to maintain minimum reserve levels. The policy
32.1. Financial risk factors continued
Market risk continued
ii) Interest rate risk (continued)
for patients that do not have a medical scheme or an insurance company paying
for the Group’s service is to require a preliminary payment instead. The Group does
not have any significant exposure to any individual customer or counterparty and
expected credit losses were assessed at the end of the year.
The Group is exposed to credit-related losses in the event of non-performance by
counterparties to hedging instruments. The counterparties to these contracts are
major financial institutions. The Group monitors its positions and limits the extent to
which it enters into contracts with any one party.
The gross carrying amounts of financial assets (before credit loss allowances)
included in the statement of financial position represent the Group’s maximum
exposure to credit risk in relation to these assets. At 31 March 2022 and 31 March 2021,
the Group did not consider there to be a significant concentration of credit risk.
Liquidity risk
The Group manages liquidity risk by monitoring cash flow forecasts to ensure that it
has sucient cash to meet operational needs, while maintaining sucient headroom
on its undrawn borrowing facilities at all times so that the Group does not breach
borrowing limits or covenants (where applicable) on any of its borrowing facilities.
2022 2021
£’m £’m
The Group's unused banking and overdraft facilities 408 385
Cash and cash equivalents 534 294
Cash and available facilities 942 679
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT236
The following table details the Group’s remaining contractual maturity for its financial
liabilities. The table has been prepared based on the undiscounted cash flows of
financial liabilities based on the required date of repayment. The table includes both
interest and principal cash flows. The analysis of derivative financial instruments has
been prepared based on undiscounted net cash inflows/(outflows) that settle on
a net basis.
32. FINANCIAL RISK MANAGEMENT CONTINUED
32.1. Financial risk factors continued
Liquidity risk continued
Insurance risk
The risk that an insured event occurs and the amount of the resulting claim is
uncertain. The risks covered by the Group’s insurance policies include property
damage and business interruption, malpractice claims, directors’ and ocers’ liability,
commercial crime and cyber risk. The Group manages insurance risk by outsourcing
claims handling to service providers who review the claims on a regular basis and
by pursuing early settlement of claims to reduce its exposure to unpredictable
developments.
32.2. Capital management
The Group manages its capital to ensure that entities in the Group will be able to
continue as a going concern while maximising the return to stakeholders through
the optimisation of the debt and equity balance. The capital structure of the Group
consists of debt, which includes the borrowings disclosed in note 25; cash and cash
equivalents and equity attributable to equity holders of the parent, comprising issued
capital, retained earnings and other reserves, and NCI, as disclosed in notes 21, 22 and
23, respectively. The Group’s Audit and Risk Committee reviews the going concern
status and capital structure of the Group biannually. The Group balances its overall
capital structure through the payment of dividends and new share issues, as well
as the issue of new debt or the redemption of existing debt. Although a dividend
suspension was in place during the reporting period, the Group’s dividend policy is to
target a payout ratio of 25–35% of adjusted earnings. The Board may revise the policy
at its discretion. The debt-to-capital ratios as at 31 March 2022 and 31 March 2021
were as follows:
Note
1
Excluding non-financial liabilities.
Financial liabilities
Carrying
value
£’m
Contractual
cash flows
£’m
1–12 months
£’m
1–5 years
£’m
Beyond 5
years
£’m
31 March 2022
Borrowings 1 803 2 217 174 1 060 983
Lease liabilities 786 1 057 67 246 744
Derivative financial
instruments 129 136 5 131 –
Trade payables and
other payables
1
522 522 522 – –
3 240 3 932 768 1 437 1 727
31 March 2021
Borrowings 1 777 2 550 147 1 549 854
Lease liabilities 676 886 59 217 610
Derivative financial
instruments 126 130 8 122 –
Trade payables and
other payables 441 441 441 – –
3 020 4 007 655 1 888 1 464
2022 2021
£’m £’m
Borrowings 1 803 1 777
Less: cash and cash equivalents (534) (294)
Net incurred debt 1 269 1 483
Lease liabilities 786 676
Net debt 2 055 2 159
Total equity 3 246 2 967
Debt-to-equity capital ratio 63.3% 72.8%
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 237
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
33. CASH FLOW INFORMATION
Cash and cash equivalents consist of balances with banks and cash-on-hand and are
classified as debt instruments measured at amortised cost. Cash at banks comprises
cash that can readily be converted into cash. Bank overdrafts are classified as
financial liabilities at amortised cost and are disclosed as part of borrowings in
current liabilities in the statement of financial position.
Cash flows in currencies other than the functional currency are translated at the
average exchange rate for the period in question. The cash flow statement is
prepared by the indirect method based on consolidated profit before income tax,
and shows cash flows from operating, investing and financing activities as well as
the Group’s cash at banks at opening and closing.
Cash flow from operating activities is specified as the profit before income tax for
the year adjusted for non-cash operating items, changes in the working capital,
and corporation tax paid. Cash flow from investing activities includes the purchase
and sale of property, equipment and vehicles and intangible assets, as well as the
acquisition and disposal of investments in subsidiaries and associates. Cash flow
from financing activities includes the raising and repaying of long-term liabilities,
short-term bank loans and the payment of dividends.
2022 2021
£’m £’m
33.1.
Reconciliation of profit before taxation to cash
generated from operations
Profit before taxation 211 104
Adjustments for:
Finance cost – net 68 95
Share of net profit of equity-accounted investments 1 10
Share-based payments 4 –
Depreciation and amortisation 228 217
Loss allowance of trade receivables 12 11
Movement in provisions 21 12
Movement in retirement benefit obligations 16 6
Impairment of properties and intangible assets 7 3
Impairment of equity-accounted investment – 1
Foreign exchange dierences 1 –
Insurance proceeds (6) (2)
Other non-cash items 1 (2)
Operating income before changes in working capital 564 455
Working capital changes 99 (125)
Decrease/(increase) in inventories 15 (10)
Decrease/(increase) in trade and other receivables 35 (129)
Increase in trade and other payables 49 14
663 330
33.2. Interest paid
Finance cost per income statement 74 99
Non-cash items
Amortisation of capitalised financing fees (3) (3)
Borrowing costs capitalised 1 1
Remeasurement of redemption liability (1) (23)
Unwinding of discount of redemption liability (1) (1)
Accrued interest on lease liability (1) (3)
69 70
33.3. Tax paid
Liability at the beginning of the year 4 2
Provision for the year 46 31
50 33
Liability at year end (4) (4)
46 29
2022 2021
(Continued)
£’m £’m
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT238
33.4. Capital expenditure to maintain operations
Property, equipment and vehicles purchased 84 46
Intangible assets purchased 10 8
Movement in capital expenditure payables 2 2
96 56
33.5. Capital expenditure to expand operations
Property, equipment and vehicles purchased 73 59
Intangible assets purchased 11 13
Movement in capital expenditure payables (1) 8
83 80
33. CASH FLOW INFORMATION CONTINUED
2022 2021
(Continued)
£’m £’m
33.6.
Changes in liabilities arising
from financing activities
Total
borrowings
Net derivative
financial
instruments
held to hedge
borrowings
Total lease
liabilities Total
£’m £’m £’m £’m
Year ended 31 March 2022
Opening balance 1 777 10 676 2 463
Cash flow movements
Proceeds from borrowings 89 – – 89
Repayment of borrowings (183) – – (183)
Repayment of lease liabilities – – (42) (42)
Refinancing transaction cost (3) – – (3)
Interest payments (presented as
cash flows from operating activities) (43) (6) (20) (69)
Non-cash items
Amortisation of capitalised
financing fees 3 – – 3
Cash flow hedges reclassified to
profit and loss – (6) – (6)
Fair value adjustment on cash
flow hedges – (1) – (1)
New lease commitments entered
into during the year – – 109 109
Lease commitments terminated
during the year – – (5) (5)
Accrued interest 43 6 21 70
Exchange rate dierences 120 – 47 167
Closing balance 1 803 3 786 2 592
2022 2021
£’m £’m
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 239
Year ended 31 March 2021
(Re-presented)
Opening balance 1 951 10 703 2 664
Cash flow movements
Proceeds from borrowings 115 – – 115
Repayment of borrowings (196) – – (196)
Repayment of lease liabilities – – (39) (39)
Refinancing transaction cost (3) – – (3)
Interest payments (presented as
cash flows from operating activities) (46) (7) (17) (70)
Non-cash items
Amortisation of capitalised
financing fees 3 – – 3
Cash flow hedges reclassified to
profit and loss – (2) – (2)
Fair value adjustment on cash
flow hedges – 2 – 2
New lease commitments entered
into during the year – – 59 59
Lease commitments terminated
during the year – – (1) (1)
Remeasurement of lease liabilities – – 8 8
Accrued interest 46 7 20 73
Exchange rate dierences (93) – (57) (150)
Closing balance 1 777 10 676 2 463
33. CASH FLOW INFORMATION CONTINUED
Note
1
The comparatives have been re-presented to present interest payments (as cash flow movements) and
accrued interest (as non-cash items) on a gross basis. Previously, interest payments were included as
part of accrued interest as non-cash items.
Notes
1
The facility agreement of the Swiss subsidiary restricts the distribution of cash. Bank balances to the
value of £65m (2021: £15m) are held with counterparties who have a minimum A1 credit rating by
Moody’s and £96m (2021: £73m) are held with counterparties who have a minimum Aa2 credit rating
by Moody’s.
2
The counterparties have a minimum Ba2 credit rating by Moody’s.
3
The counterparties have a minimum A1 credit rating by Moody’s.
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
33.6.
Changes in liabilities arising from
financing activities continued
Total
borrowings
Net derivative
financial
instruments
held to hedge
borrowings
Total lease
liabilities Total
£’m £’m £’m £’m
2022 2021
£’m £’m
33.7.
Cash and cash equivalents
For the purposes of the statement of cash flows, cash,
cash equivalents and bank overdrafts include:
Cash and cash equivalents 534 294
Cash, cash equivalents and bank overdrafts are
denominated in the following currencies:
Swiss franc
1
161 88
South African rand
2
190 112
UAE dirham
3
95 31
Sterling
3
74 56
US dollar
3
14 7
534 294
Exchange controls in South Africa may restrict the use of certain cash balances at
the Group’s Southern African operations. These restrictions are not expected to have
any material eect on the Group’s ability to meet its ongoing obligations.
Cash and cash equivalents denominated in Swiss franc amounting to £72m
(2021: £60m) and South African bank accounts denominated in South African
rand amounting to £58m (2021: £5m) have been ceded as security for borrowings
(see note 25).
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT240
34. BUSINESS COMBINATIONS
The Group accounts for business combinations using the acquisition method of
accounting. The cost of the business combination is measured as the aggregate of
the fair values of assets obtained and liabilities incurred or assumed. Costs directly
attributable to the business combination are expensed as incurred, except the costs
to issue debt or incur borrowings, which are amortised as part of the eective
interest, and costs to issue equity, which are included in equity.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the
recognition conditions of IFRS 3 Business Combinations are recognised at their fair
values at acquisition date, except for non-current assets (or disposal companies)
that are classified as held-for-sale in accordance with IFRS 5 Non-current Assets
Held-for-sale and Discontinued Operations, which are recognised at fair value less
costs to sell.
Contingent liabilities are included in the identifiable assets and liabilities of the
acquiree only where there is a present obligation at acquisition date.
On acquisition, the Group assesses the classification of the acquiree’s assets
and liabilities and reclassifies them where the classification is inappropriate for
Group purposes. This excludes lease agreements and insurance contracts, whose
classification remains as per their inception date.
NCI arising from a business combination, which are present ownership interests and
entitle their holders to a proportionate share of the entity’s net assets in the event
of liquidation, are measured either at the present ownership interests’ proportionate
share in the recognised amounts of the acquiree’s identifiable net assets or at
fair value. The treatment is not an accounting policy choice but is selected for
each individual business combination and disclosed in the note for business
combinations. All other components of NCI are measured at their acquisition date
fair values, unless another measurement basis is required by IFRS.
In cases where the Group held a non-controlling shareholding in the acquiree prior
to obtaining control, that interest is measured to fair value at acquisition date. The
measurement to fair value is included in profit or loss for the year. Amounts arising
from interests in the acquiree prior to the acquisition date that have previously been
recognised in other comprehensive income are reclassified to profit or loss, where
such treatment would be appropriate if that interest were disposed of.
Goodwill is determined as the consideration paid, plus the fair value of any
shareholding held prior to obtaining control, plus NCI, less the fair value of the
identifiable assets and liabilities of the acquiree. If the total of consideration
transferred, NCI recognised and previously held interest measured is less than the
fair value of the net assets of the subsidiary acquired, the dierence is recognised
directly in the income statement.
Goodwill is not amortised but is tested on an annual basis for impairment or more
frequently if events or changes in circumstances indicate a potential impairment. If
goodwill is assessed to be impaired, that impairment is not subsequently reversed.
Goodwill arising on acquisition of foreign entities is considered an asset of the
foreign entity. In such cases, the goodwill is translated to the functional currency
of the Company at the end of each reporting period with the adjustment recognised
in equity through other comprehensive income.
The following business combinations occurred during the current and prior years:
2022 2021
£’m £’m
Cash flow on acquisition:
OPERA Zumikon – (2)
Bourn Hall International MENA Limited (3) –
Ayadi Home Health Care LLC (4) –
(7) (2)
Bourn Hall International MENA Limited
Eective on 11 November 2021, Emirates Healthcare Limited, which forms part of
the Middle East segment, acquired the remaining 70% shares in Bourn Hall for
£4m. Bourn Hall specialises in IVF treatments. The goodwill of £7m arising from
the acquisition is attributable to the acquired workforce and future cash flow from
operations.
Revenue and profit contribution
The acquired business contributed revenues of £4m and net profit of less than
£0.5m to the Group for the period from 11 November 2021 to 31 March 2022. If the
acquisition had occurred on 1 April 2021, consolidated pro-forma revenue and net
profit for the year ended 31 March 2022 would have been £7m and less than £0.5m,
respectively.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 241
34. BUSINESS COMBINATIONS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Ayadi Home Health Care LLC
Eective on 27 December 2021, Mediclinic Hospitals LLC, which forms part of the
Middle East segment, acquired 100% of the shares in the accredited Al Ain-based
home healthcare services business, Ayadi Home Health Care LLC (‘Ayadi Home
Healthcare’), for £4m. The goodwill of £3m arising from the acquisition is attributable
to the acquired workforce and future cash flow from operations.
Revenue and profit contribution
The acquired business contributed revenues of £1m and net profit of less than
£0.5m to the Group for the period from 27 December 2021 to 31 March 2022. If the
acquisition had occurred on 1 April 2021, consolidated pro-forma revenue and net
loss for the year ended 31 March 2022 would have been £3m and £1m, respectively.
The following table summarises the provisional fair value of assets acquired and
liabilities assumed at the respective acquisition dates:
35. DISPOSAL OF SUBSIDIARIES
During the prior year, the Group disposed of a number of outpatient clinics which
were part of the Swiss division and Mediclinic Howick, which was part of the
Southern African division. The total net assets disposed of had a carrying value
of £4m and were disposed of for a total consideration of £4m. The transactions
resulted in a net loss on disposal of subsidiary of less than £0.5m. After considering
the cash and cash equivalents disposed of, the net cash flow on disposal was £4m.
36. COMMITMENTS
2022 2022 2022
£’m £’m £’m
Bourn Hall
Ayadi Home
Healthcare Total
Recognised amounts of identifiable
assets acquired and liabilities assumed
Total assets 5 1 6
Total liabilities 5 – 5
Total identifiable net assets at fair value – 1 1
Goodwill 7 3 10
Consideration transferred
for the business 7 4 11
Fair value of the Group's existing portion (3) – (3)
Cash flow on acquisition 4 4 8
Cash flow on acquisition
Net cash acquired with subsidiary 1 – 1
Cash paid (4) (4) (8)
Net cash flow upon acquisition (3) (4) (7)
2022 2021
£’m £’m
Capital commitments
Incomplete capital expenditure contracts 161 190
Switzerland 114 125
Southern Africa 31 55
Middle East 16 10
Capital expenses authorised by the
Board of Directors but not yet contracted 109 77
Switzerland 13 12
Southern Africa 74 39
Middle East 22 26
270 267
These commitments will be financed from Group cash flow and borrowed funds.
Income guarantees
As part of the expansion of network of specialist institutes in Switzerland and
centres of expertise, the Group has agreed to guarantee a minimum net income to
these specialists for a start-up period of 3–5 years. Payments under such guarantees
become due if the net income from the collaboration does not meet the amounts
guaranteed. There were no payments under the aforementioned income guarantees
in the reporting period as the net income individually generated met or exceeded the
amounts guaranteed.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT242
36. COMMITMENTS CONTINUED
Income guarantees continued
Note
1
Amount is less than £0.5m in the prior year.
Notes
1
Details of directors’ remuneration are contained in the Remuneration Committee Report on
pages 143–167.
2
Amount is less than £0.1m.
2022 2021
£’m £’m
Total of net income guaranteed:
April 2021 – March 2022 – 3
April 2022 – March 2023
1
2 –
April 2023 – March 2024
1
1 –
3 3
Contingent liabilities
The Group is routinely subject to legal proceedings, claims, complaints and
investigations arising out of the ordinary course of business. The Group cannot
always accurately predict the outcome of individual legal actions, claims, complaints
or investigations but a best estimate of the likelihood of such actions and claims
crystallising a financial exposure is made at each year end. Where an exposure is
deemed probable and is reliably estimable, a provision is made.
Except for matters where provisions have been recorded, which are described in
note 28, the Group considers that no material loss to the Group is expected to result
from legal proceedings, claims, complaints and investigations.
37. RELATED PARTY TRANSACTIONS
Remgro Ltd owns, through various subsidiaries (Remgro Healthcare [Pty] Ltd,
Remgro Health Ltd and Remgro Jersey GBP Ltd), 44.56% (2021: 44.56%) of the
Company’s issued share capital.
The following transactions were carried out with related parties:
2022 2021
£’m £’m
i) Transactions with shareholders
Remgro Management Services Ltd (subsidiary
of Remgro Ltd)
Managerial and administration fees 0.3 0.3
ii) Key management compensation
1
Key management includes the directors
(executive and non-executive) and members of the
Group Executive Committee
Salaries and other short-term benefits
Short-term benefits 9 8
iii) Transactions with associates and joint ventures
Zentrallabor Zürich
Purchases 10 11
Wits University Donald Gordon Medical Centre (Pty) Ltd
Fees received (2) (2)
Agency fees received (2) (1)
Al Murjan Medical Center
Fees earned (1) –
Spire Healthcare Group plc
Non-executive director fee
2
– –
iv) Loans to related parties
Wits University Donald Gordon Medical Centre (Pty) Ltd 2 2
Bourn Hall LLC – 2
v)
Other receivables & payables due from/(to)
related parties
Wits University Donald Gordon Medical Centre (Pty) Ltd – 2
Zentrallabor Zürich ZLZ – (1)
2022 2021
(Continued)
£’m £’m
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 243
37. RELATED PARTY TRANSACTIONS CONTINUED
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Terms and conditions
Managerial and administration fees were bought on a cost-plus basis. All other
transactions were made on normal commercial terms and conditions and at
market rates.
During the year ended 31 March 2022, the Southern African division entered into an
agreement with Energy Exchange of Southern Africa, an associate of Remgro Ltd, to
procure renewable electricity. There were no transactions for the period under review
or amounts outstanding at 31 March 2022.
The loan to Wits University Donald Gordon Medical Centre (Pty) Ltd is interest free
and repayable on demand. The loan to Zentrallabor Zürich ZLZ is interest free and
repayable in August 2022.
38. EVENTS AFTER THE REPORTING DATE
The directors are not aware of any matter or circumstance arising since the end of
the financial year that would significantly aect the operations of the Group or the
results of its operations.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT244
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
Mediclinic CHF Finco Limited IFC 5, St Helier, Jersey, JE1 1ST Jersey Treasur y
100.0
100.0
Mediclinic Holdings Netherlands B.V. Schiekade 830, 3032 AL Rotterdam Netherlands Intermediary holding
company
100.0
100.0
Mediclinic International (RF) (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street,
Stellenbosch 7600
South Africa Intermediary holding
company
100.0
100.0
Mediclinic Middle East Holdings Limited IFC 5, St Helier, Jersey, JE1 1ST Jersey Intermediary holding
company
100.0
100.0
Ouroboros Solutions AG Sihlbruggstrasse 3, 6340 Baar Switzerland Intermediary holding
company
100.0
-
INDIRECTLY HELD THROUGH MEDICLINIC CHF FINCO LIMITED
Mediclinic Jersey Limited IFC 5, St Helier, Jersey, JE1 1ST Jersey Intermediary holding
company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC HOLDINGS NETHERLANDS B.V.
Mediclinic Luxembourg S.à.r.l. 14 Rue Edward Steichen, L-2540 Luxembourg Luxembourg Intermediary holding
company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC LUXEMBOURG S.À.R.L.
Hirslanden AG Boulevard Lilienthal 2, 8152 Glattpark (Opfikon) Switzerland Intermediary holding
company and operating
company of Hirslanden
100.0
100.0
INDIRECTLY HELD THROUGH HIRSLANDEN AG
AndreasKlinik AG Cham Rigistrasse 1, 6330 Cham Switzerland Healthcare services
100.0
100.0
Hirslanden Bern AG Schänzlihalde 11, 3013 Bern Switzerland Healthcare services
100.0
100.0
Hirslanden Klinik Aarau AG Schänisweg, 5000 Aarau Switzerland Healthcare services
100.0
100.0
Hirslanden Klinik Linde AG Blumenrain 105, 2503 Biel/Bienne Switzerland Healthcare services
100.0
100.0
Hirslanden Klinik Am Rosenberg AG Hasenbühlstrasse 11, 9410 Heiden Switzerland Healthcare services
100.0
100.0
Hirslanden La Colline Grangettes SA Chemin des Grangettes 7, c/o Clinique des Grangettes SA
1224 Chêne-Bougeries
Switzerland Healthcare services
60.0
60.0
SUBSIDIARIES
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 245
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH HIRSLANDEN AG CONTINUED
Hirslanden Lausanne SA Avenue d’Ouchy 31, 1006 Lausanne Switzerland Healthcare services
100.0
100.0
Hirslanden OPERA AG
2
Boulevard Lilienthal 2, 8152 Glattpark (Opfikon) Switzerland Hirslanden OPERA AG
100.0
100.0
Hirslanden Praxiszentrum am Bahnhof,
Schahausen AG
2
Bleichestrasse 3, 8200 Schahausen Switzerland Healthcare services
-
-
Hirslanden Precise AG Forchstrasse 452, 8702 Zollikon Switzerland Healthcare services
100.0
100.0
Hirslanden Venture Capital AG Boulevard Lilienthal 2, 8152 Glattpark (Opfikon) Switzerland Healthcare services
100.0
100.0
IMRAD SA Avenue d’Ouchy 31, Clinique Bois-Cerf
c/o Hirslanden Lausanne SA, 1006 Lausanne
Switzerland Healthcare services
75.0
75.0
Klinik Birshof AG Reinacherstrasse 28, 4142 Münchenstein Switzerland Healthcare services
99.9
99.9
Klinik St. Anna AG St. Anna-Strasse 32, 6006 Luzern Switzerland Healthcare services
100.0
100.0
Klinik Stephanshorn AG Brauerstrasse 95, 9016 St. Gallen Switzerland Healthcare services
100.0
100.0
Radiotherapie Hirslanden AG Rain 34, 5000 Aarau Switzerland Healthcare services
100.0
100.0
INDIRECTLY HELD THROUGH HIRSLANDEN KLINIK AM ROSENBERG AG
Klinik am Rosenberg Heiden AG Hasenbühlstrasse 11, 9410 Heiden Switzerland Healthcare services
99.2
99.2
INDIRECTLY HELD THROUGH HIRSLANDEN LA COLLINE GRANGETTES SA
Hirslanden Clinique La Colline SA Avenue de Beau-Séjour 6, 1206 Genève Switzerland Healthcare services
60.0
60.0
Grangettes Healthcare SA Chemin des Grangettes 7, c/o Clinique des Grangettes SA
1224 Chêne-Bougeries
Switzerland Healthcare services
60.0
60.0
INDIRECTLY HELD THROUGH GRANGETTES HEALTHCARE SA
Clinique des Grangettes SA Chemin des Grangettes 7, 1224 Chêne-Bougeries Switzerland Healthcare services
60.0
60.0
Dianecho SA Rue de Carouge 116, 1205 Genève Switzerland Healthcare services
43.9
43.9
INDIRECTLY HELD THROUGH HIRSLANDEN OPERA AG
2
Hirslanden OPERA Zumikon AG Morgental 35, 8126 Zumikon Switzerland Healthcare services
100.0
100.0
Hirslanden OPERA St. Gallen AG Schuppisstrasse 10, 9016 St. Gallen Switzerland Healthcare services
100.0
100.0
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT246
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH HIRSLANDEN OPERA AG
2
CONTINUED
Hirslanden OPERA Bern AG Nordring 4, 3013 Bern Switzerland Healthcare services
100.0
-
INDIRECTLY HELD THROUGH IMRAD SA
Hirslanden Freiburg AG, Düdingen Bahnhofplatz 2a, 3186 Düdingen Switzerland Healthcare services
75.0
75.0
INDIRECTLY HELD THROUGH MEDICLINIC INTERNATIONAL (RF) (PTY) LTD
Mediclinic Group Services (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Provision of group services
within Mediclinic
100.0
100.0
Mediclinic Investments (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Intermediary holding
company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC GROUP SERVICES (PTY) LTD
Medical Innovations (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital equipment and
procurement
100.0
100.00
INDIRECTLY HELD THROUGH MEDICLINIC INVESTMENTS (PTY) LTD
Mediclinic Southern Africa (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Intermediary holding
company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC SOUTHERN AFRICA (PTY) LTD
Curamed Holdings (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Intermediary holding
company
73.4
73.4
Mediclinic Denmar Mental Health
Services (Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Mental healthcare services
100.0
100.0
ER24 Holdings (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Intermediary holding
company
100.0
100.0
Intelimed (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Managed care organisation
(dormant)
100.0
100.0
Intercare Group Hospital Holdings
(Pty) Ltd (Hospitals)
Glenfair Oce Block, Lynnwood & Daventry Roads,
Lynnwood 0081
South Africa Healthcare services
59.2
50.1
Medical Human Resources (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Management of
healthcare sta
100.0
100.0
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 247
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH MEDICLINIC SOUTHERN AFRICA (PTY) LTD CONTINUED
Mediclinic (Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Intermediary holding
company and operating
company of Mediclinic
Southern Africa
100.0
100.0
Mediclinic Brits (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
66.5
66.8
Mediclinic Finance Corporation (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Treasur y
100.0
100.0
Mediclinic Holdings (Namibia) (Pty) Ltd Grant Thornton Neuhaus, 12
th
floor, Sanlam Centre,
157 Independence Avenue, Windhoek
Namibia Intermediary holding
company
100.0
100.0
Mediclinic Lephalale (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
93.0
93.0
Mediclinic Midstream (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
81.8
81.8
Mediclinic Paarl (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
77.7
75.5
Mediclinic Properties (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Property ownership
and management
100.0
100.0
Mediclinic Renal Services (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
70.0
100.0
Mediclinic Renal Services Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
70.0
100.0
Mediclinic Stellenbosch (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
87.3
87. 3
Mediclinic Tzaneen (Pty) Ltd
2
(50% plus one share)
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
52.9
50.0
Newcastle Private Hospital (Pty) Ltd
2
(50% plus one share, including B class
shares)
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
21.4
21.4
Practice Relief (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Provision of debt collection
and related services
100.0
100.0
Victoria Hospital (Pty) Ltd
2
(50% plus five shares, including B class
shares)
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
33.7
33.7
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT248
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH MEDICLINIC SOUTHERN AFRICA (PTY) LTD CONTINUED
Sandton Day Hospital (Pty) Ltd
4
Glenfair Oce Block, Lynnwood & Daventry Roads,
Lynnwood 0081
South Africa Healthcare services
70.0
70.0
Sandton Sub-Acute Hospital (Pty) Ltd
4
Glenfair Oce Block, Lynnwood & Daventry Roads,
Lynnwood 0081
South Africa Healthcare services
70.0
70.0
INDIRECTLY HELD THROUGH CURAMED HOLDINGS (PTY) LTD
Curamed Hospitals (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
100.0
100.0
Curamed Properties (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Property ownership
and management
100.0
100.0
INDIRECTLY HELD THROUGH CURAMED HOSPITALS (PTY) LTD
2
Mediclinic Thabazimbi (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
76.0
76.0
INDIRECTLY HELD THROUGH ER24 HOLDINGS (PTY) LTD
ER24 EMS (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Emergency medical services
100.0
100.0
ER24 Trademarks (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Intellectual property holding
company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC (PTY) LTD
Mediclinic Ermelo (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
61.8
59.8
Mediclinic Hermanus (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
39.1
39.1
Mediclinic Kimberley (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
89.1
89.6
Mediclinic Limpopo (Pty) Ltd
2&3
(50% plus 1 share)
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
50.0
50.0
Mediclinic Potchefstroom (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
87.4
87.7
Mediclinic Upington (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
50.0
50.0
INDIRECTLY HELD THROUGH MEDICLINIC LIMPOPO (PTY) LTD
2&3
Mediclinic Limpopo Day Clinic (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
56.4
56.4
Mediclinic Limpopo Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Investment holding company
100.0
100.0
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 249
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
HOSPITAL INVESTMENT COMPANIES
Mediclinic Bloemfontein Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
98.2
98.2
Mediclinic Cape Gate Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
93.5
91.4
Mediclinic Cape Town Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
98.0
99.0
Mediclinic Constantiaberg Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
75.0
75.0
Mediclinic Durbanville Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
99.4
99.4
Mediclinic Emfuleni Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
81.0
81.0
Mediclinic George Investments (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
99.5
99.5
Mediclinic Highveld Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
97.1
97.1
Mediclinic Hoogland Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
98.5
98.8
Mediclinic Kathu Investments (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Deregistered
0.0
100.0
Mediclinic Klein Karoo Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
100.0
100.0
Mediclinic Legae Investments (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
87.5
87. 5
Mediclinic Louis Leipoldt Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
99.9
99.9
Mediclinic Milnerton Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
97.4
99.4
Mediclinic Morningside Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
81.3
82.3
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT250
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
HOSPITAL INVESTMENT COMPANIES CONTINUED
Mediclinic Nelspruit Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
98.0
98.2
Mediclinic Panorama Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
99.2
99.2
Mediclinic Pietermaritzburg Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
77.5
77.6
Mediclinic Plettenberg Bay Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
93.0
93.0
Mediclinic Sandton Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
91.0
93.8
Mediclinic Secunda Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
100.0
82.2
Mediclinic Vereeniging Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
99.4
99.4
Mediclinic Vergelegen Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
94.9
94.9
Mediclinic Welkom Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
93.2
91.6
Mediclinic Worcester Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Hospital investment company
97.3
97.3
INDIRECTLY HELD THROUGH MEDICLINIC BLOEMFONTEIN INVESTMENTS (PTY) LTD
Mediclinic Bloemfontein Day Clinic
Investments (Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Day case clinic investment
company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC CAPE GATE INVESTMENTS (PTY) LTD
Mediclinic Cape Gate Day Clinic
Investments (Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Day case clinic investment
company
83.2
100.0
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 251
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH MEDICLINIC DURBANVILLE INVESTMENTS (PTY) LTD
Mediclinic Durbanville Day Clinic
Investments (Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Day case clinic investment
company
85.2
85.2
INDIRECTLY HELD THROUGH MEDICLINIC NELSPRUIT INVESTMENTS (PTY) LTD
Mediclinic Nelspruit Day Clinic
Investments (Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Day case clinic investment
company
86.6
100.0
INDIRECTLY HELD THROUGH MEDICLINIC VERGELEGEN INVESTMENTS (PTY) LTD
Mediclinic Vergelegen Day Clinic
Investments (Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Day case clinic investment
company
89.3
100.0
INDIRECTLY HELD THROUGH MEDICLINIC WELKOM INVESTMENTS (PTY) LTD
Welkom Medical Centre (Free State)
(Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
84.7
83.5
INDIRECTLY HELD THROUGH MEDICLINIC HOLDINGS (NAMIBIA) (PTY) LTD
Mediclinic Capital (Namibia) (Pty) Ltd Grant Thornton Neuhaus, 12
th
floor, Sanlam Centre,
157 Independence Avenue, Windhoek
Namibia Investment holding company
100.0
100.0
Mediclinic Otjiwarongo (Pty) Ltd
2
Grant Thornton Neuhaus, 12
th
floor, Sanlam Centre,
157 Independence Avenue, Windhoek
Namibia Healthcare services
100.0
100.0
Mediclinic Properties (Swakopmund)
(Pty) Ltd
Grant Thornton Neuhaus, 12
th
floor, Sanlam Centre,
157 Independence Avenue, Windhoek
Namibia Property ownership
and management
100.0
100.0
Mediclinic Properties (Windhoek)
(Pty) Ltd
Grant Thornton Neuhaus, 12
th
floor, Sanlam Centre,
157 Independence Avenue, Windhoek
Namibia Property ownership
and management
100.0
100.0
Mediclinic Swakopmund (Pty) Ltd
2
Grant Thornton Neuhaus, 12
th
floor, Sanlam Centre,
157 Independence Avenue, Windhoek
Namibia Healthcare services
98.9
98.9
Mediclinic Windhoek (Pty) Ltd
2
Grant Thornton Neuhaus, 12
th
floor, Sanlam Centre,
157 Independence Avenue, Windhoek
Namibia Healthcare services
97.5
97.4
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT252
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH MEDICLINIC STELLENBOSCH (PTY) LTD
2
Mediclinic Stellenbosch Day Clinic
(Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Dormant
76.1
76.1
Mediclinic Winelands (Pty) Ltd
2
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Healthcare services
50.1
50.1
INDIRECTLY HELD THROUGH MEDICLINIC TZANEEN (PTY) LTD
2
Mediclinic Tzaneen Investments
(Pty) Ltd
Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Investment holding company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC VICTORIA HOSPITAL (PTY) LTD
Victoria Hospital Investments (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street, Stellenbosch 7600 South Africa Investment holding company
100.0
100.0
INDIRECTLY HELD THROUGH MEDICLINIC MIDDLE EAST HOLDINGS LIMITED
Emirates Healthcare Holdings Limited IFC 5, St Helier, Jersey, JE1 1ST Jersey Intermediary holding
company
100.0
100.0
Mediclinic International Co Limited 6
th
floor, 65 Gresham Street, London, EC2V 7NQ United Kingdom Dormant
100.0
100.0
Mediclinic KSA Holdings Limited IFC 5, St Helier, Jersey, JE1 1ST Jersey Intermediary holding
company
100.0
100.0
INDIRECTLY HELD THROUGH EMIRATES HEALTHCARE HOLDINGS LIMITED
Emirates Healthcare Limited
6
IFC 5, St Helier, Jersey, JE1 1ST Jersey Healthcare services
100.0
100.0
INDIRECTLY HELD THROUGH EMIRATES HEALTHCARE LIMITED
5
Delah Cafe FZ LLC Ground floor, Mediclinic City Hospital, Building no 35 and 37,
Dubai Healthcare City, Al Razi Street, Dubai
The UAE Food and catering
100.0
100.0
Mediclinic Al Qusais Clinic LLC Plot no 284/243, Shop 3–5, Legend Middle East Building,
Al Qusais
The UAE Healthcare services
49.0
49.0
Mediclinic Beach Road LLC First floor, Dubai International Properties, Dubai The UAE Healthcare services
(in process of liquidation)
49.0
49.0
Mediclinic City Hospital FZ LLC Building no 35 and 37, Dubai Healthcare City, Al Razi Street,
Dubai
The UAE Healthcare services
100.0
100.0
Mediclinic Clinics Investment LLC Third floor, Dubai Mall, Parcel ID 345897, Dubai The UAE Healthcare services
49.0
49.0
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 253
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH EMIRATES HEALTHCARE LIMITED
5
CONTINUED
Mediclinic Hospitals LLC
(Al Noor Hospital)
7&8
Sheikh Mohamed Bin Butti Building, Sheikh Khalifa Street,
Abu Dhabi
The UAE Healthcare services
49.0
49.0
Mediclinic Ibn Battuta Clinic LLC Shop 142, China Cluster, Retail Corp, Ibn Battuta Mall, Dubai The UAE Healthcare services
49.0
49.0
Mediclinic Mirdif Clinic LLC Ground floor, Oce 13, Uptown Mirdif Building,
Parcel no 321-224 Mirdif, Dubai
The UAE Healthcare services
49.0
49.0
Mediclinic Parkview Hospital LLC Mediclinic Middle East management services, FZ.LLC Building,
Al Barsha South 3, Dubai
The UAE Healthcare services
49.0
49.0
Pharma Light Medical Store LLC Shop 27, Plot no 49, Musaah, M38, Abu Dhabi The UAE Medical store/procurement
49.0
49.0
Welcare Hospitals Limited IFC 5, St Helier, Jersey, JE1 1ST Jersey Healthcare services
100.0
100.0
Welcare World Health Systems Limited IFC 5, St Helier, Jersey, JE1 1ST Jersey Healthcare services
100.0
100.0
Bourn Hall International MENA Limited
9
C/o Al Tamimi & Company, Dubai International Financial Centre,
Registered with the DFSA, Level 7, Central Park Towers,
Dubai, UAE
The UAE General Commercial Business
100.0
30.0
INDIRECTLY HELD THROUGH BOURN HALL INTERNATIONAL MENA LIMITED
Bourn Hall LLC
10
Al Hudaiba Awards Building, Block C, 7
th
floor,
Dubai Martime City, UAE
The UAE Fertility Centre
49.0
-
INDIRECTLY HELD THROUGH MEDICLINIC HOSPITALS LLC (AL NOOR HOSPITAL)
6&7
Al Noor Hospital Clinics – Al Ain
11
Al Ain Town Center, Sheikh Mohammed Bin Butti Al Hamed
Building, Al Ain
The UAE Healthcare Services
49.0
49.0
Al Madar Medical Center Pharmacy LLC
12
Al Jimi, Al Jimi Ali Jumaa Ali Darmaki Building, Al Mouror Street,
Abu Dhabi Island, Jabr Mohamed Ghanem Sultan Al Suwaidi,
Al Ain
The UAE Healthcare services
49.0
49.0
Mediclinic – Al Mamora LLC
13
Jabr Mohamed Ghanem Sultan Al Suwaidi, Al Mouror Street,
Abu Dhabi Island
The UAE Healthcare services
99.0
99.0
Mediclinic Khalifa City LLC
14
Mabkhoot Saleh Al Mansouri Building, plot no 14, Eastern
South 42, Khalifa City, Abu Dhabi
The UAE Healthcare services
49.0
49.0
Mediclinic Hospitals – Al Musafah
Specialty Clinics LLC
Musafah Sh 10 Parcel ID 401, Floor no. M, 1&2 Huashel Saeed,
Khaseeb Al Yakooubi Building, Abu Dhabi
The UAE Healthcare services
49.0
49.0
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT254
Company Registered oce address
Country of
incorporation
and place of
business Principal activities
Interest in capital
1
31 March
2022
%
31 March
2021
%
INDIRECTLY HELD THROUGH MEDICLINIC HOSPITALS LLC (AL NOOR HOSPITAL)
6&7
CONTINUED
Mediclinic Pharmacy – Al Musaah 2 LLC Madinat Mohamed Bin Zayed, Sh 10 Parcel ID 401, Huashel
Saeed, Khaseeb Al Yakooubi Building, Abu Dhabi
The UAE Healthcare services
49.0
49.0
Aman Home for Health Medical Home
Care LLC
15
Shaabiyat Makam, No 20 Al Makam, Ground Floor, Oce no 2,
Mohamed Thaloob Salem Hamad Al Derei Building, Al Ain,
Abu Dhabi
The UAE Home Healthcare services
49.0
0.0
Ayadi Home Health Care LLC
16
Shaabiyat Makam, No 4 Al Makam, Ground Floor, Oce no 2,
Mohamed Thaloob Salem Hamad Al Derei Building, Al Ain,
Abu Dhabi
The UAE Healthcare services
49.0
0.0
INDIRECTLY HELD THROUGH WELCARE HOSPITALS LIMITED (JERSEY)
Mediclinic Welcare Hospital LLC Deira Nasser Abdullah Hussein Lootah Building, Al Garhood,
Dubai
The UAE Healthcare services
49.0
49.0
INDIRECTLY HELD THROUGH WELCARE WORLD HEALTH SYSTEMS LIMITED
Mediclinic Middle East Management
Services FZ LLC
Floor 5–7, Publishing Pavilion, Dubai Production City, Dubai The UAE Healthcare management
services
100.0
100.0
Notes
1
The equity interest in the UAE entities is disclosed herein, with the beneficial interest further explained in the
notes.
2
Controlled through long-term management agreements.
3
Operating through trusts or partnerships.
4
Managed by Intercare.
5
Mediclinic Kathu Investments (Pty) Ltd deregistered on 3 January 2022.
6
In terms of constitutional and contractual arrangements, the Group has full management control and economic
interest in the listed entities.
7
Al Nahda International Holding LLC holds 100% share capital of Al Noor Commercial Investments Sole
Proprietorship LLC (‘ANCI’). In terms of the shareholders agreement dated 17 May 2017, executed between
Emirates Healthcare Limited, Al Nahda International Limited, Al Noor Commercial Investment Sole
Proprietorship LLC and Mediclinic Hospitals LLC (Al Noor Hospital LLC), the parties agreed that Al Nahda
International Holding LLC will become the sole shareholder of ANCI and the local sponsor for all the group
entities registered in Abu Dhabi (i.e. of Mediclinic Hospitals LLC [Al Noor Hospital] and its subsidiaries and
the respective registered branches and operational units from time to time). In terms of this agreement,
ANCI holds 51% of the share capital of Mediclinic Hospitals LLC (Al Noor Hospital) and Emirates Healthcare
Limited holds the remaining 49%. By virtue of this shareholders agreement, the parties have agreed that
ANCI and Mediclinic Hospitals LLC (Al Noor Hospital) will be managed and controlled by Emirates
Healthcare Limited (‘EHL’). Given that management, voting rights and the dividend rights have been assigned
to EHL, all dividends declared by Mediclinic Hospitals LLC (Al Noor Hospital) are paid directly to EHL.
As per the termination agreement dated 21 August 2017, between Al Noor Golden Commercial Investment
LLC (‘ANGCI’), Sheikh Mohamed Bin Butti Al Hamid, Al Noor Commercial Investment LLC, ANMC
Management Limited (‘ANMC’), Al Noor Holdings Cayman and EHL, the parties agreed to terminate the
following:
a) The relationship management agreement entered into between ANGCI, Sheikh Bin Butti and Mediclinic
Hospitals LLC (Al Noor Hospital) on 20 May 2013;
b) The relationship agreement entered into between ANGCI, ANCI and Mediclinic Hospitals LLC (Al Noor
Hospital) on 20 May 2013;
c) The management agreement entered into between ANCI and ANMC on 20 May 2013; and
d) A shareholder’s agreement entered into between Sheikh Bin Butti, The First Arabian Corporation LLC,
Al Noor Cayman, ANMC and ANCI on 20 May 2013.
8
EHL holds 49% of the issued share capital of Mediclinic Hospitals LLC (Al Noor Hospital), with the remaining
51% held by ANCI. ANCI assigned 100% of the voting rights, management control and dividend to EHL. EHL has
the right to be appointed as the proxy of ANCI, to attend and to vote at all shareholder meetings of Mediclinic
Hospitals LLC (Al Noor Hospital).
9
EHL holds 100% of the issued share capital of Bourn Hall International MENA Limited. Bourn Hall International
MENA Ltd is registered in Jebel Al Free Zone, Dubai, and EHL, Jersey, holds 100% issued paid-up and
subscribed share capital of this company.
10
Bourn Hall LLC is registered in Dubai. The shareholders of Bourn Hall LLC are:
• Bourn Hall International MENA Ltd - 49%;
• Al Noor Commercial Investment - Sole Proprietorship LLC - 51%.
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 255
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS CONTINUED
Note
1
Shareholding indirectly held through Clinique des Grangettes SA.
JOINT VENTURES
COMPANY
COUNTRY OF INCORPORATION
AND PLACE OF BUSINESS PRINCIPAL ACTIVITIES
INTEREST IN CAPITAL
31 March
2022
%
31 March
2021
%
Wits University Donald Gordon Medical Centre (Pty) Ltd Mediclinic Corporate Oce, 25 Du Toit Street,
Stellenbosch 7600, South Africa
Healthcare services
49.9
49.9
GRGB Santé SA, Genève Chemin de Beau-Soleil 20, 1206 Genève,
Switzerland
Healthcare services
30.0
30.0
Centre de Chirurgie Ambulatoire (CCA) - HUG Hirslanden SA,
Genève 3
Rue Gabrielle-Perret-Gentil 4, c/o Les hôpitaux
universitaires de Genève, 1205 Genève,
Switzerland
Healthcare services
50.0
50.0
11
100% beneficial interest of Bourn Hall LLC is ultimately held by EHL. Bourn Hall LLC has two branches, one in
Abu Dhabi and one in Al Ain. Bourn Hall LLC and its branch in Al Ain are operating as clinics and the statutory
licensing of the Abu Dhabi branch to operate as a clinic is under process.
Al Noor Commercial Investment Sole Proprietorship LLC holds 51% of the issued share capital of Al Noor
Hospital Clinics – Al Ain, with the remaining 49% held by Mediclinic Hospitals LLC (Al Noor Hospital).
12
Mediclinic Hospitals LLC (Al Noor Hospital) holds 49% of the issued share capital of Al Madar Medical Centre
Pharmacy LLC, with the remaining 51% held by ANCI. The memorandum of association of the company
provides that Mediclinic Hospitals LLC (Al Noor Hospital) is entitled to receive 99% of distributions by the
company and ANCI is entitled to receive 1%. Mediclinic Hospitals LLC (Al Noor Hospital)’s eective beneficial
interest in the entity is therefore 99%.
13
Mediclinic Hospitals LLC (Al Noor Hospital) holds 99% and ANCI holds 1% of the issued share capital of
Mediclinic Al Mamora LLC.
14
Mediclinic Hospitals LLC (Al Noor Hospital) holds 49% of the issued share capital of Mediclinic Khalifa City
Clinic LLC, with the remaining 51% held by ANCI. The memorandum of association of the company provides
that Mediclinic Hospitals LLC (Al Noor Hospital) is entitled to receive 99% of distributions by the company
and ANCI is entitled to receive 1%. Mediclinic Hospitals LLC (Al Noor Hospital)’s eective beneficial interest in
the entity is therefore 99%.
15
Mediclinic Hospitals LLC (Al Noor Hospital) holds 49% of the issued share capital of Aman Home for Health
Medical Home Care LLC, with the remaining 51% held by ANCI. The memorandum of association of the
company provides that Mediclinic Hospitals LLC (Al Noor Hospital) is entitled to receive 99% of distributions
by the company and ANCI is entitled to receive 1%. Mediclinic Hospitals LLC (Al Noor Hospital)’s eective
beneficial interest in the entity is therefore 99%.
16
Mediclinic Hospitals LLC (Al Noor Hospital) holds 49% of the issued share capital of Ayadi Home Health Care
LLC, with the remaining 51% held by ANCI. The memorandum of association of the company provides that
Mediclinic Hospitals LLC (Al Noor Hospital) is entitled to receive 99% of distributions by the company and ANCI
is entitled to receive 1%. Mediclinic Hospitals LLC (Al Noor Hospital)’s eective beneficial interest in the entity is
therefore 99%.
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
SUBSIDIARIES CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT256
COMPANY REGISTERED OFFICE ADDRESS
INTEREST IN
CAPITAL
BOOK VALUE OF
INVESTMENT
31 March
2022
%
31 March
2021
%
31 March
2022
£’m
31 March
2021
£’m
Listed
Spire Healthcare Group plc (held through Mediclinic Jersey
Limited)
3 Dorset Rise, London, EC4Y 8EN
29.9
29.9
156
157
Unlisted
Intercare Holdings Proprietary Limited Glenfair Oce Block, Lynnwood & Daventry Roads,
Lynnwood 0081
34.0
34.0
3
2
Icon Joint Venture Proprietary Limited 1
st
Floor Madison Square Park, 4 Howick Close, Tygerfalls, 7530,
South Africa
25.0
–
–
–
Bourn Hall International MENA Limited C/o Al Tamimi & Company
Dubai International Financial Centre,
Registered with the DFSA
Level 7, Central Park Towers, Dubai, UAE
100.0
30.0
–
5
Zentrallabor Zürich, Zürich
3
Forchstrasse 452, 8702 Zollikon
49.0
49.47
–
1
Baukonsortium, Cham
Rigistrasse 1, 6330 Cham
24.0
24.0
1
1
EFG Parkierung Rigistrasse, Cham
2
Rigistrasse 1, 6330 Cham
25.0
25.0
–
–
La Colline, Centre de Réeducation et de Physiothérapie SA
2
,
Genève
Avenue de la Roseraie 76A, 1205 Genève
20.0
20.0
–
–
La Colline, Centre de Physiothérapie du Sport S.à.r.l.
2
, Genève
Chemin Thury 7A, 1206 Genève
23.0
23.0
–
–
CORTS AG, Maur
2
c/o ETU Treuhand und Unternehmensberatung, Ch. Lutz,
Zürichstrasse 268, 8122 Binz
37.8
37.8
–
–
Hystrix Medical AG Bahnhofstrasse 47, 4900 Langenthal
8.7
8.7
1
1
Al Murjan Medical Center Company Limited Al Rawdah District, Prince Saud Al Faisal Street, Jeddah, 21573,
Saudi Arabia
1.0
–
–
–
161
167
ASSOCIATES
1
Notes
1
The nature of the activities of the associates is similar to the major activities of the Group.
2
Book value is less than £0.5m.
3
The Swiss division does not control Zentrallabor Zürich.
39. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES CONTINUED
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 257
Notes
2022
£’m
2021
£’m
Non-current assets
Investment in subsidiaries 3 3 311
3 311
Current assets
Cash and cash equivalents 74 54
Total assets 3 385 3 365
EQUITY
Share capital 5 74 74
Capital redemption reserve 6 6
Share premium 5 690 690
Retained earnings 2 585 2 568
Total equity 3 355 3 338
Current liabilities
Other payables 2 1
Amount due to related parties 4 28 26
Total liabilities 30 27
3 385 3 365
COMPANY STATEMENT OF FINANCIAL POSITION
AT 31 MARCH 2022
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
The profit after tax for the year ended 31 March 2022 amounted to £17m (2021: £21m).
These financial statements as set out on pages 258–262 were approved and
authorised for issue by the Board of Directors and signed on their behalf by:
Dr Ronnie van der Merwe Jurgens Myburgh
Chief Executive Ocer Group Chief Financial Ocer
24 May 2022 24 May 2022
Mediclinic International plc (Company no 08338604)
The notes on pages 259–262 form an integral part of these financial statements.
The notes on pages 259–262 form an integral part of these financial statements.
Share capital
£’m
Capital
redemption
reserve
£’m
Share
premium
reserve
£’m
Retained
earnings
£’m Total
At 1 April 2020 74 6 690 2 547 3 317
Profit for the year – – – 21 21
At 30 March 2021 74 6 690 2 568 3 338
Profit for the year – – – 17 17
At 31 March 2022 74 6 690 2 585 3 355
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT258
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
Notes
2022
£’m
2021
£’m
Operating activities
Profit before tax 17 21
Adjustments for:
Foreign exchange dierences 2 (3)
Dividend income (25) (23)
Change in other payables 1 (1)
Net cash used in operating activities (5) (6)
Investing activities
Proceeds from derivative – 2
Dividend received 4 25 23
Net cash generated from investing activities 25 25
Financing activities
Dividend paid 6 – –
Net cash used in financing activities – –
Net movement in cash and cash equivalents 20 19
Cash and cash equivalents at the beginning of the year 54 35
Cash and cash equivalents at the end of the year 74 54
The notes on pages 259–262 form an integral part of these financial statements.
1. STATUS AND ACTIVITY
Mediclinic was incorporated in England and Wales on 20 December 2012. The
address of the registered oce of the Company is c/o Link Company Matters
Limited, 6
th
Floor, 65 Gresham Street, London, EC2V 7NQ. The registration number
of the Company is 08338604. There is no ultimate controlling party. The domicile
of the Company is the UK. The Company is a public limited company with divisions
in Switzerland, Southern Africa (South Africa and Namibia) and the Middle East
(the UAE).
The Company is a holding company. The activities of the subsidiaries are the
operation of hospitals and clinics, and the sale of pharmaceuticals, medical supplies
and related equipment.
These financial statements are the financial statements of the Company only.
The financial statements are available at the registered oce of the Company.
2. BASIS OF PREPARATION
The Company’s principal accounting policies applied in the preparation of these
financial statements are the same as those set out in the Group annual financial
statements, except as noted below. These policies have been consistently applied
to all the years presented.
• Investments in subsidiaries are carried at cost less any accumulated impairment.
• Dividend income is recognised when the right to receive payment is established.
The Company is taking advantage of the exemption in Section 408 of the UK
Companies Act 2006 not to present its individual income statement as part of these
financial statements.
2.1. Basis of measurement
The financial statements of the Company have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
There are no dierences for the Company in applying IFRS as issued by the IASB
and UK-adopted IFRS. The financial statements are prepared on the historical-cost
convention, as modified by the revaluation of certain financial instruments to fair
value through profit or loss.
NOTES TO THE COMPANY
ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 259
2.2. Functional and presentation currency
The financial statements and financial information are presented in sterling, rounded
to the nearest million.
2.3. Going concern
The Company annual financial statements were prepared on a going concern basis.
The directors believe that the Company will continue to be in operation for at least
12 months from the date of this report and in the foreseeable future. See note 2.7 in
the Group annual financial statements for more detail relating to the going concern
basis of accounting used in preparing the financial statements.
2.4. Accounting estimates
The Company makes estimates and assumptions concerning the future. Although
these estimates and assumptions are based on management’s best information
regarding current circumstances and future events, actual results may dier.
3. INVESTMENT IN SUBSIDIARIES
Investment in subsidiaries is stated at cost less impairment.
2022
£’m
2021
£’m
Shares at cost 5 916 5 916
Less: accumulated impairment charge (2 605) (2 605)
Closing balance 3 311 3 311
The investments held by the Company are Mediclinic CHF Finco Ltd, Mediclinic
Holdings Netherlands B.V., Mediclinic Middle East Holdings Ltd and Mediclinic
International (RF) (Pty) Ltd, each being wholly owned subsidiaries. The activities
of the subsidiaries are the operation of hospitals and clinics, and the sale of
pharmaceuticals, medical supplies and related equipment.
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED
Impairment assessment
At 31 March 2022, the Company’s market capitalisation of £2 626m (2021: £2 109m)
was less than the net assets of the Company. The recoverable amounts of the
investment of subsidiaries were calculated based on FVLCOD calculations and
exceeded the carrying value. As a result no impairment was recognised.
The following assumptions were used in the FVLCOD calculations:
- Mediclinic CHF Finco Ltd: the cash flows were discounted at a rate of 6.8% and
beyond five years a growth rate of 1.9% was used;
- Mediclinic Holdings Netherlands B.V.: the cash flows were discounted at a rate of
5.0% and beyond five years a growth rate of 1.6% was used;
- Mediclinic Middle East Holdings Ltd: the cash flows were discounted at a rate of
8.1% and beyond five years a growth rate of 3.0% was used; and
- Mediclinic International (RF) (Pty) Ltd: the cash flows were discounted at a rate of
12.8% and beyond five years a growth rate of 5.5% was used.
See note 39 of the Group annual financial statements for a complete list of
investments in subsidiaries, associates and joint ventures of the Group, and details
of the country of incorporation, place of business, principal activities and interest
in capital.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT260
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED
4. RELATED PARTY BALANCES AND TRANSACTIONS
Related parties comprise the subsidiaries, the shareholders, key management
personnel and those entities over which the parent, the directors or the Company
can exercise significant influence or which can significantly influence the Company.
Note
1
This amount included the transaction and operational expenses paid by Mediclinic Hospitals LLC
on behalf of the Company. This amount is payable on demand. Information regarding the Group’s
subsidiaries and associates can be found in note 39 to the Group annual financial statements.
2022
£’m
2021
£’m
a) Transactions with key management personnel
Key management includes the directors
(executive and non-executive) and members
of the Group Executive Committee
Directors’ fees 1 1
b) Amount due to a related party
1
Mediclinic Hospitals LLC 28 26
c) Dividends received from related parties:
Mediclinic CHF Finco Ltd – 2
Mediclinic Holdings Netherlands B.V. 8 21
Mediclinic International (RF) (Pty) Ltd 17 –
25 23
2022
£’m
2021
£’m
Issued share capital
Share capital 74 74
Share premium 690 690
764 764
Ordinary shares 2022 2021
Number of shares in issue and fully paid 737 243 810 737 243 810
Nominal value 10p 10p
5. SHARE CAPITAL
Value: Indicating nominal and share premium amount
Rights of the ordinary shares to profits: All dividends shall be declared and paid
according to the amounts paid up on the ordinary shares.
Rights of the ordinary shares to capital: If there is a return of capital on winding up
or otherwise, the ordinary shares shall confer full rights but they do not confer any
rights of redemption.
Voting rights of the ordinary shares: The ordinary shares shall confer, on each holder
of the ordinary shares, the right to receive notice of and to attend, speak and vote
at all general meetings of the Company. Each ordinary share carries the right to one
vote on a poll.
6. DIVIDENDS
The Company did not declare interim dividends for FY22 or final dividends for FY21
during the year under review (2021: nil).
Details on the final proposed dividend have been disclosed in note 13 to the Group
annual financial statements.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 261
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED
7. AUDITORS’ REMUNERATION
The Company incurred an amount of £0.8m (2021: £0.7m) to its auditors in respect
of the audit of the Company’s and Group’s financial statements for the year ended
31 March 2022. The fee includes an amount of less than £0.1m (2021: £0.1m) in
respect of prior years.
Fees paid to the Company’s auditors for other services amounted to £0.1m
(2021: £0.1m).
8. TAXATION
At 31 March 2022, the Company had unutilised tax losses of approximately £62m
(2021: £54m). No deferred tax asset has been recognised in respect of these losses
due to the unpredictability and availability of future profit streams.
9. FINANCIAL INSTRUMENTS
9.1. Capital risk management
The Company manages its capital to ensure it is able to continue as a going concern
while maximising the return on equity. The Company does not have a formalised
optimal target capital structure or target ratios in connection with its capital risk
management objective. The Company’s overall strategy remains unchanged from the
prior year. The Company is not subject to externally imposed capital requirements.
9.2. Financial risk management objectives
The Company is exposed to the following risks related to financial instruments: credit
risk, liquidity risk and foreign currency risk. The Company does not enter into or
trade in financial instruments, investments in securities, including derivative financial
instruments, for speculative purposes.
9.3. Credit risk
The carrying amount of cash and cash equivalents represents the maximum
credit exposure. There is no material credit risk involved on the Company financial
statements. The Company’s cash equivalents are placed with reputable financial
institutions with a high credit rating.
9.4. Liquidity risk
The ultimate responsibility for liquidity risk management rests with the directors of
the Company, who have built an appropriate liquidity risk management framework
for managing the Company’s short-, medium- and long-term funding and liquidity
management requirements. The Company manages liquidity risk by maintaining
adequate reserves by continuously monitoring forecast and actual cash flows,
and matching the maturity profiles of financial assets and liabilities.
Liquidity risk is the risk that the Company will be unable to meet its funding
requirements. The table below summarises the maturity profile of the Company’s
financial liabilities. The contractual maturities of the financial liabilities have been
determined on the basis of the remaining period at the end of the reporting period
to the contractual repayment date. The maturity profile is monitored by management
to ensure adequate liquidity is maintained.
The maturity profile of the liabilities at the end of the reporting period based on
existing contractual repayment arrangements was as follows:
Carrying amount
£'m
Contractual
cash flows
£’m
1 year
or less
£’m
31 March 2022
Other payables 2 2 2
Related-party payables 28 28 28
30 30 30
31 March 2021
Other payables 1 1 1
Related-party payables 26 26 26
27 27 27
9.5. Foreign currency risk
The Company has insignificant exposure to foreign currency risk, but a prudent
approach towards foreign cover is followed where applicable.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT262
SHARE CAPITAL AND SHAREHOLDERS
STRUCTURE
The Company’s ordinary issued share
capital at 31 March 2022 was 737 243 810
ordinary shares of £0.10 each, with a
primary listing on the LSE in the UK and
secondary listings on the JSE in South
Africa and the NSX in Namibia. The
ordinary share class represents 100% of
the Company’s total issued share capital.
See note 21 to the Group annual financial
statements on page 210 for more on the
Company’s issued share capital
There are no known arrangements under
which financial rights are held by a person
other than the holder of the shares. Shares
acquired through the Company’s share
schemes and plans rank equally with the
other shares in issue and have no special
rights.
See the Remuneration Committee Report on
pages 160–161 for more on the Company’s
employee share scheme
The Company has no intention to complete
a market purchase of its ordinary shares
and will not seek this authority at the
Company’s 2022 AGM.
RESTRICTIONS ON THE TRANSFER
OF COMPANY SHARES
There are no restrictions on transfer of
the Company’s shares.
RESTRICTIONS ON VOTING RIGHTS
The Company’s Articles provide that,
unless the directors determine otherwise,
a shareholder shall not be entitled to vote,
either personally or by proxy, at any
general meeting of the Company or to
exercise any other right conferred by
membership, if:
• any call or other sum payable to the
Company in respect of that share
remains unpaid; or
• such shareholder, having been duly
served with a notice to provide the
Company with information under Section
793 of the Act, has failed to do so within
14 days of such notice, for so long as
the default continues.
SUBSTANTIAL SHAREHOLDERS
At year end, the following shareholders
notified the Company in accordance with
the Disclosure Guidance and Transparency
Rules of their interest of 3% or more in the
Company’s issued share capital:
Between year end and the Last Practicable Date, the Company received the following
notification from shareholders in their interest of 3% or more in the Company’s issued share
capital, in accordance with the Disclosure Guidance and Transparency Rules:
SHAREHOLDER
INFORMATION
TABLE 1: FY22 SUBSTANTIAL SHAREHOLDERS
ORDINARY
SHARES
% VOTING
RIGHTS
DATE
NOTIFIED
Remgro Ltd
(through wholly owned
subsidiaries)
328 497 888 44.56 17/02/2016
Public Investment Corporation
SOC Ltd
74 357 880 10.09 22/09/2021
ORDINARY
SHARES
% VOTING
RIGHTS
DATE
NOTIFIED
Public Investment Corporation
SOC Ltd
81 184 020 11.01 17/05/202 2
2022 ANNUAL GENERAL MEETING
The Company’s AGM will take place at 15:00 (BST) on Thursday, 28 July 2022 at Rosewood
London Hotel, 252 High Holborn, London, WC1V 7EN, UK. Shareholders should read the
2022 Notice of AGM carefully should they plan to attend. The 2022 Notice of AGM is available
at annualreport.mediclinic.com and has been posted as a separate booklet at the same time
as this Annual Report.
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 263
DIVIDENDS
At the end of FY20, the Board took the prudent and appropriate decision to suspend the
dividend as part of the Group’s eorts to maintain its liquidity position and maximise its
ability to navigate through the pandemic. Given the financial strength of the Company today,
the resilience we displayed throughout the pandemic and a more stable outlook, though
subject to macroeconomic factors, the Board felt it appropriate to propose a final dividend
of 3.00 pence, for approval by the Company’s shareholders at the 2022 AGM.
Shareholders on the South African register will be paid the South African rand cash equivalent
of 59.53230 cents (47.62584 cents net of dividend withholding tax) per share. A dividend
withholding tax of 20% will be applicable to all shareholders on the South African register who
are not exempt therefrom. The South African rand cash equivalent has been calculated using
the following exchange rate: GBP1:ZAR19.8441, being the five-day average ZAR/GBP exchange
rate (Bloomberg) on Friday, 20 May 2022 at 3:00pm GMT.
The final dividend will be paid on Friday, 26 August 2022 to all ordinary shareholders
who are on the register of members at the close of business on the record date of
Friday, 5 August 2022.
The salient dates for the dividend will be as follows:
The Company’s Dividend Policy is dealt with
in the ‘Financial review’ section of the Group
Chief Financial Ocer’s Report on page 80.
SHARE PRICE
The latest share price information can
be found on the Company’s website at
www.mediclinic.com or through a broker.
SHAREHOLDER SERVICES AND CONTACTS
Enquiries relating to shareholdings, including
notification of change of address, queries
regarding the loss of a share certificate and
dividend payments should be made to the
Company’s registrars:
SHAREHOLDERS ON THE UK REGISTER
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol,
BS13 8AE, UK
Tel: +44 370 703 6022
E-mail: WebCorres@computershare.co.uk
Website: www.investorcentre.co.uk
Lines are open during normal business hours
from 08:30 to 17:30 GMT, Monday to Friday,
and charged at the standard rate.
Shareholders can use Computershare’s
website to check and maintain their records.
SHARE DEALING SERVICE
Computershare oers a share dealing service
that allows UK resident shareholders to buy
and sell the Company’s shares. Shareholders
can deal in their shares on the Internet or by
telephone. Please contact Computershare for
more details on this service.
SHAREGIFT
If a few shares are held, whose low value
makes them dicult to sell, they may
be donated to charity through ShareGift,
an independent charity share donation
scheme. For further details, please
contact Computershare or ShareGift at
tel. +44 20 7930 3737 or visit their website
at www.sharegift.org.
SHAREHOLDERS ON THE SOUTH AFRICAN
AND NAMIBIAN REGISTERS
SOUTH AFRICAN TRANSFER SECRETARY
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue,
Rosebank 2196, South Africa
Postal address: Private Bag X9000,
Saxonwold 2132, South Africa
Tel: +27 11 370 5000
Fax: +27 11 688 5200
Email: Groupadmin1@computershare.co.za
NAMIBIAN TRANSFER SECRETARY
Transfer Secretaries (Pty) Ltd
4 Robert Mugabe Avenue,
Windhoek, Namibia
Postal address: PO Box 2401,
Windhoek, Namibia
Tel: +264 61 227 647
Fax: +264 61 248 531
Email: ts@nsx.com.na
TABLE 2: FY22 DIVIDENDS DECLARED
FY21 FY22
Interim dividend n/a n/a
Final dividend n/a 3.00
Total dividend n/a 3.00
Dividend announcement date Wednesday, 25 May 2022
Last date to trade cum dividend
(SA register)
Tuesday, 2 August 2022
First date of trading ex-dividend
(SA register)
Wednesday, 3 August 2022
First date of trading ex-dividend
(UK register)
Thursday, 4 August 2022
Record date Friday, 5 August 2022
Payment date Friday, 26 August 2022
Share certificates may not be dematerialised or rematerialised within Strate from
Wednesday, 3 August 2022 to Friday, 5 August 2022, both dates inclusive. No transfers
between the UK and South African registers may take place from Tuesday, 25 May 2022
to Friday, 5 August 2022, both dates inclusive.
The tax treatment of the dividend for shareholders on the South African register is available
on the Company’s website. Details of the Dividend Access Trust established for South
African resident shareholders are provided in note 21 of the Group annual financial
statements on page 210.
The dividends declared by the Company
to its ordinary shareholders during the
reporting period are summarised below:
SHAREHOLDER INFORMATION CONTINUED
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT264
COMPANY INFORMATION
Mediclinic International plc
(incorporated and registered in England
and Wales)
Company number: 08338604
REGISTERED OFFICE
Mediclinic International plc
6
th
Floor, 65 Gresham Street
London, EC2V 7NQ, United Kingdom
Tel: +44 333 300 1930
Email: info@mediclinic.com
Website: www.mediclinic.com
TOLL-FREE ETHICS LINES AND EMAIL
SWITZERLAND
Tel: 0800 005 316
SOUTH AFRICA
Tel: 0800 005 316
NAMIBIA
Tel: 0800 003 313
MTC Networks: 081 91847
THE UAE
Tel: 800 1 55000
Email: mediclinic@tip-os.com
LISTING
FTSE sector: Health Care – Health Care
Providers – Health Care Facilities
ISIN code: GB00B8HX8Z88
SEDOL number: B8HX8Z8
EPIC number: MDC
LEI: 2138002S5BSBIZTD5I60
Primary listing: LSE (share code: MDC)
Secondary listing: JSE (share code: MEI)
Secondary listing: NSX (share code: MEP)
COMPANY SECRETARY
Link Company Matters Limited
Caroline Emmet
6
th
Floor, 65 Gresham Street
London, EC2V 7NQ, United Kingdom
Tel: +44 333 300 1930
Email: MediclinicInternational@linkgroup.co.uk
INVESTOR RELATIONS
James Arnold
Head of Investor Relations
Hudson House, 8 Tavistock Street
London, WC2E 7PP, United Kingdom
Tel: +44 20 3786 8180/1
Email: ir@mediclinic.com
REGISTRAR/TRANSFER SECRETARIES
UK
United Kingdom Computershare Investor
Services PLC
The Pavilions, Bridgwater Road, Bristol,
BS13 8AE
Tel: +44 370 703 6022
Email: WebCorres@computershare.co.uk
SOUTH AFRICA
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue,
Rosebank 2196
Private Bag X9000, Saxonwold 2132
Tel: +27 11 370 5000
Email: Groupadmin1@computershare.co.za
NAMIBIA
Transfer Secretaries (Pty) Ltd
4 Robert Mugabe Avenue, Windhoek
PO Box 2401, Windhoek
Tel: +264 61 227 647
Email: ts@nsx.com.na
CORPORATE ADVISERS
AUDITOR
PricewaterhouseCoopers LLP, London
CORPORATE BROKER AND SPONSORS
UK
Joint corporate brokers: Morgan Stanley & Co
International plc and UBS Investment Bank
SOUTH AFRICA
JSE sponsor: Rand Merchant Bank
(a division of FirstRand Bank Limited)
NAMIBIA
NSX sponsor: Simonis Storm Securities
(Pty) Ltd
LEGAL ADVISERS
UK
Slaughter and May
SOUTH AFRICA
Clie Dekker Hofmeyr Inc.
REMUNERATION CONSULTANT
Deloitte LLP
COMMUNICATION AGENCY
FTI Consulting
Tel: +44 20 3727 1000
Email: businessinquiries@fticonsulting.com
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 265
FORWARD-LOOKING
STATEMENTS
This Annual Report contains certain
forward-looking statements relating to
the business of the Company and its
subsidiaries, including with respect to the
progress, timing and completion of the
Group’s development; the Group’s ability
to treat, attract and retain patients and
clients; its ability to engage consultants
and healthcare practitioners and to
operate its business and increase
referrals; the integration of prior
acquisitions; the Group’s estimates for
future performance and its estimates
regarding anticipated operating results;
future revenue; capital requirements;
shareholder structure; and financing. In
addition, even if the Group’s actual results
or developments are consistent with the
forward-looking statements contained in
this Annual Report, those results or
developments may not be indicative of
the Group’s results or developments in
the future. In some cases, forward-
looking statements can be identified by
words such as ‘could’, ‘should’, ‘may’,
‘expects’, ‘aims’, ‘targets’, ‘anticipates’,
‘believes’, ‘intends’, ‘estimates’, or similar.
These forward-looking statements are
based largely on the Group’s current
expectations as of the date of this
Annual Report and are subject to a
number of known and unknown risks
and uncertainties and other factors that
may cause actual results, performance
or achievements to be materially dierent
from any future results, performance or
achievement expressed or implied by
these forward-looking statements. In
particular, the Group’s expectations could
be aected by, among other things,
uncertainties involved in the integration
of acquisitions or new developments;
changes in legislation or the regulatory
regime governing healthcare in
Switzerland, South Africa, Namibia and
the Middle East; poor performance by
healthcare practitioners who practise at
its facilities; unexpected regulatory
actions or suspensions; competition in
general; the impact of global economic
changes; the impact of pandemics,
including COVID-19; the impact of military
conflicts, including the current events in
the Ukraine; and the Group’s ability to
obtain or maintain accreditation or
approval for its facilities or service lines.
In light of these risks and uncertainties,
there can be no assurance that the
forward-looking statements made in
this Annual Report will in fact be realised
and no representation or warranty is
given with regard to the completeness
or accuracy of the forward-looking
statements contained herein.
The Group is providing the information in
this Annual Report as of this date, and
disclaims any intention to, and makes no
undertaking to, publicly update or revise
any forward-looking statements, whether
as a result of new information, future
events or otherwise.
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT266
GLOSSARY OF TERMS
TERM
MEANING
A action
Act the United Kingdom Companies Act 2006
AGM annual general meeting
ANCI Al Noor Commercial Investments Sole Proprietorship LLC
ANGCI Al Noor Golden Commercial Investment LLC
ANMC ANMC Management Limited
Annual Report this annual report with financial statements for the reporting period ended
31 March 2022
APMs alternative performance measures
AR6 6
th
Assessment Report of the Intergovernmental Panel for Climate Change
Articles the Company’s Articles of Association as adopted
on 22 July 2020
Ayadi Home Healthcare Ayadi Home Health Care LLC
B-BBEE broad-based black economic empowerment
Board or Board
of Directors
the board of directors of Mediclinic International plc
Bourn Hall Bourn Hall International MENA Limited
BUPA British United Provident Association
CAP College of American Pathologists
CCC Comprehensive Cancer Centre
CE marking certification mark for products sold in the European Economic Area
CEO Chief Executive Ocer
CFO Chief Financial Ocer
CGU cash-generating unit
CMA the UK’s Competition and Market Authority
CMI case mix index
CO
2
e carbon dioxide equivalent
Code 2018 UK Corporate Governance Code published
by the Financial Reporting Council
CoE(s) Centre(s) of Excellence
COHSASA Council for Health Service Accreditation of Southern Africa
Committee pertaining to the committee previously defined,
e.g. Audit and Risk Committee
Company Mediclinic International plc
CSI corporate social investment
D decision
DAS Dividend Access Scheme
TERM
MEANING
DHA Dubai Health Authority
DRG diagnostic-related group
EASO European Association for the Study of Obesity
EBA economic benefit available
EBIT earnings before interest and taxes
EBITDA earnings before interest, tax, depreciation and amortisation
EEA European Economic Area
EHL Emirates Healthcare Limited
EHRs electronic health records
EMEA Europe, Middle East and Africa region
EMP environmental management programme
EMS environmental management system
Energy Exchange Energy Exchange of Southern Africa
EPS earnings per share
ERM enterprise-wide risk management
ESG environmental, social and governance
external auditors the Group’s independent external auditors, PricewaterhouseCoopers LLP
FBU fair, balanced and understandable
FCA Financial Conduct Authority
FRC Financial Reporting Council
FVLCOD fair value less cost of disposal
FVOCI fair value through other comprehensive income
FVPL fair value through profit or loss
FY20 the financial year ended on 31 March 2020
FY21/prior financial year the financial year ended on 31 March 2021
FY22/period under
review/ reporting period/
year under review
the financial year ended on 31 March 2022
FY23, FY24 the financial years ending 31 March 2023 and
31 March 2024, respectively
GDP gross domestic product
GDPR General Data Protection Regulation
GHG greenhouse gas
GRI Standards Global Reporting Initiative Sustainability Reporting Standards 2016
Group Mediclinic International plc and its subsidiaries, including its divisions in
Switzerland, Southern Africa and the Middle East
STRATEGIC REPORT
GOVERNANCE AND
REMUNERATION REPORT
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2022 ANNUAL REPORT MEDICLINIC INTERNATIONAL PLC 267
GLOSSARY OF TERMS CONTINUED
TERM
MEANING
Group Executive
Committee
the executive committee of Mediclinic International plc
HCRW healthcare risk waste
HCT Higher Colleges of Technology
HEPS headline earnings per share
Hirslanden the Group’s operations in Switzerland, trading under the Hirslanden brand,
with Hirslanden AG as the intermediary holding company of the Group’s
operations in Switzerland
IAS International Accounting Standard
ICT Information and communications technology
ICU intensive care unit
IFRS International Financial Reporting Standards
IPCC Intergovernmental Panel for Climate Change
ISA International Standards of Auditing (UK)
IT information technology
IVF in vitro fertilisation
JACIE Joint Accreditation Committee ISCT-Europe
and EBMT
JCI Joint Commission International
JIBAR Johannesburg Interbank Average Rate
JSE the stock exchange operated by the JSE Ltd, based in Johannesburg
KPI key performance indicator
Last Practicable Date the date of the approval of the Annual Report, being 24 May 2022
LIBOR London Interbank Oered Rate
Lintstock Lintstock Ltd, the firm appointed to evaluate the Board’s performance
Listing Rules the listing rules issued by the Financial Conduct Authority
Listings Requirements the listings requirements of the JSE
LSE the stock exchange operated by London Stock Exchange plc, based in London
LTI long-term incentive scheme for executive and senior management
Mediclinic Mediclinic International plc
Mediclinic Middle East the Group’s operations in the Middle East, trading under the Mediclinic brand,
with Mediclinic Middle East Holdings (registered in Jersey) as the intermediate
holding company of the Group’s operations in Dubai and Abu Dhabi
Mediclinic Southern Africa the Group’s operations in South Africa and Namibia, trading under the
Mediclinic brand, with Mediclinic Southern Africa (Pty) Ltd as the intermediary
holding company of the Group’s operations in South Africa and Namibia
MR mixed reality
NCI non-controlling interests
TERM
MEANING
NHS the National Health Service in the UK
NPS® Net Promoter Score®
NSX Namibian Stock Exchange
OECD Organisation for Economic Co-operation and Development
PCR polymerase chain reaction, used in testing for COVID-19
PH Pensionskasse Hirslanden, the fund which provides post-employment,
death-in-service and disability benefits
PPDs paid patient days
PPPs public-private partnerships
PV photovoltaic
PwC the Group’s independent external auditors, PricewaterhouseCoopers LLP
RCF revolving credit facility
Relationship Agreement the Company’s relationship agreement with its principal shareholder, Remgro
Remgro Remgro Ltd, a controlling shareholder of Mediclinic, which through wholly
owned subsidiaries held a 44.56% stake in the Company as at 31 March 2022
ROIC return on invested capital
RPA robotic process automation
RPM remote patient monitoring
SAICA South African Institute of Chartered Accountants
SARON Swiss Average Rate Overnight
SCADA supervisory control and data acquisition, a system
to monitor energy consumption
Section 172 Section 172 of the United Kingdom Companies
Act 2006
SID Senior Independent Director
SOFR Secured Overnight Financing Rate
Spire Spire Healthcare Group plc, a leading UK-based independent hospital group
listed on the LSE
STI short-term incentive scheme for management
TARMED national outpatient tari in Switzerland
TCFD Task Force on Climate-related Disclosures
TSR total shareholder return
UAE the United Arab Emirates
UK the United Kingdom of Great Britain and Northern Ireland
US the United States of America
WACC weighted average cost of capital
MEDICLINIC INTERNATIONAL PLC 2022 ANNUAL REPORT268
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