Integrated Diagnostics Holdings PLC Preliminary Results (8940I)

TIDMIDHC

RNS Number : 8940I

Integrated Diagnostics Holdings PLC

21 April 2022

Integrated Diagnostics Holdings Plc

FY 2021 Results

Thursday, 21 April 2022

Integrated Diagnostics Holdings Plc concludes outstanding 2021 reporting revenues in excess of EGP 5 billion and record-high margins

(Cairo and London) - Integrated Diagnostics Holdings ("IDH," "the Group," or "the Company"), a leading consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria, released today its audited financial statements and operational performance for the year ended 31 December 2021, reporting revenue of EGP 5,225 million, up 97% compared to FY 2020. Profitability came in at an all-time high, with adjusted EBITDA 1 growing 116% year-on-year to record EGP 2,530 million, and net profit recording a 145% year-on-year increase to reach EGP 1,493 million in FY 2021. In the final quarter of the year, IDH reported revenue of EGP 1,458 million, 48% above the previous year's figure, and net profit of EGP 345 million, up 47% from the comparable three month period of 2020. It is important to note that information in relation to the Company's full year results has been extracted from our audited annual report. Meanwhile, disclosures and statements in respect of quarterly information are unaudited.

In light of IDH's outstanding performance for the twelve months ended 31 December 2021, IDH's board of directors has recommended a dividend distribution of EGP 2.17 per share, or EGP 1.3 billion in aggregate, to shareholders (exact US dollar amount is subject to the exchange rate at the time of the upstreaming from the subsidiaries to the holding company). This represents a significant increase compared to a final dividend of US$ 29.1 million distributed for the previous financial year.

Financial Results (IFRS)

 
  EGP mn                      Q4 2020   Q4 2021     Change   FY 2020         FY 2021    Change 
===========================  ========  ========  =========  ========  ==============  ======== 
 Revenues                         986     1,458        48%     2,656           5,225       97% 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Cost of Sales                  (474)     (821)        73%   (1,314)         (2,421)       84% 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Gross Profit                     513       638        24%     1,343           2,804      109% 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Gross Profit Margin              52%       44%   -8.3 pts       51%             54%   3.1 pts 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Adjusted Operating Profit 
  2                               410       468        14%       986           2,292      132% 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Adjusted EBITDA(1)               460       537        17%     1,171           2,530      116% 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Adjusted EBITDA Margin           47%       37%   -9.8 pts       44%             48%   4.4 pts 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Net Profit                       234       345        47%       609           1,493      145% 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Net Profit Margin                24%       24%          -       23%             29%   5.6 pts 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 Cash Balance                     877     2,350       168%       877           2,350      168% 
---------------------------  --------  --------  ---------  --------  --------------  -------- 
 

Note (1): Adjusted operating profit, EBITDA and adjusted EBITDA are measures utilized by management in assessing performance of the group. These adjusted measures eliminate the one off impacts of items in the year to provide a measure of underlying performance. EBITDA is an important measure as it shows the performance of the Group and the Group's ability to reinvest funds generated and this is a widely used term for acquisitive businesses such as ourselves.

Note (2): Throughout the FY 2021 Earnings release, percentage changes between reporting periods are calculated using the exact value (as reported in the Company's Consolidated Financials) and not the corresponding rounded figure.

Note (3): Quarterly results are unaudited.

Key Operational Indicators3

 
                              FY 2020   FY 2021   change 
===========================  ========  ========  ======= 
 Branches                         481       502       21 
---------------------------  --------  --------  ------- 
 Patients ('000)                7,113    10,317      45% 
---------------------------  --------  --------  ------- 
 Revenue per Patient (EGP)        373       489      31% 
---------------------------  --------  --------  ------- 
 Tests ('000)                  27,073    33,659      24% 
---------------------------  --------  --------  ------- 
 Revenue per Test (EGP)            98       150      53% 
---------------------------  --------  --------  ------- 
 Test per Patient                 3.8       3.3     -14% 
---------------------------  --------  --------  ------- 
 

(1) Adjusted EBITDA is calculated as operating profit plus depreciation and amortization and excluding one-off fees incurred in FY 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

(2) Adjusted Operating Profit excludes one-off fees incurred in FY 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

(3) Key operational indicators are calculated based on net sales for the year of EGP 5,048 million. More details on the difference between net sales and total revenues is available below.

Important Notice: Treatment of Revenue Sharing Agreements and Use of Alternative Performance Measures

As part of IDH's efforts to support local authorities in Egypt and Jordan in the fight against the pandemic, Biolab (IDH's Jordanian subsidiary) secured several revenue-sharing agreements to operate testing stations, primarily dedicated to PCR testing for Covid-19, in multiple locations across the country including Queen Alia International Airport (QAIA) and Aqaba Port. Under these agreements, Biolab receives the full revenue (gross sales) for each test performed and pays a proportion to QAIA (38% of gross sales) and Aqaba Port (36% of gross sales) as concession fees to operate in the facilities, thus effectively earning the net of these amounts (net sales) for each test supplied. During Q3 2021, management had reported the net sales generated from these contracts. The treatment has been altered during Q4 2021 in accordance with IFRS 15 paragraph B34, which considers Biolab as a Principal (and not an Agent). Subsequently, revenues generated from these agreements are reported in the Consolidated Financial Statements as gross (inclusive of concession fees) and the fees paid to QAIA and Aqaba Port are reported as a separate line item in the direct cost.

For IFRS purposes Biolab is considered the principal in this relationship and record the full amount received as revenue. For internal purposes management considers the net amount earned to be net sales, and have therefore included this measure as an "alternative performance measure" (APM) alongside the IFRS measure when describing the business' performance. The decision to present APMs reflects the Directors' view that they provide the user of the accounts with additional information to the IFRS information reported to help understand the performance of the business, and is consistent with how the Company's performance is reviewed internally. Moreover, it allows further comparability when describing the performance of the Group's regions and year-on-year analysis.

Throughout the report, management utilizes net sales of EGP 5,048 million for FY 2021 (IFRS revenues stand at EGP 5,225 million for the year), and cost of net sales of EGP 2,244 million (IFRS cost of sales recorded EGP 2,421 million). Net sales for the period are calculated as total gross revenues (IFRS compliant measure) excluding concession fees and sales taxes paid as part of Biolab's revenue sharing agreements with Queen Alia International Airport (QAIA) and Aqaba Port.

It is important to note that aside from revenue and cost of sales, all other figures related to gross profit, operating profit, EBITDA, and net profit are identical in the APM and IFRS calculations. However, the margins related to the aforementioned items differ between the two sets of performance indicators due to the use of Net Sales in the APM calculations and the use of Revenues for the IFRS calculations. More specifically, under the APM, in FY 2021 IDH reported a gross profit margin on net sales of 56%, an EBITDA margin on net sales of 50%, and a net profit margin on net sales of 30%. Under the IFRS regime, gross profit margin recorded 54%, EBITDA margin stood at 48%, and net profit margin recorded 29%. Furthermore, this amendment has no impact on the prior year reported revenues.

Adjustments Breakdown

 
  EGP mn                                           Q4 2021   FY 2021 
================================================  ========  ======== 
 Net Sales                                           1,281     5,048 
------------------------------------------------  --------  -------- 
 QAIA and Aqaba Port Concession Fees                   177       177 
------------------------------------------------  --------  -------- 
 Revenues                                            1,458     5,225 
------------------------------------------------  --------  -------- 
 Cost of Net Sales                                   (644)   (2,244) 
------------------------------------------------  --------  -------- 
 Adjustment for QAIA, and Aqaba Port Agreements      (177)     (177) 
------------------------------------------------  --------  -------- 
 Cost of Sales                                       (821)   (2,421) 
------------------------------------------------  --------  -------- 
 

Adjustments by Country

 
   EGP mn       Q4 2021   Q4 2021   FY 2021   FY 2021 
                 (IFRS)              (IFRS) 
                            (APM)               (APM) 
=============  ========  ========  ========  ======== 
 Egypt              986       986     4,108     4,108 
-------------  --------  --------  --------  -------- 
 Jordan             454       277     1,046       869 
-------------  --------  --------  --------  -------- 
 Nigeria             13        13        54        54 
-------------  --------  --------  --------  -------- 
 Sudan                4         4        17        17 
-------------  --------  --------  --------  -------- 
 Group total      1,458     1,281     5,225     5,048 
-------------  --------  --------  --------  -------- 
 

Alternative Performance Measures (APM)

 
  EGP mn                       Q4 2020   Q4 2021     Change   FY 2020   FY 2021    Change 
============================  ========  ========  =========  ========  ========  ======== 
 Net Sales                         986     1,281        30%     2,656     5,048       90% 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Cost of Net Sales               (474)     (644)        36%   (1,314)   (2,244)       71% 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Gross Profit                      513       638        24%     1,343     2,804      109% 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Gross Profit Margin on 
  Net Sales                        52%       50%   -2.2 pts       51%       56%   5.0 pts 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Adjusted Operating Profit*        410       468        14%       986     2,292      132% 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Adjusted EBITDA**                 460       537        17%     1,171     2,530      116% 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Adjusted EBITDA Margin 
  on Net Sales                     47%       42%   -4.7 pts       44%       50%   6.1 pts 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Net Profit                        234       345        47%       609     1,493      145% 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Net Profit Margin on Net 
  Sales                            24%       27%    3.2 pts       23%       30%   6.6 pts 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 Cash Balance                      877     2,350       168%       877     2,350      168% 
----------------------------  --------  --------  ---------  --------  --------  -------- 
 

*Adjusted Operating Profit excludes one-off fees incurred in FY 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

** Adjusted EBITDA is calculated as operating profit plus depreciation and amortization and excluding one-off fees incurred in FY 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

Note (1): Adjusted operating profit, EBITDA and adjusted EBITDA are measures utilized by management in assessing performance of the group. These adjusted measures eliminate the one off impacts of items in the year to provide a measure of underlying performance. EBITDA is an important measure as it shows the performance of the Group and the Group's ability to reinvest funds generated and this is a widely used term for acquisitive businesses such as ourselves.

Note (2): Quarterly results are unaudited.

Important notice: A reconciliation between IFRS and APM measures is provided earlier in this announcement.

Introduction

   i.    Financial Highlights 

-- Net Sales surpassed the EGP 5 billion mark to record EGP 5,048 million in FY 2021, representing a 90% year-on-year expansion. Net sales growth for the year was dual driven, with total tests performed increasing 24% year-on-year and average price per test expanding 53% versus FY 2020. Consolidated net sales were supported by strong demand for both IDH's Covid-19-related4 and conventional tests portfolios, with the segments contributing to 51% and 49% of consolidated FY 2021 net sales, respectively. Covid-19-related tests witnessed high demand throughout FY 2021, supported by rising infection rates in the first half of the year and the widespread lifting of travel bans in the second half of 2021. On the conventional tests front, demand recorded a sustained recovery following the Covid-19-related slowdown experienced in the previous year, with conventional test net sales expanding 22% versus FY 2020, and coming in 13% above pre-covid levels recorded in FY 2019. On a quarterly basis, net sales stood at EGP 1,281 million in Q4 2021, up 30% versus Q4 2020.

-- It is important to note that within the Covid-19-related tests classification, the Company includes both "core Covid-19 tests" (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19. During the twelve months to 31 December 2021, core Covid-19 tests made up 44% of the Company's consolidated net sales, while other Covid-19-related tests made an 8% contribution to consolidated net sales for the year.

-- Throughout the year, IDH's ability to effectively ramp up its house call capabilities in both Egypt and Jordan, saw the service make a significant contribution to consolidated net sales. More specifically, net sales generated from the service expanded an impressive 87% year-on-year in FY 2021, with its contribution to total net sales standing at 20%, unchanged from the previous year. It is worth highlighting that tests performed through IDH's house call service, are offered at the same price as at traditional branches, with an additional house call delivery fee charged to patients to cover the chemist transportation costs.

-- Gross Profit grew 109% year-on-year in FY 2021 to record EGP 2,804 million. Gross Profit Margin on net sales stood at 56%, a solid five percentage point expansion compared to the previous twelve months. Improved gross profitability continued to be supported by strong net sales growth and the subsequent dilution of fixed costs for the year such as direct salaries and wages and other expenses. On a three-month basis, gross profit came in at EGP 638 million in Q4 2021, representing a 24% increase from Q4 2020. Gross profit margin on net sales for the quarter recorded 50% versus 52% in the same three months of 2020 and 58% during Q3 2021. Lower gross profit margins versus both periods reflects a decline in the average price of Covid-19-related tests during the quarter as well as lower demand for Covid-19-related tests as the spike in demand from passengers traveling abroad witnessed in the third quarter of 2021 subsided.

-- Adjusted Operating Profit5 recorded EGP 2,292 million, up 132% year-on-year. Adjusted operating profit margin on net sales stood at 45% for the year, up eight percentage points from FY 2020. Strong operating profit growth came on the back of solid gross profitability for the year, and was further buoyed by the normalisation of provisions booked in FY 2021, which stood at EGP 25 million down from the EGP 42 million recorded in FY 2020 to account for expected credit losses in accordance with IFRS 9.

-- Adjusted EBITDA6 increased 116% year-on-year in FY 2021 to reach EGP 2,530 million, while EBITDA margin on net sales expanded six percentage points to record 50% for the year. Strong EBITDA profitability was supported by the Company's strong net sales growth for the year and the subsequent dilution of its fixed costs. In Q4 2021, adjusted EBITDA recorded EGP 537 million, 17% above the previous year's figure and with an adjusted EBITDA margin on net sales of 42% for the quarter, down from 47% in Q4 2020 and 54% in Q3 2021. Lower margins versus both periods reflect relatively lower gross profitability combined with increased marketing and administrative expenses for the quarter.

-- Net Profit reached EGP 1,493 million in FY 2021, up 145% versus FY 2020. Net profit margin on net sales expanded seven percentage points from FY 2020 to record 30% for the year. The remarkable net profit growth comes on the back of strong EBITDA level profitability and despite the Company booking EGP 29 million in one-off fees related to its dual-listing in May 2021 as well as EGP 20 million in fees related to the IFC loan also secured in May 2021. In the last three months of the year, net profit recorded EGP 345 million, up 47% year-on-year and with an associated margin on net sales of 27% versus 24% in the same quarter of 2020.

   --    Earnings per share stood at EGP 2.35 in FY 2021 compared to EGP 0.99 in FY 2020. 

-- IDH's board of directors has recommended a dividend distribution of EGP 2.17 per share, or EGP 1.3 billion in aggregate, to shareholders in respect of the financial year ended 31 December 2021 (exact US dollar amount is subject to the exchange rate at the time of the upstreaming from the subsidiaries to the holding company). This represents a significant increase compared to a final dividend of US$ 29.1 million distributed for the previous financial year.

4 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.

5 Adjusted Operating Profit excludes one-off fees incurred in FY 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

(6) Adjusted EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in FY 2021 (EGP 29 million) related to the Company's EGX listing completed in May 2021.

ii. Operational Highlights

-- IDH's branch network stood at 502 branches as at year-end 2021, up from 481 branches as of 31 December 2020.

-- Total tests performed increased 24% year-on-year to reach 33.7 million in FY 2021. Test volume growth was driven by both strong demand for IDH's Covid-19-related7 test offering, which nearly doubled versus the previous year, coupled with a 15% year-on-year increase in conventional tests performed. During the final quarter of the year, IDH performed 8.7 million tests, up 5% year-on-year.

-- Average revenue per test increased 53% year-on-year to EGP 150 in FY 2021. Controlling for the generally higher value Covid-19-related(7) tests, average revenue per test increased 7% versus the previous year.

-- Total patients served surpassed the 10 million mark for the first time, reaching 10.3 million in FY 2021, an increase of 45% from the previous year. Average test per patient declined to 3.3 in FY 2021 from 3.8 in FY 2020 due to the increasing number of patients who visited the Group's labs for single Covid-19 tests (PCR, Antigen and Antibody) throughout the year.

-- In Egypt, IDH recorded revenue of EGP 4,108 million (contributing to 81% of IDH net sales), up 89% year-on-year in FY 2021 on the back of solid growth in both patient and test volumes. Revenue growth in IDH's home market was supported by both Covid-19-related(7) and conventional tests, and was further boosted by the Group's house call service which in the twelve months ended on 31 December 2021 saw its revenue nearly double, contributing 23% of Egypt's revenues versus 22% in FY 2020. Throughout 2021, demand for conventional tests continued to recover following the Covid-19-related slowdown recorded in 2020, with conventional test revenue increasing 23% year-on-year on the back of a 15% year-on-year increase in conventional test volumes.

-- Al-Borg Scan recorded year-on-year revenue growth of 81%, with the venture's revenues reaching EGP 45 million in FY 2021. Revenue growth was supported by solid growth in volumes, with both tests performed and patients served standing 70% above the preceding year's figures. To capitalise on Al-Borg Scan's growing popularity, the Group inaugurated two Al-Borg Scan branches in the second half of 2021, and a third in March 2022. In the coming months, IDH is looking to inaugurate additional branches to expand its reach across Greater Cairo.

-- Wayak recorded strong year-on-year standalone revenue growth in FY 2021, which when combined with management's cost optimisation strategy continued to support a narrowing of the venture's standalone EBITDA losses in FY 2021 versus the previous year.

-- Meanwhile, in Jordan net sales reached EGP 869 million (IFRS revenues8 recorded EGP 1,046 million in FY 2021), representing a 112% expansion versus the previous year. Strong growth for the year, saw the country's contribution to total consolidated net sales reach a record high of 17.2%, up from 15.4% in the previous twelve months. The impressive performance was supported by solid growth in both tests performed and average revenue per test. Covid-19-related tests made up 68% of the country's net sales with the contribution further bolstered by Biolab's multiple revenue-sharing partnerships. In particular, Biolab's agreement with Queen Alia International Airport (QAIA) generated c. EGP 185 million in the five months from August to December 2021, contributing to 21% of the country's total net sales for the year. In parallel, demand for Biolab's conventional test offering rose steadily throughout the year, with the number of conventional tests performed and net sales generated during FY 2021 increasing 28% and 26% year-on-year, respectively.

-- In Georgia, where Biolab has partnered with Georgia Healthcare Group (GHG) to establish a 7,500 sqm Mega Lab, the ramp up phase is progressing as scheduled, with Biolab concluding the roll out of the new Laboratory Information Management System (LIMS) across all of GHG's 76 medical facilities (7 hospitals and 69 clinics) in 1H 2021. The Mega Lab is the region's largest diagnostic medical laboratory which will leverage the advanced technological systems provided by Biolab to connect more than 40 hospitals and diagnostic centers that are part of GHG's network. As compensation for the LIMS roll out, Biolab has received an 8.025% equity interest in Mega Lab. Moreover, in exchange for management services, which Bio Lab will be supplying for a two-year period with the option to extend, the company will receive an annual fee as well as a fixed percentage of Mega Lab's annualized EBITDA.

-- IDH's Nigerian operations reported year-on-year revenue growth of 49% in FY 2021, on the back of a 16% and 31% year-on-year rise in patients served and tests performed, respectively. Consistent revenue growth coupled with successful cost optimisation efforts implemented by the venture's new management team, see Echo-Lab on track to turn EBITDA positive in early 2022.

-- In Sudan, despite the operational difficulties and heightened uncertainty faced throughout the past year, operations are continuing without major interruptions. While results for the year were significantly impacted by the devaluation of the Sudanese Pound in February 2021, in local currency terms, IDH's Sudanese operations reported year-on-year revenue growth of 159%, as management continued to successfully raise test prices in step with inflation.

(7) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.

8 Biolab's revenues for the period are calculated as net sales and including concession fees paid to QAIA and Aqaba Port as part of their revenue sharing agreements.

iii. Management Commentary

Commenting on the Group's full-year performance, IDH Chief Executive Officer Dr. Hend El-Sherbini said: "2021 was an exceptional year for IDH which saw our 5,000 employees serve more than 10 million patients and perform more tests than ever before, helping us deliver outstanding financial results. In parallel, we added new services to our roster, expanded our reach across both digital and physical channels, enhanced the overall experience of our patients, grew our footprint, and completed our dual-listing on the Egyptian Exchange, complementing our LSE listing. This saw us end the year having built new foundations on which to drive the next phase of growth across all our markets.

Heading into 2022, there are several exciting developments I am looking forward to across both new and existing markets. In Egypt and Jordan, we are aiming to capitalise on our market leading position, expanded product offering and patient base, increased service delivery capabilities, and growing visibility to continue delivering robust growth in the year ahead. In particular, we are eager to capitalise on the post-Covid-19 rebound in conventional testing as patients' focus shifts back to conventional healthcare as the threat of Covid-19 subsides. Moreover, across both markets, our attention will now pivot towards patient retention as well look to maintain the new relationships we were able to establish during the pandemic thanks to our Covid-19-dedicated offering. In Nigeria, thanks to the consistent revenue growth and the stellar work being done by Dr. Bhatia and his team to streamline operations, Echo-Lab is on track to turn EBITDA positive in 2022. We are confident that the investments undertaken since the acquisition of Echo-Lab back in 2018 have built a stronger, leaner, and growth-oriented business which is well-placed to take full advantage of the significant growth

opportunities offered Nigeria's diagnostics market.

In the first few months of the new year, globally we have been confronted with a new set of challenges related to the long-term economic spill overs of the pandemic coupled with the impacts of the ongoing Russia-Ukraine war. Supply chain issues, fast-rising consumer demand, and the increased volatility in commodity prices which has been exacerbated by the ongoing war in Eastern Europe, are continuing to push up prices, with countries around the world recording inflation figures not seen for many years. In light of rising inflation, central banks around the world have commenced a cycle of monetary tightening, with many raising interest rates for the first time in years. Here in Egypt, on 21 March 2022, the Central Bank raised policy rates by 100bps and allowed the Egyptian Pound to devalue by more than 17% against the US Dollar. Despite the heightened uncertainty following the announcement, we are confident that our proven track record in navigating similar turbulent times and the strong mitigation frameworks we have in place provide ample protection from the short and longer-term impacts of the decision."

- End -

Analyst and Investor Call Details

An analyst and investor call will be hosted at 2pm (UK) | 3pm (Egypt) on Tuesday, 26 April 2022. You can access the call by clicking on this link, and you may dial in using the conference call details below:

-- Event number: 2379 872 7421

-- Event password: 2FHc5saY2Cn

For more information about the event, please contact: [e-mail]

About Integrated Diagnostics Holdings (IDH)

IDH is a leading consumer healthcare company in the Middle East and Africa with operations in Egypt, Jordan, Sudan and Nigeria. The Group's core brands include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab (Jordan), Ultralab and Al Mokhtabar Sudan (both in Sudan) and Echo-Lab (Nigeria). A long track record for quality and safety has earned the Company a trusted reputation, as well as internationally recognised accreditations for its portfolio of over 2,000 diagnostics tests. From its base of 502 branches as of 31 December 2021, IDH will continue to add laboratories through a Hub, Spoke and Spike business model that provides a scalable platform for efficient expansion. Beyond organic growth, the Group's expansion plans include acquisitions in new Middle Eastern, African, and East Asian markets where its model is well-suited to capitalise on similar healthcare and consumer trends and capture a significant share of fragmented markets. IDH has been a Jersey-registered entity with a Standard Listing on the Main Market of the London Stock Exchange (ticker: IDHC) since May 2015 with a secondary listing on the EGX since May 2021 (ticker: IDHC.CA).

Shareholder Information

LSE: IDHC.L

EGX: IDHC.CA

Bloomberg: IDHC:LN

Listed on LSE: May 2015

Listed on EGX: May 2021

Shares Outstanding: 600 million

Contact

Nancy Fahmy

Investor Relations Director

T: [phone] | M: [phone] | [e-mail]

Forward-Looking Statements

These results for the year ended 31 December 2021 have been prepared solely to provide additional information to shareholders to assess the group's performance in relation to its operations and growth potential. These results should not be relied upon by any other party or for any other reason. This communication contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as "according to estimates", "aims", "anticipates", "assumes", "believes", "could", "estimates", "expects", "forecasts", "intends", "is of the opinion", "may", "plans", "potential", "predicts", "projects", "should", "to the knowledge of", "will", "would" or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding business and management, future growth or profitability and general economic and regulatory conditions and other matters affecting the Group .

Forward-looking statements reflect the current views of the Group's management ("Management") on future events, which are based on the assumptions of the Management and involve known and unknown risks, uncertainties and other factors that may cause the Group's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The occurrence or non-occurrence of an assumption could cause the Group's actual financial condition and results of operations to differ materially from, or fail to meet expectations expressed or implied by, such forward-looking statements.

The Group's business is subject to a number of risks and uncertainties that could also cause a forward-looking statement, estimate or prediction to differ materially from those expressed or implied by the forward-looking statements contained in this communication. The information, opinions and forward-looking statements contained in this communication speak only as at its date and are subject to change without notice. The Group does not undertake any obligation to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this communication.

Important notice: A reconciliation between IFRS and APM measures is provided earlier in this announcement.

Chairman's Message

I am pleased to report that despite the continued operational challenges posed by Covid-19, your Company delivered an outstanding performance in 2021, providing its services to a record number of patients, while laying new foundations from which to generate sustainable growth in the coming years.

Record-Breaking Results

In our seventh year as a publicly listed company on the London Stock Exchange, we were proud to see our revenue surpass EGP 5 billion for the first time, growing year-on-year by over 90%.

Leveraging on our expanded service offerings, we attracted a record number of patients to our laboratories, serving over 10 million patients in 2021.

In both Egypt and Jordan, we continued to honour our responsibility as a leading healthcare provider, assisting local authorities tackle the pandemic and supporting the recovery of international travel.

During the year, we performed more than 2.6 million PCR, antigen, and antibody tests, and continued to improve our delivery capabilities to bring our services to as many people as possible.

We also achieved a robust recovery in our conventional business offerings, which now exceeds our pre-Covid-19 levels enhancing our long established track record in our core business.

In Nigeria, following our restructuring of the business and with our strong management team we achieved solid and sustainable results. We are expecting Echo-Lab to turn EBITDA positive in the coming months.

A Forward-looking Business

As firm believers in proactive healthcare, at IDH we take pride in our ability to deliver service excellence today, while always keeping an eye to the future. Throughout the year, we continued to invest in developing all aspects of our business, from adding new services to our portfolio and world-class doctors to our team, to expanding our delivery channels and enhancing our digital infrastructure.

We have successfully expanded our house call services.

We have also accomplished steady growth of our radiology venture, Al-Borg Scan.

In the ever burgeoning data analytics business environment, we are exploring ways to utilize our vast database to develop new services increasingly tailored to patients' individual needs.

We continue to ensure strict data privacy and remain vigilant in strengthening our IT infrastructure to proactively address all cybersecurity risks.

Expanding our Footprint

Your Company continues to enjoy strong organic growth momentum while constantly evaluating potential M&A opportunities across new African, Middle Eastern, and Asian markets.

On this front, we look forward to potentially adding Pakistan to our footprint and commencing our partnership with Islamabad Diagnostics Centre and Dr. Uppal once all pending conditions precedent are satisfied. The combination of our two businesses will see us well-placed to meet the country's growing healthcare needs.

Environmental, Social, and Governance (ESG)

We are proud to have published our first Sustainability Report and are cognizant of our social responsibilities while seeking to constantly monitor and address all areas of ESG within the business in Egypt and elsewhere in our offices around the world.

Management regularly monitors and revises our risk matrix and heat map to ensure we have the right checks and balances in place and ensuring business continuity processes.

A United Team

We have benefitted hugely over the past three years having most of our team working out of our headquarters in Cairo's Smart Village.

We value our loyal and hard-working workforce and constantly review their KPIs to help them progress professionally in line with their ambitions while providing a long-term incentive programme (LTIP) starting 2022.

We have also recently expanded and strengthened your Company's Board of Directors, welcoming Yvonne Stillhart as a Non-Executive Director. Yvonne brings a wealth of experience across multiple sectors, and replaces James Nolan who stepped down in September of last year.

We are enormously grateful to James for his excellent service and wise counsel to IDH.

Broadening our Shareholder Base

IDH's shares are now listed on both the London Stock Exchange and Egyptian Stock Exchange. We are confident that this will expand our shareholder base to include local institutional and retail investors in Egypt, while increasing liquidity and visibility in our largest market.

In 2022 we also welcomed IFC as a strategic shareholder, and look forward to carrying on working closely together to continue meeting the strong demand for healthcare services across our footprint.

As our countries of operation prepare to transition into a post-Covid-19 world, your Company is well positioned to maintain growth and profitability and continue delivering exceptional and consistent value to patients and shareholders.

Lord St John of Bletso

Chairman

Important notice: A reconciliation between IFRS and APM measures is provided earlier in this announcement.

Chief Executive's Review

2021 was an exceptional year for IDH which saw our 5,000 employees serve more than 10 million patients and perform more tests than ever before, helping us deliver outstanding financial results. In parallel, we added new services to our roster, expanded our reach across both digital and physical channels, enhanced the overall experience of our patients, grew our footprint, and completed our dual-listing on the Egyptian Exchange, complementing our LSE listing. This saw us end the year having built new foundations on which to drive the next phase of growth across all our markets.

Similar to the previous year, 2021 was heavily impacted both economically and socially by Covid-19, as countries around the world combatted various waves of new infections and confronted multiple new variants. Despite this, 2021 was also a turnaround year for the fight against the pandemic as vaccines were gradually rolled out and governments and individuals became increasingly willing to coexist with the virus, driving widespread economic recovery from the previous year's lows.

In the midst of a challenging operating environment, we displayed a remarkable ability to adapt to changing market and demand dynamics and consistently cater to the evolving needs of our growing patient base, ensuring we continue to provide our communities with access to high quality, affordable healthcare and diagnostic services. Over the past twelve months, we continued to effectively care for both our conventional and Covid-19 patients leveraging an expanded branch network, a ramped-up house call service, and a growing digital presence to make our services increasingly accessible and our payment methods increasingly convenient. Our efforts translated in significant improvements in our patients' overall experience, with the Group's net promoter score for the year recording consistently above the 80 mark, ahead of last year's value and well above industry averages.

During 2021, we continued to serve our Covid-19 patients by ensuring we were well-equipped to handle peaks in demand when infection rates increased, while promptly adapting our offering to the requirements of patients. In the twelve months to 31 December 2021, we performed over 2.6 million PCR, antigen and antibody tests, continuing to provide patients and healthcare workers with a trustworthy first line of defence against the virus. At the same time we secured multiple partnerships with international air carriers and regional healthcare providers like National Aviation Services (NAS) Kuwait and Pure Health UAE to conduct PCR testing for passengers traveling from Egypt to other regional destinations. We also offered PCR testing for passengers on a walk-in basis, and were the first lab in Egypt to provide QR codes on travel certificates. This enabled us to not only to play an important role in supporting the recovery of international travel, but also ensured that we successfully captured a leading market share for the service.

In parallel, despite the challenges posed by the pandemic, we never lost sight of the needs of our conventional patients, continuing to care for them even at the height of the Covid-19 crisis. Our efforts focused on expanding our service offering and delivery capabilities, as well as organising special campaigns to raise healthcare awareness specifically targeting patients suffering from chronic diseases, a particularly vulnerable category in light of the ongoing pandemic.

Throughout the year, we also devoted increasing attention and resources towards developing our digital infrastructure to expand our reach, provide new services to our patients, and improve their overall experience. Highlights for the year included the roll out of multiple new patient touch points including a revamped IDH app, a new chatbot function, as well as an additional call centre. At the same time, we also made it increasingly convenient for our patients to pay for our services.

Record-breaking Growth and Operational Results

Our ability to transform the business in step with changing demand dynamics enabled us to build on an already strong 2020, to deliver a formidable set of operational and financial results in 2021. More specifically, in the twelve months to 31 December 2021, we recorded consolidated revenue of EGP 5.2 billion, up 97% year-on-year and representing the highest full-year revenue figure on record. Meanwhile, net sales expanded an impressive 90% from the previous year, coming in at EGP 5.0 billion in FY 2021. Net sales growth for the year was dual driven, as we performed 24% more tests than in the previous year and recorded a 53% year-on-year rise in average price per test versus 2020.

Throughout the year, consolidated net sales was supported by strong demand for both our Covid-19-related and conventional tests portfolios, with each segment contributing to around half of consolidated net sales for the year. On the conventional tests front, demand recorded a sustained recovery following the Covid-19-related slowdown experienced in the previous year, with conventional test net sales expanding 22% versus 2020, and coming in a noteworthy 13% above pre-Covid-19 levels recorded in 2019.

Volume and net sales growth for the year also reflected our ongoing investments to expand our delivery capabilities, which over the course of 2021 saw us grow our patient reach across both traditional branches and our house call service. On the one hand, we inaugurated 23 new branches in Egypt and an additional branch in Jordan, taking the total number of operational branches as at year-end 2021 to 502. Our ability to consistently rollout new branches within and outside the Greater Cairo area currently sees us operate the largest network of branches amongst private players in the country, enabling us to strengthen our brand name and maintain our leadership position in the market. Moreover, it is also important to note that our Mega Lab, which continues to be the sole CAP-accredited facility in Egypt, typically operates at around 55% of its maximum capacity leaving abundant room for further growth. In 2021, we also continued to work closely with local authorities in Egypt to obtain the necessary certifications to take part in the government's Universal Healthcare Insurance (UHI) system which is being rolled out across the entire country. As at year-end 2021, IDH had 13 out of the 19 UHI-accredited labs in the country, with several more of our labs looking to obtain accreditation in the coming year. On the other hand, in response to the growing demand for our house call services in both Egypt and Jordan, we continued to ramp up our house call capabilities. In our home market of Egypt, where sample collected directly in patient homes made up 23% of the country's revenues for the year, we added a second call centre, expanded our house call team to an average of 400 chemists, and streamlined logistics to further decrease turnaround times. On this last point, we were particularly happy to note our success in keeping turnaround times strictly below 24 hours even throughout the multiple peaks in infection rates witnessed in 2021. Our ability to effectively ramp up the service to match its growing popularity is enabling us to perform over five thousand house visits per day, the most out of any other player in the market, and process over ten thousand calls each day.

Regionally, in Egypt, as with the consolidated performance, our revenues were supported by both our Covid-19-related test offering, which in 2021 made up 49% of the country's revenues, as well as the country's conventional test offering, which made up the remaining 51%. During the year, we continued to lead the market in terms of core Covid-19 tests performed, further testament to the high quality of our offering and the extensive reach of our services. At the same time, we observed a sustained recovery in our conventional business, with revenues generated by conventional tests increasing a solid 23% versus the previous year supported by a 15% rise in conventional tests performed and a 7% expansion in average revenue per conventional test.

Egypt's revenues were further buoyed by revenues generated by our house call service, which expanded an impressive 94% versus 2020, contributing an additional EGP 935 million to the country's total revenues for the year. Meanwhile, at our fast-growing radiology venture, Al-Borg Scan, we witnessed a solid 81% year-on-year increase in revenue to EGP 45 million supported by a 70% year-on-year rise in both tests performed and patients served, which recorded 78 thousand and 62 thousand, respectively. I am particularly happy to note the growing success of Al-Borg Scan, which is helping us to capitalise on the important growth opportunities offered by Egypt's fragmented radiology market while delivering on our vision of providing patients with a one-stop-shop service offering featuring both pathology and radiology. To capitalise on the rising patient demand for our radiology services, we inaugurated two new Al-Borg Scan branches in 2021 and a third in March 2022. In the coming months, we plan to continue launching additional branches, further expanding our reach across Great Cairo. Finally, it is also worth

highlighting Wayak's growing market traction, with the venture continuing to expand its patient base and product offering. The company's EBITDA losses have narrowed significantly and management has ambitious plans to build on this momentum by rolling out multiple new services in 2022.

Jordan was the standout performer for the year, with Biolab reporting year-on-year net sales growth of 112% and contributing a record share of consolidated net sales at 17.2%. During the year, Covid-19-related tests contributed to 68% of Biolab's net sales as the venture continued to record strong demand at both its regular branches and across its testing booths located in the country's main airports and ports. In fact, Covid-19-related net sales in Jordan was boosted by strong contributions from Biolab's new partnership with Queen Alia International Airport, King Hussain International Airport, and Aqaba Port. As part of these agreements, Biolab has been operating testing stations across all three locations primarily focused on offering PCR testing for Covid-19 to passengers arriving in Jordan. Through these initiatives, Biolab was able to continue playing a frontline role in the country's fight against the pandemic and simultaneously expand its patient base and reach across new segments of the population. Meanwhile, we were also very pleased to note the robust recovery in Biolab's conventional test net sales, which increased 26% year-on-year on the back of a solid rise in conventional tests performed.

In Nigeria, we continued to record steady revenue growth throughout the entire year on the back of growing test and patient volumes. In 2021, Echo-Lab's revenues expanded 49% year-on-year on the back of a 31% increase in tests performed coupled with a 14% rise in average revenue per test. Growing volumes continue to highlight the effectiveness of our investments to revamp Echo-Lab's operations and the success of our targeted marketing efforts. The consistent growth delivered by our Nigerian operations also reflect the incredible work done by Dr. Alok Bhatia, who joined Echo-Lab as CEO in March 2021. Dr. Bhatia and his team have brought the skills and expertise needed to deliver on our long-term vision for Echo-Lab and we look forward to reaping the rewards of their hard work in the coming years.

Finally, in Sudan our results for the year were heavily impacted by the devaluation of the Sudanese Pound in February 2021 as well as the rise in social and political unrest witnessed in the final months of the year. However, management's continued success in raising prices in step with inflation, saw revenue in local currency terms grow an impressive 159% in 2021. It is also worth highlighting that despite the operational difficulties and heightened uncertainty faced throughout the past year, operations are continuing without major interruptions.

Further down the income statement, we reported impressive margin expansions at all levels of profitability supported by strong revenue growth and the subsequent dilution of IDH's fixed costs. More specifically gross profit for the year more than doubled with a five-point margin expansion. Meanwhile, EBITDA adjusted for one-off listing fees expanded 116% with a margin on net sales of 50%, up six percentage points from 2020 (adjusted EBITDA margin on revenues stood at 48% in FY 2021). Strong adjusted EBITDA level profitability supported a 145% year-on-year expansion in net profit which reached EGP 1,493 million in 2021. Net profit margin on net sales expanded seven percentage points versus 2020 to record 30% for the year (net profit margin on revenues stood at 29% in FY 2021). It is worth highlighting that the remarkable net profit growth comes despite the Company booking EGP 29 million in one-off fees related to our dual-listing as well as EGP 20 million in fees related to the IFC loan secured in May of last year.

Expanding Our Footprint

While effectively serving our patients and delivering exceptional results across our existing geographies, we also worked to expand our footprint into new territories. On this front, in December 2021, we signed a sale and purchase agreement to acquire 50% of Islamabad Diagnostic Centre (IDC), one of Pakistan's largest, most respected, and fastest growing integrated diagnostics companies, for a total consideration of USD 72.35 million. The deal, which is currently pending regulatory approval, would see us partner with IDC's founder and CEO, Dr Rizwan Uppal, and acquire a stake in an established provider with a strong track-record, solid financial performance, and an ambitious growth plan. The transaction will see us add a fifth country to our footprint and help us further diversify our revenue base in line with our long-term strategy. IDC will be fully consolidated on IDH's accounts following the completion of the transaction and the transfer of funds to the Evercare Group. Under the agreement, IDH will hold four of the seven seats on IDC's board. The transaction, which is subject to the satisfaction of a number of conditions precedent should be completed later in 2022.

With a population of over 200 million, 63% of which is under the age of 30, Pakistan boasts an attractive demographic profile providing long-term sustainable demand for quality healthcare services. Meanwhile, like many of the markets we currently operate in, its healthcare industry is characterised by a widening demand-supply gap for high quality healthcare services, a high degree of out-of-pocket payments (medical expenses not reimbursed by insurance), and increasingly favourable regulations aimed at encouraging private sector participation. Similar to our existing businesses, IDC boasts an established position in the Pakistani market with network of over 85 branches across 30 cities, and offers a full roster of pathology and radiology diagnostic services. These characteristics make IDC the perfect partner for IDH, and Pakistan an ideal location where our proven business model is well placed to drive new value and help meet the rising demand for high quality healthcare.

Dual-listing on the EGX

Adding to this past year's list of achievements, in May 2021 we successfully completed our dual-listing on the Egyptian Exchange (EGX), successfully meeting our goal of offering IDH's unique value proposition to the widest investor base possible. With our shares now listed on the both the LSE and the EGX and tradeable in a fully fungible manner, we have provided local retail and institutional investors as well as global emerging markets specialists who regularly invest through the EGX with the possibility to capitalize on our attractive growth profile. We remain optimistic that going forward investors will find having two venues on which to trade IDH shares increasingly useful, realizing our target of having a larger number of the Company's shares being traded on the EGX.

Our Sustainability Journey

Across our operations, we continue to place a strong focus on strengthening our environmental, social and governance (ESG) monitoring and compliance frameworks to ensure we continue working to the betterment of our communities and safeguarding the interests of all our stakeholders. Throughout 2021, we devoted our attention to developing a more assertive road map that draws clear guidelines and methods to monitor, evaluate, and improve our sustainability practices. Under the guidance of a top-tier ESG consultant, we undertook a rigorous ESG assessment across all functions to highlight key sustainability initiatives while identifying areas of improvement. This allowed us to set the foundation for future ESG implementation by internally mapping key performance indicators to the newly developed sustainability framework. As a critical sector, the healthcare industry stands at the threshold of each of the UN's Sustainable Development Goals (SDGs). Throughout our operations, we have direct impacts on a number of key SDGs, and indirectly impact multiple others. Through our Sustainability Report, we were able to successfully share with our peers and wider community our contributions across all 17 SDGs, providing stakeholders with a clear framework to benchmark our contributions and hold us accountable in the years to come.

In a world where investment decisions are being taken with an increasing focus on the ESG profile of a company, we have provided investors with an in-depth analysis of our ESG performance, facilitating their due diligence processes. On this front, we have dedicated a chapter of the report to address our investors' inquiries related to our ESG performance and strategy, aligning ourselves with the global action plan set by the Principles of Responsible Investment. As we leave 2021 behind us, we are proud of the progress made on this front, but remain cognizant that of the long road ahead of us. As we enter this exciting new chapter for IDH, we welcome all our stakeholders to share their insights and help us generate additional social and environmental value for our communities.

Throughout this process, we have been closely guided by our world-class Board of Directors, which has been overseeing all aspects of the business since our listing on the LSE in 2015. Our Board is composed in the majority by independent, non-executive directors and is backed by a robust and constantly enhanced policy framework. In early 2022, our Board of Directors was further strengthened with the appointment of Ms. Yvonne Stillhart, as a Non-Executive Director. Yvonne is a seasoned Senior Executive working with innovation and growth driven companies across a wide range of industries and geographical regions, including Europe, USA, North Africa and Sub-Saharan Africa.

Dividend Policy and Proposed Dividend

In view of the strong cash-generative nature of our business and its asset-light strategy, our dividend policy is to return to shareholders the maximum amount of excess cash after taking careful account of the cash needed to support operations and expansions. As such, IDH is delighted to recommend a final dividend in respect of the financial year ended 31 December 2021 of EGP 2.17 per share, or EGP 1.3 billion in aggregate. The equivalent value, which will depend on the exchange rate at the time of the upstreaming from the subsidiaries to the holding company, represents a significant increase from the dividend of US$ 29.1 million distributed for the previous financial year.

2022 Outlook

We kicked off 2022 recording another surge in Covid-19 infections across our markets as the highly-infective Omicron variant became increasingly prevalent. Throughout this new wave, in both Egypt and Jordan we continued to provide our patients with widespread access to Covid-19-related testing, helping to keep our communities safe and providing local authorities with vital support in the fight against the virus. In the final weeks of the first quarter, as vaccines continued to be rolled out, we witnessed a sustained decline in new infections with governments around the world signalling a strong will to transition into a post-Covid-19 normality. While the Group remains vigilant and ready to respond to possible new waves in infections, we are prepared and excited to kickstart our post-pandemic strategy and venture into a new chapter of sustainable growth. During the course of 2021, while our priority remained helping governments combat the Covid-19 pandemic, we also worked tirelessly to improve all aspects of the business and lay solid foundations on which to build out next phase of development and value creation.

Heading into 2022, there are several exciting developments I am looking forward to across both new and existing markets. In Egypt and Jordan, we are aiming to capitalise on our market leading position, expanded product offering and patient base, increased service delivery capabilities, and growing visibility to continue delivering robust growth in the year ahead. In particular, we are eager to capitalise on the post-Covid-19 rebound in conventional testing as patients' focus shifts back to conventional healthcare as the threat of Covid-19 subsides. Moreover, across both markets, our attention will now pivot towards patient retention as well look to maintain the new relationships we were able to establish during the pandemic thanks to our Covid-19-dedicated offering. On this front, we have recently launched a new dedicated loyalty programme in partnership with a leading loyalty solutions provider, and are working to roll out multiple new marketing campaigns making full use of our growing social media presence. In parallel, we are also leveraging our enhanced digital and data analytics capabilities to monitor patient records and disease cycles, and provide tailored services and increase cross-selling. Our efforts continue to ensure that our patients enjoy a hassle-free experience from start to finish, further enhancing their overall experience. At the same time, we are targeting the roll out of an additional 25 to 30 branches in and outside the Greater Cairo area, and continue to take advantage of the abundant spare capacity at our house call division to further scale up the service. In Nigeria, thanks to the consistent revenue growth and the stellar work being done by Dr. Bhatia and his team to streamline operations, Echo-Lab is on track to turn EBITDA positive in 2022. We are confident that the investments undertaken since the acquisition of Echo-Lab back in 2018 have built a stronger, leaner, and growth-oriented business which is well-placed to take full advantage of the significant growth opportunities offered Nigeria's diagnostics market. Finally, in Sudan, we are continuing to monitor the ongoing political and social instability and have put in place strong mitigation strategies to protect our people and operations.

Beyond our current markets, we are also looking forward to obtaining the remaining regulatory approvals and add Pakistan to our footprint. IDC is expected to generate substantial value from the very start and we are thrilled to kick off our partnership with Dr. Uppal in the coming months. In parallel, we will continue to assess other potential value-accretive acquisition opportunities both across new and existing markets in Africa, the Middle East, and Asia which present similar characteristics to our current markets and where our operational model would be best-suited to drive long-term value creation.

A Turbulent Start to the Year

In the first few months of the new year, globally we have been confronted with a new set of challenges related to the long-term economic spill overs of the pandemic coupled with the impacts of the ongoing Russia-Ukraine war. Supply chain issues, fast-rising consumer demand, and the increased volatility in commodity prices which has been exacerbated by the ongoing war in Eastern Europe, are continuing to push up prices, with countries around the world recording inflation figures not seen for many years. In light of rising inflation, central banks around the world have commenced a cycle of monetary tightening, with many raising interest rates for the first time in years.

Here in Egypt, on 21 March 2022, the Central Bank raised policy rates by 100bps and allowed the Egyptian Pound to devalue by more than 17% against the US Dollar. Despite the heightened uncertainty following the announcement, we are confident that our proven track record in navigating similar turbulent times and the strong mitigation frameworks we have in place provide ample protection from the short and longer-term impacts of the decision. Going forward, we will continue to keep a close eye on the evolving situation, and have taken proactive steps to build up our inventory to safeguard ourselves from any potential future disruptions.

I would like to conclude by thanking all my colleagues for their exceptional work over the course of the last year. 2021 was the outstanding year that it was in great part due to your relentless efforts to deliver on our vision and goals. I am honoured to have the opportunity to work with you, and I am confident that by working together we will be able to continue delivering exceptional value in 2022.

Dr. Hend El-Sherbini

Chief Executive Officer

Important notice: A reconciliation between IFRS and APM measures is provided earlier in this announcement.

Group Operational & Financial Review

   i.    Revenue/Net Sales and Cost Analysis 
 
 Revenue/Net Sales 
  Consolidated Analysis 
  IDH reported total revenues of EGP 5,225 million in FY 2021, up 97% 
  year-on-year. Consolidated net sales9 surpassed the EGP 5 billion mark, 
  recording EGP 5,048 million in FY 2021, up 90% versus FY 2020. The 
  remarkable growth was dual driven with tests performed during the year 
  growing 24% and average price per test rising 53% year-on-year. 
  On a service basis, net sales growth was supported by both IDH's Covid-19-related1 
  (0) and conventional test portfolios, both of which recorded growing 
  demand during the period. IDH's Covid-19-related offering contributed 
  to just over half of consolidated net sales in FY 2021 compared to 
  the 24% contribution made in FY 2020. The segment witnessed high demand 
  throughout the entire year, supported by rising infection rates in 
  the first half of the year and the widespread lifting of travel bans 
  in the second half of 2021. 
  In parallel, a steady recovery in demand for conventional tests, saw 
  conventional net sales expand 22% year-on-year supported by a 15% year-on-year 
  rise in tests performed and a 7% increase in average price per conventional 
  test. Conventional test net sales for the year stood 13% above its 
  pre-pandemic level, a testament to the Company's impressive ability 
  to expand its service accessibility and delivery capabilities, to drive 
  a rapid recovery across its conventional test portfolio despite the 
  difficult operating conditions faced over the last two years. 
  On a quarterly basis, consolidated revenue recorded EGP 1,458 million, 
  up 48% year-on-year, while net sales recorded EGP 1,281 million, up 
  30% year-on-year. Despite the strong growth versus the previous year, 
  net sales for the quarter posted a 13% quarter-on-quarter decline. 
  This was largely attributable to a 17% quarter-on-quarter decline in 
  net sales generated by IDH's core Covid-19 tests, which recorded EGP 
  627 million in Q4 2021 versus EGP 760 million in Q3 2021. Falling Covid-19-related 
  net sales reflect both a decrease in average price of Covid-19-related 
  tests as well as lower demand generated by passengers traveling abroad 
  as the surge in traveling-related demand witnessed in Q3 2021 following 
  the lifting of travel bans subsided. 
  House Call Service 
  The Group's consolidated net sales was buoyed by its house call services 
  in Egypt and Jordan, which generated EGP 990 million in revenue in 
  FY 2021, up 87% versus the previous year. By test type, in FY 2021 
  revenue net sales generated by core Covid-19 tests stood at EGP 544 
  million, making up 55% of total house call revenue for the year. Geographically, 
  in Egypt house call services generated EGP 935 million in revenue, 
  contributing 23% to the country's revenue. Meanwhile, In Jordan house 
  call revenue stood at EGP 55 million, making up 6% of the country's 
  revenue for the year. It is worth highlighting that in FY 2021, average 
  net sales per house call test stood at EGP 202, significantly above 
  the Group's average of EGP 150. 
 

9 A reconciliation between revenue and net sales is available earlier in this announcement.

(10) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.

Detailed Consolidated Performance Breakdown

 
                          Q1   Q1 2021   Q2 2020   Q2 2021   Q3 2020   Q3 2021   Q4 2020   Q4 2021   FY 2020   FY 2021 
                        2020 
-------------------  -------  --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 Total net sales 
  (EGP mn)               500     1,130       450     1,164       720     1,473       986     1,281     2,656     5,048 
 Total tests 
  (mn)                   6.1       8.1       5.1       8.3       7.5       8.6       8.3       8.7      27.1      33.7 
===================  =======  ========  ========  ========  ========  ========  ========  ========  ========  ======== 
 Conventional 
  test net sales 
  (EGP mn)               495       594       367       594       568       667       577       597     2,007     2,452 
 Conventional 
  tests performed 
  (mn)                   6.1       6.8       4.6       6.9       7.0       7.5       7.3       7.3      24.9      28.5 
===================  =======  ========  ========  ========  ========  ========  ========  ========  ========  ======== 
 Total 
  Covid-19-related 
  test net sales 
  (EGP mn)                 5       536        83       569       152       806       409       684       649     2,596 
===================  =======  ========  ========  ========  ========  ========  ========  ========  ========  ======== 
  Core Covid-19 
   tests (PCR, 
   Antigen, 
   Antibody) 
   (EGP mn)                5       399        26       431        92       760       314       627       437     2,217 
  Core Covid-19 
   tests performed 
   (k)                     4       407        42       387        92       882       300       935       438     2,610 
===================  =======  ========  ========  ========  ========  ========  ========  ========  ========  ======== 
  Other 
   Covid-19-related 
   tests (EGP 
   mn)                     0       137        57       138        60        47        95        58       213       379 
  Other 
   Covid-19-related 
   tests performed 
   (k)                     0       874       531       933       477       284       714       416     1,722     2,507 
-------------------  -------  --------  --------  --------  --------  --------  --------  --------  --------  -------- 
                                         Contribution to consolidated results 
---------------------------------------------------------------------------------------------------------------------- 
 Conventional 
  test net sales         99%       53%       82%       51%       79%       45%       59%       47%       76%       49% 
 Conventional 
  tests performed       100%       84%       89%       84%       92%       87%       88%       84%       92%       85% 
===================  =======  ========  ========  ========  ========  ========  ========  ========  ========  ======== 
 Total 
  Covid-19-related 
  tests                   1%       47%       18%       49%       21%       55%       41%       53%       24%       51% 
===================  =======  ========  ========  ========  ========  ========  ========  ========  ========  ======== 
  Core Covid-19 
   tests (PCR, 
   Antigen, 
   Antibody)              1%       35%        6%       37%       13%       52%       32%       49%       16%       44% 
  Core Covid-19 
   tests performed        0%        5%        1%        5%        1%       10%        4%       11%        2%        8% 
===================  =======  ========  ========  ========  ========  ========  ========  ========  ========  ======== 
  Other 
   Covid-19-related 
   tests                  0%       12%       13%       12%        8%        3%       10%        5%        8%        8% 
  Other 
   Covid-19-related 
   tests performed        0%       11%       10%       11%        6%        3%        9%        5%        6%        7% 
 

Note: Quarterly results included in the table above are unaudited.

 
 Net Sales Analysis: Contribution by Patient Segment 
 
  Contract Segment 
  Revenue generated by IDH's contract segment reached EGP 3,062 million 
  in FY 2021, representing a 113% year-on-year increase versus the previous 
  twelve months. Meanwhile, net sales generated by the Group's contract 
  segment more than doubled year-on-year to record EGP 2,885 million in 
  FY 2021 supported by a 25% increase in contract tests performed and 
  a 61% rise in the average net sales per contract test. The segment's 
  contribution to total net sales subsequently increased to reach 57% 
  from 54% in FY 2020. Covid-19-related(11) testing contributed 53% of 
  contract net sales in FY 2021 as the Company continued to record strong 
  patient demand in both Egypt and Jordan. Controlling for contributions 
  made by Covid-19-related tests during the year, the contract segment 
  would record a 23% year-on-year increase in conventional test net sales 
  on the back of a 17% increase in tests performed and a 6% expansion 
  in average net sales per test. 
  The contract segment's results include contributions from IDH's multiple 
  partnerships to conduct PCR testing for passengers. More specifically, 
  IDH's agreement with Pure Health UAE and with National Aviation Services 
  Kuwait (NAS) generated EGP 89 million and EGP 91 million, respectively, 
  in FY 2021. The number of PCR tests performed during the year as part 
  of IDH's partnerships with Pure Health stood at 83 thousand, making 
  up 7% of total PCR tests performed in Egypt for the year. Meanwhile, 
  tests performed as part of the Company's agreement with NAS stood at 
  51 thousand, representing 4% of total PCR tests performed in Egypt during 
  FY 2021. 
  In Jordan, the Group's partnership with Queen Alia International Airport 
  (QAIA) generated net sales of EGP 185 million. As part of the agreement, 
  Biolab carried out 503 thousand PCR tests, representing 41% of total 
  PCR tests performed in Jordan for the year. At the same time, Biolab's 
  agreements with Aqaba's King Hussein International Airport (KHIA) and 
  Aqaba Port contributed an additional EGP 107 million to the segment. 
  It is worth noting that Biolab's partnership with KHIA started in August 
  2020, followed by the company's agreement with Aqaba Port which kicked 
  off in May 2021, and its partnership with QAIA which commenced in August 
  2021. 
  Walk-in Segment 
  The Group's walk-in segment recorded revenue and net sales (IFRS and 
  APM measures for walk-in segment were identical for the year) of EGP 
  2,162 million in FY 2021, up 77% versus the previous year. The year-on-year 
  growth was supported by a 23% increase in tests performed and a 44% 
  increase in average price per test. The segment's contribution to total 
  net sales stood at 43% versus the 46% in FY 2020. Meanwhile, the contribution 
  of Covid-19-related tests to the walk-in segment stood at 49% in FY 
  2021, compared to 26% in FY 2020. Excluding Covid-19-related contributions, 
  conventional walk-in net sales recorded a 21% increase versus the previous 
  year, as conventional walk-in tests volumes grew 9% year-on-year and 
  net sales per conventional walk-in test increased 11% versus FY 2020. 
  1 (1) Covid-19-related tests include both core Covid-19 tests (Polymerase 
  Chain Reaction (PCR), Antigen, and Antibody) as well as other routine 
  inflammatory and clotting markers including, but not limited to, Complete 
  Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin 
  and C-reactive Protein (CRP), which the Company opted to include in 
  the classification as "other Covid-19-related tests" due to the strong 
  rise in demand for these tests witnessed following the outbreak of Covid-19. 
 

Key Performance Indicators

 
                               Walk-in Segment           Contract Segment                   Total 
=========================  =======================  =========================  =============================== 
                             FY20    FY21   Change     FY20     FY21   Change     FY20     FY21         Change 
=========================  ======  ======  =======  =======  =======  =======  =======  =======  ============= 
 Net sales^ (EGP mn)        1,222   2,162      77%    1,434    2,885     101%    2,656    5,048            90% 
  Total Covid-19-related 
   net sales (EGP mn)         314   1,063     239%      335    1,533     357%      649    2,596           300% 
 Patients ('000)            2,288   3,464      51%    4,825    6,853      42%    7,113   10,317            45% 
 % of Patients                32%     34%               68%      66% 
 Net sales per Patient 
  (EGP)                       534     624      17%      297      421      42%      373      489            31% 
-------------------------  ------  ------  -------  -------  -------  -------  -------  -------  ------------- 
 Tests ('000)               7,052   8,693      23%   20,021   24,966      25%   27,073   33,659            24% 
 % of Tests                   26%     26%               74%      74% 
  Total Covid-19-related 
   tests ('000)               659   1,745     165%    1,501    3,372     125%    2,160    5,117           137% 
 Net Sales per Test 
  (EGP)                       173     249      44%       72      116      61%       98      150            53% 
 Test per Patient             3.1     2.5     -19%      4.1      3.6     -12%      3.8      3.3           -14% 
-------------------------  ------  ------  -------  -------  -------  -------  -------  -------  ------------- 
 
   Revenue Analysis: Contribution by Geography 
   Egypt 

   In Egypt, IDH reported revenue of EGP 4,108 million, 89% above the previous 
   year's figure and contributing to 81.4% of total net sales for the year. 
   The impressive result was supported by a 21% year-on-year rise in test 
   performed coupled with a 56% year-on-year increase in average revenue 
   per test. As with the consolidated performance, Egypt's revenues were 
   supported by both the Group's Covid-19-related1 (2) test offering which 
   in FY 2021 made up 49% of the Egypt's revenues, as well as the country's 
   conventional test offering, which made up the remaining 51% of Egypt's 
   revenues. When controlling for contributions made by Covid-19-related 
   tests during the year, revenue generated by conventional tests increased 
   a solid 23% versus the previous year supported by a 15% rise in conventional 
   tests performed and a 7% expansion in average revenue per conventional 
   test. 
   On a quarterly basis, net sales generated by IDH's Egyptian operations 
   reached EGP 986 million in Q4 2021, up 29% versus the final three months 
   of FY 2020. Despite the strong year-on-year rise, on a quarter-on-quarter 
   basis, revenue declined 17% primarily driven by lower revenue generated 
   by the Company's core Covid-19 test offering versus the previous quarter. 
   Lower Covid-19-related revenue reflect a more than 21% quarter-on-quarter 
   fall in the average price for core Covid-19 test during Q4 2021 coupled 
   with lower demand from international travellers, which had boosted results 
   in the third quarter following a widespread lifting of international 
   travel restrictions. 
   House Call Service 
   IDH's house call service in Egypt, which has been successfully ramped 
   up to capitalise on the service's growing popularity, recorded revenue 
   of EGP 935 million in FY 2021, up 94% year-on-year. The service's contribution 
   to the country's revenues stood at 23% in FY 2021, versus the 22% contribution 
   made in FY 2020. Core Covid-19 tests performed through its house call 
   service made up 30% of total core Covid-19 tests performed by IDH in 
   the country throughout the year. It is also important to note that, 
   tests performed through IDH's house call service are offered at the 
   same price as at traditional branches, with only an additional house 
   call delivery fee charged to patients to cover the transportation costs 
   of the chemist. 
   Al-Borg Scan 
   IDH's fast-growing radiology venture, Al-Borg Scan, reported revenue 
   of EGP 45 million in FY 2021, a solid 81% year-on-year increase. Revenue 
   growth was supported by a 70% rise in both tests performed and patients 
   served versus the previous year. To capitalise on Al-Borg Scan's growing 
   popularity, the Group inaugurated two Al-Borg Scan branches in the second 
   half of 2021, and a third in March 2022. In the coming months, IDH is 
   looking to inaugurate additional branches to expand its reach across 
   Greater Cairo. 
   Overall, IDH served 8.5 million patients in Egypt and performed 29.7 
   million tests in FY 2021, up 34% and 21% year-on-year, respectively. 
   (12) Covid-19-related tests include both core Covid-19 tests (Polymerase 
   Chain Reaction (PCR), Antigen, and Antibody) as well as other routine 
   inflammatory and clotting markers including, but not limited to, Complete 
   Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin 
   and C-reactive Protein (CRP), which the Company opted to include in 
   the classification as "other Covid-19-related tests" due to the strong 
   rise in demand for these tests witnessed following the outbreak of Covid-19. 
 
 

Detailed Egypt Revenue Breakdown

 
 EGP mn                   Q1   Q1 2021   Q2 2020   Q2 2021   Q3 2020   Q3 2021   Q4 2020   Q4 2021   FY 2020   FY 2021 
                        2020 
-------------------  -------  --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 Total Revenue           424       920       381     1,015       602     1,187       767       986     2,173     4,108 
 Conventional 
  Revenue                424       507       314       510       482       573       493       513     1,713     2,103 
 Total 
  Covid-19-related 
  Revenue                  0       414        67       504       120       614       273       474       460     2,005 
  Core Covid-19 
   tests (PCR, 
   Antigen, 
   Antibody)               0       277        10       366        60       567       178       416       248     1,626 
  Other 
   Covid-19-related 
   tests                   0       137        57       138        60        47        95        58       213       379 
-------------------  -------  --------  --------  --------  --------  --------  --------  --------  --------  -------- 
                                            Contribution to Egypt Net Sales 
---------------------------------------------------------------------------------------------------------------------- 
 Conventional 
  tests                 100%       55%       82%       50%       80%       48%       64%       52%       79%       51% 
 Total 
  Covid-19-related 
  tests                   0%       45%       18%       50%       20%       52%       36%       48%       21%       49% 
  Core Covid-19 
   tests (PCR, 
   Antigen, 
   Antibody)              0%       30%        3%       36%       10%       48%       23%       42%       11%       40% 
  Other 
   Covid-19-related 
   tests                  0%       15%       15%       14%       10%        4%       12%        6%       10%        9% 
 

Note: Quarterly results included in the table above are unaudited.

 
 Jordan 
  In Jordan, the Group recorded revenue of EGP 1,046 million in FY 2021, 
  up 156% from the previous year. Meanwhile, IDH's Jordanian operations 
  saw net sales1 (3) more than double year-on-year to reach EGP 869 million 
  for the year, up 113% versus FY 2020. Net sales growth was driven by 
  an 75% increase in test performed coupled with a 21% rise in Biolab's 
  average net sales per test. During the year, Covid-19-related tests 
  contributed to 68% of Biolab's net sales and to 37% of its tests performed. 
  Covid-19-related net sales in Jordan was boosted by contributions of 
  EGP 185 million from Biolab's new partnership with QAIA coupled with 
  the EGP 107 million in net sales coming from its partnerships with KHIA 
  and Aqaba Port. As part of these agreements, Biolab has been operating 
  testing stations across all three locations primarily focused on PCR 
  testing for Covid-19 to passengers arriving in Jordan. The stations 
  also offer additional diagnostic tests to patients including rapid PCR 
  testing for Covid-19 for departing passengers and other, more generic 
  diagnostic tests. Meanwhile, conventional test net sales increased 26% 
  year-on-year on the back of a 28% increase in conventional tests performed. 
  Meanwhile, the country's net sales continued to be supported by Biolab's 
  house call service which generated EGP 55 million in net sales in FY 
  2021, up 12% year-on-year. 
  In Q4 2021, Jordan's net sales recorded EGP 277 million, representing 
  a 45% increase from Q4 2020 and up 3% versus Q3 2021 (Jordan's revenues 
  (IFRS) in Q4 2021 recorded EGP 454 million, up 137% versus Q4 2020). 
  During the quarter, Biolab's partnership with QAIA generated EGP 101 
  million in net sales while net sales from its partnerships with KHIA 
  and Aqaba Port stood at EGP 48 million. In Q4 2021, PCR tests performed 
  as part of Biolab's agreement with QAIA recorded 278 thousand (55% of 
  Jordan's total PCR tests for the quarter). In parallel, during the quarter 
  Biolab performed 118 thousand PCR tests at KHIA and Aqaba Port, representing 
  23% of total PCR tests carried out by Biolab in the year. Robust volumes 
  generated though these agreements more than offset a general decrease 
  in demand for Covid-19-related testing as infection rates declined following 
  the continued ramp up of the country's vaccination campaign. 
 

Detailed Jordan Net Sales Breakdown

 
 EGP mn              Q1 2020   Q1 2021   Q2 2020   Q2 2021   Q3 2020   Q3 2021   Q4 2020   Q4 2021   FY 2020   FY 2021 
------------------  --------  --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 Total Net Sales          58       190        59       134       100       269       191       277       409       869 
 Conventional 
  Net Sales               53        68        44        68        68        76        55        66       220       278 
 Total 
  Covid-19-related 
  Net Sales (PCR 
  and Antibody)            5       122        16        65        32       192       136       211       189       591 
                                           Contribution to Jordan Net Sales 
---------------------------------------------------------------------------------------------------------------------- 
 Conventional 
  Net Sales              91%       36%       74%       51%       68%       28%       29%       24%       54%       32% 
 Total 
  Covid-19-related 
  Net Sales (PCR 
  and Antibody)           9%       64%       26%       49%       32%       72%       71%       76%       46%       68% 
 

Note: Quarterly results included in the table above are unaudited.

1 (3) Biolab's net sales for the period are calculated as revenues excluding concession fees paid to QAIA and Aqaba Port as part of their revenue sharing agreement.

 
            Nigeria 
             At the Group's Nigerian subsidiary, revenue expanded 49% year-on-year 
             to reach EGP 54 million in FY 2021. Growth was even more pronounced 
             in local currency terms with revenue up 53% year-on-year supported by 
             a 31% year-on-year expansion in tests performed (patients served were 
             up 16%) coupled with a 14% rise in average revenue per test. Over the 
             last two years, Echo-Lab's has consistently delivered solid volume growth 
             thanks to an effective revamp strategy which has involved the complete 
             renovation of the venture's branches combined with the rollout of targeted 
             marketing campaigns aimed at stimulating demand for the venture's services. 
             Volumes for the year also benefitting from a gradual normalisation of 
             traffic following the easing of restrictive measures enforced to curb 
             the spread of Covid-19 throughout 2020. 
             In Q4 2021, IDH's Nigeria operations recorded year-on-year revenue growth 
             of 18% to record EGP 13.4 million. As part of the venture's revamp strategy, 
             Echo-Lab's management team was strengthened with several key hires. 
             Most notably, Dr. Alok Bhatia, an industry expert with over 25 years 
             of experience in the field, joined Echo-Lab as CEO in March 2021. 
 
             Sudan 
             Finally in Sudan, IDH reported a 56% year-on-year contraction in revenue 
             to EGP 17 million for the year. The country's results continue to be 
             significantly impacted by the devaluation of the Sudanese pound in early 
             2021 with the average SDG/EGP rate in FY 2021 standing at 0.05 versus 
             0.29 in FY 2020. Nonetheless, management's continued success in raising 
             prices in step with inflation throughout the year, saw revenue in local 
             currency terms grow an impressive 159% in FY 2021. 
             Net Sales Contribution by Country                            FY 2020   FY 2021   Change 
             =========================  ========  ========  ======= 
              Egypt Net Sales (EGP 
               mn)                         2,173     4,108      89% 
                Covid-19-related (EGP 
                 mn)                         460     2,005     335% 
              Egypt Contribution             82%       81% 
             =========================  ========  ========  ======= 
              Jordan Net Sales (EGP 
               mn)                           409       869     112% 
                Covid-19-related (EGP 
                 mn)                         189       591     213% 
              Jordan Revenues (EGP 
               mn) (IFRS)                    409     1,046     156% 
              Jordan Net Sales (JOD 
               mn)                            19        39     113% 
              Jordan Revenues (JOD 
               mn) (IFRS)                     18        47     157% 
              Jordan Contribution            15%       17% 
             =========================  ========  ========  ======= 
              Nigeria Net Sales (EGP 
               mn)                            36        54      49% 
              Nigeria Net Sales (NGN 
               mn)                           898     1,373      53% 
              Nigeria Contribution            1%        1% 
              Sudan Net Sales (EGP 
               mn)                            38        17     -56% 
              Sudan Net Sales (SDG 
               mn)                           129       335     159% 
              Sudan Contribution            1.4%      0.3% 
             =========================  ========  ========  ======= 
 
             --- 
             Patients Served and Tests Performed by Country                                    FY 2020   FY 2021   Change 
             =================================  ========  ========  ======= 
              Egypt Patients Served (mn)             6.3       8.5      34% 
              Egypt Tests Performed (mn)            24.4      29.7      21% 
                  Covid-19-related tests (mn)        1.9       3.8     102% 
             =================================  ========  ========  ======= 
              Jordan Patients Served (k)             550     1,627     196% 
              Jordan Tests Performed (k)           2,011     3,529      75% 
                  Covid-19-related tests (k)         269     1,302     383% 
              Nigeria Patients Served (k)            131       153      16% 
              Nigeria Tests Performed (k)            215       281      31% 
              Sudan Patients Served (k)              130        70     -46% 
              Sudan Tests Performed (k)              409       182     -55% 
             =================================  ========  ========  ======= 
              Total Patients Served (mn)             7.1      10.3      45% 
              Total Tests Performed (mn)            27.1      33.7      24% 
 
             Branches by Country                   31 December   31 December         Change 
                                       2020          2021 
             ================  ============  ============  ============= 
              Egypt                     429           452             23 
             ================  ============  ============  ============= 
              Jordan                     20            21              1 
             ================  ============  ============  ============= 
              Nigeria                    12            10             -2 
             ================  ============  ============  ============= 
              Sudan                      20            19             -1 
             ================  ============  ============  ============= 
              Total Branches            481           502             21 
             ================  ============  ============  ============= 
 
             -Cost of Net Sales14 
             IDH's cost of net sales rose 71% year-on-year to record EGP 2,244 million15 
             in FY 2021, rising at a slower pace than the Group's revenue for the 
             year. This supported a 109% year-on-year rise in IDH's gross profit 
             for FY 2021 which recorded EGP 2,804 million. IDH's gross profit margin 
             on consolidated revenue recorded 54% in FY 2021 versus 51% in the previous 
             year. Meanwhile, gross profit margin on net sales of 56% versus 51% 
             in FY 2020. 
             Cost of Net Sales Breakdown as a Percentage of Net Sales                                FY 2020   FY 2021 
             =============================  ========  ======== 
              Raw Materials                    18.4%     19.6% 
             =============================  ========  ======== 
              Wages & Salaries                 14.7%     12.6% 
             =============================  ========  ======== 
              Depreciation & Amortisation       6.1%      4.2% 
             =============================  ========  ======== 
              Other Expenses                   10.3%      8.1% 
             =============================  ========  ======== 
              Total                            49.5%     44.4% 
             =============================  ========  ======== 
 
             Raw material costs, which include cost of specialized analysis at other 
             laboratories, recorded EGP 987 million for the year, continuing to make 
             up the largest share of total COGS at 44%. As a share of net sales, 
             raw material costs increased to 19.6% in FY 2021 compared to 18.4% in 
             the previous year. This increase is primarily attributable to higher 
             raw material costs as a share of net sales recorded by Biolab, driven 
             by both the retesting of Covid-19 positive cases in the first part of 
             the year, and by additional fees incurred by the company as part of 
             its revenue sharing agreement with QAIA. On a quarterly basis, raw material 
             costs as a share of on net sales reached 23% in Q4 2021 versus 19% in 
             Q3 2021. This is mainly attributable to IDH's Egyptian operations which 
             saw their raw material to net sales ratio expand five percentage points 
             quarter-on-quarter in Q4 2021, on the back of a 23% decline in the average 
             price of core Covid-19 tests coupled with a 12% increase in the average 
             cost per PCR test kit versus the third quarter of this year. 
             Direct salaries and wages for the year rose 63% year-on-year to EGP 
             635 million, making the second largest share of total COGS at 28%. The 
             increase comes on the back of a 116% year-on-year rise in the share 
             of profits allocated to direct salaries and wages to EGP 175 million 
             in FY 2021 from EGP 81 million in FY 2020 following higher net profit 
             recorded at its Egyptian operations,1 (6) in addition to higher bonuses 
             and incentives paid during FY 2021 in light of this year's record-breaking 
             performance. 
             Direct depreciation and amortisation increased 31% year-on-year in FY 
             2021 to EGP 214 million, principally due to the incremental amortisation 
             of new branches (IFRS 16 right-of-use assets). 
             Other expenses for the year increased 49% versus FY 2020, to record 
             EGP 407 million. The increase was primarily driven by higher transportation 
             costs related to IDH's house call service, and increased utilities and 
             cleaning expenses mainly due to the net addition of 21 new branches 
             throughout the year. 

             (14) Cost of net sales is calculated as cost of sales (IFRS) for the 
             period excluding commission fees paid to QAIA and Aqaba Port by Biolab 
             as part of its revenue sharing agreements with the two terminals. 
             15 According to IFRS 15, cost of sales recorded EGP 2,421 million in 
             FY 2021, up 84% year-on-year. In the final quarter of the year, IDH 
             recorded a cost of sales of EGP 821 million. Meanwhile, gross profit 
             margin recorded 44% in Q4 2021 versus 52% in Q4 2020. 
             (16) According to IAS1, employee profit share is recorded in wages 
             and salaries. 
             Selling, General and Administrative Expenses 
             Total SG&A outlays for the year stood at EGP 513 million, up 44% from 
             FY 2020. The increase was driven by rising salaries and marketing spending, 
             coupled with higher call center costs and a new contract with PwC for 
             external auditing services. 
             Marketing and advertising expenses came in at EGP 97 million in FY 2021, 
             up 57% year-on-year. The increase largely reflects an overall expansion 
             in IDH's marketing and advertisement efforts, which throughout the year 
             saw the Company launch targeted campaigns across a wide variety of channels. 
             EBITDA 
             IDH's adjusted EBITDA(17) recorded EGP 2,530 million (identical in absolute 
             terms when using IFRS or APM) in the twelve months to 31 December 2021, 
             up a solid 116% versus the previous year. Adjusted EBITDA margin on 
             consolidated revenue recorded 48% in FY 2021 versus 44% in the previous 
             year. Meanwhile, adjusted EBITDA margin on net sales expanded to 50% 
             in FY 2021 versus 44% in FY 2020.1 (8) Improved EBITDA level profitability 
             was supported by robust revenue growth for the year and the subsequent 
             dilution of fixed costs. EBITDA growth was also supported by a decrease 
             in level of receivable provisions for expected credit, which recorded 
             EGP 25 million versus the EGP 42 million booked in the previous twelve 
             months to account for expected credit losses in accordance with IFRS 
             9. It is important to note that adjusted EBITDA excludes one-off listing 
             fees of EGP 29 million incurred in FY 2021 related to the Company's 
             dual listing on the EGX completed in May 2021. 
             On a three-month basis, adjusted EBITDA expanded 17% year-on-year to 
             record EGP 537 million in the final quarter of 2021 (identical in absolute 
             terms between IFRS and APM). However, on a quarter-on-quarter basis 
             normalized EBITDA declined 32% versus Q3 2021 mainly due to a quarter-on-quarter 
             decrease in net sales and concurrent increase in outlays for the quarter, 
             in particular sales and marketing expenses. Adjusted EBITDA margin on 
             consolidated revenue recorded 37% in Q4 2021 versus 47% in the same 
             quarter of the previous year. Meanwhile, adjusted EBITDA margin on net 
             sales stood at 42% for the quarter, down from 47% recorded in Q4 2020 
             and the 54% margin recorded in Q3 2021. 
             In IDH's home market of Egypt, EBITDA recorded EGP 2,206 million in 
             FY 2021, up 112% year-on-year on the back of strong revenue growth. 
             EBITDA margin on net sales increased six percentage points to 54% the 
             year. 
             IDH's Jordanian operations recorded EBITDA of EGP 331 million in FY 
             2021, up 155% versus the previous year on the back of strong growth. 
             In local currency terms, EBITDA grew 156% compared to the previous year. 
             EBITDA margin on net sales recorded 38% in FY 2021 compared to 32% in 
             FY 2020. It is important to note that Jordan's EBITDA calculated using 
             revenues for the year (in compliance with IFRS), recorded the same absolute 
             value as the APM figure for the year which utilises net sales. However, 
             EBITDA margin calculated on revenues (IFRS compliant) would stand at 
             32% in FY 2021 unchanged versus last year. 
             Operations in Nigeria posted an EBITDA loss of EGP 7 million, in line 
             with the previous year's figure. Losses for the year partially reflect 
             a one-off EGP 4.4 million adjustment related to the previous year. Controlling 
             for the one-off adjustment, EBITDA losses would come in at EGP 2.6 million, 
             significantly narrowing from the previous year's figure. In light of 
             the steady improvements witnessed throughout 2021, Nigeria is expected 
             to turn EBITDA positive during the first half of 2022. 
             1 (7) Adjusted EBITDA is calculated as operating profit plus depreciation 
             and amortization and minus one-off fees incurred in FY 2021 related 
             to the Company's EGX listing completed in May 2021. 
             1 (8) It is important to note that while in absolute terms the Normalised 
             EBITDA figure is identical when using IFRS or APM, its margin differs 
             between the two sets of performance indicators. 
             Finally, in Sudan the Company recorded an EBITDA loss of EGP 0.5 million 
             in FY 2021, compared to a positive EBITDA of EGP 6.1 million in FY 2020. 
             EBITDA for the year was impacted by the sharp SDG devaluation in February 
             2021. In SDG terms EBITDA declined 148% year-on-year. 
             Regional EBITDA in Local Currency Mn                                            FY 2020   FY 2021    Change 
             ---------------------------  ------  -------  --------  --------  -------- 
              Egypt                                EGP        1,041     2,206      112% 
               Margin on net sales                              48%       54% 
              Jordan                               JOD            6        15      156% 
               Margin on net sales                              32%       38% 
               Margin on revenues (IFRS)                        32%       32% 
              Nigeria                              NGN         -170      -179        6% 
               Margin on net sales                             -19%      -13% 
              Sudan                                SDG           21       -10     -148% 
               Margin on net sales                              16%       -3% 
 
 
 
             Interest Income / Expense 
             IDH recorded interest income of EGP 113 million in FY 2021, up 113% 
             year-on-year on the back of higher cash balances during the year coupled 
             with an optimised cash allocation between T-bills and time deposits. 
 
             Interest expense recorded EGP 118 million in the twelve months to year-end 
             2021, up 65% year-on-year. The increase in attributable to: 
              *    Higher interest on lease liabilities related to IFRS 
                   16 following the addition of new branches in Egypt 
                   and Jordan and the renewal of medical equipment 
                   agreements with our main equipment suppliers. 
 
 
              *    Higher bank charges resulting from increased 
                   penetration of, and reliance on, POS machines and 
                   electronic payments in both Egypt and Jordan during 
                   the period. It is important to note that bank charges 
                   recorded by IDH's Jordanian operations represented 
                   58% of total bank charges during FY 2021, which is 
                   mainly related to Biolab's partnership with QAIA. 
 
 
              *    Loan-related expenses incurred by IDH during the 
                   period as the Company secured a new eight-year US$ 45 
                   million facility with the International Finance 
                   Corporation (IFC) in May 2021. More specifically, IDH 
                   booked loan-related expenses of EGP 20.3 million in 
                   FY 2021 including a front-end fee, syndication fee, 
                   and legal advisory fees. 
 
 
             Interest Expense Breakdown EGP Mn                           FY 2020   FY 2021   Change 
             ===============================  ========  ========  ======= 
              Interest on Lease Liabilities 
               (IFRS 16)                          51.4      59.5      16% 
             ===============================  ========  ========  ======= 
              Interest Expenses on 
               Borrowings1 (9)                    12.4       9.4     -24% 
             ===============================  ========  ========  ======= 
              Loan-related Expenses                  -      20.3      N/A 
               on IFC facility 
             ===============================  ========  ========  ======= 
              Interest Expenses on 
               Leases                              4.1       8.8     117% 
             ===============================  ========  ========  ======= 
              Bank Charges                         3.7      20.0     445% 
             ===============================  ========  ========  ======= 
              Total Interest Expense              71.5     118.0      65% 
             ===============================  ========  ========  ======= 
 
             (19) Interest expenses on medium-term loans divided as EGP 2.6 million 
             related to its medium term facility with the Commercial International 
             Bank (CIB) and EGP 6.5 million to its facility with Ahli United Bank 
             Egypt (AUBE). 
             Foreign Exchange 
             IDH recorded a net foreign exchange loss of EGP 18 million in FY 2021 
             compared to EGP 13 million in FY 2020. The figure largely reflects FX 

             losses on the back of the SDG devaluation versus the EGP in February 
             2021. 
 
             Taxation 
             Tax expenses recorded EGP 740 million in FY 2021 versus EGP 360 million 
             in the previous twelve months. The effective tax rate stood at 33% for 
             the year versus 37% in FY 2020. The lower effective tax rate largely 
             reflects the recognition of Echo-Scan's deferred tax assets. It is important 
             to note that there is no tax payable for IDH's two companies at the 
             holding level, while tax was paid on profits generated by operating 
             subsidiaries. 
             Taxation Breakdown by Region EGP Mn                FY 2020   FY 2021   Change 
             ====================  ========  ========  ======= 
              Egypt                   340.6     704.8     107% 
             ====================  ========  ========  ======= 
              Jordan                   19.0      54.0     184% 
             ====================  ========  ========  ======= 
              Nigeria                  -1.0     -20.0      N/A 
             ====================  ========  ========  ======= 
              Sudan                     1.0       1.0       0% 
             ====================  ========  ========  ======= 
              Total Tax Expenses      359.6     739.8     106% 
             ====================  ========  ========  ======= 
 
             Net Profit 
             IDH's consolidated net profit expanded 145% year-on-year in FY-2021 
             to record EGP 1,493 million (identical in absolute terms between IFRS 
             and APM measures). Net profit margin on consolidated revenue recorded 
             29% for the year, versus 23% in FY 2020. Meanwhile, net profit margin2 
             (0) on net sales stood at 30% for the year, up seven percentage points 
             from the previous twelve month period. Net profitability improvements 
             for the year were supported by strong revenue growth coupled with the 
             dilution of fixed costs, and normalising provisions for the year. In 
             Q4 2021, net profit stood at EGP 345 million, up 47% year-on-year. Net 
             profit margin on consolidated revenue stood at 24% unchanged year-on-year. 
             Net profit margin on net sales recorded 27%, up three percentage points 
             year-on-year. 
             2 (0) It is important to note that while in absolute terms the net profit 
             figure is identical when using IFRS or APM, its margin differs between 
             the two sets of performance indicators. 
 

ii. Balance Sheet Analysis

 
 Assets 
  Property, Plant and Equipment 
  IDH held gross property, plant and equipment (PPE) of EGP 1,659 million 
  as at year-end 2021, up from the EGP 1,252 million as of 31 December 
  2020. Meanwhile, CAPEX outlays excluding payments on account and accounting 
  for the impact of hyperinflation, represented 8.6% of consolidated net 
  sales in FY 2021. The increase in CAPEX outlays as a share of total 
  net sales for the year is in part attributable to EGP 115.7 million 
  in equipment related to the Reagent deals and to EGP 53.7 million spent 
  on the purchase of a new radiology branch during the year. It is worth 
  noting that IDH engages in Reagent deals whereby the majority of its 
  testing equipment is provided at no upfront payment as part of a wider 
  agreement to purchase a minimum volume of kits from the equipment supplier. 
  These contracts typically have tenors ranging from 5 to 7 years, with 
  the equipment substituted following the contract's renewal. 
  Total CAPEX Breakdown EGP Mn                           FY 2021   % of Net 
                                                 Sales 
  ===============================  ========  ========= 
   Mega Lab                           132.5       2.6% 
  ===============================  ========  ========= 
   Al-Borg Scan Expansion             154.0       3.1% 
  ===============================  ========  ========= 
   Leasehold Improvements/others      147.6       2.9% 
  ===============================  ========  ========= 
   Total CAPEX Additions              434.1       8.6% 
  ===============================  ========  ========= 
 
  Accounts Receivable and Provisions 
  As at 31 December 2021, accounts receivables' Days on Hand (DOH) stood 
  at 107 days compared to 144 days at year-end 2020. The significant decline 
  witnessed throughout the year highlights a sustained improvement in 
  collections versus the previous year. Accounts receivables' DOH is calculated 
  based on credit revenues (credit revenues relates to patients who paid 
  for IDH's services on credit) amounting to EGP 1.28 billion during FY 
  2021. 
  The receivables balance in Egypt and Jordan stood at EGP 366 million 
  as at year-end 2021. More specifically, in Egypt account receivables' 
  DOH declined to 96 days as at 31 December 2021 compared to 145 days 
  as at year-end 2020. Accounts receivables' DOH for Egypt is calculated 
  based on credit revenues amounting to EGP 1.04 billion during FY 2021. 
  Meanwhile, in Jordan accounts receivables' DOH increased from 150 days 
  to 154 days as at year-end 2021 largely due to agreements with various 
  airline companies as part of QAIA and KHIA agreements. Accounts receivables' 
  DOH for Jordan is calculated based on credit revenues amounting to EGP 
  221 million during FY 2021. 
  Provision for doubtful accounts established during the twelvemonths 
  to 31 December 2021 amounted to EGP 25 million, down from the EGP 42 
  million booked in the previous year. 
  Inventory 
  As at year-end 2021, the Group's inventory balance reached EGP 223 million, 
  up from EGP 100 million as at year-end 2020. Meanwhile, days Inventory 
  Outstanding (DIO) decreased to 61 days as at year-end 2021 from 72 days 
  as at year-end 2020. The decline largely reflects the high turnover 
  of PCR testing for Covid-19. 
  Cash and Net Debt/Cash 
  IDH's cash balances increased to EGP 2,350 million as at year-end 2021 
  compared to EGP 877 million as at 31 December 2020. 
   EGP million         31 Dec 2020   31 Dec 2021 
  ==================  ============  ============ 
   Time Deposits               162           628 
  ==================  ============  ============ 
   T-Bills                     461         1,461 
  ==================  ============  ============ 
   Current Accounts            234           239 
  ==================  ============  ============ 
   Cash on Hand                 19            22 
  ==================  ============  ============ 
   Total                       877         2,350 
  ==================  ============  ============ 
 
  Net cash balance2 (1) amounted to EGP 1,483 million as of year-end 2021, 
  an increase of 361% compared to EGP 321 million as of 31 December 2020. 
   EGP million                               31 Dec 2020   31 Dec 2021 
  ========================================  ============  ============ 
   Cash and Financial Assets at Amortised 
    Cost(22)                                         877         2,350 
  ========================================  ============  ============ 
   Interest Bearing Debt ("Medium 
    Term Loans")(23)                                  96           106 
  ========================================  ============  ============ 
   Lease Liabilities Property                        390           532 
  ========================================  ============  ============ 
   Long-term Equipment Liabilities                    69           229 
  ========================================  ============  ============ 
   Net Cash Balance                                  321         1,483 
  ========================================  ============  ============ 
 
  Note: Interest Bearing Debt includes accrued interest for each period. 
  2 (1) The net cash balance is calculated as cash and cash equivalent 
  balances including includes financial assets at amortised cost, less 
  interest-bearing debt (medium term loans), finance lease and Right-of-use 
  liabilities. 
  2 (2) As outlined in Note 18 of IDH's Consolidated Financial Statements, 
  some term deposits and treasury bills cannot be accessed for over 90 
  days and are therefore not treated as cash. Term deposits which cannot 
  be accessed for over 90 days stood at EGP 148 million in FY 2021, while 
  there were no such term deposits in the previous year. Meanwhile, treasury 
  bills not accessible for over 90 days stood at EGP 1,311 million in 
  FY 2021, up from EGP 277 million in FY 2020. 
  (23) IDH's interest bearing debt as at year-end 2021 is split as EGP 
  13 million related to its medium term facility with the Commercial International 
  Bank (CIB) and EGP 85 million to its facility with Ahli United Bank 
  Egypt (AUBE). 
  Lease liabilities on property stood at EGP 532 million as at year-end 
  2021, up from the EGP 390 million booked as at year-end 2020. The increase 
  is attributable to the addition of new branches throughout 2021. Meanwhile, 
  financial obligations related to equipment recorded EGP 229 million 
  as of 31 December 2021, up from EGP 69 million as of year-end 2020, 
  reflecting the renewal of the Company's contracts and the addition of 
  new equipment. The main components of total financial obligations related 
  to equipment in FY 2021 included EGP 116 million related to equipment 
  at IDH's Mega Lab, and EGP 54 million for equipment at Al-Borg Scan. 
  The rise in interest-bearing debt is related to IDH's two medium-term 
  facilities with Commercial International Bank (CIB) and Ahli United 
  Bank of Egypt (AUBE). More specifically, IDH's interest-bearing debt 
  as of year-end 2021 is split as EGP 13 million related to its medium-term 
  facility with CIB and EGP 85 million related to its facility with AUBE. 
  It is worth noting that interest-bearing debt in both twelve-month periods 
  includes accrued interest. 
  Liabilities 
  Accounts Payable(24) 

  As of year-end 2021, accounts payable balance recorded EGP 311 million 
  up from EGP 178 million as of 31 December 2020. Nonetheless, the Group's 
  days payable outstanding (DPO) decreased to 93 days as of year-end 2021 
  down from 127 days as at 31 December 2020. The decline is mainly related 
  to the fact that PCR testing kit suppliers are paid within a period 
  of 15 days. 
  Put Option 
  The put option current liability is related to the option granted in 
  2011 to Dr. Amid, Biolab's CEO, to sell his stake (40%) to IDH. The 
  put option is in the money and exercisable since 2016 and is calculated 
  as 7 times LTM EBITDA minus net debt. Biolab's put option liability 
  increased following the subsidiary's EBITDA year-on-year growth of 155% 
  in EGP terms. The vendor has not exercised this right at 31 December 
  2021. It is important to note that the put option liability is treated 
  as current as it could be exercised at any time by the non-controlling 
  interest (NCI). However, based on discussions and ongoing business relationship, 
  there is no expectation that this will happen in next 18 months. 
  The put option non-current liability is related to the option granted 
  in 2018 to the International Finance Corporation from Dynasty - shareholders 
  in Echo Lab - and it is exercisable in 2024. The put option is calculated 
  based on fair market value (FMV). 
 
 

2 (4) Accounts payable is calculated based on average payables at the end of each year.

iii. Cash Flow Analysis

 
   Net cash flow from operating activities recorded EGP 
    2,269 million in FY 2021 compared to EGP 883 million 
    in FY 2020. The 157% year-on-year increase versus FY 
    2020 demonstrates once more IDH's strong cash generation 
    ability. 
 

iv. Principal Risks, Uncertainties & Their Mitigation

As in any corporation, IDH has exposure to risks and uncertainties that may adversely affect its performance. IDH Chairman Lord St John of Bletso has emphasised that ownership of the risk matrix is sufficiently important to the Group's long-term success that it must be equally shared by the Board and senior management. While no system can mitigate every risk - and some risks, as at the country level, are largely without potential mitigants - the Group has in place processes, procedures and baseline assumptions that provide mitigation. The Board and senior management agree that the principal risks and uncertainties facing the Group include:

 
 
 Country/regional risk - Economic                     Overall, management notes that IDH 
  & Forex                                              has a resilient business model and 
  The Group is subject to the economic                 that the business continued to grow 
  conditions of Egypt specifically                     year-on-year through two revolutions, 
  and, to a lesser extent, those of                    as well as under extremely difficult 
  the other geographies. Egypt accounted               operating conditions in 2016 and 
  for c. 81% of our revenues in 2021                   in 2020. 
  (2020: 82%).                                         Foreign investors welcomed March 
                                                       2022 CBE move as it demonstrated 
                                                       the Egyptian government's willingness 
  Economic risk: On the 21st of March                  to improve investment climate. 
  2022, the Central Bank of Egypt (CBE)                IDH management is closely monitoring 
  raised policy rates by 100bps and                    the impact of the rise of inflation 
  allowed the Egyptian Pound (EGP)                     on its cost base, especially raw 
  to depreciate against the United                     material. The risk is partially mitigated 
  States Dollar (USD) by around 17%,                   given its long-term contractual agreement 
  which will impose Inflationary pressures             with its raw material suppliers. 
  in the short to medium term. Inflation 
  rates are expected to average around 
  13% to 15% during 2022, up from 5.9% 
  in December 2021. Moreover, GDP growth 
  in FY22/23 was revised downward to 
  5.5% from 5.7% by the Egyptian government 
  in March 2022. 
                                                    ---------------------------------------------------- 
 Country/regional risk - Economic                     During FY2021, only 10% of IDH's 
  & Forex                                              cost of supplies (c.2% of revenues) 
                                                       are payable in US dollars, minimising 
  Foreign currency risk: The Group                     the Group's exposure to foreign exchange 
  is exposed to foreign currency risk                  (FX) scarcity and in part, the volatility 
  on the cost side of the business.                    of the Egyptian pound. 
  The majority of supplies it acquires 
  are paid in Egyptian pounds (EGP), 
  but given they are imported, their 
  price will vary with the rate of 
  exchange between the EGP and foreign                 The Group is closely monitoring the 
  currencies. In addition, a portion                   economic situation in Sudan and has 
  of supplies are priced and paid in                   implemented several price increases 
  foreign currencies.                                  to keep instep with inflationary 
  High Inflation in Sudan: Following                   pressures. IDH is also working to 
  substantial currency devaluation                     limit expatriate salaries and foreign 
  in Sudan during 2018 the currency                    currency needs by increasing dependence 
  lost 85% of its value. In 2019, the                  on local hires. 
  Sudanese Pound's official rate versus 
  the US Dollar remained relatively 
  stable at 45.11 as 31 December according 
  to the Central Bank of Sudan. However, 
  in July 2020 the Sudanese government 
  announced it would devalue its currency 
  and cut fuel subsidies due to a huge 
  budget deficit and an economic crisis 
  aggravated by the coronavirus pandemic. 
  In February 2021, the Sudanese government 
  announced it would float the Sudanese 
  Pound in an effort to bridge the 
  gap with the forex prices at the 
  parallel market. This led to a significant 
  increase in the currency rates. The 
  US Dollar rate for instance rose 
  from SDG 55 to more than SDG 375. 
  This was followed by the removal                     In Nigeria, until currency exchange 
  of fuel subsidies in June 2021, which                policy is clarified and there is 
  again led to the increase of consumer                greater visibility regarding profit 
  prices. According to data from Sudan's               repatriation, IDH expects to reinvest 
  Central Bureau of Statistics, the                    early profits into its Nigerian business. 
  country's headline inflation rate                    Dividend payments are expected to 
  averaged 359% in 2021, up from 163%                  be repatriated after the completion 
  in 2020.                                             of the branch roll-out plan. 
  Nigeria: Capital controls could make 
  profit repatriation difficult in 
  the short term. 
  Nigeria: Depreciation of the Naira 
  would make imported products and 
  raw materials more expensive and 
  would reduce Nigeria's contribution 
  to consolidated Company revenues. 
  Whilst capital controls have helped 
  the official exchange converge with 
  the black market rate, the central 
  bank has yet to allow the naira to 
  float freely. 
                                                    ---------------------------------------------------- 
 Country risk - Political & Security                  It is important to note that in FY 
  Sudan is currently undergoing a significant          2021 Sudan made up just 0.3% of IDH's 
  political transition which began                     net sales. Moreover, while nationwide 
  in 2019 when severe political unrest                 protests do affect patient and test 
  and protests led the military to                     volumes in Sudan, the diagnostic 
  remove long-time president Omar Al-Bashir.           industry is relatively immune given 
  Following his removal, the military                  the inelastic demand for healthcare 
  signed a power-sharing agreement                     services. Additionally, management 
  with an opposition coalition in July                 in Sudan has been successful in offsetting 
  2019, with the aim of eventually                     the effect of lower volumes due to 
  transferring power to a civilian                     protest with higher pricing, and 
  government. On 25 October 2021, Sudan's              in 2019, 2020, and 2021 the geography 
  Prime Minister was detained by armed                 recorded solid year-on-year revenue 
  forces, and Army chief General Abdel                 growth in SDG terms. 
  Fattah al-Burhan announced that the                  In December 2020, US removed Sudan 
  civilian government and other transitional           from its States Sponsors of Terrorism 
  bodies have been dissolved. Throughout               list. The change in the country's 
  November, the country witnessed several              designation is expected to allow 
  mass rallies and increased civil                     Sudan to have access to international 
  unrest with protesters asking for                    funds and investment, including the 
  the reinstatement of the civilian                    International Monetary Fund, paving 
  Prime Minister, Abdalla Hamdok. The                  the way for the country's economic 
  protests led to the temporary closure                growth. 
  of all of IDH's Sudanese branches.                   IDH's management on the ground continues 
  All locations were reopened within                   to monitor the evolving situation 
  a few days and quickly gained back                   and has put in place an all-encompassing 

  momentum. On 21 November 2021, Mr.                   mitigation strategy to safeguard 
  Hamdok took office once again but                    staff and patient wellbeing and protect 
  later stepped down on 2 January 2022.                IDH's operations. 
  Civil unrest and protests are continuing             While this is relatively hard to 
  as the country's future remains unclear.             mitigate, IDH is continuously evaluating 
  The situation in Sudan is volatile                   its processes to safeguard its employees 
  and continued civil unrest could                     and operations. Overall, IDH applies 
  adversely affect IDH's business.                     rigorous standards to evaluating 
                                                       all aspects of its business processes 
  Nigeria faced security challenges                    in Nigeria to ensure it is well-equipped 
  on several fronts, including re-emerging             to respond to the evolving situation. 
  ethnic tensions and resurgent attacks 
  by Islamist militants in the northeast. 
  Against the backdrop of a sluggish 
  economy and the slow implementation 
  of reforms, mounting discontent could 
  translate into further social unrest. 
  The government dissolved the special 
  division known as SARS (Special Anti-Robbery 
  Squad) in October 2021. In late 2020 
  and throughout 2021, protests have 
  decreased significantly across the 
  country but a potential escalation 
  of civil unrest remains possible. 
                                                    ---------------------------------------------------- 
 Covid-19                                             All of IDH staff use appropriate 
  The ongoing Covid-19 pandemic presents               protective equipment when interacting 
  business continuity risks to IDH                     with patients, including those suspected 
  including, but not limited to, supply-chain          of having Covid-19 or any other infectious 
  disruptions, government enforced                     disease. IDH is currently administering 
  quarantines and their effect on IDH's                PCR, Antibody, and Antigen testing 
  business operations and risk of infection            for Covid-19 in Egypt and Jordan. 
  among IDH employees. In 2021, the                    All of the Group's employees have 
  rollout of vaccines across its countries             been fully vaccinated during 2021 
  of operation coupled with governments'               and they are subject to regular communications 
  willingness and ability to coexist                   reminding them that they may not 
  with the virus, saw restrictions                     report to work if they have symptoms 
  imposed to curb the spread being                     of a Covid-19 infection. 
  lifted and operations running normally               The effective rollout of vaccines 
  throughout the year. No new restrictions             and the increasing ability and willingness 
  have been imposed following the rise                 of governments to coexist with the 
  of new Covid-19 variants throughout                  virus and its variants have supported 
  the year, with countries across IDH's                a steady recovery of the global economy 
  footprint continuing to push forward                 throughout 2021. 
  their vaccination campaigns. As at                   Throughout the Covid-19 crisis, IDH 
  the end of March 2022, the share                     has maintained a strong focus on 
  of the population having received                    growing its conventional (non-Covid-19-related) 
  at least one Covid-19 vaccine dose                   business, which in FY 2021 expanded 
  stood at approximately: 45% in Egypt,                22% versus FY 2020, and came in 13% 
  45% in Jordan, 10% in Nigeria, and                   above pre-covid levels recorded in 
  at 13% in Sudan.                                     FY 2019. Moreover, in both Egypt 
  Covid-19 global economic impact:                     and Jordan, IDH enjoys a market leading 
  Rising inflation rates, supply chain                 position and plans to capitalise 
  disruptions, and the rise of new,                    on its expanded product offering 
  more fast-spreading Covid-19 variants                and patient base, increased service 
  continue to pose a threat for the                    delivery capabilities, and growing 
  global economic recovery.                            visibility to continue delivering 
  Covid-19 impact on IDH Financials                    growth in the year ahead. Across 
  Throughout FY 2021, IDH generated                    both markets, the Group's strategy 
  around 50% of its revenues from Covid-19-related     will now pivot towards patient retention 
  testing. In light of the increasing                  as it looks to maintain the new relationships 
  roll out of vaccines and the widespread              established during the pandemic thanks 
  decline in infection rates, Covid-19-related         to its Covid-19-dedicated offering. 
  revenues are expected to gradually 
  decline throughout 2022. 
                                                    ---------------------------------------------------- 
 Global Supply Chain Disruptions                      IDH's management team continually 
  Throughout 2021, restrictions imposed                monitors the evolving situation and 
  to curb the spread of Covid-19, labour               have taken proactive steps to build 
  shortages, and fast-rising demand                    up its inventory to shield the Group 
  for goods saw global supply chains                   from any potential future disruptions. 
  come under strong pressure causing                   IDH is in continual dialogue with 
  delays and shortages worldwide. The                  key suppliers to gauge the risk associated 
  ongoing global supply chain disruptions              with a shortage of materials and 
  have had no impacts on IDH's operations              is yet to identify a weakness. 
  throughout the year.                                 IDH's test kits are purchased on 
                                                       fixed-price contracts with tenors 
                                                       ranging from five to seven years, 
                                                       providing effective protection from 
                                                       short-term price fluctuations. 
                                                    ---------------------------------------------------- 
 Supplier risk                                        IDH has strong, longstanding relationships 
  IDH faces the risk of suppliers re-opening           with its suppliers, to whom it is 
  negotiations in the face of cost                     a significant regional client. Due 
  pressure owing to the prevailing                     to the volumes of kits the Group 
  inflationary environment and/or a                    purchases, IDH is able to negotiate 
  possible albeit limited devaluation                  favourable pricing and maintain raw 
  risk.                                                material costs increases at a rate 
  IDH's supplier risk is concentrated                  slower than inflation. It is worth 
  amongst three key suppliers - Siemens,               highlighting that IDH's supplier 
  Roche and BM (Sysmex)- who provide                   relations were not impacted by COVID-19. 
  it with kits representing 24% of                     Total raw materials costs as a percentage 
  the total value of total raw materials               of net sales were 19.6% in 2021 compared 
  in 2021 (2020: 52%).                                 with 18.4% in 2020. 
                                                    ---------------------------------------------------- 
 Remittance of dividend regulations                   As a foreign investor in Egypt, IDH 
  and repatriation of profit risk                      does not have issues with the repatriation 
  The Group's ability to remit dividends               of dividends, yet given the recent 
  abroad may be adversely affected                     depreciation in the EGP value, the 
  by the imposition of remittance restrictions.        Company foresees probable delays 
  More specifically, under Egyptian                    in FX sourcing and repatriation. 
  law, companies must obtain government                As a provider of medical diagnostic 
  clearance to transfer dividends overseas             services, IDH's operations in Sudan 
  and are subject to higher taxation                   are not subject to sanctions. Notably, 
  on payment of dividends.                             in October 2017 the US lifted a host 
                                                       of sanctions imposed 20 years ago 
                                                       that included a comprehensive trade 
                                                       embargo, a freeze on government assets 
                                                       and tight restrictions on financial 
                                                       institutions dealing with the country. 
                                                       More recently, in December 2020 the 
                                                       US removed Sudan from its States 
                                                       Sponsors of Terrorism list. 
                                                    ---------------------------------------------------- 
 Legal and regulatory risk to the                     The Group's general counsel and the 
  business                                             quality assurance team work together 
  The Group's business is subject to,                  to keep IDH abreast of, and in compliance 
  and affected by, extensive, stringent                with, both legislative and regulatory 
  and frequently changing laws and                     changes. 

  regulations, as well as frequently                   On the antitrust front, the private 
  changing enforcement regimes, in                     laboratory segment (of which IDH 
  each of the countries in which it                    is a part) accounts for a small proportion 
  operates. Moreover, as a significant                 of the total market, which consists 
  player in the Egyptian private clinical              of small private labs, private chain 
  laboratory market, the Group is subject              labs and large governmental and quasigovernmental 
  to antitrust and competition-related                 institutions. 
  restrictions, as well as the possibility 
  of investigation by the Egyptian 
  Competition Authority. 
                                                    ---------------------------------------------------- 
 Risk from contract clients                           IDH diligently works to maintain 
  Contract clients including private                   sound relationships with contract 
  insurers, unions and corporations,                   clients. All changes to pricing and 
  account for c. 57% of the Group's                    contracts are arrived at through 
  net sales in 2021. Should IDH's relationship         discussion rather than blanket imposition 
  with these clients deteriorate, for                  by IDH. Relations are further enhanced 
  example if the Group were unable                     by regular visits to contract clients 
  to negotiate and retain similar fee                  by the Group's sales staff. 
  arrangements or should these clients                 IDH's attractiveness to contract 
  be unable to make payments to the                    clients is enhanced by the extent 
  Group, IDH's business could be materially            of its national network. 
  and adversely affected.                              It should be highlighted that, excluding 
                                                       the contributions from IDH's multiple 
                                                       partnerships to conduct PCR testing 
                                                       for passengers (Pure Health, NAS, 
                                                       QAIA), which in 2021 generated EGP 
                                                       365 million in contract segment net 
                                                       sales, no single client contract 
                                                       accounts for more than 1% of total 
                                                       net sales or 1.4% of contract net 
                                                       sales. 
                                                    ---------------------------------------------------- 
 Pricing pressure in a competitive,                   This is an external risk for which 
  regulated environment                                there exist few mitigants. 
  The Group faces pricing pressure                     In the event there is escalation 
  from various third-party payers,                     of price competition between market 
  including national health insurance,                 players, the Group sees its wide 
  syndicates, other governmental bodies,               national footprint as a mitigant; 
  which could materially and adversely                 c. 57% of IDH net sales in 2021 is 
  affect its revenue. Pricing may be                   generated by servicing contract clients 
  restrained in cases by recommended                   (private insurer, unions and corporations) 
  or mandatory fees set by government                  who prefer IDH's national network 
  ministries and other authorities.                    to patchworks of local players. 
  This risk may be more pronounced                     IDH has a limited ability to influence 
  in the context of the imminent inflationary          changes to mandatory pricing policies 
  pressures following the recent depreciation          imposed by government agencies, as 
  of the Egyptian Pound.                               is the case in Jordan, where basic 
  The Group might face pricing pressure                tests that account for the majority 
  from existing competitors and new                    of IDH's business in that nation 
  entrants to the market.                              are subject to price controls. 
                                                       IDH enjoys a strong brand equity 
                                                       in its markets of operation which 
                                                       enables all its brands to enjoy a 
                                                       solid positioning in the markets 
                                                       in which it operates. As such, IDH 
                                                       is a price maker, especially in Egypt, 
                                                       where the Group currently controls 
                                                       the largest network of branches amongst 
                                                       all private sector players. Moreover, 
                                                       in its home market of Egypt, which 
                                                       in FY 2021 accounted for 81.4% of 
                                                       total revenues, the Group faces no 
                                                       potential risk of price regulation 
                                                       by the government. 
                                                    ---------------------------------------------------- 
 Cybersecurity risks                                  The Company has stringent control 
  The Company controls a vast amount                   over its data security and regularly 
  of confidential data for its patients'               stress tests its IT infrastructure 
  records; to this end, there is a                     to assess the robustness of its internal 
  cybersecurity risk for both data                     controls. Moreover, its cybersecurity 
  confidentiality and data security.                   controls and protocols are regularly 
                                                       updated to proactively address potential 
                                                       shortcomings, keep them in full adherence 
                                                       with data security regulations in 
                                                       the Group's markets of operation, 
                                                       and maintain them in line with global 
                                                       best practices. 
                                                    ---------------------------------------------------- 
 Business continuity risks                            IDH understands the need to support 
  Management concentration risk: IDH                   its future growth plans by strengthening 
  is dependent on the unique skills                    its human capital and engaging in 
  and experience of a talented management              appropriate succession planning. 
  team. The loss of the services of                    The Company is committed to expanding 
  key members of that team could materially            the senior management team, led by 
  and adversely affect the Company's                   its CEO Dr. Hend El Sherbini, to 
  operations and business.                             include the talent needed for a larger 
  Business interruption: IT systems                    footprint. The Group has constituted 
  are used extensively in virtually                    an Executive Committee led by Dr. 
  all aspects of the Group's business                  El Sherbini and composed of heads 
  and across each of its lines of business,            of departments. The Executive Committee 
  including test and exam results reporting,           meets every second week. 
  billing, customer service, logistics                 The Group has in place a full disaster 
  and management of medical data. Similarly,           recovery plan, with procedures and 
  business interruption at one of the                  provisions for spares, redundant 
  Group's larger laboratory facilities                 power systems and the use of mobile 
  could result in significant losses                   data systems as alternatives to landlines, 
  and reputational damage to the Group's               among multiple other factors. IDH 
  business as a result of external                     tests its disaster recovery plans 
  factors such as natural disasters,                   on a regular basis. 
  fire, riots or extended power failures.              In Egypt and Jordan, to mitigate 
  The Group's operations therefore                     the impact of potential branch closures 
  depend on the continued and uninterrupted            on operations, the Group has been 
  performance of its systems.                          ramping up its house call services. 
  Business Interruption: across its                    Moreover, the Group's important role 
  geographies, the reimposition of                     in conducting PCR testing for Covid-19 
  restrictive measures related to Covid-19             in both Egypt and Jordan makes it 
  (including curfews and lockdowns)                    unlikely that branches would be closed 
  could impact the working hours of                    even if new restrictive measures 
  branches and in extreme cases could                  were introduced. 
  lead to their temporary closure. 
                                                    ---------------------------------------------------- 
 

-End-

 
 INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH" 
  AND ITS SUBSIDIARIES 
 
 
 
 
 
 
  Consolidated Financial Statements 
  for the year ended 31 December 2021 
 

Consolidated statement of financial position as at 31 December 2021

 
                                             Notes           2021                      2020 
                                                          EGP'000                   EGP'000 
------------------------------------------  -------  ------------   ----------------------- 
  Assets 
 Non-current assets 
 Property, plant and equipment                 11       1,061,808                   793,013 
 Intangible assets and goodwill                12       1,658,867                 1,659,755 
 Right of use assets                           26         462,432                   354,688 
 Financial assets at fair value through 
  profit and loss                              14          10,470                     9,604 
 Total non-current assets                               3,193,577                 2,817,060 
 
 Current assets 
 Inventories                                   15         222,612                   100,115 
 Trade and other receivables                   16         469,727                   383,480 
 Financial assets at amortized cost            18       1,458,724                   276,625 
 Cash and cash equivalents                     17         891,451                   600,130 
                                                     ------------   ----------------------- 
 Total current assets                                   3,042,514                 1,360,350 
                                                     ------------   ----------------------- 
 Total assets                                           6,236,091                 4,177,410 
                                                     ============   ======================= 
 Equity 
 Share capital                                 19       1,072,500                 1,072,500 
 Share premium reserve                         19       1,027,706                 1,027,706 
 Capital reserves                              19       (314,310)                 (314,310) 
 Legal reserve                                 19          51,641                    49,218 
 Put option reserve                            19       (956,397)                 (314,057) 
 Translation reserve                           19         150,730                   145,617 
 Retained earnings                                      1,550,976                   603,317 
 Equity attributable to the owners 
  of the Company                                        2,582,846                 2,269,991 
 Non-controlling interests                     2          211,513                   156,383 
                                                     ------------   ----------------------- 
 Total equity                                           2,794,359                 2,426,374 
                                                     ------------   ----------------------- 
 
 
 
 Non-current liabilities 
 Provisions                                    21           4,088                     3,408 
 Borrowings                                    24          76,345                    67,617 
 Other financial obligations                   26         645,196                   398,525 
 Non-current put option liability              25          35,037                    31,790 
 Deferred tax liabilities                      9          332,149                   240,333 
 Total non-current liabilities                          1,092,815                   741,673 
 Current liabilities 
 Trade and other payables                      22         777,354                   383,623 
 Other financial obligations                   26         115,478                    60,517 
 Current put option liability                  23         921,360                   282,267 
 Borrowings                                    24          21,721                    25,416 
  Current tax liabilities                      29         513,004                   257,540 
 Total current liabilities                              2,348,917                 1,009,363 
 Total liabilities                                      3,441,732                 1,751,036 
                                                     ------------   ----------------------- 
 Total equity and liabilities                           6,236,091                 4,177,410 
                                                     ============   ======================= 
 
 
 
   The accompanying notes form an integral 
   part of these consolidated financial 
   statements. 
                                                     =========================      ================ 
 
   These consolidated financial statements were approved and authorised 
   for issue by the Board of Directors and signed on their behalf 
   on 20 April 2021 by: 
 
           Dr. Hend El Sherbini                           Hussein Choucri 
          Chief Executive Officer                               Independent Non-Executive 
                                                                         Director 
 
 
 

Consolidated income statement for the year ended 31 December 2021

 
                                                  Notes          2021                          2020 
                                                              EGP'000                       EGP'000 
-----------------------------------------------  ------  ------------  ---------------------------- 
 
 Revenue                                            6       5,224,712                     2,656,264 
 Cost of sales                                     8.1    (2,420,647)                   (1,313,688) 
                                                         ------------  ---------------------------- 
 Gross profit                                               2,804,065                     1,342,576 
 
 Marketing and advertising expenses                8.2      (163,163)                     (107,216) 
 Administrative expenses                           8.3      (370,014)                     (221,874) 
 Impairment loss on trade and other receivable     16        (24,656)                      (42,131) 
 Other Income                                                  15,828                        14,191 
                                                         ------------  ---------------------------- 
 Operating profit                                           2,262,060                       985,546 
 
 Finance costs                                     8.6      (142,917)                      (84,107) 
 Finance income                                    8.6        113,178                        67,643 
 Net finance costs                                 8.6       (29,739)                      (16,464) 
                                                         ------------  ---------------------------- 
 Profit before income tax                                   2,232,321              969,082 
 
 Income tax expense                                 9       (739,815)                     (359,600) 
 Profit for the year                                        1,492,506                       609,482 
                                                         ============  ============================ 
 
 Profit attributed to: 
      Owners of the Company                                 1,412,609                       594,015 
      Non-controlling interests                                79,897                        15,467 
                                                            1,492,506                       609,482 
                                                         ============  ============================ 
 Earnings per share                                10 
 Basic and Diluted                                               2.35                          0.99 
 
 
 
 
   The accompanying notes form an integral part of these consolidated financial statements. 
 

Consolidated statement of comprehensive income/(expenses) for the year ended 31 December 2021

 
                                                                          2021               2020 
                                                                       EGP'000            EGP'000 
----------------------------------------------------------------   -----------  ----------------- 
 
 Net profit for the year                                             1,492,506            609,482 
 
 Other comprehensive income/(expenses): 
 Items that may be reclassified to profit or loss: 
 Exchange difference on translation of foreign operations                7,808           (20,292) 
                                                                   -----------  ----------------- 
 Other comprehensive income/(expenses) for the year, net of tax          7,808           (20,292) 
                                                                   -----------  ----------------- 
 Total comprehensive income/loss for the year                        1,500,314            589,190 
                                                                   ===========  ================= 
 
 Attributable to: 
 Owners of the Company                                               1,417,722            583,809 
 Non-controlling interests                                              82,592              5,381 
                                                                     1,500,314            589,190 
                                                                   ===========  ================= 
 The accompanying notes form an integral part of these consolidated financial statements. 
 
 

Consolidated statement of cash flows for the year ended 31 December 2021

 
                                                    Note           2021            2020 
                                                                EGP'000         EGP'000 
-------------------------------------------------  ------  ------------   ------------- 
 Cash flows from operating activities 
 Profit before tax                                            2,232,321         969,082 
 Adjustments for: 
 Depreciation of property, plant and equipment       11         151,826         118,632 
 Depreciation of right of use assets                 26          79,617          60,803 
 Amortisation of intangible assets                   12           7,201           5,926 
 Unrealised foreign exchange gains and losses        8.6         17,912          12,580 
 Finance income                                      8.6      (113,178)        (53,120) 
 Finance Expense                                     8.6        118,029          71,527 
 Gain on disposal of Property, plant and 
  equipment                                                        (78)            (98) 
 Impairment in trade and other receivables           16          24,656          42,131 
 Equity settled financial assets at fair 
  value                                                           (866)         (3,213) 
 ROU Asset/Lease Termination                                      1,351           (609) 
 Hyperinflation                                                   6,976        (14,523) 
 Change in Provisions                                  21           681         (1,866) 
 Change in Inventories                                        (127,643)        (17,121) 
 Change in Trade and other receivables                        (106,458)       (140,563) 
 Change in Trade and other payables                             351,803          53,822 
 Cash generated from operating activities 
  before income tax payment                                   2,644,150       1,103,390 
                                                           ------------   ------------- 
 Taxes paid                                                   (374,305)       (220,875) 
                                                           ------------   ------------- 
 Net cash generated from operating activities                 2,269,845         882,515 
                                                           ------------   ------------- 
 
 
 Cash flows from investing activities 
 Proceeds from sale of property, plant and 
  equipment                                                       6,627           5,316 
 Interest received on financial asset at 
  amortised cost                                                111,367          51,187 
 Payments for acquisition of property, plant 
  and equipment                                               (253,385)       (118,372) 
 Payments for acquisition of intangible 
  assets                                                       (10,354)         (7,638) 
 Decrease / (increase) in restricted cash                             -             247 
 Payments for the purchase of financial 
  assets at amortized cost                                  (1,599,238)       (112,115) 
 Proceeds for the sale of financial assets 
  at amortized cost                                             417,139          57,107 
 Net cash used in investing activities                      (1,327,844)       (124,268) 
                                                           ------------   ------------- 
 
 Cash flows from financing activities 
 Proceeds from borrowings                           28           30,450          11,727 
 Repayment of borrowings                            28         (25,416)        (25,416) 
 Payments of lease liabilities                                 (50,227)        (33,509) 
 Payment of financial obligations                               (9,383)         (9,237) 
 Dividends paid                                               (478,748)       (450,737) 
 Interest paid                                                 (93,799)        (73,736) 
 Bank charge paid                                              (20,026)               - 
 Injection of cash by non-controlling interest                        -          17,372 
 Net cash flows used in financing activities                  (647,149)       (563,536) 
                                                           ------------   ------------- 
 
 Net increase in cash and cash equivalents                      294,852         194,711 
 Cash and cash equivalents at the beginning 
  of the year                                                   600,130         408,892 
 Effect of exchange rate                                        (3,531)         (3,473) 
 Cash and cash equivalents at the end of 
  the year                                           17         891,451         600,130 
                                                           ============   ============= 
 
 
        Non-cash investing and financing activities disclosed in other notes 
        are: 
         *    acquisition of right-of-use assets - note 26 
 
 
         *    Property plant and equipment - note 11 
 
 
         *    Put option liability - note 23 and 25 
 
 
        The accompanying notes form an integral part of these consolidated 
        financial statements. 
 
 

Consolidated statement of changes in equity for the year ended 31 December 2021

 
 EGP'000            Share       Share       Capital     Legal      Put         Translation     Retained    Total         Non-Controlling   Total Equity 
                    Capital     premium     reserve     reserve*   option      reserve         earnings    attributed    interests 
                                                                   reserve                                 to 
                                                                                                           the owners 
                                                                                                           of the 
                                                                                                           Company 
-----------------  ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 
   As at 1 
   January 2021     1,072,500   1,027,706   (314,310)     49,218   (314,057)         145,617     603,317     2,269,991           156,383      2,426,374 
 Profit for the 
  year                      -           -           -          -           -               -   1,412,609     1,412,609            79,897      1,492,506 
 Other 
  comprehensive 
  income for the 
  year                      -           -           -          -           -           5,113           -         5,113             2,695          7,808 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 Total 
  comprehensive 
  income                    -           -           -          -           -           5,113   1,412,609     1,417,722            82,592      1,500,314 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 Transactions 
 with owners in 
 their capacity 
 as owners 
 
 Dividends                  -           -           -          -           -               -   (455,182)     (455,182)          (23,566)      (478,748) 
 Legal reserve 
  formed during 
  the year*                 -           -           -      2,423           -               -     (2,423)             -                 -              - 
 Impact of 
  hyperinflation            -           -           -          -           -               -     (7,345)       (7,345)           (3,896)       (11,241) 
 Movement in put 
  option 
  liabilities for 
  the year                  -           -           -          -   (642,340)               -           -     (642,340)                 -      (642,340) 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 Total                      -           -           -      2,423   (642,340)               -   (464,950)   (1,104,867)          (27,462)    (1,132,329) 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 
 At 31 December 
  2021              1,072,500   1,027,706   (314,310)     51,641   (956,397)         150,730   1,550,976     2,582,846           211,513      2,794,359 
                   ==========  ==========  ==========  =========  ==========  ==============  ==========  ============  ================  ============= 
 
 As at 1 January 
  2020              1,072,500   1,027,706   (314,310)     46,330   (229,164)         155,823     456,661     2,215,546           144,710      2,360,256 
 Profit for the 
  year                      -           -           -          -           -               -     594,015       594,015            15,467        609,482 
 Other 
  comprehensive 
  expense for the 
  year                      -           -           -          -           -        (10,206)           -      (10,206)          (10,086)       (20,292) 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 Total 
  comprehensive 
  income                    -           -           -          -           -        (10,206)     594,015       583,809             5,381        589,190 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 Transactions 
 with owners in 
 their capacity 
 as owners 
 

 Dividends                  -           -           -          -           -               -   (441,855)     (441,855)           (8,882)      (450,737) 
 Legal reserve 
  formed during 
  the year*                 -           -           -      2,888           -               -     (2,888)             -                 -              - 
 Impact of 
  hyperinflation            -           -           -          -           -               -     (2,616)       (2,616)           (2,198)        (4,814) 
 Movement in put 
  option 
  liabilities for 
  the year                  -           -           -          -    (84,893)               -           -      (84,893)                 -       (84,893) 
 Non-controlling 
  interest cash 
  injection in 
  subsidiaries 
  during the year           -           -           -          -           -               -           -             -            17,372         17,372 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 Total                      -           -           -      2,888    (84,893)               -   (447,359)     (529,364)             6,292      (523,072) 
                   ----------  ----------  ----------  ---------  ----------  --------------  ----------  ------------  ----------------  ------------- 
 
 At 31 December 
  2020              1,072,500   1,027,706   (314,310)     49,218   (314,057)         145,617     603,317     2,269,991           156,383      2,426,374 
                   ==========  ==========  ==========  =========  ==========  ==============  ==========  ============  ================  ============= 
 
 * Under Egyptian Law each subsidiary must set aside at least 5% of its annual net profit into 
  a legal reserve until such time that this represents 50% of each subsidiary's issued capital. 
  This reserve is not distributable to the owners of the Company 
  . 
 

Notes to the Consolidated Financial Statements - For the Year Ended 31 December 2021

(In the notes all amounts are shown in Egyptian Pounds "EGP'000" unless otherwise stated)

   1.    Corporate information 

The consolidated financial statements of Integrated Diagnostics Holdings plc and its subsidiaries (collectively, "the Group") for the year ended 31 December 2021 were authorised for issue in accordance with a resolution of the directors on 20 April 2022. Integrated Diagnostics Holdings plc "IDH" or "the company" has been established according to the provisions of the Companies (Jersey) law 1991 under No. 117257. The registered office address of the Company is 12 Castle Street, St Helier, Jersey, JE2 3RT. The Company is a dually listed entity, in both London stock exchange (since 2015) and in the Egyptian stock exchange (in May 2021).

The principal activity of the Company is investments in all types of the healthcare field of medical diagnostics (the key activities are pathology and Radiology related tests), either through acquisitions of related business in different jurisdictions or through expanding the acquired investments IDH has. The key jurisdictions that the group operates are in Egypt, Jordan, Nigeria, and Sudan

The Group's financial year starts on 1 January and ends on 31 December each year.

   2.    Group information 

Information about subsidiaries

T he c on s ol i da t ed f i na n cial st a t e me n ts of t he G r oup i n cl u de:

 
                                   Principal             Country        % Equity interest       Non-Controlling 
                                   activities               of                                      interest 
                                                      Incorporation 
                             ---------------------  ---------------- 
                                                                              2021    2020           2021    2020 
  ------------------------------------------------------------------  ------------  -------  ------------  ------ 
 Al Borg Laboratory           Medical diagnostics 
  Company ("Al-Borg")          service                    Egypt              99.3%    99.3%          0.7%    0.7% 
 Al Mokhtabar Company 
  for Medical Labs            Medical diagnostics 
  ("Al Mokhtabar")             service                    Egypt              99.9%    99.9%          0.1%    0.1% 
 Medical Genetic              Medical diagnostics 
  Center                       service                    Egypt              55.0%    55.0%         45.0%   45.0% 
 Al Makhbariyoun              Medical diagnostics 
  Al Arab Group                service                   Jordan              60.0%    60.0%         40.0%   40.0% 
 Golden Care for              Holding company 
  Medical Services             of SAMA                    Egypt             100.0%   100.0%          0.0%    0.0% 
 Integrated Medical 
  Analysis Company            Medical diagnostics 
  (S.A.E)                      service                    Egypt              99.6%    99.6%          0.4%    0.4% 
 SAMA Medical Laboratories 
  Co. ("Ultralab 
  medical laboratory          Medical diagnostics 
  ")                           service                    Sudan              80.0%    80.0%         20.0%   20.0% 
 AL-Mokhtabar Sudanese        Medical diagnostics 
  Egyptian Co.                 service                    Sudan              65.0%    65.0%         35.0%   35.0% 
 Integrated Diagnostics       Intermediary               Caymans 
  Holdings Limited             holding company            Island            100.0%   100.0%          0.0%    0.0% 
 Dynasty Group Holdings       Intermediary               England 
  Limited                      holding company          and Wales            51.0%    51.0%         49.0%   49.0% 
 Eagle Eye-Echo               Intermediary 
  Scan Limited                 holding company          Mauritius            76.5%    76.5%         23.5%   23.5% 
                              Medical diagnostics 
 Echo-Scan*                    service                   Nigeria            100.0%   100.0%          0.0%    0.0% 
 WAYAK Pharma                 Medical services            Egypt             99.99%   99.99%         0.01%   0.01% 
 

* The group consolidate "Echoscan" a subsidiary based in Nigeria despite of 37% indirect ownership for more details refer to note 4-2.

Non-Controlling interest

Non-Controlling Interest is measured at the proportionate share basis.

Financial information of subsidiaries that have material non-controlling interests is provided below:

Proportion of equity interest held by non-controlling interests:

 
                                                     Country of incorporation     2021     2020 
                                                -----------------------------  -------  ------- 
 Medical Genetic Center                                                 Egypt    45.0%    45.0% 
 Al Makhbariyoun Al Arab Group (Hashemite Kingdom 
  of Jordan)                                                           Jordan    40.0%    40.0% 
 SAMA Medical Laboratories Co. " Ultra lab medical 
  laboratory "                                                          Sudan    20.0%    20.0% 
 Al Borg Laboratory Company                                             Egypt     0.7%     0.7% 
                                                                      England 
 Dynasty Group Holdings Limited                                     and Wales      49%      49% 
 Eagle Eye-Echo Scan Limited                                        Mauritius   23.53%   23.53% 
 
 

The summarised financial information of these subsidiaries is provided below. This information is based on amounts before inter-company eliminations.

 
                                                                             Other 
                                            Al             Alborg         subsidiaries 
                    Medical Genetic    Makhbariyoun      Laboratory           with 
                        Center        Al Arab Group        Company       immaterial NCI   Dynasty Group      Total 
                        EGP'000          EGP'000           EGP'000          EGP'000          EGP'000         EGP'000 
                   ----------------  ---------------  ----------------  ---------------  --------------  ------------- 
 Summarised 
 statement of 
 Income for 2021: 
 Revenue                      3,092        1,046,107         1,594,275        3,821,004          53,604      6,518,082 
 Profit                     (2,627)          214,588           401,401        1,162,009         (8,795)      1,766,576 
 Other 
  comprehensive 
  income                          -             (56)                 -           10,935         (4,733)          6,146 
 Total 
  comprehensive 
  income                    (2,627)          214,532           401,401        1,172,944        (13,528)      1,772,722 
-----------------  ----------------  ---------------  ----------------  ---------------  --------------  ------------- 
 Profit allocated 
  to 
  non-controlling 
  interest                  (1,193)           86,747             2,841          (3,261)         (5,237)         79,897 
 Other 
  comprehensive 
  income 
  allocated to 
  non-controlling 
  interest                        -               64                 -            5,667         (3,036)          2,695 
=================  ================  ===============  ================  ===============  ==============  ============= 
 
 Summarised 
 statement of 
 financial 
 position as at 
 31 December 
 2021: 
 Non-current 
  assets                        682          211,430           541,782          707,847          90,509      1,629,987 
 Current assets               3,975          432,149           598,084        2,017,197          24,356      3,051,276 
 Non-current 
  liabilities                  (27)         (76,599)         (361,520)        (303,142)          20,743      (741,272) 
 Current 
  liabilities               (7,148)        (237,206)         (266,796)        (701,516)          28,313    (1,216,878) 

 Net assets                 (2,518)          329,774           511,550        1,720,386         163,921      2,723,113 
-----------------  ----------------  ---------------  ----------------  ---------------  --------------  ------------- 
 Net assets 
  attributable to 
  non-controlling 
  interest                  (1,143)          133,310             3,621          (4,626)          80,351        211,513 
=================  ================  ===============  ================  ===============  ==============  ============= 
 
                                                                             Other 
                                                                          subsidiaries 
                                            Al             Alborg             with 
                    Medical Genetic    Makhbariyoun      Laboratory        immaterial        Dynasty 
                        Center        Al Arab Group        Company            NCI             Group          Total 
                        EGP'000          EGP'000           EGP'000          EGP'000          EGP'000         EGP'000 
                   ----------------  ---------------  ----------------  ---------------  --------------  ------------- 
 Summarised 
 statement of 
 profit or loss 
 for 2020: 
 Revenue                      2,822          409,069           911,923        1,731,237          36,089      3,091,140 
 Profit                     (3,412)           71,043           238,889          454,318        (26,832)        734,006 
 Other 
  comprehensive 
  expense                         -          (2,691)                 -            1,060        (15,789)       (17,420) 
 Total 
  comprehensive 
  income                    (3,412)           68,352           238,889          455,378        (42,621)        716,586 
-----------------  ----------------  ---------------  ----------------  ---------------  --------------  ------------- 
 Profit allocated 
  to 
  non-controlling 
  interest                  (1,549)           28,719             1,691            2,599        (15,992)         15,468 
 Other 
  comprehensive 
  expense 
  allocated to 
  non-controlling 
  interest                        -          (1,088)                 -              263         (9,261)       (10,086) 
=================  ================  ===============  ================  ===============  ==============  ============= 
 
 Summarised 
 statement of 
 financial 
 position as at 
 31 December 
 2020: 
 Non-current 
  assets                        736          183,237           357,303          556,725         113,941      1,211,942 
 Current assets               4,105          155,185           436,895        1,040,393          43,615      1,680,193 
 Non-current 
  liabilities                  (27)         (64,249)         (199,597)        (216,983)        (23,621)      (504,477) 
 Current 
  liabilities               (4,705)        (104,517)         (254,625)        (462,853)        (24,121)      (850,821) 
 Net assets                     109          169,656           339,976          917,282         109,814      1,536,837 
-----------------  ----------------  ---------------  ----------------  ---------------  --------------  ------------- 
 Net assets 
  attributable to 
  non-controlling 
  interest                       49           68,582             2,405           40,324          45,023        156,383 
=================  ================  ===============  ================  ===============  ==============  ============= 
 
 
   3.    Basis of preparation 

Statement of compliance

Integrated Diagnostics Holdings plc "IDH" or "the company" has been established according to the provisions of the Companies (Jersey) law 1991 under No. 117257. The Company is a dually listed entity, in both London stock exchange and in the Egyptian stock exchange. The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and the Companies (Jersey) Law 1991.

Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis, except where adopted IFRS mandates that fair value accounting is required which is related to financial assets and liabilities measured at fair value.

New standards and interpretations adopted

The Group has applied the following amendments for the first time for their annual reporting period commencing 1 January 2021:

   --    Covid-19-Related Rent Concessions - amendments to IFRS 16, 

-- Interest Rate Benchmark Reform - Phase 2 - amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16.

   --    Annual Improvements to IFRS Standards 2018-2020, and 

-- Deferred Tax related to Assets and Liabilities arising from a Single Transaction - amendments to IAS 12.

The amendments listed above did not have any impact on current and prior years and and not expected to affect future years

New standards and interpretations not yet adopted

Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 31 December 2021 reporting period and have not been early adopted by the company. These standards, amendments or interpretations are not expected to have a material impact on the group in the current or future reporting periods and on foreseeable future transactions.

Going concern

These consolidated financial statements have been prepared on the going concern basis. At 31 December 2021, the Group had net assets amounting to KEGP 2,794,359. The Directors have considered a number of downside scenarios, including the most severe but plausible scenario, for a period of 16 months from the signing of the financial statements. They have also assessed the likelihood of any key one-off payments arising such as dividends or those in respect of M&A activity. Under all of these scenarios there remains significant headroom from a liquidity and covenant perspective. Reverse stress tests have been performed to determine the level of downside required to cause a liquidity or covenant issue with these scenarios not considered plausible. Therefore the Directors believe the Group has the ability to meet its liabilities as they fall due and the use of the going concern basis in preparing the financial statements is appropriate.

3.1. Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

i. Subsidiaries

Subsidiaries are all entities over which the group has control. The group controls an entity where the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of income statement of comprehensive income, statement of changes in equity and statement of financial position respectively.

   ii.          Changes in ownership interests 

The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of the group.

When the group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

3.2. Significant accounting policies

The accounting policies set out below have been consistently applied to all the years presented in these Consolidated financial statements.

   a)    Business combinations 

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

-- fair values of the assets transferred

-- liabilities incurred to the former owners of the acquired business

-- equity interests issued by the group

-- fair value of any asset or liability resulting from a contingent consideration arrangement, and

-- fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the:

-- consideration transferred,

-- amount of any non-controlling interest in the acquired entity, and

-- acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.

   b)    Impairment of assets 

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an

impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

   c)    Fair value measurement 

The Group measures financial instruments such as non-derivative financial instruments and contingent consideration assumed in a business combination at fair value at each balance sheet date.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value is categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Ø Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Ø Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Ø Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

The fair value less any estimated credit adjustments for financial assets and liabilities with maturity dates less than one year is assumed to approximate their carrying value. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contracted cash flows at the current market interest rate that is available to the Group for similar transactions.

   d)    Re v enu e  rec o gniti on: 

Revenue represents the value of medical diagnostic services rendered in the year and is stated net of discounts. The Group has two types of customers: Walk-in patients and patients served under contracts. For patients under contracts, rates are agreed in advance on a per-test, client-by-client basis based on the pricelists agreed within these contracts.

The following steps are considered for all types of patients:

1. Identification of the Contracts: written contracts are agreed between IDH and customers. The contracts stipulate the duration, price per test and credit period.

2. Determining performance obligations are the diagnostics tests within the pathology and radiology services. The performance obligation is achieved when the customer receives their test results, and so are recognised at point in time.

3. Transaction price: Services provided by the Group are distinct in the contract, as the contract stipulates the series of tests' names/types to be conducted along with its distinct prices.

4. Allocation of price to performance obligations: Stand-alone selling price per test is stipulated in the contract. In case of discounts, it is allocated proportionally to all of tests prices in the contract.

   5.    Revenue is being recorded after the satisfaction of the above mentioned conditions. 

The group considers whether it is the principal or the agent in each of its contractual arrangements. In line with IFRS 15 "Revenue from contracts" in assessing the appropriate treatment of each contract, factors that are considered include which party is controlling the service being performed for the customer and bears the inventory risk. Where the group is largely controlling the service and bearing the inventory risk it is deemed to be the principal and the full consideration received from the customer is recognised as revenue, with any amounts paid to third parties treated as cost of sales.

Customer loyalty program:

The group operates a loyalty program where customers accumulate points for purchases made which entitle them to a discount on future purchases. The points are valid for 24 months from the time they are awarded. The value of points to be provided is based on the expectation of what level will be redeemed in the future before their expiration date. This amount is netted against revenue earned and included as a contract liability and only recognised as revenue when the points are then redeemed.

   e)   Income Taxes 

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

   i.     Current tax 

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

   ii.    Deferred tax 

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.

However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.

f) Foreign currency translation

i) Functional and presentation currency

Each of the Group's entities is using the currency of the primary economic environment in which the entity operates ('the functional currency'). The Group's consolidated financial statements are presented in Egyptian Pounds, being the reporting currency of the main Egyptian trading subsidiaries within the Group and the primary economic environment in which the Group operates.

   ii)    Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other gains/(losses).

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss, and translation differences on non-monetary assets such as equities classified as at fair value through other comprehensive income are recognised in other comprehensive income.

   g)   Property, plant and equipment 

All property and equipment are stated at historical cost or fair value at acquisition, less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the consolidated statement of income during the financial period in which they are incurred. Land is not depreciated.

Depreciation expense is calculated using the straight-line method to allocate the cost or to their residual value over their estimated useful lives, as follows:

Buildings 50 years

   Medical, electric and information systems equipment              4-10 years 

Leasehold improvements 4-5 years

Fixtures, fittings & vehicles 4-16 years

The assets useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains - net' in the consolidated statement of income.

   h)   Intangible assets 

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of income in the expense category that is consistent with the function of the intangible assets. The Group amortises intangible assets with finite lives using the straight-line method over the following periods:

   -     IT development and software 4-5 years 

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquire.

Goodwill is stated at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. the impairment assessment is done on an annual basis.

Brand

Brand names acquired in a business combination are recognised at fair value at the acquisition date and have an indefinite useful life.

The Group brand names are considered to have indefinite useful life as the Egyptian brands have been established in the market for more than 40 years and the health care industry is very stable and continues to grow.

The brands are not expected to become obsolete and can expand into different countries and adjacent businesses, in addition, there is a sufficient ongoing marketing efforts to support the brands and this level of marketing effort is economically reasonable and maintainable for the foreseeable future.

Impairment of intangible assets

The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impairment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.

The recoverable amounts of cash generating units have been determined based on value in use. The value

in use calculation is based on a discounted cash flow ("DCF") model.

The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset's performance of the CGU being tested.

We test for impairment at the smallest grouping of CGUs at which a material impairment could arise or at the lowest level at which goodwill is monitored. References to testing being performed at a CGU level throughout the rest of the financial statements is referring to the grouping of CGUs at which at the test is performed. The grouping of CGUs are shown in note 13 where the assumptions for the impairment assessment are disclosed.

   I)   Financial instruments - initial recognition and subsequent measurement 

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

   i)    Financial assets 

Classification

The group reclassifies debt investments when and only when its business model for managing those assets changes.

The group classifies its investments in debt Instruments in the following measurement categories:

-- those to be measured subsequently at fair value (either through OCI or through income statement), and

-- those to be measured at amortised cost.

The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.

For investment is equity instrument measured at fair value, gains and losses will either be recorded in income statement or OCI.

For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).

Recognition and derecognition

According to the standard purchases and sales of financial assets are recognised on trade date, being the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

Measurement

At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the group's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:

-- Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the consolidated income statement.

-- FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment losses, interest income and foreign exchange gains and losses, which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses), and impairment expenses are presented as separate line item in the consolidated income statement.

-- FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises. Management has assessed the underlying nature of the investments and designated upon investment that this should be treated as an investment held at fair value with movements going through the income statement on the basis of the size of the investment and the reasons for making the investment.

Equity instruments

The group subsequently measures all equity investments at fair value. Where the group's management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the group's right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of income as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment

The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Further disclosures relating to impairment of financial assets are also provided in the following notes:

   Ø Disclosures for significant estimates and assumptions                     Note 4.2 

Ø Financial assets Note 5

Ø Trade receivables Note 16

The Group uses an allowance matrix to measure the ECLs of trade receivables from individual customers, which comprise a very large number of small balances.

Loss rates are calculated using a 'roll rate' method based on the probability of a receivable progressing through successive stages of delinquency to write-off. Roll rates are calculated separately for exposures in different segments based on credit risk characteristics, age of customer relationship.

Loss rates are based on actual credit loss experience over the past three years. These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions and the Groups view of economic conditions over the expected lives of the receivables.

   ii.    Financial liabilities 

Initial recognition and measurement

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified at FVTPL if it is classified as held for trading, financial liabilities at FVTPL are measured at fair value and net gains and losses including any interest expenses are recognised in profit or loss.

Put options included in put option liabilities are carried at the present value of the redemption amount in accordance with IAS 32 in regard to the guidance on put option on an entity's own equity shares. The group has written put options over the equity of its (Bio Lab and Echo Scan) subsidiaries the option on exercise is initially recognised at the present value of the redemption amount with a corresponding charge directly to equity. The charge to equity is recognised separately as written put options reserve and that this is in line with paragraph 23 of IFRS 10 with the non-controlling interests, adjacent to non-controlling interests in the net assets of consolidated subsidiaries.

All of the Group's financial liabilities are classified as financial liabilities carried at amortised cost using the effective interest method. The Group does not use derivative financial instruments or hedge account for any transactions. Unless otherwise indicated, the carrying amounts of the Group's financial liabilities are a reasonable approximation of their fair values.

The Group's financial liabilities include trade and other payables, put option liabilities, borrowings, and other financial obligations.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of income.

   iii.       Offsetting of financial instruments 

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

   j)    Impairment of non-financial assets 

Further disclosures relating to impairment of non-financial assets are also provided in the following notes:

   Ø Disclosures for significant assumptions and estimates                     Note 4.2 
   Ø Goodwill and intangible assets                   Note 13 

The Group assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or CGU's fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognised in the statement of profit or loss in expense categories consistent with the function of the impaired asset.

For assets excluding goodwill and indefinite lived intangible assets, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased.

If such indication exists, the Group estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the consolidated income statement.

Goodwill is tested for impairment annually as at 31 October and when circumstances indicate that the carrying value may be impaired. Management takes into consideration any changes that occur and have impacts between the impairment report date of 31 October and date of end year of 31 December.

Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

Intangible assets with indefinite useful lives are tested for impairment annually as at 31 October at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (CGU). Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.

k) Inventories

Raw materials are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

l) Cash and short-term deposits

Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and short-term deposits with an original maturities of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group's cash management .

   m)        Borrowings 

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

n) Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.

   o)   Provisions 

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as a finance cost.

   p)   Pensions and other post-employment benefits 

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Obligations for contributions to defined contribution pension plans are recognized as an expense in the income statement in the periods during which services are rendered by employees.

   q)   Segmentation 

The Group has four operating segments based on geographical location rather than two operating segments based on service provided.

   r)   Leases as lessee (IFRS 16) 

At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

As a lessee

At commencement or on modification of a contract that contains a lease component, along with one or more other lease or non-lease components, the Group accounts for each lease component separately from the non-lease components. However, for the non-leases element of the underlying asset, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component. The Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone price and the aggregate stand-alone price of the non-lease components.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate for the IFRS 16 calculations. This is set based upon the interest rate attached to the groups financing and adjusted, where appropriate, for specific factors such as asset or company risk premiums..

Lease payments included in the measurement of the lease liability comprise the following:

   -     fixed payments, including in-substance fixed payments; 

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date

   -     amounts expected to be payable under a residual value guarantee; and 
   -     the exercise price under a purchase option that the Group is reasonably certain to exercise, 

- lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and

- penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, to the extent that the right-of-use asset is reduced to nil, with any further adjustment required from the remeasurement being recorded in profit or loss.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for lease of low-value assets and short-term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

   4.    Judgement and estimates 

4.1. Judgement

Useful economic lives of Brands

Management have assessed that the brands within the group which have a value have an indefinite life. This is based on their strong history and existence in the market over a large number of years, in addition to the fact that these brands continue to grow and become more profitable. As the brands have been assigned an indefinite life then they are not amortised and assessed for impairment on an annual basis.

Control over subsidiaries

The group makes acquisitions that often see a non-controlling interest retained by the seller. The assessment of if the group has control of these acquisitions in order to consolidate is a critical judgement in these financial statements.

The group consolidate the subsidiaries assessed for the following reasons:

1) The group has the majority on shareholder stake

2) The group has the majority on the board of subsidiaries

3) The group has full control of the operations and is involved in all decisions.

The group consolidate "Echoscan" a subsidiary based in Nigeria despite of 37% indirect ownership for the following reasons:

1) The group has control over all intermediate entities between the parent and Echoscan

2) The group has a technical service agreement which enables them to direct and control the operations in Nigeria.

4.2. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Impairment of intangible assets

The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impairment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.

The recoverable amounts of cash generating units have been determined based on value in use. The value

in use calculation is based on a discounted cash flow ("DCF") model.

The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset's performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. For more detailed assumptions refer to (note 13).

Customer loyalty program

The group operates a loyalty program where customers accumulate points for purchases made which entitle them to a discount on future purchases. A contract liability is recognised for the points awarded at the time of the sale based on the expected level of redemption. At 31 December 2021 the level of points accumulated by customers which had not expired was equivalent to 24m EGP. The estimate made by management is how much of this amount ought to be recognised as a liability based on future usage. The level of future redemption is estimated using historical data and adjustments for likely future trends in usage. Therefore, upon initial recognition of the sale to a customer, if management expects the group to be entitled to a breakage amount (i.e. not all points will be redeemed and so it is highly probable that there will be no significant reversal of revenue) this breakage amount is recognised within revenue. This assessment is reviewed periodically, to ensure that only revenue which is highly probable not to result in a significant reversal in future periods is recognised. Management has estimated that 24m EGP out of the total potential amount that could be redeemed is likely to be utilised by customers

   5.    Financial assets and financial liabilities 

The fair values of all financial assets and financial liabilities by class shown in the balance sheet are as follows:

 
                                               2021                            2020 
                                            EGP'000                          EGP'00 
                                         ----------  ------------------------------ 
 Cash and cash equivalent                   891,451                         600,130 
 Short term deposits - treasury bills     1,458,724                         276,625 
 Trade and other receivables (Note 16)      447,080                         364,117 
 Total financial assets                   2,797,255                       1,240,872 
                                         ==========  ============================== 
 
 
                                               2021                            2020 
                                            EGP'000                          EGP'00 
                                         ----------  ------------------------------ 
 Trade and other payables                   749,272                         380,201 
 Put option liability                       956,397                         314,057 
 Financial obligation                       760,674                         459,043 
 Loans and borrowings                       101,545                          96,455 
 Total other financial liabilities        2,567,888                       1,249,756 
                                         ==========  ============================== 
 
 Total financial instruments*               229,367                         (8,884) 
 

* The financial instruments exclude prepaid expenses, deferred revenue, and tax (current tax, payroll tax, withholding tax,...etc).

The fair values measurements for all the financial assets and liabilities have been categorized as Level 3, it is fair value can't be determined by using readily observable measures and Echo-Scan put option (note 26) has been categorized as Level 3 as the fair value of the option is based on un-observable inputs using the best information available in the current circumstances, including the company's own projection and taking into account all the market assumptions that are reasonably available.

Financial instruments risk management objectives and policies

The Group's principal financial liabilities are trade and other payables, put option liabilities, borrowings and other financial liabilities. The Group's principal financial assets include trade and other receivables, financial asset at amortised cost, financial asset at fair value and cash and cash equivalent that derive directly from its operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of markets and seeks to minimize potential adverse effects on the Group's financial performance. The Group's senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, and credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

   -     Market risk 

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at 31 December in 2021 and 2020 The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.

The analysis exclude the impact of movements in market variables on provisions; and the non-financial assets and liabilities of foreign operations. The following assumptions have been made in calculating the sensitivity analysis:

Ø The sensitivity of the relevant consolidated income statement item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 December 2021 and 2020.

   -     Interest rate risk 

The Group is trying to minimize its interest rate exposure, especially in Egypt region, which has seen several interest rate cuts over the last two years. Minimising interest rate exposure has been achieved partially by entering into fixed-rate instruments.

Exposure to interest rate risk

The interest rate profile of the Group's interest-bearing financial instruments as reported to the management of the group is as follow:

 
                                                2021       2020 
                                             EGP'000    EGP'000 
-----------------------------------------  ---------  --------- 
 Fixed-rate instruments 
 Financial obligation (note 26)              760,674    459,043 
 CIB BANK Loans and borrowings (note 24)      13,238          - 
-----------------------------------------  ---------  --------- 
 Variable-rate instruments 
 AUB BANK Loans and borrowings (note 24)      84,828     93,033 
 

The Group does not account for any fixed-rate financial liabilities at FVTPL. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable-rate instruments

A reasonable possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts EGP 980K (2020: EGP 930K). This analysis assumes that all other variables, remain constant.

   -     Foreign currency risk 

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US Dollar, Sudanese Pound, the Jordanian Dinar and Nigerian Naira. Foreign exchange risk arises from the Group's operating activities (when revenue or expense is denominated in a foreign currency), recognized assets and liabilities and net investments in foreign operations. However, management aims to minimize open positions in foreign currencies to the extent that is necessary to conduct its activities.

Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity's functional currency.

At year end, major financial assets / (liabilities) denominated in foreign currencies were as follows (the amounts presented are shown in thousands in EGP):

 
                                                                                                  31-Dec-21 
         ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 
                                               Assets                                                                           Liabilities                                        Net exposure 
                                                                                                                                                                               -------------------- 
          Cash and cash equivalents         Other                        Total                Put option          Finance               Trade                Total 
                                             assets                       assets                                   lease                 payables             liability 
         --------------------------------  ---------------------------  -------------------  ------------------  --------------------  -------------------  -----------------  -------------------- 
 US                               917,673                       11,880              929,553                   -              (56,744)            (140,808)          (197,552)               732,001 
 Euros                                397                            -                  397                   -                     -                (342)              (342)                    55 
 JOD                              297,154                      112,409              409,563           (921,360)              (93,999)            (171,481)        (1,186,840)             (777,277) 
 SDG                                1,010                          604                1,614                   -                 (850)              (1,718)            (2,568)                 (954) 
 NGN                                8,591                        5,094               13,685            (35,037)               (9,104)              (9,413)           (53,554)              (39,869) 
 
                                                                                                  31-Dec-20 
         ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 
                                               Assets                                                                           Liabilities                                        Net exposure 
                                                                                                                                                                               -------------------- 
          Cash and cash equivalents         Other                        Total                Put option          Finance               Trade                Total 
                                             assets                       assets                                   lease                 payables             liability 
         --------------------------------  ---------------------------  -------------------  ------------------  --------------------  -------------------  -----------------  -------------------- 
 US                                81,956                        5,138               87,094                   -              (67,764)             (29,120)           (96,884)               (9,790) 
 Euros                                176                            -                  176                   -                     -              (1,588)            (1,588)               (1,412) 
 JOD                               76,954                       62,062              139,015           (282,266)              (75,365)             (70,489)          (428,121)             (289,106) 
 SDG                                2,429                        2,712                5,140                   -               (6,682)              (6,376)           (13,058)               (7,918) 
 NGN                                8,749                        9,211               17,960            (31,790)              (14,825)             (14,574)           (61,189)              (43,229) 
 

The following is the exchange rates applied:

 
                Average rate for the year ended 
                     31-Dec-21         31-Dec-20 
 
 US Dollars              15.64             15.71 
 Euros                   18.46             17.85 
 GBP                     21.51             20.25 
 JOD                     22.03             22.13 
 SAR                      4.17              4.21 
 SDG                      0.06              0.29 
 NGN                      0.04              0.04 
 
                 Spot rate for the year ended 
                     31-Dec-21         31-Dec-20 
 
 US Dollars              15.65             15.66 
 Euros                   17.73             19.23 
 GBP                     21.12             21.38 
 JOD                     22.05             22.06 
 SAR                      4.17              4.18 
 SDG                      0.04              0.28 
 NGN                      0.04              0.04 
 

At 31 December 2021, if the Egyptian Pound had weakened/strengthened by 10% against the US Dollar with all other variables held constant, total equity for the year would have increased/decreased by EGP (73m) (2020: EGP (0.9m)), mainly as a result of foreign exchange gains/losses and translation reserve on the translation of US dollar-denominated financial assets and liabilities as at the financial position of 31 December 2021.

At 31 December 2021, if the Egyptian Pound had weakened / strengthened by 10% against the Jordanian Dinar with all other variables held constant, total equity for the year would have increased/decreased by EGP 77m (2020: EGP 28m), mainly as a result of foreign exchange gains/losses and translation reserve on translation of JOD -denominated financial assets and liabilities as at the financial position of 31 December 2021.

At 31 December 2021, if the Egyptian Pound had weakened / strengthened by 25% against the Sudanese Pound with all other variables held constant, total equity for the year would have increased/decreased by by EGP

0.238 (2020: EGP (1.9m)), mainly as a result of foreign exchange gains/losses and translation reserve on the translation of SDG - denominated financial assets and liabilities as at the financial position of 31 December 2021.

At 31 December 2021, if the Egyptian Pound had weakened / strengthened by 10% against the Nigeria Naira with all other variables held constant, total equity for the year would have increased/decreased by EGP 3.9m (2020: 4.3m), mainly as a result of foreign exchange gains/losses and translation reserve on the translation of Naira - denominated financial assets and liabilities as at the financial position of 31 December 2021.

   -     Price risk 

The group's exposure to equity securities price risk arises from investments held by the group and classified in the balance sheet as at fair value through profit or loss (FVPL) (note 14).

   -     Credit risk 

Credit risk is the risk a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and it arises principally from under the Groups receivables. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and financial assets at amortised cost, such as term deposits and treasury bills.

Credit risk is managed on a group basis, except for credit risk relating to accounts receivable balances. Each local entity is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions.

The cash balance and financial assets at amortized cost within the group is held within financial institutions, 86% with a rating of B+ and 7% is rated at least BB.

Trad e re c eiva b les

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country or region in which customers operate. Details of concentration of revenue are included in the operating segment note (see Note 6).

The risk management committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered and credit limit is set for each customer. The Group's review includes external ratings, if available, financial statements, industry information and in some cases bank references. Receivable limits are established for each customer and reviewed quarterly. Any receivable balance exceeding the set limit requires approval from the risk management committee. In response to the COVID-19 pandemic, the risk management committee has also been performing more frequent reviews of sales limits for customers in regions and industries that are severely impacted. Outstanding customer receivables are regularly monitored and the average general credit terms given to contract customers are 45 - 60 days.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data and expected future credit losses. The Group does not hold collateral as security. Any receivables balances over 365 days are fully provided for by the group.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 16.

Cash and cash equivalents

Credit risk from balances with banks and financial institutions is managed by the Group's treasury department in accordance with the Group's policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group's Board of Directors on an annual basis and may be updated throughout the year subject to approval of the Group's management. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through a counterparty's potential failure to make payments.

The maximum exposure to credit risk at the reporting date is the carrying value of cash and cash equivalents disclosed in Note 17.

   -     Li q ui d it y  r isk 

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of finance leases and loans.

The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted cashflows:

 
 31 December 2021            1 year or less   1 to 5 years   more than 5 years       Total 
                            ---------------  -------------  ------------------  ---------- 
 
 Financial obligations              211,242        701,084             191,229   1,103,555 
 Put option liabilities             921,360         35,037                   -     956,397 
 Borrowings                          31,107         94,490                   -     125,597 
 Trade and other payables           749,272              -                   -     749,272 
                                  1,912,981        830,611             191,229   2,934,821 
                            ===============  =============  ==================  ========== 
 
 31 December 2020            1 year or less   1 to 5 years   more than 5 years       Total 
                            ---------------  -------------  ------------------  ---------- 
 
 Financial obligations              126,999        463,646             131,605     722,250 
 Put option liabilities             282,267         31,790                   -     314,057 
 Borrowings                          33,977         70,001              11,252     115,230 
 Trade and other payables           380,201              -                   -     380,201 
                                    823,444        565,437             142,857   1,531,738 
                            ===============  =============  ==================  ========== 
 

Cash flow forecasting is performed in the operating entities of the group and aggregated by group finance. Group finance monitors rolling forecasts of the group's liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the group's compliance with internal financial position ratio targets and, if applicable external regulatory or legal requirements - for example, currency restrictions.

The group's management retain cash balances in order to allow repayment of obligations in due dates, without taking into account any unusual effects which it cannot be predicted such as natural disasters. All suppliers and creditors will be repaid over a period not less 30 days from the date of the invoice or the date of the commitment.

   6.    Segment reporting 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions.

The preparation of the Group's consolidated financial statements in conformity with adopted IFRSs requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities.

The Group has four operating segments based on geographical location rather than two operating segments based on service provided, as the Group's Chief Operating Decision Maker (CODM) reviews the internal management reports and KPIs of each geography. The CODM does not separately review assets and liabilities of the group by reportable segment.

The Group operates in four geographic areas, Egypt, Sudan, Jordan, and Nigeria. As a provider of medical diagnostic services, IDH's operations in Sudan are not subject to sanctions. The revenue split, EBITDA split (being the key profit measure reviewed by CODM), impairment loss on trade receivables and net profit and loss between the four regions is set out below.

 
                                                Revenue by geographic location 
                      ---------------------------------------------------------------------------------- 
 For the year ended             Egypt region   Sudan region   Jordan region   Nigeria region       Total 
                      ----------------------  -------------  --------------  ---------------  ---------- 
 31-Dec-21                         4,108,357         16,644       1,046,107           53,604   5,224,712 
 31-Dec-20                         2,173,411         37,695         409,069           36,089   2,656,264 
 
 
                                                Adjusted EBITDA by geographic location 
                      ----------------------------------------------------------------------------------------- 
 For the year ended    Egypt region   Sudan region   Jordan region   Nigeria region    Dual listing       Total 
                                                                                           fees 
                      -------------  -------------  --------------  ---------------  --------------  ---------- 
 31-Dec-21                2,177,160          (500)         331,042          (6,998)          29,033   2,529,737 
 31-Dec-20                1,041,359          6,100         129,885          (6,826)               -   1,170,518 
 
 
                            Impairment loss on trade receivables by geographic location 
                      ---------------------------------------------------------------------- 
 For the year ended    Egypt region   Sudan region   Jordan region   Nigeria region    Total 
                      -------------  -------------  --------------  ---------------  ------- 

 31-Dec-21                   21,537              -           1,412            1,707   24,656 
 31-Dec-20                   38,051            440           3,230              410   42,131 
 
 
                                       Net profit and loss by geographic location 
                      --------------------------------------------------------------------------- 
 For the year ended    Egypt region   Sudan region   Jordan region   Nigeria region         Total 
                      -------------  -------------  --------------  ---------------  ------------ 
 31-Dec-21                1,309,247       (22,533)         214,588          (8,796)     1,492,506 
 31-Dec-20                  557,743          7,529          71,043         (26,833)       609,482 
 

The following additional analysis of performance by service has been provided as it is also reviewed by the CODM:

 
               Revenue by categories 
                 2021         2020 
               EGP'000      EGP'000 
             -----------  ----------- 
 
 Walk-in      2,162,415    1,119,953 
  Contract    3,062,297    1,536,311 
                          ----------- 
              5,224,712    2,656,264 
             ===========  =========== 
 
 
 
                                             Revenue Analysis Performance 
 
                                          2021                      2020 
                                 ---------------------  ---------------------------- 
                                        EGP'000                    EGP'000 
                                 ---------------------  ---------------------------- 
 
 
 Conventional test revenues                  2,352,870                     1,945,327 
 Covid-19-related test revenue               2,773,043                       649,000 
 Radiology                                      98,799                        61,937 
                                             5,224,712                     2,656,264 
                                 =====================  ============================ 
 
                                               Net profit by type 
 
                                          2021                      2020 
                                 ---------------------  ---------------------------- 
                                        EGP'000                    EGP'000 
                                 ---------------------  ---------------------------- 
 
 Pathology                                   1,528,132                       645,307 
 Radiology                                    (35,626)                      (35,826) 
                                             1,492,506                       609,482 
                                 =====================  ============================ 
 

Pathology profits include profits from conventional tests and Covid 19 tests.

The operating segment profit measure reported to the CODM is EBITDA, as follows:

 
                                                                     2021            2020 
                                                                  EGP'000         EGP'000 
                                                               ----------  -------------- 
 
 Profit from operations                                         2,262,060         985,546 
 
 Property, plant and equipment and Right of use depreciation      231,443         179,046 
 Amortization of Intangible assets                                  7,201           5,926 
 EBITDA                                                         2,500,704       1,170,518 
                                                               ----------  -------------- 
 Nonrecurring items "Dual listing fees"                            29,033               - 
 Adjusted EBITDA                                                2,529,737       1,170,518 
                                                               ==========  ============== 
 

The non- current assets reported to CODM is in accordance with IFRS are as follows:

 
                                       Non-current assets by geographic location 
                      -------------------------------------------------------------------------- 
 For the year ended    Egypt region   Sudan region   Jordan region   Nigeria region        Total 
                      -------------  -------------  --------------  ---------------  ----------- 
 31-Dec-21                2,803,954          7,234         291,880           90,509    3,193,577 
 31-Dec-20                2,415,220         24,132         263,767          113,941    2,817,060 
 
   7.    Capital management 

The Group's objectives when managing capital are to safeguard the Group's ability to continue in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The repatriation of a declared dividend from Egyptian group entities are subject to regulation by Egyptian authorities. The outcome of an Ordinary General Meeting of Shareholders declaring a dividend is first certified by the General Authority for Investment and Free Zones (GAFI).

Approval is subsequently transmitted to Misr for Central Clearing, Depository and Registry (MCDR) to distribute dividends to all shareholders, regardless of their domicile, following notification of shareholders via publication in one national newspapers.

The Group monitors capital on the basis of the net debt to equity ratio. This ratio is calculated as net debt divided by total equity. Net debt is calculated as (short-term and long-term financial obligation plus short-term and long term borrowings) less cash and cash equivalents and financial assets at amortised cost.

 
                                                               2021                  2020 
                                                              EGP'000               EGP'000 
                                                      ---------------------  ------------------- 
 Financial obligations (note 26)                                    760,674              459,043 
 Borrowings                                                         105,693               96,455 
 Less: Financial assets at amortised cost (note 18)             (1,458,724)            (276,625) 
 Less: Cash and cash equivalents (Note 17)                        (891,451)            (600,130) 
                                                      ---------------------  ------------------- 
 Net debt                                                       (1,483,808)            (321,257) 
                                                      =====================  =================== 
 Total Equity                                                     2,794,359            2,426,374 
                                                      ---------------------  ------------------- 
 Net debt to equity ratio                                            -53.1%               -13.2% 
 

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2021 and 31 December2020.

   8.    Expense 

Included in consolidated income statement are the following:

8.1 Cost of sales

 
                                                                                   2021        2020 
                                                                                EGP'000     EGP'000 
                                                                             ----------  ---------- 
 Raw material                                                                   962,748     466,679 
 Cost of specialized 
  analysis at other laboratories                                                 24,086      20,992 
 Wages and salaries                                                             635,407     390,020 
 Property, plant and equipment, right of use depreciation and Amortisation      213,919     162,928 
 Other expenses                                                                 584,487     273,069 
 Total                                                                        2,420,647   1,313,688 
                                                                             ==========  ========== 
 

8.2 Marketing and advertising expenses

 
                                                                             2021                            2020 
                                                                          EGP'000                         EGP'000 
                                                   ------------------------------  ------------------------------ 
 Advertisement expenses                                                 96,745                          61,530 
 Wages and salaries                                                     44,739                          30,187 
 Property, plant and equipment and Amortisation                               518                             340 
 Other expenses                                                         21,161                          15,158 
 Total                                                               163,163                         107,215 
                                                   ------------------------------  ------------------------------ 
 

8.3 Administrative expenses

 
                                                                                   2021                         2020 
                                                                                EGP'000                      EGP'000 
                                                            ---------------------------  --------------------------- 
  Wages and salaries                                                          146,929                      104,211 
  Property, plant and equipment and Right of use 
   depreciation                                                                  24,207                       21,704 
  Other expenses                                                              198,878                         95,959 
 Total                                                                          370,014                      221,874 
                                                            ---------------------------  --------------------------- 
 

8.4 Expenses by nature

 
                                                                                   2021        2020 
                                                                                EGP'000     EGP'000 
                                                                             ----------  ---------- 
 Raw material                                                                  962,748     466,679 
 Wages and Salaries                                                            827,075     524,419 
 Property, plant and equipment, right of use depreciation and Amortisation     238,644     184,972 
 Advertisement expenses                                                        96,745      61,530 
 Cost of specialized 
  analysis at other laboratories                                               24,086      20,991 
 Transportation and shipping                                                   101,239     73,570 
 cleaning expenses                                                             60,488      50,967 
 Call Center                                                                   33,531      16,822 
 Hospital Contracts                                                            39,051      19,227 
 consulting Fees                                                               112,398     47,743 
 Utilities                                                                     28,307      34,891 
 License Expenses                                                              19,792      15,776 
 Other expenses                                                                409,720     125,189 
 Total                                                                        2,953,824   1,642,776 
                                                                             ----------  ---------- 
 

8.5 Auditors' remuneration

The group paid or accrued the following amounts to its auditor PWC year 2021 (KPMG 2020) and its associates in respect of the audit of the financial statements and for other services provided to the group

 
                                                                                                      2021      2020 
                                                                                                   EGP'000   EGP'000 
                                                                                                  --------  -------- 
 Fees payable to the Company's auditor for the audit of the Group's annual financial statements     21,759     8,544 
 The audit of the Company's subsidiaries pursuant to legislation                                     6,998     4,008 
 Tax compliance and advisory services                                                                    -        55 
 Assurance services                                                                                    302         - 
                                                                                                    29,059    12,607 
                                                                                                  ========  ======== 
 

8.6 Net finance costs

 
                                                               2021             2020 
                                                            EGP'000          EGP'000 
                                                   ----------------  --------------- 
 Loss on hyperinflationary net monetary position            (6,976)                - 
 Interest expense                                          (98,003)         (67,851) 
 Net foreign exchange loss                                 (17,912)         (12,580) 
 Bank Charges                                              (20,026)          (3,676) 
                                                   ----------------  --------------- 
 Total finance costs                                      (142,917)         (84,107) 
                                                   ================  =============== 
 
                                                               2021             2020 
                                                            EGP'000          EGP'000 
                                                   ----------------  --------------- 
 Interest income                                            113,178           53,120 
 Gain on hyperinflationary net monetary position                  -           14,523 
                                                   ----------------  --------------- 
 Total finance income                                       113,178           67,643 
                                                   ----------------  --------------- 
 Net finance cost                                          (29,739)         (16,464) 
                                                   ================  =============== 
 
 
 
   8.7        Employee numbers and costs 

The average number of persons employed by the Group (including directors) during the year and the aggregate payroll costs of these persons, analysed by category, were as follows:

 
                                     2021                           2020 
                           ------------------------  ---------------------------------  ------ 
                   Medical   Administration       Total       Medical   Administration   Total 
                               and market                                 and market 
                  --------  ---------------  --------------  --------  ---------------  ------ 
 Average number 
  of employees      5,364        1,024            6,388        4,813         798         5,611 
 
 
 
 
                                                             2021                                  2020 
                                                            EGP'000                               EGP'000 
                                            -------------------------------------  ----------------------------------- 
                                              Medical   Administration      Total   Medical   Administration     Total 
                                            ---------  ---------------  ---------  --------  ---------------  -------- 
 Wages and salaries                           600,527          183,611    784,138   363,397          127,655   491,052 
 Social security costs                         26,735            6,003     32,738    19,736            5,269    25,005 
 Contributions to defined contribution 
  plan                                          8,145            2,054     10,199     6,888            1,473     8,361 
 Total                                        635,407          191,668    827,075   390,021          134,397   524,418 
                                            =========  ===============  =========  ========  ===============  ======== 
 

Details of Directors' and Key Management remuneration and share incentives are disclosed in the Remuneration Report, the Remuneration Committee Report on note 27.

   9.    Income tax 
   a)    Amounts recognised in profit or loss 
 
                                                   2021        2020 
                                                EGP'000     EGP'000 
                                            -----------  ---------- 
 
 Current year tax                             (579,262)   (268,796) 
 WHT suffered                                  (68,737)    (24,470) 
                                            -----------  ---------- 
 Current tax                                  (647,999)   (293,266) 
 
 DT on undistributed reserves                 (106,767)    (67,124) 
 DT on reversal of temporary differences         14,951         790 
 Total Deferred tax                            (91,816)    (66,334) 
 
 Tax expense recognized in profit or loss     (739,815)   (359,600) 
                                            ===========  ========== 
 
   b)   Reconciliation of effective tax rate 

The company is considered to be a UK tax resident, and subject to UK taxation. Dividend income into the company is exempt from taxation when received from a wholly controlled subsidiary, and costs incurred by the company are considered unlikely to be recoverable against future UK taxable profits and therefore form part of our unrecognised deferred tax assets. Our judgement on tax residency has been made based on where we hold board meetings, our listing on the London Stock Exchange and interactions with investors, and where our company secretarial function is physically based. Our external company secretarial function manages a number of activities of our parent and its board. During the year and due to the ongoing impact of Covid, although our board meetings are still actively managed through London, directors have largely attended virtually. Our view is our tax residency has not changed, however if it were deemed that the company was no longer a UK tax resident, our assessment is this would not lead to a material change to the taxation payable by the group.

                                                                                           2021                   2020 
                                                                                        EGP'000                EGP'000 
                                                                -------------------------------  --------------------- 
 
 
 Profit before tax                                                                    2,232,321                969,082 
 Profit before tax multiplied by rate of corporation tax in 
  Egypt of 22.5% (2020: 22.5%)                                                          502,272                218,044 
 Effect of tax rate in UK of 19% (2020: Jersey 0%)                                        3,445                  (346) 
 Effect of tax rates in Cayman, Jordan, Sudan and Nigeria of 
  0%, 21%, 30% and 30% respectively 
  (2020: 0%, 21%, 30% and 30%)                                                          (6,676)                  9,855 
 Tax effect of:                                                                               - 
 Recognition of previously unrecognised deferred tax                                   (24,435)                      - 
 Deferred tax not recognised                                                             28,132                 20,454 
 Deferred tax arising on undistributed dividend                                         175,504                 91,593 
 Non-deductible expenses for tax purposes - employee profit 
  share                                                                                  39,419                 18,223 
 Non-deductible expenses for tax purposes - other                                        22,154                  1,777 
 Tax expense recognised in profit or loss                                               739,815                359,600 
                                                                ===============================  ===================== 
 

Def e rr e d tax

Defe r re d t ax rel a t es to the f o ll o win g:

 
                                                           2021                                     2020 
                                                 ------------------------  ---------------------  -------- 
                                                   Assets       Liabilities                 Assets      Liabilities 
                                                                                 ------ 
                                                  EGP'000         EGP'000                  EGP'000        EGP'000 
                                                 ---------  -------------------  ------  -----------  -------------- 
 Property, plant and equipment                           -             (28,925)                    -        (18,334) 
 Intangible assets                                       -            (105,358)                    -       (106,702) 
 Undistributed reserves from group 
  subsidiaries*                                          -            (223,425)                    -       (116,657) 
 Tax Losses                                         25,559                    -                1,360               - 
 Total deferred tax assets - liability              25,559            (357,708)                1,360       (241,693) 
                                                                      (332,149)                    -       (240,333) 
                                                 =========  ===================  ======  ===========  ============== 
 
 

All deferred tax amounts are expected to be recovered or settled more than twelve months after the reporting period.

The difference between net deferred tax balances recorded on the income statement is as follows:

 
 2021                        Net Balance 1 January    Deferred tax recognized     WHT tax      Net Balance 31 December 
                                                         in profit or loss          paid 
-------------------------  ------------------------  ------------------------  -------------  ------------------------ 
 Property, plant and 
  equipment                                (18,333)                  (10,592)                                 (28,925) 
 Intangible assets                        (106,702)                     1,344                                (105,358) 
 Undistributed dividend 
  from group subsidiaries                 (116,658)                 (175,504)         68,737                 (223,425) 
 Tax losses                                   1,360                    24,199                                   25,559 
                                          (240,333)                 (160,553)         68,737                 (332,149) 
                           ========================  ========================  =============  ======================== 
 
 
 2020                          Net balance at 1       Deferred tax recognised   WHT tax paid   Net balance 31 December 
                                    January              in profit or loss 
-------------------------  ------------------------  ------------------------  -------------  ------------------------ 
 Property, plant and 
  equipment                                (17,460)                     (873)                                 (18,333) 
 Intangible assets                        (108,365)                     1,663                                (106,702) 
 Undistributed dividend 
  from group subsidiaries                  (49,534)                  (91,593)         24,469                 (116,658) 
 Tax losses                                   1,360                         -                                    1,360 
                                          (173,999)                  (90,803)         24,469                 (240,333) 
                           ========================  ========================  =============  ======================== 
 

All movements in the deferred tax asset/liability in the year have been recognised in the profit or loss account.

Deferred tax liabilities and assets have been calculated based on the enacted tax rate at 31 December 2021 for the country the liabilities and assets has arisen. The enacted tax rate in Egypt is 22.5% (2020: 22.5%), Jordan 21% (2020: 21%), Sudan 30% (2020: 30%) and Nigeria 30% (2020: 30%).

   *   Undistributed reserves from group subsidiaries 

The Group's dividend policy is to distribute any excess cash after taking into consideration all business cash requirements and potential acquisition considerations. The expectation is to distribute profits held within subsidiaries of the Group in the near foreseeable future. During 2015 the Egyptian Government imposed a tax on dividends at a rate of 5% of dividends distributed from Egyptian entities. On September 30, 2020, the Egyptian government issued a law to increase the tax rate to 10%. As a result a deferred tax liability has been recorded for the future tax expected to be incurred from undistributed reserves held within the Group which will be taxed under the new legislation imposed and were as follows:

 
                                            2021       2020 
                                           EGP'000    EGP'000 
                                         ---------  --------- 
 Al Mokhtabar Company for Medical Labs      85,546     58,558 
 Alborg Laboratory Company                  38,545     24,122 
 Integrated Medical Analysis Company        75,841     22,319 
 Al Makhbariyoun Al Arab Group              23,493     11,659 
                                           223,425    116,658 
                                         =========  ========= 
 

Unrecognized deferred tax assets

The following items make up unrecognised deferred tax assets. The local tax law does not permit deductions for provisions against income tax until the provision becomes realised. No deferred tax asset has been recognised on tax losses for both Echo-Scan Nigeria and Wayak Egypt due to the uncertainty of the available future taxable profit, which the Group can use the benefits therefrom.

 
                                           2021                 2021               2020          2020 
                                       Gross Amount          Tax Effect        Gross Amount   Tax Effect 
                                         EGP'000               EGP'000           EGP'000       EGP'000 
                                   -------------------  --------------------  -------------  ----------- 
 
 Impairment of trade receivables 
  (Note 16)                                    101,183                22,766         77,727       17,489 
 Impairment of other receivables 
  (Note 16)                                      8,585                 1,932          8,509        1,915 
 Provision for legal claims 
  (Note 21)                                      4,088                   920          3,134          705 
 Tax losses*                                   320,391                78,142        107,341       29,736 
                                   -------------------  --------------------  ------------- 
                                               434,247               103,760        196,711       49,845 
 Unrecognized deferred tax 
  asset                                                              103,760                      49,845 
 

There is no expiry date for the Unrecognized deferred tax assets.

* The company has carried forward tax losses on which no deferred tax asset is recognised as follow:

 
                                                                 2021           2021           2020          2020 
                                                             Gross Amount    Tax Effect    Gross Amount   Tax Effect 
               Company                       Country            EGP'000        EGP'000       EGP'000       EGP'000 
-------------------------------------  -------------------  --------------  ------------  -------------  ----------- 
 Integrated Diagnostics Holdings plc          Jersey               271,689        67,922              -            - 
 Dynasty Group Holdings Limited         England and Wales           13,446         2,555         12,371        2,350 
 Eagle Eye-Echo Scan Limited                  Mauritius              3,556           533          1,222          183 
 Echo-Scan                                      Nigeria                  -             -         81,450       24,435 
 WAYAK Pharma                                 Egypt                 16,269         3,660          8,503        1,913 
 Medical Genetic Center                       Egypt                  6,421         1,445          3,795          854 
 Golden care                                  Egypt                  9,010         2,027              -            - 
                                                                   320,391        78,142        107,341       29,736 
                                                            ==============  ============  =============  =========== 
 

10. Earnings per share (EPS)

Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. There are no dilutive effects from ordinary share and no adjustment required to weighted-average numbers of ordinary shares.

The following table reflects the income and share data used in the basic and diluted EPS computation:

 
                                                                                         2021        2020 
                                                                                      EGP'000     EGP'000 
                                                                                   ----------  ---------- 
 Profit attributable to ordinary equity holders of the parent for basic earnings    1,412,609     594,015 
 Weighted average number of ordinary shares for basic and dilutive EPS                600,000     600,000 
                                                                                   ----------  ---------- 
 Basic and dilutive earnings per share                                                   2.35        0.99 
                                                                                   ----------  ---------- 
 

Earnings per diluted share are calculated by adjusting the weighted average number of shares by the effects resulting from all the ordinary potential shares that causes this dilution.

The Company has no potential diluted shares as of the 31 December 2021 and 31 December 2020, therefore; the earnings per diluted share are equivalent to basic earnings per share.

11. Property, plant and equipment

 
                              Medical, &                  Fixtures,     Building & Leasehold 
                   Land &      electric     Leasehold     fittings &      improvements in       Payment on 
                 Buildings    equipment    improvements    vehicles         construction         account       Total 
                  EGP'000      EGP'000       EGP'000       EGP'000            EGP'000            EGP'000      EGP'000 
                -----------  -----------  -------------  -----------  -----------------------  -----------  ---------- 
 Cost 
 At 1 January 
  2020              332,353      483,370        225,281       66,461                   19,924        4,099   1,131,488 
 Additions              555       84,615         32,473        8,703                    5,011        1,324     132,681 
 Hyper 
  inflation               -        8,628              -            -                        -            -       8,628 
 Disposals                -      (2,675)          (638)        (522)                  (2,789)            -     (6,624) 
 Exchange 
  differences         (563)      (8,241)        (2,643)      (1,381)                    (938)            -    (13,766) 
 At 31 
  December 
  2020              332,345      565,697        254,473       73,261                   21,208        5,423   1,252,407 
 Additions*          51,357      285,848         75,993       25,630                    4,016        1,338     444,182 
 Hyper 
  inflation               -      (8,740)              -            -                        -            -     (8,740) 
 Disposals          (2,471)      (8,042)        (1,092)      (1,567)                        -            -    (13,172) 
 Exchange 
  differences         (348)     (10,135)        (2,317)      (1,358)                  (1,141)            -    (15,299) 
 Transfers                -            -          8,146            -                  (8,146)            -           - 
 At 31 
  December 
  2021              380,883      824,628        335,203       95,966                   15,937        6,761   1,659,378 
                ===========  ===========  =============  ===========  =======================  ===========  ========== 
 
 Depreciation 
 and 
 impairment 
 At 1 January 
  2020               39,718      180,046        105,108       21,070                        -            -     345,942 
 Depreciation 
  charge for 
  the year            8,057       70,454         33,967        6,154                        -            -     118,632 
 Disposals                5      (2,380)             87          881                        -            -     (1,407) 
 Exchange 
  differences          (56)      (2,191)          (650)        (876)                        -            -     (3,773) 
                -----------  -----------  -------------  -----------  -----------------------  -----------  ---------- 
 At 31 
  December 
  2020               47,724      245,929        138,512       27,229                        -            -     459,394 
 Depreciation 
  charge for 
  the year            5,797       97,386         40,569        8,074                        -            -     151,826 
 Disposals                -      (4,522)          (916)      (1,185)                        -            -     (6,623) 
 Exchange 
  differences          (31)      (4,987)          (935)      (1,074)                        -            -     (7,027) 
 At 31 
  December 
  2021               53,490      333,806        177,230       33,044                        -            -     597,570 
 Net book 
 value 
                -----------  -----------  -------------  -----------  -----------------------  -----------  ---------- 
 At 31-12-2021      327,393      490,822        157,973       62,922                   15,937        6,761   1,061,808 
                ===========  ===========  =============  ===========  =======================  ===========  ========== 
 At 31-12-2020      284,621      319,768        115,961       46,032                   21,208        5,423     793,013 
                ===========  ===========  =============  ===========  =======================  ===========  ========== 
 

*During year 2021 the additions include EGP 154m related to Alborg Scan branches, EGP 79.3m related to medical equipment and new branch Capital Business EGP 48.7m. This amount does not Include any capitalised borrowing costs and is ready to use.

12. Intangible assets and goodwill

 
                                            Goodwill   Brand Name   Software        Total 
                                             EGP'000      EGP'000    EGP'000      EGP'000 
                                         -----------  -----------  ---------  ----------- 
 Cost 
 At 1 January 2020                         1,264,086      384,414     59,558    1,708,058 
 Additions                                         -            -      7,639        7,639 
 Effect of movements in exchange rates       (2,278)        (492)       (40)      (2,810) 
                                         -----------  -----------  ---------  ----------- 
 At 31 December 2020                       1,261,808      383,922     67,157    1,712,887 
                                         -----------  -----------  ---------  ----------- 
 Additions                                         -            -     10,354       10,354 
 Effect of movements in exchange rates         (843)         (13)      (117)        (973) 
                                         -----------  -----------  --------- 
 At 31 December 2021                       1,260,965      383,909     77,394    1,722,268 
                                         ===========  ===========  =========  =========== 
 
 Amortisation and impairment 
 At 1 January 2020                             1,849            -     45,373       47,222 
 Amortisation                                      -            -      5,926        5,926 
 Effect of movements in exchange rates             -            -       (16)         (16) 
                                         -----------  -----------  ---------  ----------- 
 At 31 December 2020                           1,849            -     51,283       53,132 
 Impairment*                                     341           47          -          388 
 Amortisation                                      -            -      7,201        7,201 
 Effect of movements in exchange rates         2,362          325        (7)        2,680 
 At 31 December 2021                           4,552          372     58,477       63,401 
                                         ===========  ===========  =========  =========== 
 Net book value 
 At 31 December 2021                       1,256,413      383,537     18,917    1,658,867 

                                         -----------  -----------  ---------  ----------- 
 At 31 December 2020                       1,259,959      383,922     15,874    1,659,755 
                                         ===========  ===========  =========  =========== 
 
 

* The impairment amount in goodwill and brand name related to Ultra lab company in Sudan has full impaired in impairment study due to the severe devaluation of SDG currency.

13. Goodwill and intangible assets with indefinite lives (note 3.2-h)

Goodwill acquired through business combinations and intangible assets with indefinite lives are allocated to the Group's CGUs as follows:

 
                                                       2021        2020 
                                                    EGP'000     EGP'000 
                                                 ----------  ---------- 
 Medical Genetics Center 
 Goodwill                                             1,755       1,755 
                                                 ----------  ---------- 
                                                      1,755       1,755 
                                                 ----------  ---------- 
 Al Makhbariyoun Al Arab Group ("Biolab") 
 Goodwill                                            46,145      46,174 
 Brand name                                          20,153      20,165 
                                                 ----------  ---------- 
                                                     66,298      66,339 
                                                 ----------  ---------- 
 Golden Care for Medical Services ("Ultralab") 
 Goodwill                                                 -       2,703 
 Brand name                                               -         372 
                                                          -       3,075 
                                                 ----------  ---------- 
 Alborg Laboratory Company ("Al-Borg") 
 Goodwill                                           497,275     497,275 
 Brand name                                         142,066     142,066 
                                                    639,341     639,341 
                                                 ----------  ---------- 
 Al Mokhtabar Company for Medical Labs 
  ("Al-Mokhtabar") 
 Goodwill                                           699,102     699,102 
 Brand name                                         221,319     221,319 
                                                    920,421     920,421 
                                                 ----------  ---------- 
 Echo-Scan 
 Goodwill                                            12,136      12,950 
                                                     12,136      12,950 
                                                 ----------  ---------- 
 Balance at 31 December                           1,639,950   1,643,881 
                                                 ----------  ---------- 
 

The G roup perf o rmed its an n u al im p a i rment te st in October 2021. Nothing occurred between the impairment test and the balance sheet date that would require the assumptions in the models to be updated. T he G roup c o nsi d ers the r e la t io n s h ip b e t w een i ts m ark et ca p i t al i sat i on a nd i ts b o ok val u e, amo ng ot h er fa c to r s, w h en r e vie w i ng f or i n d i cato rs of i m pa i r m e n t.

Assumptions used in value in use calculations and sensitivity to changes in assumptions

IDH worked with Alpha Capital, management's expert, to prepare an impairment assessments of the Group's CGUs. The assessment was carried out based on business plans provided by IDH.

These plans have been prepared based on criteria set out below:

 
                                                                                 Year 2021 
                                                            ---------------------------------------------------- 
                                                            Ultra Lab  Bio Lab  Al-Mokhtabar  Al-Borg   Echo-Scan 
                                                            ---------  -------  ------------  -------  ----------- 
Average annual patient growth rate from 2022 -2026             4%       0.2%       -0.1%        2%         26% 
Average annual price per test growth rate from 2022 -2026      49%       -7%        -2%         3%         7% 
Annual revenue growth rate from 2022 -2026                     56%       -5%        0.4%        6%         40% 
Average gross margin from 2022 -2026                           35%       38%        52%         48%        39% 
Terminal value growth rate from 1 January 2027                 3%        3%          5%         5%         3% 
Discount rate                                                 40.6%     14.8%      20.19%      20.4%      21.7% 
 
 
                                                                                 Year 2020 
                                                            ---------------------------------------------------- 
                                                            Ultra Lab  Bio Lab  Al-Mokhtabar  Al-Borg  Echo-Scan 
                                                            ---------  -------  ------------  -------  --------- 
Average annual patient growth rate from 2021 -2025             8%        6%          5%         5%        25% 
Average annual price per test growth rate from 2021 -2025      2%        0%          7%        7.5%      9.5% 
Annual revenue growth rate from 2021 -2025                     11%       6%         12%         13%       54% 
Average gross margin from 2021 -2025                          36.5%     46.4%       55%         49%       53% 
Terminal value growth rate from 1 January 2026                 1%        2%          3%         3%        2% 
Discount rate                                                 34.5%     18.6%      20.3%       20.3%      20% 
 

Management have compared the recoverable amount of CGUs to the carrying value of CGUs. The recoverable amount is the higher of value in use and fair value less costs of disposal. In the exercise performed and the assumptions noted above the value in use was noted to be higher than the fair value less costs of disposal.

During year 2021, The management has conducted business plan projection with the help of a management's expert, (Alpha Capital), using the assumptions above to be able to calculate the net present value of the asset in use and determine the recoverable amount. The projected cash flows from 2022- 2026 have been based on detailed forecasts prepared by management for each CGU and a terminal value thereafter. Management have used experience and historic trends achieved to determine the key growth rate and margin assumptions set out above. The terminal value growth rate applied is not considered to exceed the average growth rate for the industry and geographic locations of the CGUs.

As a sensitivity analysis, Management considered a change in the discount rates of 2% increase to reflect additional risk that could reasonably be foreseen in the marketplaces in which the Group operates. This has not result to an impairment under any of the CGUs.

Management has also considered a change in the terminal growth rate by 1% decrease to reflect additional risk, which did not result in any impairment under any of the CGUs.

This recoverable amount is then compared to the carrying value of the asset as recorded in the books and records of IDH plc. The WACC has been used considering the risks of each CGU. These risks include country risk, currency risk as well as the beta factor relating to the CGU and how it performs relative to the market.

The headroom between the carrying value and value in use as follows:

 
 Company           Value in use        CGU carrying value          Headroom 
                      EGP'000                EGP'000 
-------------  --------------------  ---------------------  ---------------------- 
 Almokhtabar              3,373,147              1,161,565               2,211,582 
 Alborg                   2,727,434              1,007,779               1,719,655 
 Bio Lab                    572,968                152,963                 420,005 
 Echo Scan                  233,476                 44,190                 189,286 
 

14. Financial asset at fair value through profit and loss

 
                              2021       2020 
                           EGP'000    EGP'000 
                          --------  --------- 
 
 Equity investment*         10,470      9,604 
 Balance at 31 December     10,470      9,604 
                          ========  ========= 
 

* On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT purchase Agreement with JSC Mega Lab (Buyer) to transfer and install the Laboratory Information Management System (LIMS) for a purchase price amounted to USD 400 000, which will be in the form of 10% equity stake in JSC Mega Lab. In case the valuation of the project is less or more than USD 4,000,000, the seller stake will be adjusted accordingly, in a way that the seller equity stake shall not fall below 5% of JSC Mega Lab.

- ownership percentage in JSC Mega Lab at the transaction date on April 8, 2019, and as of December 31, 2021, was 8.25%.

- On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed a Shareholder Agreement with JSC Mega Lab and JSC Georgia Healthcare Group (CHG), whereas, BioLab Shall have a put option, exercisable within 12 months immediately after the expiration of five(5) year period from the signing date, which allows BioLab stake to be bought out by CHG at a price of the equity value of BioLab Shares/total stake (being USD 400,000.00) plus 15% annual IRR (including preceding 5 Financial years). After the expiration of above 12 months from the date of the put option period expiration, which allows CHG to purchase Biolab's all shares at a price of equity value of Biolab's stake (having value of USD 400,000) plus higher of 20% annual IRR or 6X EV/EBITDA (of the financial year immediately preceding the call option exercise date. In case the Management Agreement or the Purchase Agreement and/or the SLA is terminated/cancelled within 6 months period from the date of such termination/cancellation, CHG shall have a call option, which allows the CHG to purchase Biolab's all Shares at a price of the equity value of BioLab's stake in JSC Mega Lab (having value of USD 400,000.00) plus 205 annual IRR. If JCI accreditation is not obtained, immediately after the expiration of the additional 12 months period of the CHG shall have a call option (the Accreditation Call option), exercisable within 6 months period, which allows CHG to purchase BioLab's all Shares at a price of the equity value of BioLab's stake in JSC Mega Lab (having value of USD 400,00.00) plus 20% annual IRR.

15. I n ven t o r ies

 
                                         2021       2020 
                                      EGP'000    EGP'000 
                                    ---------  --------- 
 Chemicals and operating supplies     222,612    100,115 
                                      222,612    100,115 
                                    =========  ========= 
 

Dur i ng 2 021, EGP 962,748k (2020: EGP 466,679k) w as re c o g nised as an expense for inventories, this was recognised in cost of sales. The major balance of the raw material is represented in the Kits, slow-moving items of those Kits are immaterial. It is noted that day's inventory outstanding (based on the average of opening and closing inventory) stands as 61 days at 31 Dec 2021.

No impairment of inventory during the year 2021.

   16.          Trad e  and  other  recei v ab l es 
 
                                           2021       2020 
                                        EGP'000    EGP'000 
                                      ---------  --------- 
 Trade receivables - net                371,051    325,770 
 Prepayments                             22,647     19,363 
 Due from related parties note (27)       5,237      2,910 
 Other receivables                       67,974     34,431 
 Accrued revenue                          2,818      1,006 
                                        469,727    383,480 
                                      =========  ========= 
 

As at 31 December 2021, the expected credit loss related to trade and other receivables was EGP 109,768K (2020: EGP 86,237k). Below show the movements in the provision for impairment of trade and other receivables:

 
                                2021      2020 
                             EGP'000   EGP'000 
                           ---------  -------- 
 At 1 January                 86,237    44,528 
 Charge for the year          24,656    42,131 
 Utilised                          -   (3,629) 
 Unused amounts reversed        (32)     (837) 
 Exchange differences        (1,093)     4,044 
 At 31 December              109,768    86,237 
                           =========  ======== 
 

The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (historical customer's collection, Customers' contracts conditions) and applying experienced credit judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default.

Expected credit loss assessment is based on the following:

   1.    The customer list was divided into 9 sectors 
   2.   Each sector was divided according to customers aging 

3. Each sector was studied according to the historical events of each sector. According to the study conducted, the expected default rate was derived from each of the aforementioned period.

   4.    General economic conditions 

Based on the expected credit loss assessment, an additional provision was calculated for the year, yielding an additional Expected Credit Losses (ECL) for IDH Group amounting to EGP 24 million. On quarterly basis, IDH revises its forward-looking estimates and the general economic conditions to assess the expected credit loss, which will be mainly based on current and expected inflation rates. The results of the quarterly assessment will increase/decrease the percentage allocated to each period.

Balances overdue by at least one year are fully provided for.

Impairment of trade and notes receivables

The requirement for impairment of trade receivables is made through monitoring the debts aging and reviewing customer's credit position and their ability to make payment as they fall due. An impairment is recorded against receivables for the irrecoverable amount estimated by management. At the year end, the provision for impairment of trade receivables was EGP 101,183K (31 December 2020: EGP 77,727K)

A reasonable possible change of 100 basis points in the expected credit loss at the reporting date would have increased (decreased) profit or loss by the amount of EGP 4,347K. This analysis assumes that all other variables remain constant.

The following table provides information about the exposure to credit risk and ECLs for trade receivables from individual customers For the nine segments at:

 
                                    Weighted average            Gross carrying                           Loss 
                                           loss rate                    amount                      allowance 
 31-Dec-21                                   EGP'000                   EGP'000                        EGP'000 
---------------------------------  -----------------  ------------------------  ----------------------------- 
 Current (not past due)                        0.00%                   151,592                              - 
 1-30 days past due                            1.79%                    85,764                        (1,532) 
 31-60 days past due                           5.25%                    74,505                        (3,911) 
 61-90 days past due                           5.89%                    31,028                        (1,828) 
 91-120 days past due                          9.06%                    17,469                        (1,582) 
 121-150 days past due                        18.45%                     8,576                        (1,582) 
 More than 150 -365days past due              87.89%                   103,300                       (90,748) 
 
 
                                    Weighted average            Gross carrying                           Loss 
                                           loss rate                    amount                      allowance 
 31-Dec-20                                   EGP'000                   EGP'000                        EGP'000 
---------------------------------  -----------------  ------------------------  ----------------------------- 
 Current (not past due)                        0.00%                   187,705                              - 
 1-30 days past due                            5.06%                    63,771                        (3,228) 
 31-60 days past due                           6.18%                    46,097                        (2,847) 
 61-90 days past due                          13.61%                    17,322                        (2,358) 
 91-120 days past due                         18.85%                     9,816                        (1,850) 
 121-150 days past due                        36.38%                     6,436                        (2,341) 
 More than 150-365 days past due              89.98%                    72,350                       (65,103) 
 

As at 31 D e c e m b e r, the ag e ing a n al y s is of t r ade r e c e iva b les i s as f ol l ow s:

 
 
                  Total           < 30 days          30-60 days        61-90 days                 > 90 days 
        ===============  ==================  ==================  ================  ======================== 
 2021           371,051             235,824              70,594            29,200                    35,433 
 2020           325,770             248,248              43,250            14,964                    19,308 
 

17. C ash and cash equivalents

 
                                            2021      2020 
                                      ----------  -------- 
 Cash at banks and on hand               261,430   253,225 
 Treasury bills (less than 90 days)      150,431   184,525 
 Term deposits (less than 90 days)       479,590   162,380 
                                      ----------  -------- 
                                         891,451   600,130 
                                      ==========  ======== 
 

Cash at b an ks e ar ns i n t er e st at f l oat i ng ra t es bas ed on d ai ly b ank d e pos it r at e s. S h or t -t e rm d e pos i ts and treasury bills a re m ade for va r y i ng p e r i ods of b e t w een o ne d ay a nd t h r ee mo n t h s, d e p en d i ng on t he i mm e d i ate cash r e q ui r em e n ts of the G rou p, a nd e a rn inte r est at the re sp ect i ve s hor t - t erm d e p o s it weighted average rate 7.75% (2020: 7%) and Treasury bills 12.44% (2020: 10%) per annum.

18. Financial assets at amortised cost

 
                                            2021                              2020 
                                         EGP'000                           EGP'000 
                                      ----------  -------------------------------- 
 Term deposits (more than 90 days)       148,136                                 - 
 Treasury bills (more than 90 days)    1,310,588                           276,625 
                                      ----------  -------------------------------- 
                                       1,458,724                           276,625 
                                      ========== 
 

The maturity date of the fixed term deposit and treasury bills is between 3-12 months and the effective interest rate on the treasury bills is 12.44% (2020: 10%) and deposits is 7.75%.

19. Share capital and reserves

The Company's ordinary share capital is $150,000,000 equivalent to EGP 1,072,500,000.

All shares are authorised and fully paid and have a par value $0.25.

 
                                              Ordinary shares    Ordinary shares 
                                                    31-Dec-21          31-Dec-20 
In issue at beginning of the year                 600,000,000     150,000,000 
In issue at the end of the year                   600,000,000     600,000,000* 
 
Ordinary share capital      Number of shares     % of contribution       Par value 
 Name                                                                       USD 
 
 
Hena Holdings Limited              152,982,356                25.50%       38,245,589 
Actis IDH B V                      126,000,000                21.00%       31,500,000 
Free floating                      321,017,644                53.50%       80,254,411 
                                   600,000,000                  100%      150,000,000 
 
 

* At the Extraordinary General Meeting of the Company held on 23 December 2020, it was resolved that the Company's existing issued ordinary share capital of 150,000,000 ordinary shares of US$1.00 each (the "Existing Ordinary Shares") will be sub-divided into 600,000,000 ordinary shares of US$0.25 each (the "New Ordinary Shares") (the "Sub-Division"). The Sub-Division was successfully completed with effect from 24 December 2020.

Capital reserve

The capital reserve was created when the Group's previous parent company, Integrated Diagnostics Holdings LLC - IDH (Caymans) arranged its own acquisition by Integrated Diagnostics Holdings PLC, a new legal parent. The balances arising represent the difference between the value of the equity structure of the previous and new parent companies.

Legal reserves

Legal reserve was formed based on the legal requirements of the Egyptian law governing the Egyptian subsidiaries. According to the Egyptian subsidiaries' article of association 5% (at least) of the annual net profit is set aside to from a legal reserve. The transfer to legal reserve ceases once this reserve reaches 50% of the entity's issued capital. If the reserve falls below the defined level, then the entity is required to resume forming it by setting aside 5% of the annual net profits until it reaches 50% of the issued share capital.

Put option reserve

Through acquisitions made within the Group, put option arrangements have been entered into to purchase the remaining equity interests in subsidiaries from the vendors at a subsequent date. At acquisition date an initial put option liability is recognised and a corresponding entry recognised within the put option reserve. After initial recognition the accounting policy for put options is to recognise all changes in the carrying value of the liability within put option reserve. When the put option is exercised by the vendors the amount recognised within the reserve will be reversed.

Translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

20. Distributions made and proposed

 
                                                       2021      2020 
                                                    EGP'000   EGP'000 
Cash dividends on ordinary shares declared and 
 paid: 
US$ 0.0485 per qualifying ordinary share (2020: 
 US$ 0.19)                                          455,182   441,855 
                                                    455,182   441,855 
After the balance sheet date, the following 
 dividends were proposed by the directors (the 
 dividends have not been provided for):           1,300,000   455,831 
EGP 2.17 per share (2020: $0.049) per share       1,300,000   455,831 
 
   21.    Provisions 
 
                            Egyptian Government  Provision for     Total 
                              Training Fund for   legal claims   EGP'000 
                                      employees        EGP'000 
                                        EGP'000 
At 1 January 2021                           191          3,217     3,408 
Provision made during the 
 year                                         -          2,146     2,146 
Provision used during the 
 year                                         -          (993)     (993) 
Provision reversed during 
 the year                                 (191)          (282)     (473) 
At 31 December 2021                           -          4,088     4,088 
Current 
Non- Current                                  -          4,088     4,088 
 
 
                                 Egyptian Government   Provision     Total 
                                   Training Fund for   for legal   EGP'000 
                                           employees      claims 
                                             EGP'000     EGP'000 
At 1 January 2020                                191       5,082     5,273 
Provision made during the year                     -       3,194     3,194 
Provision used during the year                     -     (5,040)   (5,040) 
Provision reversed during the 
 year                                              -        (19)      (19) 
At 31 December 2020                              191       3,217     3,408 
Non- Current                                     191       3,217     3,408 
 

Legal claims provision

The amount comprises the gross provision in respect of legal claims brought against the Group. Management's opinion, after taking appropriate legal advice, is that the outcome of these legal claims will not give rise to any significant loss beyond the amounts provided as at 31 December 2021.

In addition to the provisions for legal claims recognised, there is also an Arbitration Claim that has been made and includes the Company as a respondent. No provision is recognised for this claim, as the Group believes it will succeed in this matter as demonstrated by previous claims by the claimant that have been successfully defended.

22. Trade and other payables

 
                                       2021     2020 
 
                                    EGP'000  EGP'000 
Trade payables                      311,321  177,603 
Accrued expenses                    325,677  151,201 
Due to related parties note (27)     13,234      439 
Other payables                       99,040   50,959 
Deferred revenue                     24,603        - 
Accrued finance cost                  3,479    3,421 
                                    777,354  383,623 
 

23. Current put option liability

 
                                2021     2020 
 
                             EGP'000  EGP'000 
Put option - Biolab Jordan   921,360  282,267 
                             921,360  282,267 
 

The accounting policy for put options after initial recognition is to recognise all changes in the carrying value of the put liability within equity.

Through the historic acquisitions of Makhbariyoun Al Arab the Group entered into separate put option arrangements to purchase the remaining equity interests from the vendors at a subsequent date. At acquisition a put option liability has been recognised for the net present value for the exercise price of the option.

The options is calculated at seven times EBITDA of the last 12 months - Net Debt and exercisable in whole from the fifth anniversary of completion of the original purchase agreement, which fell due in June 2016. The vendor has not exercised this right at 31 December 2021. It is important to note that the put option liability is treated as current as it could be exercised at any time by the NCI. However, based on discussions and ongoing business relationship, there is no expectation that this will happen in next 18 months. The option has no expiry date.

24. Loan and borrowings

The terms and conditions of outstanding loans are as follows:

 
                         Currency          Nominal             Maturity     31 Dec 21  31 Dec 20 
              interest rate 
 
         A) CIB BANK        EGP       Secured rate 9.5%      5 April 2022      13,238     38,654 
         B) AUB BANK        EGP     CBE corridor rate*+1%   26 April 2026      84,828     54,379 
                                                                         -     98,066     93,033 
Amount held as: 
Current liability                                                              21,721     25,416 
Non- current liability                                                         76,345     67,617 
                                                                               98,066     93,033 
 

A) In April 2017 AL-Mokhtabar for medical lab, one of IDH subsidiaries, was granted a medium term loan amounting to EGP 110m from Commercial International Bank "CIB Egypt" to finance the purchase of the new administrative building for the group. Starting May 2021, the loan has been secured through restricted time deposits.

B) In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a medium term loan amounting to EGP 130.5m from Ahli United Bank "AUB Egypt" to finance the investment cost related to the expansion into the radiology segment. As at 31 December 2021 only EGP 84.8m had been drawn down from the total facility available. The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:

   1.    The financial leverage shall not exceed 0.7 throughout the period of the loan 

"Financial leverage": total bank debt divided by net equity

   2.    The debt service ratios   (DSR) shall not be less than 1.35 starting 2020 

"Debt service ratio": cash operating profit after tax plus depreciation for the financial year less annual maintenance on machinery and equipment adding cash balance (cash and cash equivalent ) divided by total financial payments.

"Cash operating profit": Operating profit after tax, interest expense, depreciation and amortization, is calculated as follows: Net income after tax and unusual items adding Interest expense, Depreciation, Amortisation and provisions excluding tax related provisions less interest income and Investment income and gains from extraordinary items

"Financial payments": current portion of long-term debt including interest expense and fees and dividends distributions.

   3.    The current ratios shall not be less than 1. 

"Current ratios": Current assets divided current liabilities.

*As at 31 December 2021 corridor rate 9.25% (2020: 9.25%)

AL- Borg company didn't breach any covenants for MTL agreements.

The group signed two agreements of debt facilities. The debt package includes the US$ 45.0 million facilities secured an 8-year period starting May 2021 from International Finance Corporation (IFC), and an additional US$ 15.0 million IFC syndicated facility from Mashreq Bank in Dec 2021 debt has not been withdrawn by IDH.

25. Non-current put option liability

 
                            2021      2020 
                         EGP'000   EGP'000 
Put option liability*     35,037    31,790 
                          35,037    31,790 
 

*According to definitive agreements signed on 15 January 2018 between Dynasty Group Holdings Limited and International Finance Corporation (IFC) related to the Eagle Eye-Echo Scan Limited transaction, IFC has the option to put it is shares to Dynasty Group Holdings Limited in year 2024. The put option price will be calculated on the basis of the fair market value determined by an independent valuer.

According to the International Private Equity and Venture Capital Valuation Guidelines, there are multiple ways to calculate the put option including Discounted Cash Flow, Multiples, Net assets. Multiple valuation was applied and EGP 35 million was calculated as the valuation as at 31 December 2021 (2020; EGP 32m). In line with IAS 32 the entity has recognised a liability for the present value of the exercise price of the option price. The ramp-up of Echo-Scan operations driven by the new radiology equipment installed during Q4 2019 in Lagos and the following years yielding a Compounded Annual Growth Rate of 40% from 2022 to 2025.

26. Financial obligations

The Group leases property and equipment. Property leases include branches, warehouse, parking and administration buildings. The leases typically run for average period from 5-10 years, with an option to renew the lease after that date. Lease payments are renegotiated with renovation after the end of the lease term to reflect market rentals. For certain leases, the Group is restricted from entering into any sub-lease arrangements. The property leases were entered into as combined leases of land and buildings.

Adding to remaining agreement signed in 2015, to service the Group's state-of-the-art Mega Lab. The agreement periods are 5 and 8 years which is deemed to reflect the useful life of the equipment. If the minimum annual commitment payments are met over the agreement period ownership of the equipment supplied will legally transfer to the IDH. The finance asset and liability has been recognised at an amount equal to the fair value of the underlying equipment. This is based on the current cost price of the equipment supplied provided by the suppliers of the agreement. The averaged implicit interest rate of finance obligation has been estimated to be 9.85%. The equipment is being depreciated based on units of production method as this most closely reflects the consumption of the benefits from the equipment.

Information about the agreements for which the Group is lessee is presented below.

   a)    Right-of-use assets 
 
                                   Buildings                   Buildings 
                                        2021                        2020 
                                     EGP'000                     EGP'000 
                                                                       - 
Balance at 1 January                 354,688                     264,763 
Addition for the year                198,402                     152,030 
Depreciation charge for the year    (79,617)                    (60,803) 
Terminated Contracts                 (7,643)                     (1,302) 
Exchange differences                 (3,398)                           - 
Balance at 31 December               462,432                     354,688 
 
   b)    Other Financial obligations 

Future minimum financial obligation payments under leases and sales purchase contracts, together with the present value of the net minimum lease payments are, as follows:

 
 
                                                 2021                 2020 
                                              EGP'000              EGP'000 
*Financial liability- laboratory equipment    228,870               69,123 
*Lease liabilities building                   531,804              389,920 
                                              760,674              459,043 
 

*The financial obligation liabilities for the laboratory equipment and building are payable as follows:

 
                                   Minimum payments          Interest             Principal 
At 31 December 2021                            2021              2021                  2021 
                                            EGP'000           EGP'000               EGP'000 
Less than one year                          211,242            95,764               115,478 
Between one and five years                  701,084           227,314               473,770 
More than 5 years                           191,229            19,803               171,426 
                                          1,103,555           342,881               760,674 
 
                                   Minimum payments          Interest               Principal 
At 31 December 2020                            2020              2020                    2020 
                                            EGP'000           EGP'000                 EGP'000 
Less than one year                          126,999            66,481                  60,518 
Between one and five years                  463,646           176,312                 287,334 
More than 5 years                           131,605            20,415                 111,190 
                                            722,250           263,208                 459,042 
 
 
   c)    Amounts other financial obligations recognised in consolidated income statement 
 
                                          2021     2020 
                                       EGP'000  EGP'000 
Interest on lease liabilities           68,352   58,864 
Expenses related to short-term lease    18,875   13,771 
 
   27.    Related party transactions disclosures 

The significant transactions with related parties, their nature volumes and balance during the period 31 December 2021 and 2020 are as follows:

 
                                                                                         2021 
                                                                      ------------------------------------------ 
Related Party         Nature of transaction         Nature of          Transaction amount     Amount due from / 
                                                  relationship             of the year              (to) 
                                                                            EGP'000               EGP'000 
 
 ALborg Scan           Expenses paid on 
  (S.A.E)*              behalf                  Affiliate                                 1                   351 
 
 International         Expenses paid on 
  Fertility (IVF)**     behalf                  Affiliate                                 -                 1,767 
 
                                                Entity owned by 
                                                 Company's board 
 H.C Security          Provide service           member                               (243)                 (319) 
 
                                                Entity owned by 
 Life Health Care      Provide service           Company's CEO                     (11,232)                 2,094 
 
                                                Bio. Lab C.E.O and 
 Dr. Amid Abd Elnour   Put option liability      shareholder                      (639,093)             (921,360) 
 
 International 
  Finance                                       Eagle Eye - Echo Scan 
  corporation (IFC)    Put option liability      limited shareholder                (3,247)              (35,037) 
 
 International 
  Finance                                       Eagle Eye - Echo Scan 
  corporation (IFC)    Current account           limited shareholder               (12,915)              (12,915) 
 
 
 Integrated 
  Treatment for 
  Kidney Diseases                               Entity owned by 
  (S.A.E)              Rental income             Company's CEO                        (298)                 1,025 
  Medical Test analysis                                                                530 

 Total                                                                                                 (964,394) 
                                                                                            ==================== 
 
 
 
                                                                                          2020 
                                                                      ------------------------------------------ 
Related Party         Nature of transaction         Nature of          Transaction amount      Amount due from 
                                                  relationship             of the year 
                                                                            EGP'000               EGP'000 
 
 ALborg Scan           Expenses paid on 
  (S.A.E)*              behalf                  Affiliate                                 6                   350 
 
 International         Expenses paid on 
  Fertility (IVF)**     behalf                  Affiliate                           (3,449)                 1,767 
 
                                                Entity owned by 
                                                 Company's board 
 H.C Security          Provide service           member                               (412)                  (76) 
 
                                                Entity owned by 
 Life Health Care      Provide service           Company's CEO                     (11,058)                 (363) 
 
                                                Bio. Lab C.E.O and 
 Dr. Amid Abd Elnour   Put option liability      shareholder                       (83,126)             (282,267) 
 
 International 
  Finance                                       Eagle Eye - Echo Scan 
  corporation (IFC)    Put option liability      limited shareholder                (1,757)              (31,790) 
 
 
 
 Integrated            Rental income           Entity owned by                           - 
 Treatment for                                 Company's CEO 
 Kidney Diseases 
 (S.A.E) 
  Medical Test analysis                                                                588                   793 
 Total                                                                                                 (311,586) 
                                                                                            ==================== 
 

* ALborg Scan is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).

** International Fertility (IVF) is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).

Chief Executive Officer Dr. Hend El-Sherbini and her mother, Dr. Moamena Kamel jointly hold the 25.5% of shares held by Hena Holdings Limited, Hena Holdings Limited is a related party and received dividends of USD 7,419,644 in year 2021 and USD 7,151,925 received in year 2020.

Terms and conditions of transactions with related parties

The transactions with the rel a ted p ar t ies a re ma de on t erms e q uiv a le nt to th o se th at pre v a il in tr a ns a ct i on s. O u ts t an d ing b a l an c es at the ye a r-end are un s ec u red a nd in t ere st f ree a nd se t tle m ent o c curs in c a sh. There h a ve b e en no gu a ran t ees pr o vi d ed or re c ei v ed f or any rel a ted p ar ty recei v a b les or p a y a ble s. F or t he ye ar ended 31 De c em b er 20 21, the G ro up h as n ot rec o rded a ny im p a i rment of rec e iv a bles rel a ting to am o unts o wed by rel a ted p ar t ies ( 20 20: nil). This a s ses s ment is u n de r t a ken ea ch fin a nci al ye ar thr o u gh ex a min i ng the fi na n c i al p o si t i on of the rel a ted p ar ty a nd the m a rket in whi ch the rel a ted p ar ty o per a tes.

IDH opts to pay up to 1% of the net after-tax profit of the subsidiaries Al Borg and Al Mokhtabar to the Moamena Kamel Foundation for Training and Skill Development. Established in 2006 by Dr. Moamena Kamel, a Professor of Pathology at Cairo University and founder of IDH subsidiary Al-Mokhtabar Labs and mother to the CEO Dr. Hend El Sherbini. The Foundation allocates this sum to organisations and groups in need of assistance. The foundation deploys an integrated program and vision for the communities it helps that include economic, social, and healthcare development initiatives. In 2021 EGP 9,578 K (2020: EGP 6,510K) was paid to the foundation by the IDH Group.

Com p en s atio n of k ey m ana g em e nt p e rsonn el of the Group

Key management people can be defined as the people who have the authority and responsibility for planning, directing, and controlling some of the activities of the Company, directly or indirectly

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel.

 
                                                          2021          2020 
                                                       EGP'000       EGP'000 
Short-term employee benefits                            55,082        51,556 
Total compensation paid to key management personnel     55,082        51,556 
 
   28.    Reconciliation of movements of liabilities to cash flows arising from financing activities 
 
                                                  Other loans        Other financial 
EGP'000                                        and borrowings             obligation 
 Balance at 1 January 2021                             96,455                459,043 
 Proceeds from loans and borrowings                    30,450                      - 
 Repayment of borrowings                             (25,416)                      - 
 Payment of liabilities                                     -               (59,610) 
 Interest paid                                       (25,446)               (68,354) 
 Total changes from financing cash flows             (20,412)              (127,964) 
 New agreements signed in the period                        -                367,533 
Terminated contracts during the year                        -                (6,292) 
 Interest expense                                      29,651                 68,353 
 Total liability-related other changes                 29,651                429,594 
 Balance at 31 December 2021                          105,694                760,673 
                                                  Other loans        Other financial 
EGP'000                                        and borrowings             obligation 
 Balance at 1 January 2020                            111,750                338,073 
 Proceeds from loans and borrowings                    11,727                      - 
 Repayment of borrowings                             (25,416)                      - 
 Payment of liabilities                                     -               (42,746) 
 Interest paid                                       (14,160)               (59,576) 
 Total changes from financing cash flows             (27,849)              (102,321) 
 New agreements signed in the period                        -                166,339 
 Terminated contracts during the year                       -                (1,912) 
 Interest expense                                      12,554                 58,864 
Total Liability - related other changes                12,554                223,291 
 Balance as at 31 December 2020                        96,455                459,043 
 
 
 
   29.    Current tax liabilities 
 
                                                                    2021      2020 
                                                                  EGP'000   EGP'000 
 
Debit withholding Tax (Deduct by customers from sales invoices)   (34,166)  (37,282) 
Income Tax                                                        521,929   281,777 
Credit withholding Tax (Deduct from vendors invoices)              17,922    9,672 
Other                                                              7,319     3,373 
                                                                  513,004   257,540 
 
   30.    Post Balance Sheet Events 

On the 20th of December 2021, Integrated Diagnostics Holdings Plc announced the signing of a sale and purchase agreement (the "SPA") to acquire 50% shareholding in Base Consultancy FZ LLC, the holding company of Islamabad Diagnostic Centre Limited ("IDC"), from the Evercare Group, an emerging markets healthcare delivery platform managed by TPG for a total consideration of US$ 72.35 million. The transaction, which is subject to the satisfaction of a number of key conditions precedent including, but not limited to, the receipt of regulatory approval from the Competition Commission of Pakistan, will see IDH acquire a stake in one of Pakistan's leading diagnostic providers and partner with the founder Dr Rizwan Uppal. IDC will be fully consolidated on IDH's accounts following the completion of the transaction and transfer of funds to the Evercare Group. The transaction is expected to close in the first half of 2022. IDH plans to finance the transaction through a combination of existing cash and committed debt facilities. The debt package includes the US$ 45.0 million facility secured an 8-year period starting May 2021 from International Finance Corporation (IFC), and an additional US$ 15.0 million IFC syndicated facility from Mashreq Bank.

On 21 March 2022, the Central Bank raised policy rates by 100bps and allowed the Egyptian Pound to devalue by more than 17% against the US Dollar which is expected to impose Inflationary pressures in the short to medium term. Inflation rates are expected to average around 13% to 15% during 2022, up from 5.9% in December 2021. Moreover, GDP growth in FY22/23 was revised downward to 5.5% from 5.7% by the Egyptian government in March 2022. The Group is closely monitoring the situation and the impact that may arise.

   31.    Con t inge n t  liab i lit i es 

As required by article 134 of the labour law on Vocational Guidance and Training issued by the Egyptian Government in 2003, Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs are required to conform to the requirements set out by that law to provide 1% of net profits each year into a training fund. Integrated Diagnostics Holdings plc have taken legal advice and considered market practice in Egypt relating to this and more specifically whether the vocational training courses undertaken by Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs suggest that obligations have been satisfied through training programmes undertaken in-house by those entities. Since the issue of the law on Vocational Guidance and Training, Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs have not been requested by the government to pay or have voluntarily paid any amounts into the external training fund. Should a claim be brought against Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs, an amount of between EGP 24m to EGP 54m could become payable, however this is not considered probable.

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(END) Dow Jones Newswires

April 21, 2022 04:46 ET (08:46 GMT)