ANNUAL REPORT

FOSTERING

SUSTAINABLE GROWTH

Contents

Table of

118

Strategic Report

06 IDH at a Glance

12 Highlights of 2023

14 Chairman’s Message

18 Chief Executive’s Report

24 A Note from Our Vice President and Group CFO

26 Our Markets

42 Our Brands

48 Our Services

52 Competitive Strengths & Growth Strategy

56 Principal Risks, Uncertainties, & Their Mitigation

Corporate Governance

94 Board of Directors

98 Corporate Governance Report

104 Audit Committee Report

108 Remuneration Committee Report

110 Nomination Committee Report

114 Directors’ Report

Performance

66 Financial & Operational Review

80 TCFD Report

88 Corporate Social Responsibility

Financial Statements

120 Independent Auditors’ Report

129 Consolidated Financial Statements

134 Notes to the Consolidated Financial Statements

Annual Report

2023

EGP 4.1 BN

Revenue in 2023

EGP 468 MN

Net profit in 2023

STRATEGIC

REPORT

4 IDH 2023 Annual Report

Integrated Diagnostics Holdings (“IDH”, the “Group”, or the

“Company”) is a leading consumer clinical laboratory, and

one of the largest diagnostic players in the Middle East and

Africa, with operations in Egypt, Jordan, Nigeria, Sudan, and

Saudi Arabia. Boasting a track record stretching over 40 years

and multiple international accreditations, the Company

stands as a premier and trusted provider of pathology and

radiology services across its growing footprint. Today, IDH

offers its patients an extensive and continually growing port-

folio of approximately 3,000 high-quality diagnostic tests as

well as a broad radiology offering ranging from MRI to PET-

CT scans. As at year-end 2023, the Group’s branch network

stood at 601

branches spread across four geographies. Addi-

tionally, in January 2024, the Company launched operations

Who We Are

in its fifth geography, Saudi Arabia, with the roll-out of two

branches in the capital city, Riyadh. Throughout its network,

IDH continues to employ a Hub, Spoke, and Spike model to

ensure scalability and operational efficiency.

Alongside its organic growth, IDH remains on the lookout

for strategic acquisition opportunities in new markets where

the Company’s brand name and business model enable it to

effectively capitalise on healthcare and consumer trends to

expand its operations. IDH has been a Jersey-registered entity

with a Standard Listing on the Main Market of the London

Stock Exchange since May 2015. Meanwhile, the Company’s

EGP-denominated and dual-listed ordinary shares have

been listed on the Egyptian Exchange since May 2021.

IDH launched operations in its fifth and latest mar-

ket of Saudi Arabia in January 2024. The launch of its

first two locations in the Kingdom see the Company

enter one of the region’s most attractive markets,

with supportive macroeconomic fundamentals and

appealing demographic factors. The venture was

launched in partnership with Fawaz Alhokair Group

and in the coming period aims to establish a fully

fledged pathology diagnostic services brand offering

a wide array of services across Saudi Arabia.

Nigeria

Sudan

Egypt

Saudi

Jordan

Our Markets

IDH currently boasts operations in Egypt, Jordan,

Nigeria, Sudan, and Saudi Arabia. The Company’s

chosen markets present similar characteristics,

including fragmented and underpenetrated diag-

nostic sectors, favourable demographic profiles, and

increasingly attractive regulatory and investment

environments. Together, these factors ensure ample

room for development and provide robust drivers for

the Company’s future growth.

IDH’s branch network includes 17 branches in Sudan that have been closed due to ongoing conflict in the country.

6 IDH 2023 Annual Report

Strategic Report

40+

track record at the subsidiary levels

key brands with strong awareness

in underserved markets

LSE

listed since May 2015

countries across the Middle East

& Africa

601

branches as of 31 December 2023

(of which 17 in Sudan are currently closed)

4.1 EGP/BN

in revenue in 2023, +14% versus

2022

EGX

listed since May 2021

2023 Annual Report IDH 7

Our Services

Clinical Pathology Offering

IDH offers approximately 3,000 internationally accredited pathology tests through its brands, ranging from

basic blood glucose tests for diabetes to advanced molecular testing for genetic disorders. IDH’s Mega Lab

is a CAP-accredited facility, a testament to IDH’s patient care and confidence in its laboratory’s practices.

Immunology Microbiology Haematology

Cytogenetics Histopathology Genetics

Endocrinology Clinical Chemistry Molecular Biology

8 IDH 2023 Annual Report

Strategic Report | Who We Are

Our Brands

IDH’s core operational brands include Al Borg, Al Borg Scan, and Al Mokhtabar in Egypt; Biolab in Jordan;

Ultralab and Al Mokhtabar in Sudan; Echo-Lab in Nigeria; and Biolab KSA in Saudi Arabia.

Radiology Offering

In addition to its pathology offering, IDH also offers

a host of radiology services through its Al Borg Scan

brand in Egypt, as well as its Echo-Lab brand in

Nigeria. The Group’s new radiology venture, Al Borg

Scan, was launched in 2018 with the aim of expand-

ing the Company’s service offering, complementing

its pathology portfolio, and becoming a one-stop-

shop provider of diagnostic services in its home

and largest market, Egypt. To date, Al Borg Scan is

the only radiology provider in Africa to enjoy the

prestigious American College of Radiology (ACR)

accreditation, testament to the quality offered across

its branches. Today, IDH’s radiology services include

PET-CT, CT scans, MRI, Mammography, Ultrasound,

X-Ray, EMG, EEG, ECG, and Gamma Camera. Dur-

ing 2023, the Company continued to expand its

radiology network with the addition of a seventh

Al Borg Scan location. From its growing network,

its radiology subsidiary has served over 399,000

patients since inception.

Diagnostic Radiology Interventional Radiology Nuclear Radiology

PET-CT

Mammography

EMG

Ultrasound

EEG

MRI

X-Ray

ECG

2023 Annual Report IDH 9

Our Patients

Through its operations, the Company serves two

principal client types: contract (corporate) and

walk-in (individuals). The Company also provides

house call services to each of these client types, in

addition to a lab-to-lab service for the corporate

segment.

IDH’s walk-in clients, also known as “self-payers”,

include individuals paying out of pocket for diag-

nostics services. This category made up 36% of the

Group’s total revenues in 2023.

IDH’s contract clients, which constituted the remaining

64% of consolidated revenues for the year, encompass

institutions that include syndicates, unions, private

and public insurance companies, banks, and corpora-

tions who enter into one-year renewable contracts at

set rates per test and per-client.

An Asset-Light Business Model

IDH is able to grow in a capital-efficient manner,

utilising an asset-light business model for its lab-

oratory offering. This model is comprised of two

integral components; first, the Company’s scalable

“Hub, Spoke and Spike” network of branch laborato-

ries. Second, the Group’s dynamic and long-lasting

relationships with major suppliers, enabling rapid

expansion opportunities without the need to pur-

chase expensive medical diagnostic equipment.

Hub, Spoke, and Spike

IDH’s CAP-accredited Mega Lab functions as the

"Hub". The centre is equipped with the latest in diag-

nostic equipment and provides the necessary tools

and capacity to effectively process tests and services

for samples collected by the B-Labs (Spokes) and

C-Labs (Spikes). Meanwhile, the Group uses its

B-Labs to process routine tests, while leveraging

their capacities to manage traffic to the Mega Lab

as necessary. In parallel, C-Labs serve primarily

as collection centres, significantly increasing

the Company’s reach and allowing it to serve a

wider patient base nationwide. The Company also

launched an encompassing radiology venture to

complement its lab and pathology offering. This

venture diversifies the Group’s revenue streams

while boosting further growth at IDH’s conventional

pathology segment. This “plug and play” business

model is the operational backbone of the Group,

providing considerable leverage in extracting rev-

enue while forming long-lasting supplier relation-

ships to create substantial cost synergies at all levels

of operation.

Supplier Relationships

As one of the forefront providers of diagnostics ser-

vices in the MENA region, in both scale and service,

the Group enjoys significant bargaining power with

suppliers, allowing it to secure favourable terms for

both medical equipment and test kits. IDH’s supplier

contracts, which also include the provision of equip-

ment to analyse laboratory test results, have min-

imum annual commitment payments to cover the

medical diagnostic equipment, kits, and chemicals

10 IDH 2023 Annual Report

Strategic Report | Who We Are

IDH’s agreements with its key suppliers have a typical

tenure of five to seven years, with equipment substi-

tution following the renewal of contracts. Extended

tenures effectively shield the Company from price

fluctuations resulting from a turbulent macroeco-

nomic environment, providing a significant advantage,

specifically considering the continued inflationary

pressures faced by the Company over the past couple

of years. In line with its commitment to stellar service

quality, the Group primarily partners with top inter-

national suppliers, including Siemens, Roche, Abbott

Laboratories, Sysmex, General Electric, and Philips.

to be used for testing, as well as ongoing mainte-

nance and support services. As a direct consequence

of its scale and expanding volumes, IDH comforta-

bly covers minimum annual payments. Meanwhile,

the Company achieves economies of scale through

significant operating volumes and strategic pricing

power, reducing costs per test and avoiding the

initial outlay usually required for the purchase of

additional medical diagnostic equipment.

Integrated Diagnostics Holdings Suppliers

2023 Annual Report IDH 11

Financial Highlights

2023 Highlights

Earnings per Share

stood at EGP 0.85 in 2023 compared to EGP

0.90 in 2022.

Net Profit

of EGP 468 million was recorded in 2023, down

11% from EGP 527 million in 2022. IDH’s net

profit margin (NPM) stood at 11% for the year,

down from 15% in 2022.

Conventional (non-Covid-19) tests include IDH’s full service offering excluding Covid-19 related tests.

Adjusted EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically an EGP 11.9 million

one-off expense owed to the Egyptian government for vocational training, EGP 18.2 million in pre-operating expenses in Saudi Arabia, EGP 5.0 million

impairment expense in Sudan due to the ongoing situation in the country, and an EGP 18.0 million impairment expense in goodwill and assets in Nigeria.

Conventional revenue

Excluding Covid-19-related contributions from last

year’s figure (which amounted to EGP 702 million,

or 19% of consolidated revenues in 2022), IDH

booked an impressive 42% year-on-year increase

in conventional revenue during 2023.

Consolidated Revenue

of EGP 4,123 million was recorded in 2023,

representing a 14% year-on-year increase.

Adjusted EBITDA

of EGP 1,192 million was recorded in 2023, up 2%

year-on-year and with an EBITDA margin of 29%

(versus 33% in 2022).

Gross Profit

of EGP 1,524 million was recorded in 2023, up

4% from EGP 1,462 million in 2022. Gross profit

margin (GPM) stood at 37% in 2023, down from

41% one year prior.

12 IDH 2023 Annual Report

Strategic Report

Operational Highlights

Consolidated test volumes for

the year reached a record-high

36.1 million test in 2023, up a

solid 10% year-on-year on the

back of strong growth in Egypt.

Conventional test volumes were

up 17% versus 2022, testament

to the strong underlying demand

enjoyed by IDH.

During 2023, IDH served a

total of 8.5 million patients, a

marginal 2% decline compared

to 2022, primarily reflecting last

year’s Covid-19-related high

base. In parallel, the Company

booked a record-high 4.2

average tests per patient during

the year, up significantly from

3.7 tests in 2022.

In Jordan, IDH reported

lower consolidated revenues,

reflecting the large contribution

made by Covid-19-related

testing in the previous year.

Meanwhile, conventional

revenue in local currency

terms for the year recorded a

solid 8% rise versus last year’s

figure, supported by rising

test volumes and showcasing

the underlying health of IDH's

Jordanian operations.

As of year-end 2023, IDH

operated a total branch network

of 601

branches, spread across

four markets. This represents

a 49-branch increase over the

previous year.

Consolidated average revenue

per test recorded EGP 114

in 2023, a 4% increase from

last year’s figure. Meanwhile,

conventional revenue per test

expanded 22% year-on-year.

In Egypt, IDH continued

to post strong results,

with consolidated revenue

reaching EGP 3,411 million,

an impressive 18% year-

on-year rise on the back of

increasing test volumes and

average revenues per test.

In Nigeria, Echo-Lab recorded

a 15% year-on-year increase

in revenues in local currency

terms (up 22% in EGP terms),

reaching NGN 2.0 billion in

2023. Meanwhile, inflationary

pressures and an expanded

cost base in Nigeria weighed

down on EBITDA profitability,

expanding adjusted EBITDA

losses to NGN 498 million in

2023, down from NGN 337

million one year prior.

IDH’s Sudanese operations

booked total revenues for

the year of SDG 220 million,

down 60% year-on-year (in

EGP terms, revenue declined

44% versus 2022) as the

country’s operations continue

to be heavily affected by the

ongoing conflict, which has

led to the closure of 17 of the

country’s 18 branches since

April 2023.

IDH launched its first two

Saudi Arabian branches in

2024, one in January and

another in March. In the

long run, the venture aims

to establish itself as a fully

fledged clinical pathology

diagnostic services provider

boasting a branch network

covering the entire Kingdom.

The new venture will be

fully consolidated on IDH’s

accounts starting in 2024.

IDH's branch network includes 17 branches in Sudan that have been closed due to the ongoing conflict in the country.

2023 Annual Report IDH

Chairman’s Message

Despite a challenging year for the healthcare sector, I am

pleased to report that 2023 was a year of sustained growth

and solid progress for your Company. IDH’s manage-

ment team was effective in delivering on the Board’s

agreed strategic objectives and remains committed to

diversifying into other jurisdictions to deliver and drive

further growth.

Navigating Challenges

We continued to face a challenging operating environ-

ment across both Egypt and Nigeria, where currency

devaluations, persistent inflation, and foreign exchange

restrictions were a major impediment to our operational

successes.

In Sudan, we decided, following the continued civil

war, to halt our operations in the country, cutting all

operating expenditure while retaining the business.

Despite these ongoing challenges we are proud to

have recorded strong, double-digit revenue growth in

2023 supported by record-high test volumes.

We also achieved 42% year-on-year growth in our

conventional revenue, which counter balances the

contribution of Covid-19-related testing in the pre-

vious year’s results and reflects the resilience of the

business.

Our core focus remains delivering excellence of care to

our loyal patients and communities. We are cognisant

of the socio-economic challenges of our patients and

ensured that our tests remained accessible to as many

people as possible.

In response to the ongoing economic challenges,

management took proactive measures to shield the

business as much as possible from exchange-rate

Lord St John of Bletso

Chairman

14 IDH 2023 Annual Report

Strategic Report

fluctuations and ongoing uncertainty. Our manage-

ment team leveraged the Company’s solid and long-

established relationships with our strategic suppliers

to secure long-term contracts with semi-fixed rates.

Heading into 2024, the recent developments in Egypt

leave us cautiously optimistic that the country’s econ-

omy is in recovery mode with increasing foreign direct

investment and a floating exchange rate policy.

New Beginnings

We are also pleased to report that the Group expanded

its operations in Saudi Arabia, with the inauguration of

two branches in Riyadh, one in January and another in

March 2024.

The Kingdom has an impressive record of rapid

economic growth, a growing population, and a frag-

mented diagnostic market that is complimentary with

your Company’s integrated and value-added business

model.

Driving Change

We are exploring the opportunities to embrace gen-

erative artificial intelligence (AI) and drive additional

revenue, leveraging the vast data base that we control

with stringent security and privacy.

We are enthusiastic about the potential enhancements

in the diagnostics field as AI solutions are being incor-

porated in to traditional testing protocols.

Management is also exploring cost reduction measures

and economies of scale, embracing new disruptive

technologies.

Environmental, Social, and

Governance (ESG)

We are committed to maintaining transparent and sus-

tainable operations across our markets. Accordingly, we

published our second Sustainability Report in January

2024, addressing our ESG practices and the initiatives

we take to increase our stakeholder impact.

Risk Matrix

Our Audit Committee consistently monitors our risk

matrix, ensuring that we have the right policies in

place to ensure business continuity, while promoting a

productive work environment for our team.

2023 was a year

of sustained

growth and solid

progress for your

Company, with IDH's

management team

remaining effective

in delivering on the

Board's strategic

objectives.

2023 Annual Report IDH 15

We are enormously grateful and proud of our dedicated

and loyal workforce, led by our highly experienced

management team. Having most of the staff based

out of our Smart Village headquarters in Cairo has

enhanced staff morale and team building.

Over the past year, we continued to attract and retain

the highest calibre of medical and non-medical talent.

In January 2024, we welcomed aboard Sherif El Zeiny

as Vice President, Group Chief Financial Officer, and

Board Member. Sherif brings a wealth of experience in

financial management and corporate strategy and will

play a pivotal role in ensuring our future success.

Our Thanks to Our Shareholders

Finally, we would like to extend our thanks to our

shareholders and reiterate our commitment that we

shall do everything possible to drive maximum value.

Despite the challenges we continue to face across our

markets, we are confident that our resilient business

model and value-creation strategies will assist in this

aspiration going forward.

Since our initial public offering back in 2015, your

Company has been committed to paying a regular divi-

dend. Foreign exchange restrictions in Egypt meant we

were unable to distribute dividends for the year ended

31 December 2022 and have also been unable to dis-

tribute dividends for the year that just ended.

Despite this decision, our dividend policy has not

changed. As part of our asset-light strategy, our dividend

policy is to return to shareholders the maximum amount

of excess cash after taking into account the capital needed

We enter 2024

eager to build on

the foundation laid

in 2023 so that we

may continue to

deliver sustainable

value for our

shareholders.

to support operations, capital expenditure plans, and

potential acquisitions.

We enter 2024 eager to build on the foundation laid in

2023 so that we may continue to deliver sustainable

value for our shareholders while offering our patients

world-class quality and superior experience.

Lord St John of Bletso

Chairman

16 IDH 2023 Annual Report

Strategic Report | Chairman’s Message

2023 Annual Report IDH 17

Chief Executive’s Report

2023 was a year characterised by growth and execu-

tion, as the Company delivered robust revenue growth

despite a challenging operating environment and took

important steps forward on our long-term growth and

value creation strategy. After months of preparation, in

January 2024, we added a fifth market to our portfolio

with the official launch of Biolab KSA in Saudi Arabia.

At the same time, we continued to capitalise on the

important growth opportunities offered by our exist-

ing markets to drive strong year-on-year consolidated

revenue growth and continue expanding our reach in

the process. We ended the year on very solid footing,

having once more demonstrated the resilience of our

business model, the potential of our chosen markets,

and the effectiveness of our growth strategies.

A Year of Macroeconomic Turbulence

As a business operating in this part of the world, we

are no strangers to macroeconomic volatility. 2023

was no different, as our markets of operation were

confronted with devaluation, record-high inflation,

tightening monetary policies, and fluctuating energy

prices. Over the last two years, our home and largest

market of Egypt has been particularly impacted by

global economic headwinds stemming from the post-

Covid-19 recovery, the Russia-Ukraine conflict, and

the most recent escalation in the Israeli-Palestinian

conflict. Meanwhile, inflation has remained at record-

highs throughout 2023, continuing to put increasing

pressure on consumers and businesses alike. On a

similar note, following a devaluation of the Nigerian

Naira (NGN) in early 2023, Nigerians have been con-

fronted with rising inflation and soaring diesel prices.

Finally, the eruption of a civil war in one of our oldest

geographies, Sudan, resulted in the near complete halt

of IDH’s operations in the country, with the majority of

our branches indefinitely shut down.

Dr. Hend El-Sherbini

Chief Executive Officer

18 IDH 2023 Annual Report

Strategic Report

Despite all this, our two largest markets, Egypt and Jor-

dan, remained resilient, supported by attractive fun-

damentals that are set to drive their long-term growth

over the coming decade. Leveraging our established

brand name and strong market positioning, we are

ideally positioned to capitalise on these fundamentals,

drive future growth, and generate sustainable value for

all stakeholders.

A Year of Sustainable Growth and Value

Creation

Throughout 2023, IDH continued delivering on its

promise of caring for its patients, providing unparal-

leled quality and accuracy in its testing, and building

long-term relationships across its communities. At the

same time, in line with our commitment to sharehold-

ers, we continued to drive growth and profitability

across the business, recording remarkable results

throughout the year.

Looking at our results in more detail, in the 12 months

ended 31 December 2023, we recorded total revenues

in excess of EGP 4,100 million, up a solid 14% from last

year’s figure that had included significant contribu-

tions from Covid-19-related testing. Excluding Covid-

19-related contributions from the comparable period,

revenue growth at our conventional business was even

more notable, coming in at 42% for the year and sitting

89% above pre-pandemic revenues of EGP 2,179

million

in 2019. Conventional revenue growth was supported

by steady rises in test volumes; increased contributions

from our house call services, which sit comfortably

above pre-pandemic averages at 14%; and increased

growth momentum from our fast-growing radiology

venture, Al Borg Scan, which saw the launch of a seventh

branch in 2023. More specifically, in 2023, we performed

17% more conventional tests compared to the previous

12 months. Conventional revenue growth was also sup-

ported by our strategic price increases, which saw aver-

age revenue per conventional test increase to EGP 114

versus EGP 94 last year. These increases, which remain

below market averages, not only ensured that our

tests continued to be affordable for as many people as

possible but also enabled us to build stronger relation-

ships with our patients, boosting long-term retention.

As a result of these efforts, one of our most important

operational metrics, average tests per patient, reported

its highest figure on record, coming in at 4.2 tests in 2023

up from 3.7 in 2022.

Throughout 2023,

IDH continued

delivering on

its promise of

caring for its

patients, providing

unparalleled quality,

and building long-

term relationships

across its

communities.

Excluding contributions from the 100 million lives campaign in 2019

2023 Annual Report IDH 19

geography. Meanwhile, consolidated revenues in

Jordan were down 34% compared to 2022, due to

significant contributions from Covid-19 testing in the

previous year (constituting 41% of Jordan's revenues).

Due to its material insignificance in 2023, we have

opted not to report on Covid-19-related revenues

since the start of the year. In Nigeria, our operations

posted a 15% rise in revenues in NGN terms, on the

back of higher test prices as Echo-Lab continued to

adjust its mix in favour of its higher-priced offerings.

Top-line growth in Nigeria was achieved despite a

12% year-on-year decline in test volumes. It is also

important to mention that the devaluations of the

Naira seen between February 2023 and February 2024,

along with an expanding cost base, has led to widened

EBITDA losses, reaching NGN 498 million during the

year. Finally, in Sudan, our operations remain highly

affected by the ongoing conflict, which has seen the

temporary closure of 17 out of 18 branches starting in

April 2023. Since the start of the conflict, we have con-

tinued to closely monitor the situation, prioritising as

always the health and safety of our staff and patients.

Throughout the year, we continued to employ a

proactive cost management strategy to mitigate the

impacts on our cost base of rising inflation and a

weakening EGP. As part of our staff retention strat-

egy, during the year, we introduced higher-than-

usual salary hikes to support our people during the

ongoing period of high inflation. Meanwhile, we

were once again happy to note that our long-term

supplier relationship and the sheer scale of our

operations enabled us to negotiate and secure very

competitive prices for test kits, helping to limit the

rise of our raw materials bill over the 12-month

period. Moreover, as the year progressed, the antici-

pated seasonal slowdowns during the first half of the

year began to fade, and the effects of our strategic

price hikes across Egypt and Nigeria began to take

effect, we saw a steady normalisation of our margins

during the second half of the year, compared to 1H

2023. As a result, we ended the full year with an

adjusted EBITDA margin of 29%, in line with the

guidance communicated to investors at the start of

the year.

On a geographic basis, we recently launched operations

in our fifth geography, Saudi Arabia, expanding our

geographic reach in one of the region’s fastest-growing

economies characterised by favourable demograph-

ics. Meanwhile, Egypt, our largest market, continued

to represent the lion share of consolidated revenues,

contributing 82.7% in 2023. Total revenues in our home

market rose by 18% for the year to record EGP 3.4 bil-

lion, supported by higher volumes and prices. Similar

to trends seen at the consolidated level, conventional

revenues in Egypt rose by an impressive 40% versus

2022. Throughout the year, we performed 33.4 million

tests, a robust 13% year-on-year increase, testament

to the growing attractiveness of our offering. We also

recorded the highest ever number of tests per patient

at 4.2, as the revamped loyalty programmes introduced

as part of our post-Covid-19 strategy delivered the

desired results. Higher test and patient volumes were

also supported by an expanded branch network, which

saw the addition of 44 new branches in 2023, as well

as by our house call services, which remain a preferred

method to access our services for a significant segment

of our patient base. Meanwhile, the Company booked

an 18% increase in average revenue per conventional

test on the back of strategic price hikes introduced at

the start of the year. Revenues in Egypt were further

boosted by an increasing contribution from our fast-

growing radiology venture, Al Borg Scan. The venture

recorded revenues of EGP 155 million for the year,

up 82% from 2022. To build on this momentum, in

September 2023, we rolled out a seventh Al Borg Scan

location with our radiology network now spanning the

entire Greater Cairo area and ensuring that we rapidly

capture a growing share of this high-fragmented and

quickly expanding market segment.

Meanwhile, in Jordan we recorded similar trends,

with conventional revenues reporting a year-on-year

increase of 68%. Conventional growth was also evi-

dent in local currency terms, reaching JOD 14 million,

and representing an 8% rise compared to 2022. Con-

ventional revenue growth in Jordan was wholly driven

by higher test volumes, which grew to 2.4 million tests

during the year, as the Company continued to focus

on driving volumes in the highly price-regulated

20 IDH 2023 Annual Report

Expanded Footprint

We started 2024 on an exciting note, with the launch

of the first two branches of Biolab KSA in partnership

with our Jordanian subsidiary, Biolab, and Izhoor, a

company owned by Fawaz Alhokair, chairman of the

renowned Saudi retail group, Fawaz Alhokair Group.

The two branches are located in the Kingdom’s capi-

tal city of Riyadh, with their day-to-day management

under the supervision of Biolab’s founder and CEO,

Dr. Amid Abdelnour, and his team. The inauguration

of Biolab KSA’s first two locations marked our entrance

into the Saudi Arabian market, one of the fastest grow-

ing and most attractive markets in the region. Once

fully ramped up, Biolab KSA aims to become a fully

fledged diagnostic services provider capable of cap-

turing the vast opportunities offered by the currently

underserved and highly fragmented Saudi market.

Over the coming years, the Saudi Arabian market is

expected to witness rapid growth supported by a grow-

ing and increasingly health-conscious population, as

well as a large elderly population afflicted by a high

prevalence of non-communicable diseases.

This latest expansion falls perfectly in line with our

long-term growth strategy, which sees us target

potential opportunities for greenfield and brownfield

investment in markets where our business model is

best fit to capitalise on prevailing demographic factors

and industry dynamics. In the coming years, we expect

our current and potential expansions in the GCC to

contribute an increasing share to the Group’s top line,

helping us to further diversify our revenue base and

guarantee the business’ long-term sustainability.

Our Sustainability Journey

As our footprint, operations, and patient base continue

to grow, we remain as committed as ever to developing

our sustainability frameworks and adhering to global

environmental, social, and governance (ESG) best prac-

tices. Across all our operations, ESG monitoring and

compliance play a pivotal role, ensuring we give back to

the communities we serve and leave a lasting impact on

our people beyond our traditional diagnostics services.

This commitment has been largely reflected in the

ambitious steps taken over the past three years to set

defined goals and strategies for our ESG initiatives and

increase our accountability towards investors and stake-

holders. In 2022, we worked closely with a leading ESG

consultant to design and implement an encompassing

strategy for our business, setting clear long-term goals

and guiding our efforts for the coming years. In 2023, we

remained on track, delivering the desired progress set

forth by our defined sustainability strategy and targets,

under the guidance and supervision of a specialised

ESG committee on our Board of Directors. To this end,

in January 2024, we published our second Sustainability

Report, with an enhanced focus on sustainability data

management, delivering on our commitment to main-

tain transparent and sustainable operations across our

geographies. Moreover, starting last year, we have been

including the Task Force on Climate-related Financial

Disclosures (TCFD) in the Company’s annual report in

line with listing requirements. We have remained com-

mitted to increasing our transparency in sustainability

disclosures. Our updated TCFD can be found on page

80 of this report.

Our experienced and highly competent Board of

Directors continues to provide the support and

guidance necessary for the uninterrupted growth

of our business. Our Board brings together a host

of established professionals boasting varied and

extensive experience in their respective fields. IDH’s

Board of Directors comprises mainly non-executive

directors and is further strengthened by robust and

constantly refined governance framework. On this

note, I am happy to announce that in January 2024,

we welcomed Sherif El Zeiny on board, filling the role

of Group Chief Financial Officer, Vice President, and

Executive Director on IDH’s Board of Directors. Sher-

if’s extensive experience in financial management

and corporate strategy is sure to prove invaluable to

the Company as we continue to identify new areas

through which to expand our presence and cement

our foothold across the region. In the period prior to

Sherif joining the Company, our finance team, rely-

ing on their specialised training and knowledge of

both LSE and EGX reporting requirements, worked

tirelessly to ensure the Company's efficient operation

during this transitional phase. I want to extend my

2023 Annual Report IDH 21

devaluation. Throughout the year, IDH will continue

to leverage its standing as a leader in the industry to

negotiate favourable terms with our test kit suppliers

and ensure we maintain our costs ratios and margins

in line with historical averages. In parallel, we are

constantly studying avenues for cost optimisation

throughout our operations, maintaining adequate

stocks and streamlining our operations where pos-

sible to eliminate all unnecessary expenses.

In parallel, we are excited to continue ramping up

our new Saudi venture in partnership with Biolab

and Izhoor. In the coming year, we will look to

establish the Biolab KSA brand in the Riyadh market

through targeted marketing campaigns and through

the delivery of exceptional quality to patients. Mean-

while, we will also look to rapidly expand our branch

network and operations, cementing our position

as a full-fledged diagnostics provider in the Saudi

Arabian market.

While our long-term dividend policy that sees us

return to shareholders the maximum amount of

excess cash after taking careful account of the cash

needed to support operations and expansions remains

unchanged, the continued economic headwinds and

foreign currency shortages in Egypt have led the Board

of Directors to opt not to distribute dividends for the

year ended 31 December 2023.

Dr. Hend El-Sherbini

Chief Executive Officer

gratitude to all the members of our staff and manage-

ment team who contributed to our success during the

second half of the year and ensured a smooth hando-

ver to Sherif when he officially joined in January.

Our Outlook for 2024

Despite the significant macroeconomic hurdles we

have had to overcome over the past two-year period,

IDH has continued to prove its resilience, relying on

its proven strategies and expertise to achieve notable

operational and financial success throughout the

entire period. Our impressive results in 2023, specifi-

cally, have underscored the success of our long-term

growth strategies to expand our conventional business

and usher in a new era of sustained success following

the end of the Covid-19 pandemic. I remain confident

in IDH's abilities to navigate macroeconomic pres-

sures and deliver yet another year of sustained growth

and expansion in 2024.

Across our more established markets of Egypt, Jor-

dan, and Nigeria, our priorities remain unchanged.

Throughout these markets, we will continue to target

double-digit revenue growth supported by a combi-

nation of higher volumes and prices. Meanwhile, in

Egypt, we will continue to grow our branch network to

widen our reach and expand our patient base across

the country. We will also continue to ramp up our radi-

ology venture in Egypt, Al Borg Scan, growing its con-

tribution to the country’s revenues and providing an

all-encompassing test offering for our patients. On the

pricing front, across both Egypt and Nigeria, regularly

scheduled price increases were introduced at the start

of the year. In the coming months, we will evaluate the

available room to implement further price hikes with

our primary goal remaining the retention and support

of our patients during these difficult times.

In terms of our profitability, we expect continued

margin normalisation throughout 2024, as businesses

and consumers adapt to the initial effects of the

22 IDH 2023 Annual Report

Strategic Report | Chief Executive’s Report

2023 Annual Report IDH 23

A Note from Our Vice President

and Group CFO

As I embark on this exciting new journey with IDH,

I look forward to leveraging my multi-decade expe-

rience across a wide spectrum of industries and

markets to deliver incremental value to our patients,

shareholders, and wider communities. What Dr.

El Sherbini and the IDH team have been able to

achieve over the past years is inspiring, and I am

eager to contribute to the Group’s continued growth

and success.

A Digital Business Optimised for

Growth

In a rapidly changing world, harnessing the latest

technology and digital solutions has become imper-

ative. Over the coming year, we will be implement-

ing a Group-wide digitalisation strategy aiming not

only to roll out world-class solutions across various

aspects of the business but also to ensure that these

are integrated to maximise their value-added.

In similar fashion, we will also work to enhance our

internal data collection and processing capabilities

to provide managers at all levels of the Company

with the information they need to make informed

decisions, optimise the quality we deliver to patients,

and drive growth across the business. In particu-

lar, our efforts in the near term will pivot towards

assessing and deploying new artificial intelligence

(AI) tools and remaining at the forefront of a rapidly

changing diagnostic industry.

Profitable Growth

As always, the number one goal remains achieving

sustainable growth. On the one hand, we will remain

focused on growing patient and test volumes across

both existing and new markets while making tacti-

cal investments to drive future growth. On the other

Sherif El Zeiny

Group Chief Financial Officer and Executive

Director

24 IDH 2023 Annual Report

Strategic Report

hand, we will look to optimise all aspects of the busi-

ness, maintaining lean operations to navigate ongo-

ing cost pressure coming from a weakening EGP and

rising inflation.

Expanding Our Reach

With the roll out of our first Saudi Arabian branch

in early 2024, the Company has officially entered

into its fifth geography. Having previously worked

in Saudi Arabia, I look forward to supporting the

management team on the ground to ensure a rapid

and successful ramp up of operations. In parallel,

we will continue to be on the lookout for attractive

opportunities to grow our footprint and penetrate

new markets where our business model and supe-

rior know-how are well-placed to succeed.

Accountability and Credibility

Maintaining sound financial policies and adhering

to strong governance frameworks are at the heart of

any successful business. I am excited to be working

with Dr. Hend El Sherbini and my esteemed col-

leagues on IDH's Board of Directors as we start to

build a future of financial growth and operational

expansion for the Company, while ensuring we

continue to provide the Company with the guidance,

accountability, and credibility needed to make this

new chapter another successful one.

Sherif El Zeiny

Board Member, Vice President, and Group CFO

We will remain

focused on growing

patient and test

volumes across

both existing and

new markets while

making tactical

investments to drive

future growth.

2023 Annual Report IDH 25

IDH’s branch network includes 17 branches in Sudan that have been closed due to ongoing conflict in the country.

countries of operation

601

operational branches,

+49 versus 2022

Our Markets

Key Market Dynamics

The emerging markets in which IDH operates boast

many similar characteristics that differ substantially

from those of many Western markets. In emerging mar-

kets, the healthcare sector is divided between publicly

and privately funded institutions, allowing patients a

greater degree of freedom when choosing healthcare

providers. Additionally, general practitioners (also

referred to as family medicine practitioners or primary

care specialists) are not widely available; as a result, they

do not stand as gatekeepers through which patients

receive primary or specialist medical attention as they

typically do in more mature Western markets.

Patients requiring medical attention may choose to

receive it through visiting an emergency room, an

outpatient clinic or polyclinic, or seeking the advice

of a specialised physician directly. In doing so, medi-

cal personnel may order tests while recommending

a specific service provider, although in most cases,

patients are free to choose the service provider of

their liking. The choice of service provider depends

on several factor, including perceived service qual-

ity, pricing, insurance compatibility, and several

other factors. Walk-in patients (referred to as “self-

payers”) pay out of pocket in advance of the required

tests being completed.

Test results are usually received in-person by patients

(typically accompanied by a specialist report), which

the patients then return to the original physician

who ordered testing for diagnosis. IDH also provides

same-day electronic delivery of test results to patients

via SMS, with test results also available via the Com-

pany’s mobile app. IDH’s sales and marketing activi-

ties actively target:

• Physicians: through direct sales visits to individual

practitioners, educational and peer congresses,

client information leaflets, volume-based loyalty

programmes, and the organisation or sponsorship of

conferences.

• Walk-in Patients: through social media channels,

mass-market and targeted health awareness cam-

paigns, outdoor advertising, television, radio, and

online advertising.

• Contract Patients: through direct outreach to insur-

ers and employers.

26 IDH 2023 Annual Report

Strategic Report | Our Markets

Barriers to Market Entry

Brand Equity and Reputation

Patients are loyal to the Company’s leading brands, with a successful track

record spanning more than four decades.

Accreditation of Facilities

State-of-the-art testing capabilities and facilities are required to attract

contract clients. IDH currently boasts accreditations from CAP, ACR, ISO,

JAS, HCAC, and JCI.

Market Reach

The fragmented markets in which IDH operates demand a widespread

geographic presence for broad customer reach. The Company currently

operates the largest private labs network in Egypt, with operations in four

additional geographies.

Relationship with Key Stakeholders

Long-lasting relationships with stakeholders, including physicians and

suppliers, are required to support a scalable platform.

Economies of Scale

IT-enabled platforms, critical mass (higher margins), decades of

unparalleled experience, and the latest in medical equipment mitigate

against new entrants

2023 Annual Report IDH 27

Egypt

2023 Key Highlights

544

branches as at year-end

2023, +44 versus 2022

3.4 EGP BN

revenues in 2023,

up 18% y-o-y

8.0 MN

patients served in 2023,

up 5% y-o-y

IDH’s home and largest market of Egypt has been

at the centre of the Company’s growth story for over

four decades and, today, continues to play a key role

in driving performance and setting new standards for

the Group’s other markets. In Egypt, the Company

operates under two separate segments, pathology and

radiology, creating a fully fledged service provider and

enabling the Company to position itself as a one-stop

shop for its patients’ diagnostic needs. At its pathology

segment, the Group operates two leading pathology

labs, Al Mokhtabar and Al Borg Laboratories. Mean-

while, in 2018, in line with its long-term growth and

value creation strategy, IDH launched its radiology

venture, Al Borg Scan, capturing the attractive oppor-

tunities offered by the underpenetrated market with an

expanding branch network across Greater Cairo.

Egypt’s diagnostic market can be split into two distinct

sectors, public and private infrastructure, with the

latter consisting of labs attached to private hospitals

as well as standalone labs (chains and single-doctor

labs). On a geographic basis, Egypt’s most important

cities account for the majority of labs nationwide, leav-

ing ample opportunity to capture underserved areas

of the country and reach a wider patient base across

Egypt’s 27 governorates. Moreover, the corporate

83%

Contribution to

CONSOLIDATED

REVENUE

in 2023

market is growing as the main driver for diagnostics

services, contributing more to the sector’s top line as

more companies expand healthcare coverage for their

employees.

IDH enjoys a strong competitive position in the

Egyptian diagnostic industry, expanding its reach and

cementing its place as a market leader while creating

significant barriers to entry by leveraging its successful

40-year track record. Today, IDH continues to be the

number one private provider by market share in the

country, with a leading position in the corporate insur-

ance sector. Although there have been no recent official

28 IDH 2023 Annual Report

Strategic Report | Our Markets

government statistics released, IDH commissioned the

Boston Consulting Group (BCG) in 2016 to complete a

comprehensive study of the Egyptian diagnostic mar-

ket. As a result of this study, BCG estimated IDH’s two

lab brands accounted for over 50% of revenues in the

Egyptian private chain market.

In an effort to expand its service offering and create a

fully fledged service provider in its home market, IDH

launched Al Borg Scan, the Company’s newest and

fastest-growing radiology venture in Egypt, in 2018.

This venture has since booked notable and consistent

operational and financial success, steadily establish-

ing itself as a notable player in the radiology market.

Over the past few years, to capitalise on the strong

momentum enjoyed by the venture, IDH has invested

significant resources to boost Al Borg Scan’s branch

network. As at year-end 2023, the venture was operat-

ing seven branches across Greater Cairo, with its latest

branch launched in September 2023. Moreover, testa-

ment to the superior quality and service offered by the

subsidiary, Al Borg Scan is currently the sole radiology

provider in Africa to boast the prestigious American

College of Radiology (ACR) accreditation.

Growth in the Egyptian diagnostics industry is sup-

ported by robust market fundamentals, including:

• A large and growing population of over 100 million,

making Egypt the most populous country in the Mid-

dle East and North Africa (MENA) region; in terms

of demographics, it hosts a significant and growing

elderly population.

• An increasing prevalence of diseases, including com-

municable and non-communicable diseases, tropical

diseases, and lifestyle diseases, such as diabetes.

• A growing governmental role to increase awareness

on the importance of diagnostic testing in preventa-

tive healthcare, supporting the growth in laboratory

diagnostics as a tool in clinical practice.

• The roll-out of mandatory health insurance and

the subsequent increase in demand for private

diagnostic testing.

Macroeconomic Developments

The Egyptian economy has been facing strong head-

winds starting in 2022 and carrying on in 2023. Over

the last two years, Egyptian people and businesses

have witnessed multiple currency devaluations, faced

record-high inflation and the subsequent tightening

of monetary policy, and had to confront the spill overs

of two conflicts in Ukraine and Gaza. In early 2024,

the Egyptian government announced a series of initia-

tives and agreements that are expected to significantly

alleviate the short- and medium-term pressures on the

Egyptian economy and business community.

Long-standing brands

with impeccable

reputations have

fostered patient loyalty

Solid stakeholder

relationships, including

those with physicians,

patients, corporate

clients, suppliers, and

hospitals

A scalable, asset-light

business model that

enables expansion in

fragmented markets

International accreditations,

most notably the coveted

College of American

Pathologists (CAP)

certification of the Mega

Lab, as well as the American

College of Radiology (ACR)

accreditation

2023 Annual Report IDH 29

2023 in Review

Between March 2022 and January 2023, the Egyptian

Pound was devalued multiple times, going from trad-

ing at EGP 15.7 to the US dollar to EGP 30.9 to the

US Dollar. While the official exchange rate remained

fixed at 30.9 to the US Dollar for the remainder of

2023, in the unofficial black market, the exchange rate

progressively climbed reaching as high as 53.0 to the

US Dollar by year end. Similar trends continued in

early 2024, with the black market surpassing the 70.0

to the US Dollar mark in the final week of January.

With Egypt being heavily dependent on USD-

denominated imports, the devaluation of the EGP has

expectedly led to record-high inflation in the country,

with the annual urban inflation rate reaching 33.7% in

December 2023. As a result, the Central Bank of Egypt

(CBE) hiked interest rates in an attempt to tackle

inflationary pressures. The CBE’s main operation and

discount rates stood at 19.75% in December 2023,

versus 16.75% at the start of the year and the 9.75% in

early March 2022.

In parallel, and largely due to external geopolitical

factors as well as a decline in domestic production,

Egypt has been facing an energy crisis starting in the

summer months of 2023. As a result, the government

has introduced scheduled blackouts nationwide

in an effort to curb spiking demand on the back of

a heat wave that began in late July 2023. Significant

temporary import cuts from Israel due to the ongo-

ing Israeli-Palestinian conflict placed further pres-

sures on natural gas supply, forcing extended power

cuts to continue well into the fall.

In the final months of 2023, all three major rating

agencies S&P Global Ratings, Fitch Ratings, and

Moody’s downgraded Egypt’s sovereign debt between

October and November 2023, owing to increased risks

to external financing, macroeconomic stability, and

the trajectory of already-high government debt, in

addition to slow reform progress and FX constraints.

Several of these concerns were significantly reduced

by the landmark agreement signed by the Egyptian

government in February 2024, which is outlined in the

following section.

2024 Outlook

On 1 February 2024, interest rates were hiked a fur-

ther 200 basis points to 21.75%. Significant improve-

ments in the country’s economic situation and

outlook were recorded starting in late February and

early March 2024, following the signing of a historic

USD 35 billion agreement between the Egyptian

government and Abu Dhabi’s sovereign wealth fund,

ADQ, granting the latter development rights to Ras

El Hekma on Egypt’s North Coast. Following the

announcement, the black-market rate decreased

significantly, settling in the low 50 to the US Dollar

range. This is expected to be just the first in a series

of announcements and initiatives aimed at attract-

ing FX and investments back into the country.

On 6 March 2024, the CBE devalued the Egyptian

Pound, settling at nearly EGP 49.5 to the US Dollar at

official bank rates, compared to the EGP 30.85 that

had remained nearly unchanged for the past year.

Following the decision, the CBE increased interest

rates by another 600 basis points, reaching 27.75%.

On the heels of the devaluation, Egypt and the

International Monetary Fund (IMF) finalized an

agreement, securing an expanded loan package

of USD 8 billion. At the same time, in 2024, the

Egyptian government is looking to raise over USD

6 billion from its privatization programme through

the sale of stakes in government and military-owned

businesses to private local and foreign investors.

Combined, these are set to cover Egypt’s short-term

financing needs for the coming three to four years.

While the short-term impacts of the devaluations

between 2022 and 2024 (both in the official rate and

unofficial black market) have been severe, these are

expected to have long-term benefits for the Egyptian

economy. From attracting greater foreign direct

investment and remittances to boosting exports and

tourism revenues, an Egyptian Pound that reflects its

true market value is set to be a cornerstone of Egypt’s

macroeconomic recovery in the coming years.

Improving sentiment is also reflected in estimates

and forecasts from major international agencies.

30 IDH 2023 Annual Report

Strategic Report | Our Markets

Following the last devaluation of the EGP in March

2024, Moody’s revised its outlook on the country

from negative to positive, citing Egypt’s transition

to a managed float system, the expanded package

from the IMF, and the government’s commitment

to a tightened fiscal policy as drivers for a healthy

private sector environment, helping restore investor

confidence. In FY2023-24 the Egyptian economy

is forecasted to grow 3.0% according to estimates

from the International Monetary Fund (IMF), and

by 3.5% according to forecasts by the World Bank

and S&P. Meanwhile, according to BMI, inflation

is expected to cool to an average of 27.4% year-on-

year in 2024 from 34.1% in 2023, as a favourable

base effect outweighs the inflationary impact of the

devaluation. The Egyptian government is targeting

average annual inflation of around 15% in FY2024-

25. Finally, it is worth noting that in December 2023,

President Abdel Fattah El-Sisi was re-elected for a

new six-year term.

Financial and Operational Highlights

IDH’s home and largest market, Egypt, recorded a solid

acceleration starting in May 2023, recording sustained

top-line growth throughout the second half of the

year and closing out 2023 with consolidated revenue

of EGP 3,411 million, up 18% year-on-year. Excluding

the significant contributions made by Covid-19-related

testing in 2022, conventional revenue growth was even

more impressive at 40% for the year, boosted by 18%

increases both in test volumes and average revenue per

conventional test.

IDH’s fast-growing radiology venture, Al Borg Scan, con-

tinued to post impressive results throughout the second

half the year, with revenues reaching EGP 155 million

in 2023, representing an 82% year-on-year increase.

Top-line expansion during the year was primarily due

to higher scan volumes, which rose 43% year-on-year

in 2023, partially due to the ramp up of operations at

the venture’s newest branches. Additionally, average

revenue per scan increased 27% year-on-year, reaching

EGP 717, further contributing to revenue expansion. In

September 2023, Al Borg Scan inaugurated its seventh

branch, located in Cairo’s Nasr City neighbourhood. The

launch of this latest branch is directly in line with the

Company’s long-term strategy of expanding its presence

in Greater Cairo and cementing its position as a leader

in the country’s highly fragmented radiology market.

In the year ended 31 December 2023, IDH’s house

call service in Egypt continued to make a robust

contribution of 16% to total revenues in the country.

This remains significantly ahead of the service’s pre-

pandemic contribution, highlighting not only the

segment’s growth potential but also the effectiveness

of IDH’s investment and ramp up strategy, specifically

throughout the Covid-19 pandemic.

Finally, our Egypt-based subsidiary, Wayak, which

utilises IDH’s vast patient database to create elec-

tronic medical records and offer customised services

for our patients, completed 177,000 orders in 2023,

representing a 33% year-on-year increase. On the

profitability front, the venture’s EBITDA losses con-

tinued to narrow steadily, recording EGP 28,000 in

2023 versus the EGP 3.8 million in EBITDA losses

booked in 2022.

Turning to profitability, IDH’s Egyptian operations

recorded adjusted EBITDA of EGP 1,058 million, a 1%

year-on-year increase compared to FY 2022. Adjusted

EBITDA margin recorded 31%, a five-point year-on-year

decrease. Lower EBITDA profitability reflects higher

SG&A outlays, which increased 18% year-on-year and

weighed down on profitability during the year.

Operationally, IDH rolled out 44 new branches in Egypt

during 2023, including a new Al Borg Scan branch.

Through its expanded branches and house call services,

IDH served 8.0 million patients in 2023, up 5% year-on-

year, and performed 33.4 million tests, 13% above last

year’s figure. Meanwhile, conventional test volumes

jumped an impressive 18% year-on-year, demonstrating

the strong demand for the Company’s traditional offering.

2023 Annual Report IDH 31

Jordan

2023 Key Highlights

branches as at year-end

2023, +4 versus 2022

604 EGP MN

revenues in 2023,

down 1% y-o-y

372 K

patients served in 2023,

down 58% y-o-y

IDH first began operations in the Jordanian market

in 2011 when it acquired a 60% stake in Biolab, a

market-leading diagnostic testing provider in Jordan

with a track record surpassing two decades. Biolab

is run by Dr. Abdelnour, the venture’s founder, and

currently operates a branch network of 27 branches

spread across the Kingdom’s major cities.

Boasting one of the most developed healthcare

infrastructures in the Middle East, Jordan enjoys

strong operating fundamentals, with Amman con-

solidating a significant proportion of services and

over 70% of Jordanians medically insured. More-

over, as per information in 2021, the majority of

medically insured Jordanians are covered through

public insurance, with 38.1% covered through Royal

Medical Services (RMS) under the Jordanian Armed

Forces, 34.4% covered through the Civil Insurance

Program (CIP) provided by the Ministry of Health,

and 12.1% enjoying private insurance schemes. As a

result, the Jordanian market allows IDH the space to

continually grow its business despite the placement

of strict pricing regulations, which have remained

unchanged since their issuance by the Jordanian

Ministry of Health in 2008. Due to this fact, Biolab

focuses on driving volume growth in its operations,

15%

Contribution to

CONSOLIDATED

REVENUE

in 2023

expanding its service offering and portfolio to attract

more patients, increase loyalty, and boost average

testing per patient. Today, Biolab proudly stands as

the single largest lab in the Jordanian private sector

in terms of profitability.

Unlike operations in Egypt, Biolab does not operate

the typical Hub, Spoke, and Spike business model,

but rather operates a network of 27 branches offer-

ing a scalable platform for continuous and efficient

expansion. While Biolab’s branches are capable of

performing many of the 1,365 pathology tests offered

to patients, certain specialised tests are performed at

32 IDH 2023 Annual Report

Strategic Report | Our Markets

the four core labs, classified as specialty labs, creat-

ing a testing hub in Amman’s forefront medical area.

Biolab’s service offering encompasses an extensive

suite of laboratory tests and customised wellness

packages, provided with the highest standards of

patient-centric care. Tests performed include, but

are not limited to, haematology, endocrinology,

immunochemistry, parasitology, oncology, immu-

nology, transfusion medicine, molecular genetics

and antenatal diagnostics, and gene sequencing.

Additionally, Biolab does not share purchasing, sup-

ply and logistics, IT, marketing, or sales functions

with its Egyptian parent company.

Biolab finalized an agreement with Georgia Health-

care Group PLC (GHG) to establish a Mega Labora-

tory (Mega Lab) in Tbilisi, Georgia in 2020. The

multidisciplinary Mega Lab is the largest of its kind in

Georgia, standing at 7,500 square metres. Since 2019,

Mega Lab has been collaborating with approximately

100 medical institutions, including leading hospitals.

In accordance with the agreement, Biolab holds an

8.025% equity stake in the project and receives annual

IT support service fees for 10 years, in addition to

annual management fees for two years, in exchange

for the provision of information technology and man-

agement services provided.

Despite significant operating difficulties throughout

2020 and 2021 due to the Covid-19 pandemic, the

planned integration of the Mega Lab with GHG’s

network progressed according to schedule, with the

successful technology transfer of all 76 locations,

including the installation of the lab’s Laboratory

Information Management Systems (LIMS), in mid-

2021. The Mega Lab plans to develop and introduce

a B2B network of healthcare providers outside the

Group to reach its full operating potential, with

GHG’s network expected to only utilise one-third of

the facility’s total capacity.

Meanwhile, in July 2022, following multiple “Mock

Audits”, policy revisions, and rigorous staff training

programmes, Mega Lab was awarded the prestigious

JCI accreditation. With the successful awarding of

the accreditation, Biolab had officially fulfilled the

services stipulated in its management agreement.

Macroeconomic Developments

Despite growing economic hardships across the

wider MENA region, Jordan has maintained its eco-

nomic growth trend, with GDP estimated to record

an increase of 2.6% in 2023. Moreover, this growth

is estimated to continue well into the coming years,

with GDP growth anticipated to come in at 2.7% in

2024 and 3.0% between 2025 and 2028 according

to the latest International Monetary Fund (IMF)

estimates. Meanwhile, prices remain under control

throughout the Kingdom, with the average inflation

rate as per IMF estimates expected to narrow to 2.6%

in 2024, down from 2.7% in 2023, while remain-

ing steady at 2.5% for the coming five-year period.

Steady macroeconomic fundamentals and a growing

economy have continued to encourage foreign invest-

ment, with foreign direct investment as reported by

the Central Bank of Jordan in the first six months of

2023 reaching USD 776 million, a 20.9% year-on-year

increase. Supportive regulatory frameworks in the

form of easing license registrations, streamlining

services, and visa and investor cards have also been

integral in positioning the Kingdom as an attractive

foreign investment destination.

Financial and Operational Highlights

In IDH’s second largest market, Jordan, IDH booked

consolidated revenue of JOD 14 million in 2023, 42%

below last year’s figure (down 1% year-on-year in

EGP terms). The significant year-on-year decline is

wholly attributable to the high base effect resulting

from Covid-19-related testing in 2022, which had

significantly boosted last year’s consolidated top line.

2023 Annual Report IDH 33

Excluding this contribution, conventional revenues

recorded an 8% year-on-year expansion, supported by

an 8% rise in conventional test volumes. In EGP terms,

conventional revenues grew 68%, reaching EGP 604

million in 2023. Growth in IDH’s Jordanian operations

when looked at in EGP terms captures, in part, the

significant impact from the translation effect due to

multiple devaluations of the Egyptian Pound between

comparable periods.

IDH’s Jordanian subsidiary, Biolab, posted an adjusted

EBITDA of JOD 3.6 million, down 34% year-on-year in

2023 and yielding an adjusted EBITDA margin of 26%

(versus 23% in 2022). In EGP terms, adjusted EBITDA

came to EGP 157 million, up 16% from 2022. The

increase in adjusted EBITDA in EGP terms is due to the

translation effect following the devaluation of the EGP

in late 2022 and early 2023.

Operationally, Biolab inaugurated four new labs in

2023, taking its total network to 27 branches as at 31

December 2023. During the past year, Biolab served

372,000 patients, performing 2.4 million tests on a

consolidated basis. Meanwhile, conventional tests

performed increased a solid 8% year-on-year in 2023.

Despite economic

downturns in several

of IDH's geographies,

its two largest

markets, Egypt and

Jordan, remained

resilient, supported

by attractive

fundamentals.

34 IDH 2023 Annual Report

Section Flag | Section Subtitle

2023 Annual Report IDH 35

Nigeria

2023 Key Highlights

branches as at year-end

2023, unchanged versus

2022

96 EGP/MN

revenues in 2023,

up 22% y-o-y

132 K

patients served in 2023,

down 11% y-o-y

IDH first began operations in Nigeria in February

2018, following the acquisition of Eagle Eye Echo-

Scan Limited (Echo-Scan) through an alliance with

Man Capital LLC (Man Capital), the London-based

investment arm of the Mansour Group, called Dynasty

Holding Group (Dynasty), which is 51% owned and

controlled by IDH. Following the agreement, Dynasty

partnered with the International Finance Corpora-

tion (IFC) to invest in Echo-Scan (since rebranded

as Echo-Lab). The acquisition was driven by a strong

growth opportunity in the country, with the diagnos-

tics industry valued at c. USD 140 million in 2017 and

with an anticipated value of USD 830 million by 2025,

based on research conducted at the time of due dili-

gence by the Boston Consulting Group (BCG).

Standing as the largest population on the African

continent, at over 224 million in 2023, and sharing

similarities with the Egyptian market during the

1980s and 1990s in terms of structure, development

pace, and shifting disease profiles, Nigeria’s demo-

graphic characteristics provide an attractive invest-

ment opportunity. Currently, half of the population

— a staggering 110 million people — is 17 years old

or younger. Moreover, according to estimates from

Morgan Stanley, the population is expected to more

Contribution to

CONSOLIDATED

REVENUE

in 2023

than double in the next 50 years to reach 485 mil-

lion, adding more people than any other country in

the world over that time. Moreover, the diagnostics

market is highly fragmented and underpenetrated,

leaving ample room for economies of scale and

significant market share of a large and renowned

player. The diagnostics services industry can be

broadly divided into three groups, with the largest

of which being independent labs (chains and single

labs), followed by public and private hospitals.

The Group has introduced a comprehensive integra-

tion and value-creation strategy in Nigeria since its

36 IDH 2023 Annual Report

Strategic Report | Our Markets

acquisition of Echo-Lab, aiming to expand its network

throughout the country, renovate existing branches,

and expand its service portfolio through the procure-

ment of state-of-the-art equipment. As at year-end

2023, Nigerian operations had received a total invest-

ment of USD 14.3 million since inception. As a result,

Nigerian operations have continued their steady ramp

up, posting 22% year-on-year top-line growth in 2023.

Macroeconomic Developments

With new presidential leadership starting in February

2023, the government took steps to remove oil subsi-

dies and reform the Central Bank’s leadership, lead-

ing to the abolishment of the multiple exchange rate

system and effectively allowing the Nigerian Naira to

float. Following this decision, the Naira expectedly

dropped in value, losing approximately 29% versus

the US Dollar. Following a period of instability, the

Naira is anticipated to settle at around NGN 650–700

to the US Dollar. The floating of the Naira, coupled

with soaring diesel prices, has placed significant

pressure on prices nationwide, with inflation rates

continuing to increase and reaching 28.9% in Decem-

ber 2023, compared to 21.3% at year-end 2022.

The government is currently in the process of complet-

ing a USD 10 billion reform plan to stabilize the Nige-

rian Naira, largely based on securitising dividends of

the country’s LNG company. In addition, other FX

inflows that are likely to yield quicker results include

a USD 1.5 billion facility from the World Bank, as well

as potential inflows from foreign investors increas-

ingly attracted to the Nigerian market following the

floating of the currency. According to the IMF’s latest

estimates, the Nigerian Economy is forecasted to grow

by 2.9% and 3.0% in 2023 and 2024, marginally down

from the 3.3% GDP growth booked in 2022.

Financial and Operational Highlights

Echo-Lab reported revenue growth of 15% in local

currency terms for 2023, reaching NGN 1,961 million.

In EGP terms, Nigerian operations booked top-line

growth of 22% year-on-year, with revenues coming

in at EGP 96 million. Revenue growth for the period

was driven by 32% and 39% year-on-year increases

in average revenue per test in NGN and EGP terms,

respectively, as the Company continued to imple-

ment strategic price hikes in response to inflationary

pressures in the country.

Despite recording top-line growth during 2023, Nige-

rian operations booked a 12% year-on-year decrease

in test volumes, conducting 266,000 tests during the

year, compared to 303,000 tests in the previous year. It

is also worth mentioning that average revenue per test

increases in EGP terms partially reflected the transla-

tion effect due to a weakened EGP. Meanwhile, patient

volumes recorded 132,000, down 11% versus 2022.

Meanwhile, Nigerian operations posted increased

EBITDA losses, recording an adjusted EBITDA loss of

NGN 498 million in 2023, compared to NGN 337 mil-

lion in the previous year. Decreased test volumes and

profitability in the country continue to reflect signifi-

cant economic headwinds in the country, affecting

consumer behaviour and expanding the Company’s

cost base. As a result of this economic uncertainty,

which has included two separate currency devalua-

tions between early 2023 and 2024, management has

decided to record an NGN 18 million impairment

expense in goodwill and assets in Nigeria, accounting

for rising diesel prices and inflation that are antici-

pated to continue into the remainder of 2024. Mean-

while, IDH’s management team in Nigeria continues

to assess the impacts of the economic downturns on

the Company’s operations, putting in place strategies

for further price hikes in response to higher costs

while prioritising patient retention.

2023 Annual Report IDH 37

17 of IDH’s branches in Sudan have been closed due to ongoing conflict in the country.

Sudan

2023 Key Highlights

branches as at year-

end 2023, versus 17 in

2022

11 EGP MN

revenues in 2023,

down 44% y-o-y

14 K

patients served in

2023, down 80% y-o-y

IDH currently operates under two brand names in

Sudan, Ultralab and Al Mokhtabar Sudan. Egypt’s Al

Borg acquired majority interest in Ultralab in 2011,

while Al Mokhtabar Sudan was established in 2010,

before the Group’s acquisition of Al Mokhtabar in

Egypt.

Sudan’s economic progress continues to be severely

affected by continued economic and political tur-

moil, starting with the secession of South Sudan in

2011 and the associated loss of the majority of the

country’s oil production. This unrest continued

throughout the remainder of the decade, culminat-

ing in the removal of the country’s president, Presi-

dent Al-Bashir, in 2019 and resulting in a subsequent

military coup, seeing the military take effective con-

trol of the government.

Despite a significant easing of tensions in 2022, a

violent conflict erupted in April 2023 between two

rival groups; the Sudanese Armed Forces (SAF) and

the Rapid Support Forces (RSF). The conflict is cur-

rently ongoing and has resulted in the death of more

than 13,000 people, injury of an additional 33,000,

and the displacement of 10.7 million as of January

2024. IDH’s two brand names in Sudan have been

0.3%

Contribution to

CONSOLIDATED

REVENUE

in 2023

dramatically affected, with 17 of the Company’s 18

branches in the country closed starting April 2023.

The Company currently operates one remaining

facility and continues to monitor the situation to

safeguard its people and operations in the country

as possible.

Macroeconomic Developments

Prior to the eruption of fighting in Sudan, the coun-

try had enjoyed a positive economic outlook for the

coming years. In December 2020, the US govern-

ment had officially removed Sudan from its States

Sponsors of Terrorism list, paving the way for access

38 IDH 2023 Annual Report

Strategic Report | Our Markets

to international funds and investment, including

from the International Monetary Fund (IMF). The

lifting of sanctions also opened significant growth

opportunities for IDH, with the country open to

international suppliers and allowing the Company

to leverage its supplier relationships to import test

kits directly and improve efficiency and profitability.

Due to the ongoing internal conflict, the Sudanese

economy has suffered significantly, with GDP esti-

mated to shrink by 18% year-on-year in 2023. In

addition, inflation is estimated at 256% as at year-end

2023, up notably from 139% one year prior. Concur-

rently, unemployment in the country is expected to

increase drastically, reaching 46% of the workforce

in 2023 from 32% in 2022 accordingly to the latest

IMF estimates.

Financial and Operational Highlights

The ongoing conflict in the country has significantly

affected IDH’s operations, leading to the closure

of 17 of the Company’s 18 branches in the country

since April 2023. During 2023, Sudanese operations

booked revenues of SDG 220 million, down 60%

year-on-year compared to 2022. In EGP terms, rev-

enues stood at EGP 11 million, a 44% year-on-year

decrease. IDH continues to closely monitor the

evolving situation, prioritising the health and safety

of its staff and patients. Operationally, during 2023,

the company served 14,000 patients and completed

40,000 tests.

Adjusted EBITDA in Sudan stood at SDG 21 million for

the year, up from an EBITDA loss of SDG 2 million in

FY 2022.

2023 Annual Report IDH 39

Saudi Arabia

In October 2022, IDH and Biolab, the Group’s Jor-

danian subsidiary, signed a partnership with Izhoor

Medical, a Company owned by Fawaz Alhokair,

aimed at launching a fully fledged diagnostic ser-

vices provider in Saudi Arabia. The venture is owned

51% by IDH, while the remaining 49% will be owned

by Izhoor. The venture’s total investments are set to

reach USD 19.7 million over the coming three years.

IDH will consolidate the results of the new venture.

The venture is led by Dr. Amid Abdelnour, Biolab’s

founder and CEO, with day-to-day operations over-

seen by the Biolab team, which will look to transfer

its operational expertise and high-quality standards

to the Saudi Arabian market.

In January 2024, the Company successfully rolled

out operations in the Kingdom, with the launch of

two branches in its capital city, Riyadh. The launch

of its Saudi venture is in line with the Company’s

long-term growth strategy, penetrating attractive

markets in the region with solid macroeconomic

fundamentals, robust demographic characteristics,

and supportive regulatory environments. Ulti-

mately, the partners are looking to develop a fully

fledged pathology diagnostic services provider,

offering a wide array of diagnostics services across a

far-reaching branch network in the Kingdom.

Market Overview

The strategic partnership with Izhoor Medical marks

IDH’s entrance into a fifth geography, with Saudi

Arabia representing one of the region’s most attrac-

tive markets for healthcare players and businesses as

a whole. The Kingdom boasts a stable and expanding

economy, in addition to a growing and increasingly

health-conscious population. In addition, the stra-

tegic government reforms implemented through its

Vision 2030 programme continue to encourage the

entrance of foreign investors, with healthcare spe-

cifically undergoing structural changes to encourage

private sector participation. On this front, nearly 300

hospitals and 2,250 healthcare centres are set to be

privatised by 2030, creating ample growth potential

for both new market entrants and existing healthcare

players. This potential is further magnified by the

fact that the government has been investing heav-

ily in the sector, with 17% (USD 50.4 billion) of the

government’s 2023 budget allocated for healthcare

spending (KSA currently accounts for nearly 60% of

total healthcare spending in the Gulf Cooperation

Council (GCC)).

Today, Saudi Arabia boasts a young population of

32.2 million, with 63% of Saudis under 30 years old,

with robust growth coming from both Saudi and

non-Saudi nationals as the Kingdom positions itself

as a global economic hub and continues to attract

more people. This population increase, coupled

with a growing focus on healthy lifestyles, has

boosted demand for quality healthcare, including in

Once fully ramped

up, Biolab KSA

aims to become

a fully fledged

diagnostic services

provider capable

of capturing vast

opportunities in the

highly fragmented

Saudi market.

40 IDH 2023 Annual Report

Strategic Report | Our Markets

the diagnostic testing space, and driven the need for

private players to support public facilities in meeting

the increased demand.

Looking at the macroeconomic picture, while total

GDP is set to come in 1.1% lower in 2023 versus the

previous year reflecting lower oil revenues, non-oil

GDP continued its steady expansion, growing 4.3%

according to World Bank estimates for 2023. The

IMF expects both total and non-oil GDP to continue

growing in the coming years, supported by the coun-

try’s diversification efforts. More specifically, GDP

growth in 2025 is forecasted to come in at 5.5%.

Outlook

In 2024, IDH and its partners will press forward with

the new venture’s multi-pronged ramp up. In the com-

ing year, one of the primary aims will be to establish

the Biolab KSA brand in the Riyadh market through

targeted marketing campaigns and through the deliv-

ery of exceptional quality to patients. At the same

time, efforts will also be devoted to rapidly expanding

the venture’s branch network and operations. Once

the venture is fully ramped up, it will be operating

on a similar “Hub, Spoke, and Spike” business model

as IDH’s Egyptian operations. In the longer term, the

partners are targeting the launch of the KSA Mega

Lab in 2025, which will support a growing network of

smaller B, C, and D labs. By 2027, the venture is aim-

ing to operate a network of more than 50 labs, with six

to come online by year-end 2024.

2023 Annual Report IDH 41

Our Brands

IDH operates several core brands throughout its

various geographies, including Al Mokhtabar, Al

Borg, and Al Borg Scan in Egypt; Biolab in Jordan;

Ultralab and Al Mokhtabar Sudan in Sudan; Echo-

Lab in Nigeria; and Biolab KSA in Saudi Arabia.

Additionally, the Group introduced its Egypt-based

data analytics venture, Wayak, in 2019, which utilises

a proprietary data analytics tool to provide patients

healthcare management services while compiling

electronic medical records.

Al Mokhtabar – Egypt Al Borg Laboratories – Egypt

Al Mokhtabar’s first lab was launched over four

decades ago in 1979, under the leadership of Dr.

Moamena Kamel, Professor of Immunology at

Cairo University. MK Lab was later rebranded

as Al Mokhtabar and has since established

itself as a premier provider of world-class care

boasting a portfolio of over 2,500 clinical analy-

ses in the areas of immunology, haematology/

coagulation, clinical chemistry, parasitology,

microbiology/infectious diseases, toxicology,

cytology, surgical pathology, flowcytometry,

molecular biology, and cytogenetics.

The first medical laboratory to successfully

operate the Hub, Spoke, and Spike business

model, Al Borg Laboratories was established

in 1991. Today, Al Borg holds a holistic port-

folio of over 2,000 tests covering all fields of

medical testing, both conventional and non-

conventional. The company caters to walk-in,

corporate, insurance, and lab-to-lab clients.

Al Mokhtabar Key Highlights Al Borg Laboratories Key Highlights

312

operational branches as at 31 December 2023

224

operational branches as at 31 December 2023

4.7 MN

patients served in 2023

3.2 MN

patients served in 2023

19.9 MN

tests performed in 2023

13.2 MN

tests performed in 2023

42 IDH 2023 Annual Report

Strategic Report

Al Borg Scan – Egypt

Established by IDH to capitalise on the growing

opportunities of a high-value, underserved, and

highly fragmented radiology sector, Al Borg Scan

offers a full range of radiology services with an

expanding branch network across the Greater

Cairo area. Al Borg Scan harnesses the strong

brand equity and stellar reputation of Al Borg

to unlock a wide customer base and cement its

position as a leading provider of medical imaging.

The venture has maintained its impressive growth

momentum since launch, operating a total of seven

branches and launching its most recent branch in

September 2023. Al Borg Scan relies on the latest in

medical technology to offer the highest quality in

MRI, CT, ultrasound, x-ray, mammogram, and cath

lab services. Additionally, the venture is run by the

country’s foremost radiologists, ensuring the high-

est level of service and building a national brand in

Egypt that enables the Group to deliver its vision of

becoming a one-stop-shop provider of diagnostic

services to its patients, combining both pathology

and ACR-accredited radiology.

Wayak – Egypt

Launched in 2019, Wayak, IDH’s Egypt-based subsid-

iary, harnesses the potential of the Group’s vast and

growing patient database and its wide geographic

reach to initiate electronic medical records for its

patients and offer customised patient services.

Through Wayak’s cutting-edge operations, IDH has

been able to provide an encompassing offering to

its chronic patients, from medication home-delivery

to diagnostic testing reminders, referrals to service

providers under IDH’s network at discounted prices,

and follow-up services.

Al Borg Scan Key Highlights

Wayak Key Highlights

operational branches as at 31

December 2023

176.5 K

operational branches as at 31

December 2023

161 K

patients served in 2023

132.2 K

patients served in 2023

216 K

scans performed in 2023

EGP (0.3) MN

EBITDA in 2023 (versus EGP -3.8 MN

in 2022)

2023 Annual Report IDH 43

Biolab – Jordan

Echo-Lab – Nigeria

Biolab was originally launched in 2001 as IDH

sought to realise its vision of becoming a leader in

Jordan’s private medical laboratory sector. Biolab

currently offers a portfolio of over 1,350 diagnostic

tests to a customer base of patients, physicians, hos-

pitals, and referring clinical laboratories through a

nationwide branch network of 27 branches. Biolab

holds accreditations from the Jordanian Ministry

IDH acquired Nigerian medical diagnostics firm

Echo-Lab (previously Echo-Scan) in 2018 to

continue the Group’s expansion efforts and lever-

age the country’s supportive demographics and

growth potential. The acquisition enabled the

Company to expand its exposure and penetrate

of Health (MoH), the Health Care Accreditation

Council (HCAC), and the Jordanian Food and

Drug Administration (JFDA), with two branches

accredited with ISO 15189 and Joint Commission

International (JCI) and one branch boasting CAP

accreditation since 2018. Additionally, in 2023,

Biolab was awarded the ISO/IEC 27001 accredita-

tion for information security.

a fragmented market with characteristics similar

to those in IDH’s other geographies. Echo-Lab

employs a comprehensive suite of pathology and

radiology diagnostic testing, combining different

test categories under one stellar brand name.

Biolab Key Highlights

Echo-Lab Key Highlights

operational branches as at 31

December 2023

operational branches as at 31

December 2023

372 K

patients served in 2023

132 K

patients served in 2023

2.4 MN

tests performed in 2023

266 K

tests performed in 2023

44 IDH 2023 Annual Report

Strategic Report | Our Brands

Ultralab – Sudan

Al Mokhtabar Sudan – Sudan

Ultralab was founded in 2008 and quickly

established itself as Sudan’s largest and most

reputable laboratory chain. Since the eruption of

political conflict in Sudan in April 2023, all of the

company’s branches have been shut down. IDH

continues to monitor the evolving situation in

Al Mokhtabar Sudan was established in 2010,

prior to IDH’s acquisition of Al Mokhtabar in

Egypt. Al Mokhtabar Sudan provides a similar

diagnostic service offering as that of Ultralab,

the country, taking necessary steps to safeguard

its people and operations in Sudan and updating

the market whenever applicable.

with both companies following IDH’s efficient

Hub, Spoke, and Spike model, replicating the

approach employed by Al Borg and Al Mokh-

tabar in Egypt.

Ultralab Key Highlights

Al Mokhtabar Sudan Key Highlights

operational branches as at 31

December 2023

operational branch as at 31

December 2023

9 K

patients served in 2023

5 K

patients served in 2023

26 K

tests performed in 2023

14 K

tests performed in 2023

2023 Annual Report IDH 45

IDH's established

brand names

ideally prime

the Company to

capture new growth

opportunities and

expand its reach

across its existing

markets.

Biolab KSA – Saudi Arabia

Starting in January 2024, the Group operates

two branches in Saudi Arabia’s capital city,

Riyadh, under the brand name Biolab KSA.

The Saudi venture is owned jointly by IDH,

Biolab, and Izhoor Medical, a company owned

by Fawaz Alhokair. This newly launched ven-

ture harnesses the growth potential of one

of the region’s fastest growing economies,

characterised by a growing and increasingly

health-conscious population, to provide an

encompassing pathology services provider.

46 IDH 2023 Annual Report

Strategic Report | Our Brands

2023 Annual Report IDH 47

Our Services

Through its market-leading brands, IDH offers a full

spectrum of approximately 3,000 internationally

accredited pathology tests ranging from basic blood

glucose tests for diabetes to advanced molecular

testing for genetic disorders. To complement its tra-

ditional pathology offering, the Group also offers a

full suite of radiology services through its radiology

Pathology

IDH’s comprehensive pathology test portfolio covers immunology, haematology, endocrinology, clinical

chemistry, molecular biology, parasitology, histopathology, and microbiology

Immunology Microbiology Haematology

Endocrinology Clinical Chemistry Molecular Biology

Parasitology Histopathology Genetics

Radiology

Through Al Borg Scan (Egypt) and Echo-Lab (Nigeria), IDH's comprehensive radiology services include, but are

not limited to, magnetic resonance imaging (MRI), computed tomography (CT), ultrasound, x-ray, mammograms,

and cath lab facilities.

venture, Al Borg Scan, in Egypt and Echo-Lab in

Nigeria. Moreover, IDH’s Egypt-based subsidiary,

Wayak, leverages the Company’s vast and growing

patient database to provide its patients with custom-

ised services, including medication home-delivery,

diagnostic testing reminders, and referrals to service

providers.

48 IDH 2023 Annual Report

Strategic Report

ISO

ISO accreditation requires an initial inspection of laboratory practices, calibration,

and medical analysis by a renowned international accreditation body. In the case of Al

Mokhtabar and Al Borg, it was URS certification, internationally accredited by the United

Kingdom Accreditation Service. For Biolab, on the other hand, the initial inspection was

conducted by the Jordanian Accreditation System (JAS). The inspection involves thorough

examination of the clinical chemistry area, the virology unit, the haematology unit, and

the general laboratory management practice. The Company’s ISO 9001 accreditations for

both Al Mokhtabar and Al Borg passed accreditation reviews in December 2022 and are

valid for three years. Additionally, in 2022, the Company was awarded ISO 45001, pertain-

ing to occupational health and safety, and ISO 14001, regarding environmental safety, for

its operations in Al Mokhtabar and Al Borg.

College of American Pathologists (CAP)

Unlike ISO accreditation, CAP certification is awarded to individual labs rather than the

Group’s operations as a whole and is widely considered the global leader in laboratory

quality assurance. The Group’s central Mega Lab in Cairo, which was inaugurated in

2015, first received its CAP certification in February 2018 and is renewable every two

years. The Mega Lab replaces two smaller, independent “A-labs”, one of which was also

CAP-certified. The accreditation was renewed in October 2023.

American College of Radiology (ACR)

In 2022, both Al Borg Scan’s nuclear medicine (NucMed) and ultrasound units obtained

the prestigious ACR accreditation, making Al Borg Scan the first laboratory to earn the

accreditation in Africa. ACR accreditation is widely considered one of the most pres-

tigious certifications for radiology service providers in the world. Through a complete

review of a facility’s equipment, medical personnel, and quality assurance processes,

ACR accreditation helps guarantee that patients receive the highest level of image qual-

ity and safety. To obtain the certificate, Al Borg Scan underwent a rigorous examination

of its facilities and operational practices. Over the last two years, IFC healthcare quality

experts worked with Al Borg Scan to evaluate the baseline level of implementation of

quality standards. They also provided guidance on required improvements in infra-

structure, policies, and processes to ensure the venture remains fully compliant with

ACR standards and requirements.

Internationally Accredited Test Portfolio

The Group boasts a host of internationally acclaimed accreditations, with a robust internal audit process to ensure

the Company continues to deliver on its promise of world-class services to its patients while maintaining the

reputations of its brand names.

2023 Annual Report IDH 49

General Authority for Healthcare Accreditation and Regulation (GAHAR)

GAHAR accreditation standards were set forth with a patient-centric focus, in line with

the highest international accreditation standards, while accounting for Egyptian laws

and culture. GAHAR was established in step with the Egyptian government’s pursuit of

ensuring quality healthcare provision for its citizens, in line with the Egyptian health-

care direction set forth under Egypt’s 2030 Vision. To date, IDH has acquired GAHAR

accreditation for 13 of its labs, including IDH’s Mega Lab.

Quality Assurance

IDH’s quality assurance programme ensures that all

internal diagnostic processes, lab testing procedures,

and results analyses maintain their level of accuracy.

The quality assurance programme also ensures that

the standards of the Group’s ISO and CAP accredi-

tations are met through the regular inspection of

hardware and equipment, ensuring compliance

with procedure manuals, inspecting the accuracy

of results, and conducting competency assessments

for staff. The programme also guarantees the timely

renewal of all its accreditations. Meanwhile, the

internal audit team uses a specific audit checklist for

the basic and routine tests conducted in the Group’s

C-labs, including conformity of process; testing the

competency of employees through oral, observa-

tional, practical, and written tests; and conducting

managerial audits to assess the labs’ management

and administrative efficiency.

Employee Training

The Group values education as an essential avenue for

ensuring quality across its laboratories and branches.

To this end, IDH operates a dedicated training facility in

Cairo with four training laboratories to develop the skills

of its employees. In 2023, the training team was composed

of one manager, two medical consultants, one director,

one section head, one supervisor, along with two learning

and development senior specialists. The centre provides

training to c. 659 employees every month, including

doctors, chemists, receptionists, branch and area man-

agers, sales personnel, and administrators. The training

curriculum provided at the facility is set based on perfor-

mance KPIs, internal audit reports, management reviews,

competency assessment, and customer feedback and

complaints. IDH’s employee training is structured along

four modules covering both technical and non-technical

skills: new employee training, competency based, need-

based, and practical re-training.

50 IDH 2023 Annual Report

Strategic Report | Our Services

2023 Annual Report IDH 51

Competitive Strengths &

Growth Strategy

IDH effectively utilises its market-leading position, flexible business model, scalable platform, and seasoned

management to deliver on the Group’s long-term growth strategy while manoeuvring economic headwinds at

several of its operating markets.

Competitive Strengths

Exposure to resilient markets with favourable dynamics

IDH operates in geographies characterised by robust structural growth drivers, with

generally underserved and highly fragmented diagnostic services sectors. Meanwhile,

the counter-cyclical nature of the diagnostic and healthcare industries means that IDH

can remain resilient and maintain the growth of its business even in the face of economic

and political challenges that the Company may face in its markets. This is increasingly

evident in the Company’s performance during 2023, with IDH recording sustained top-

line growth while maintaining profitability despite ongoing challenges in several of its

markets, including its home and largest market, Egypt.

Strong market position with over four decades of industry experience

IDH’s markets of operation are defined by rigid barriers to entry (as detailed in Our

Markets on page 27). These barriers provide a significant operating advantage for

established players who, like IDH, are able to capitalise on stellar brand reputations

and patient loyalty to maintain and expand their business. IDH boasts a track record

spanning over four decades, throughout which its subsidiaries have cemented their

positions as top-tier service providers. In addition, the Company’s internationally

accredited facilities, scalable business model, and key relationships with suppliers have

continually aided IDH in its quest to expand its reach across its chosen markets.

Scalable asset-light business model

IDH employs a Hub, Spoke, and Spike business model that enables a capital efficient

expansion of the Group’s footprint. The Group operates a centralised Mega Lab fitted

with state-of-the-art, high-capacity equipment. The facility enjoys ample throughput

and supports the rapid deployment of asset-light, plug and play C-labs for sample col-

lection and simple testing across its markets. At IDH’s Mega Lab, safety remains a top

priority, with testing procedures continually reviewed and enhanced. This large-scale

operation ensures that IDH can enjoy the benefits of economies of scale and provides

the Company a unique competitive advantage over its regional peers.

52 IDH 2023 Annual Report

Strategic Report

Strong balance sheet and cash generation capacity

Leveraging the Group’s asset-light model, which facilitates minimal borrowing and signif-

icant strategic flexibility, the Company is able to maintain a strong financial position and

keep low amounts of leverage to fund its expansion. In parallel, core profitability remains

strong, with the Company able to report high EBITDA margins and sustain healthy cash

balances despite difficult operating conditions in several of its markets..

Experienced and entrepreneurial management

IDH relies on a highly experienced management team, boasting decades of experi-

ence in their respective field, while its experienced Board of Directors wields its wealth

of healthcare, MENA region, and investment experience to guide the Company’s

operations.

2023 Annual Report IDH 53

Long-Term Growth Strategy

Expand Customer Reach

IDH constantly identifies potential opportunities

through which it can increase customer reach,

expand its patient base, and access underserved

geographies. IDH expands at a rate of 25–30

branches per annum, positioning the Company

as the largest private sector player in its home and

largest market of Egypt. IDH’s scalable, asset-light

business model eases the quick and efficient roll-

out of new labs and further expands its presence

in both the Middle East and Africa. Additionally,

the Company’s wide range of complementary

services, including house calls, e-services, and

results delivery solutions create a top-of-the-line

patient experience, enhancing customer satisfac-

tion and boosting loyalty. The Company’s house

call service, in particular, has been enjoying steady

growth over the past years, with contributions to

consolidated revenues in 2023 sitting comfortably

above pre-Covid-19 levels at 14%. The Group also

seeks to expand its business by appealing to the

corporate segment through attractive deals with

institutions, ranging from public entities, such as

ministries and syndicates, to private companies.

Additionally, the Company participates in govern-

mental campaigns, including the 100 million lives

campaign that ran from November 2018 to June

2019 and served 224,000 patients.

Increase Tests per Patient

To boost average test per patient and increase

patient loyalty, the Group is active on multiple

fronts. First, the Company’s Mega Lab is capable

of conducting several complex tests that are not

available elsewhere in Egypt. Additionally, IDH

bundles testing services into discounted pack-

ages offered to repeat customers, further driving

volume growth and average revenue per patient

— an important growth driver in periods of high

inflation. To this end, in 2021, the Group launched

its loyalty programme, designed to boost patient

loyalty and increase the Company’s average tests

per patient. This new programme immediately

yielded positive results, increasing tests per

patient to its highest levels ever recorded at the

contract segment. Furthermore, the Company

actively participates in awareness campaigns

focused on particular illnesses and advocates for

healthy lifestyle choices as preventative measures

against lifestyle diseases, while highlighting the

importance of regular testing. These efforts and

their associated community engagement have

successfully boosted IDH’s volume growth and

increased average test and revenues per patient,

while growing the Company’s brand reputation in

the market.

The Company effectively harnesses the benefits associ-

ated with its competitive advantages to capture the

significant growth opportunities offered by its markets

of operation and deliver on a four-pillar growth strategy

focused on (1) maintained expansion of its patient base;

(2) widened service portfolio to boost average tests per

patient; (3) strategic penetration of new geographic

markets through specific, value-accretive acquisitions;

and (4) introduction of new medical services achieved

by leveraging the Group’s reputable brand position.

54 IDH 2023 Annual Report

Strategic Report | Competitive Strengths & Growth Strategy

new branches in 2023

8.5 MN

patients served in 2023

Geographic Expansion

IDH constantly seeks strategic acquisition oppor-

tunities within the Middle East and Africa where

markets are highly fragmented, under penetrated,

and characterised by supportive demographic

factors. IDH’s proven business model is well-

positioned to leverage prevailing consumer trends

in this region to rapidly expand its footprint and

boost its business. While relying on the strength

of its balance sheet, IDH delivers on its objectives

through value-accretive acquisitions and partner-

ships. Most recently, the Company entered Saudi

Arabia through its newest venture launched in

partnership with Biolab and Izhoor Holding (a

company owned by Fawaz Alhokair). In the long-

run, the venture aims to establish itself as a fully

fledged, pathology diagnostic service provider

in the Kingdom. Saudi Arabia presents a unique

investment opportunity for the Company, with a

highly fragmented market in one of the region’s

fastest-growing economies. The market’s growth

in the coming years is set to be supported by an

ageing population with a high prevalence of non-

communicable diseases. At the same time, rising

demand will also come on the back of a growing

trend towards health-consciousness, specifically

among youth.

Diversify into New Medical Services

The Group believes that its brand equity, track

record, and patient following ideally position it

to pursue upcoming opportunities in adjacent

markets. Delivering on this notion, the Company

launched its Egypt-based radiology venture in

2018, expanding its footprint in the high-value

and under penetrated Egyptian radiology seg-

ment. In addition to diversifying its revenue

streams, the introduction of this venture inched

the Company closer to realising its vision of

becoming a one-stop shop for diagnostic testing

services, offering a full portfolio encompassing

both pathology and radiology services.

Furthermore, IDH marked its expansion into

data-driven, tailored healthcare management

services through Wayak in September 2019.

These services allow the Company to provide an

increasingly well-rounded and tailored health-

care experience for its patients, increasing reten-

tion rates in the process.

2023 Annual Report IDH 55

Principal Risks, Uncertainties,

& Their Mitigation

As is typical with any corporation, IDH is exposed to

certain risks and uncertainties that may yield adverse

effects on the Company’s performance. IDH’s Chair-

man, Lord St John of Bletso, continually emphasises

the importance of the risk matrix as an integral driver

of the Group’s long-term success, and one which must

be equally shared by the Board of Directors and senior

management.

While no system is capable of mitigating every risk,

and while some risks, as at the country level, are

largely without potential mitigants, the Group has

placed complex processes, procedures, and baseline

assumptions that provide mitigation. The Board and

senior management agree that the principal risks and

uncertainties facing the Group include:

Specific Risk Mitigation

Country/regional risk — Economic and Forex

Egypt: IDH is directly impacted by the economic condi-

tions of its largest market, Egypt, and, to a lesser extent,

those of its other operating geographies. Egypt accounted

for c. 83% of consolidated revenues in 2023 (80% in 2022)

and 89% of adjusted EBITDA (90% in 2022).

Egypt’s most recent economic headwinds began in early

2022 with the start of the Russia-Ukraine war. The country

has been particularly impacted by the conflict due to its

significant dependency on both countries for both wheat

imports and tourism revenues. This was further exacer-

bated by a global tightening of monetary conditions to

combat record-high inflation during the post-Covid-19

recovery and widespread outflow of capital from emerg-

ing markets. Finally, the most recent escalation in Gaza

has had significant impacts on the Egyptian economy

with inflows of foreign currency weighed down by lower

tourism and Suez Canal revenues.

To tackle the shortage of foreign reserves (FX), the

government introduced plans to boost FX reserves and

maintain investor confidence. In February 2024, the

country finalized a USD 35 billion investment deal with

Abu Dhabi’s sovereign fund, ADQ. The agreement marks

a major step towards reducing the short- and medium-

term pressures on the country.

Overall, management reiterates that IDH employs a

robust and resilient business model that has helped

the Company navigate several economic and political

downturns, including two revolutions, while allowing

the business to expand its offering and record positive

growth. Moreover, as part of IDH’s long-term growth

strategy, the Company is working to diversify its geo-

graphic exposure, decreasing its exposure to any single

country. To this end, in December 2023, the Company

launched its Saudi Arabian venture under the name

Biolab KSA. Once fully ramped up, the venture will offer

a full suite of diagnostic testing services and, by 2026,

contribute over 10% of IDH’s revenues.

IDH has maintained an active approach in shielding the

business from exchange rate fluctuations in its markets.

As part of its mitigation strategy, IDH secures contracts

with tenures ranging from five to seven years (with semi-

fixed FX rates) and purchases laboratory test kits on

contract with volume-linked prices. Moreover, thanks to

its sheer operational volume and long-standing supplier

relationships, the Company is able to negotiate favour-

able test kit prices with all its major suppliers. Addition-

ally, the Company takes proactive steps to hedge against

foreign currency risks on a case-by-case basis when

applicable. Most recently, in 2023, the Company negoti-

ated for the early repayment of its contractual obligation

of USD 5.7 million with General Electric.

56 IDH 2023 Annual Report

Strategic Report

Specific Risk Mitigation

Following the announcement, on 6 March 2024, the Cen-

tral Bank devalued the Egyptian Pound, settling at nearly

EGP 49.5 to the US Dollar at official bank rates. This is the

fourth devaluation since March 2022, with the EGP hav-

ing lost more than 68% of its value. The EGP is expected

to settle between 45 and 50 to the USD in the second half

of 2024. The convergence between the official and black-

market rates, and an exchange rate that more accurately

reflects the true market value of the EGP, are expected to

attract increased FDI and remittances, as well as boost

tourism and exports in line with the government’s ambi-

tious targets.

Headline inflation reached 35.7% in February 2024.

Meanwhile, the Egyptian Central Bank’s (CBE) main

operations and discount rates stood at 27.75% in early

March 2024, up 800 basis points from January 2023 and

from 9.75% in March 2022 before the start of the latest

economic crisis.

Egypt held presidential elections in December 2023,

which saw President Abdelfattah El Sisi win a new six-

year term.

Foreign currency risk: IDH is exposed to foreign cur-

rency risk, placing potential pressure on the cost side of

the business. While the majority of the Company’s suppli-

ers receive payments in EGP, due to the fact that materials

are imported, prices vary based on the exchange rate

between EGP and foreign currencies. Additionally, a

small portion of suppliers are priced in foreign currency

and paid in EGP based on the prevalent exchange rate at

the time of purchase.

IDH utilised a bridge loan facility, with half the amount

funded internally, while the other half (amounting to

EGP 55 million) was provided through a bridge loan

by Ahli United Bank – Egypt. The bridge loan was fully

settled in Q2 2023.

Starting in January 2023, IDH has renegotiated the terms

of its contracts with its major suppliers to pay for its

supplies in EGP. Some contracts with major suppliers,

however, are fixed at USD prices, with payments made in

EGP at the official exchange rate at the time of payment.

As such, there have been no USD payments for supplies

since the beginning of 2023. Furthermore, the Company

was able to conclude several agreements with suppli-

ers to set prices at rates lower than devaluation rates,

resulting in an overall increase of raw material propor-

tion to sales to 22.2% in 2023, versus 20.4% in 2022. The

Company plans to continue leveraging its established

reputation and position as a leading diagnostic services

provider in the region to negotiate favourable prices

and mitigate the effects of foreign currency fluctuations

whenever possible.

2023 Annual Report IDH 57

Specific Risk Mitigation

Nigeria: with the election of Bola Ahmed Tinubu as

the winner of the Nigerian elections in February 2023,

the Nigerian Naira was allowed to float. Within the first

day, the Naira lost approximately 29% of its value, with

its long-term value expected to stabilise at NGN 650–700

to the US Dollar (currently at 1,025 in the parallel mar-

ket). Despite this being a necessary and positive move,

analysts believe that more policy reforms are required

to affect tangible economic change in the country,

most of which the president has not yet addressed. As a

result of the devaluation and foreign currency shortages,

Nigerian inflation has maintained an upward trend, with

inflation rates reaching 31.7% in February 2024 and die-

sel prices continuing to soar. Diesel prices stood at NGN

1,270 per litre in February 2024, up from NGN 800 per

litre in February 2023.

In response to the high inflationary pressures in Nigeria,

management is carefully studying avenues of cost reduc-

tion at its operations, while implementing strategic price

increases. In 2023, average revenue per test in Nigeria

rose 32% year-on-year, highlighting the success of man-

agement’s mitigation strategy.

It is worth mentioning that Nigerian operations are natu-

rally shielded from foreign currency risk and inflation,

due to IDH’s asset base in the country that can be sold

in USD.

Country risk — Political and Security

Sudan: Sudan’s economic progress continues to be

affected by economic and political turmoil, starting with

the secession of South Sudan in 2011 and the associated

loss of the majority of the country’s oil production. This

unrest continued throughout the remainder of the decade,

eventually culminating in the removal of the country’s

president, President Al-Bashir, in 2019 via a military coup.

Despite a significant easing of tensions in 2022, a violent

conflict erupted in April 2023 between two rival groups;

the Sudanese Armed Forces (SAF) and the Rapid Support

Forces (RSF). The conflict is currently ongoing and has

resulted in the death of more than 13,000 people, injury of

an additional 33,000, as well as the displacement of 10.7

million as of the end of 2023. The conflict has resulted in

the indefinite closure of 17 of IDH’s branches in the coun-

try, with currently only one operational branch remaining.

Nigeria: the country faces security challenges on several

fronts, including re-emerging ethnic tensions and resur-

gent attacks by Islamist militants in the northeast. Political

instability is further magnified by economic pressures,

with several currency devaluations, the emergence of a

parallel foreign currency market, increased inflation, and

spiking diesel prices following subsidy removal.

It is worth highlighting that in FY 2023, Sudan only con-

stituted 0.3% of consolidated revenues. With regards to

the ongoing conflict, management continues to actively

monitor the evolving situation in the country, taking

necessary steps and prioritising the safety of its person-

nel on the ground and its laboratories. This included

the temporary suspension of all commercial activities

at the start of the conflict at 17 of its 18 branches. IDH is

also taking steps to keep its stakeholders updated on the

developing situation.

In FY 2023, Nigeria comprised just 2.3% of IDH’s con-

solidated revenues. Additionally, while security and

political challenges do affect operations in the country,

IDH’s industry remains largely inelastic, with devel-

opments dealing minimal effects to patient and test

volumes. This is particularly apparent given the consis-

tent growth in operational KPIs, with test and patient

volumes recording a compound annual growth rate of

15% and 5%, respectively, between 2018 and 2023. It is

important to mention, however, that recent economic

downturns in Nigeria have hindered financial and

operational growth, with IDH recording a 12% year-

on-year decline in test volumes in 2023, while booking

expanded adjusted EBITDA losses, reaching NGN 498

million during the year.

58 IDH 2023 Annual Report

Strategic Report | Principal Risks, Uncertainties, & their Mitigation

Specific Risk Mitigation

Economic pressures culminated in a Nigerian Union

strike in September 2023 to protest subsidy removal and

its subsequent effects, with several critics blaming newly

appointed president, Tinubu, of not taking quick enough

actions to cushion the effects of his policies.

While these political challenges are particularly difficult

to mitigate, IDH takes the necessary steps to safeguard

its employees and operations. The Group employs rigor-

ous standards to evaluate the country’s political climate,

ensuring it is well-equipped to deal with any develop-

ments as they unfold.

Israel-Palestine War

The latest escalation of the Israeli-Palestinian conflict

erupted on 7 October 2023 following an attack by Gaza-

based group, Hamas. Israel has since launched a retaliation

campaign on Gaza, enacting a total siege on the territory.

As of the end of February 2024, the conflict has resulted in

the death of 30,000 people and the injury of an additional

70,000.

With the Gaza Strip bordering IDH’s home and largest

market, Egypt, and with several other of the Company’s

geographies situated within the region, namely Jordan and

Saudi Arabia, the continued conflict between Israel and

Palestine creates the potential for significant economic

and political headwinds. The conflict has the potential to

affect tourism revenues in neighbouring countries, while

shaking investor confidence and potentially leading to an

outflow of foreign investment.

Since the beginning of the conflict, Egypt has been

adversely affected due to natural gas import cuts from

Israel, resulting in shortages and necessitating the intro-

duction of scheduled electricity cuts nationwide to cope

with the lack of supply. Meanwhile, tourism has remained

resilient, with the country recording record-high volumes

in 2023 with the expectation of further growth in 2024.

Finally, due to ongoing attacks by Houthi rebels on ships

transiting through the Red Sea, Egypt recorded a decline

of 47% year-on-year in revenues from the Suez Canal in

January 2024 on the back of a 37% decline in ship volumes.

While this specific conflict has no direct mitigations

from the Company’s side, IDH continues to actively

monitor the situation, placing an emphasis on remain-

ing updated on the effects of the war on IDH’s markets

of operation and the subsequent repercussions on IDH’s

business. However, it is worth noting that IDH’s business

is inherently resilient to macroeconomic and political

difficulties due to its inelastic nature of healthcare and

diagnostics demand. While the Company does not

expect any major direct impact from this war on its oper-

ations, it will continue monitoring events and update the

market as necessary.

2023 Annual Report IDH 59

Specific Risk Mitigation

Global supply chain disruptions

While disruptions to global supply chains, which

negatively impacted businesses and consumers all

over the world during the post-Covid-19 recovery, have

partially eased, they remain well below optimal levels

of efficiency. Despite this, global supply chain disrup-

tions have had limited impacts on IDH’s operations

throughout 2022 and 2023.

IDH’s management team continually monitors the

evolving situation and have taken proactive steps to

build up its inventory to shield the Group from any

potential future disruptions. IDH is in continual dia-

logue with key suppliers to gauge the risk associated

with a shortage of materials and is yet to identify a

weakness. Throughout 2023, thanks to IDH’s proactive

inventory build-up and sourcing strategy, the Group

continued to face no problems acquiring raw materials.

Supplier risk

IDH faces the risk of suppliers re-opening price nego-

tiations in the face of increased inflationary pressures

and/or a possible, albeit limited, devaluation risk.

IDH’s supplier risk is concentrated among its three

largest suppliers — Siemens, Roche, and Sysmex – who

provide the Company with kits constituting 46% of the

total value of raw materials in FY 2023 (31% in FY 2022).

IDH enjoys strong, long-standing relationships with its

key suppliers, to whom IDH remains a large regional

client as a leader in its geographies. Due to the sheer

volume of kits the Group purchases on a regular basis,

the Company is able to successfully negotiate favour-

able pricing conditions and mitigate the effects of

inflationary pressures to maintain relatively stable raw

material costs as a percentage of revenues.

Total raw material costs as a percentage of sales stood

at 22.2% in FY 2023, compared to 20.4% one year prior.

This is also up from 18.9% in 2021.

Remittance of dividend regulations and

repatriation of profit risk

The Group’s ability to remit dividends abroad may be

adversely affected by the imposition of remittance

restrictions. Specifically, under Egyptian law, compa-

nies seeking to transfer dividends overseas are required

to obtain necessary government clearance and are

subject to higher taxation on payment of dividends.

Moreover, following the recent devaluation of the EGP,

lack of foreign currency supply in Egyptian banks has

resulted in increased difficulty in sourcing foreign cur-

rency under strict regulation.

As a foreign investor in Egypt, IDH did not face issues

in the repatriation of dividends. However, with the

onset of foreign currency scarcity in early 2022, the

Company faced significant hurdles in sourcing the

USD balance needed to fulfil its dividend obligations.

The Company continues to closely monitor the evolv-

ing economic situation to shield the business from

potential challenges.

60 IDH 2023 Annual Report

Strategic Report | Principal Risks, Uncertainties, & their Mitigation

Specific Risk Mitigation

Legal and regulatory risk to the business

The Group’s business is subject to, and thus affected by,

extensive, rigid, and constantly evolving laws and regu-

lations, in addition to changing enforcement regimes

in each of its operating geographies. Furthermore,

the Group’s position as a major player in the Egyptian

private clinical laboratory market subjects it to antitrust

and competition-related restrictions, as well as the

chance of investigation

The Group’s general counsel and the quality assurance

team work together to keep IDH fully informed of, and

in compliance with, both legislative and regulatory

updates.

On the antitrust front, the private laboratory segment

(of which IDH is part) accounts for only a small propor-

tion of the total market, which consists of small private

labs, private chain labs, and large governmental and

quasi-governmental institutions.

Pricing pressure in a competitive, regulated

environment

The Group may face pricing pressures from several

third-party payers, including national health insur-

ance, syndicates, and other governmental bodies,

which are potentially capable of adversely affecting

Group revenue. Pricing may also be restricted in cases

by recommended or mandatory fees set by government

ministries and other authorities.

The risk may be more apparent in cases of increased

inflationary pressures, particularly following the devalu-

ation of the Egyptian Pound and its subsequent effects.

The Group may face pricing pressure from existing

competitors and new market entrants.

This is an external risk for which there exist few mitigants.

In the case of price competition escalation between mar-

ket players, the Group relies on its wide national footprint

as a mitigant; c. 64% of the Company’s revenues in FY

2023 were generated through IDH’s contract segment,

which prefers IDH’s national network and established

position over patchworks of local players.

IDH enjoys limited ability to influence changes to man-

datory pricing policies set forth by governmental agen-

cies, as with those in Jordan, where basic tests account

for the majority of IDH’s business in that nation, are sub-

ject to price controls. Instead, IDH’s operations in Jordan

are focused on driving volume growth as a catalyst for

expanding revenues.

IDH banks on its strong brand equity in its markets of

operation to enjoy a solid positioning. As such, IDH is

a price maker, especially in Egypt where the Group cur-

rently controls the largest network of branches among

all private sector players. Furthermore, the Group faces

no potential risk of governmental price regulations in its

home and largest market, Egypt, which constituted 83%

of rev

enues in 2023.

2023 Annual Report IDH 61

Specific Risk Mitigation

Cybersecurity risks

IDH controls a vast and growing database of confidential

data for its patient records; to this end, there is a cyberse-

curity risk for both data confidentiality and security.

In July 2023, the Company reported a cybersecurity

incident after detecting unauthorised activity on its

servers.

The Company places top priority on its data security,

regularly conducting stress tests of its IT infrastructure

to confirm the effectiveness of its internal controls.

Additionally, its cybersecurity controls and protocols

are regularly updated to address potential shortcomings

and remain up-to-date and in full adherence with data

security regulations in its markets.

In response to the reported breach, immediate steps

were taken to evaluate and contain the incident, launch

an incident response plan, and engage specialist sup-

port services. While the incident did not involve patient

data nor directly impact IDH’s operations, all appropri-

ate regulatory authorities were informed of the inci-

dent, and the Company continues to conduct regular

tests of its systems to ensure their security, prioritising

the security of its patients’ data.

Business continuity risks

Management concentration risk: IDH is dependent

on a highly experienced management team boasting

decades of experience in their respective fields. The

loss of key members of IDH’s team could materially

affect the Company’s operations and business.

Effective 30 June 2023 Omar Bedewy stepped down as

IDH's CFO. The position of CFO was filled on an interim

basis by the Financial Controller for six months until

the appointment of Sherif El Zeiny in January 2024.

Business interruption: virtually, all aspects of the

Group’s business use IT systems extensively. This

includes test and exam results reporting, billing, cus-

tomer service, logistics, and management of medical

data. Similarly, business interruption at one of the

Group’s larger facilities could result in significant mate-

rial losses and reputational damage to IDH’s business.

This could be a result of natural disasters, fire, riots, or

extended power failures. The Group, therefore, depends

on the continued and uninterrupted performance of its

systems.

IDH comprehends the importance of strengthening its

human capital to support its future growth plans. The

Company is therefore committed to expanding its senior

management team, under the experienced leadership

of its CEO, Dr. Hend El Sherbini, to add and maintain

the talent needed for the expansion of its footprint. The

Group has constituted an Executive Committee, led by

Dr. El Sherbini, and composed of head of departments.

The Executive Committee meets every second week.

Following the departure of Mr. Bedewy, IDH's Regional

Financial Controller stepped in as Interim CFO until Mr.

El Zeiny took on the role on a permanent basis. During

the transitional period, IDH’s management team, led by

Dr. Hend El Sherbini, prioritised the smooth continua-

tion of all business operations and ensured an effective

handover to the new CFO.

The Group has in place a full disaster recovery plan,

with procedures and provisions for spares, redundant

power systems, and the use of mobile data systems as

alternatives to landlines, among multiple other factors.

To ensure its readiness, IDH performs disaster recovery

plan tests on a regular basis, with updates and internal

and external audits.

In Egypt and Jordan, to mitigate the impact of potential

branch closures on operations, the Group has been ramp-

ing up its house call services. Moreover, the Group’s impor-

tant role in conducting PCR testing for Covid-19 in both

Egypt and Jordan makes it unlikely that branches would be

closed, even if new restrictive measures were introduced.

62 IDH 2023 Annual Report

Strategic Report | Principal Risks, Uncertainties, & their Mitigation

Specific Risk Mitigation

Climate-related risks

IDH’s operations currently face low physical and transi-

tional risks related to climate change.

In 2022, the Company decided to begin reporting based

on the Task Force on Climate-Related Financial Disclo-

sures (TCFD) programme to provide stakeholders with

a clear framework to access its climate-related risks and

opportunities. Despite this, overall risks and opportuni-

ties related to climate change are considered immate-

rial, specifically in the short to medium term. For TCFD

disclosures related to 2023, please refer to pages 80 to 86

of this report.

2023 Annual Report IDH 63

EGP 4.1 BN

Revenue in 2023

EGP 1.2 BN

Adjusted EBITDA in 2023

PERFORMANCE

EGP 468 MN

Net Profit in 2023

64 IDH 2023 Annual Report

2023 Annual Report IDH 65

Financial & Operational Review

EGP mn FY 2022 FY 2023 Change

Revenues 3,605 4,123 14%

Conventional Revenues 2,903 4,123 42%

Covid-19-Related Revenues

702 - -100%

Cost of Sales (2,143) (2,598) 21%

Gross Profit 1,462 1,524 4%

Gross Profit Margin 41% 37% -4 pts

Operating Profit 832 738 -11%

Adjusted EBITDA

1,172 1,192 2%

Adjusted EBITDA Margin 33% 29% -4 pts

Net Profit 527 468 -11%

Net Profit Margin 15% 11% -3 pts

Cash Balance

816 835 2%

Note (1): Throughout the document, percentage changes between reporting periods are calculated using the exact value (as per the Consolidated Financials)

and not the corresponding rounded figure.

Financial Results (IFRS)

Revenue and Cost Analysis

Consolidated Revenue

In 2023, IDH recorded consolidated revenues of

EGP 4,123 million, up 14% year-on-year. Total

revenue growth was supported primarily by higher

test volumes, which rose 10% year-on-year, as well

as by increased average revenue per test, which

booked a 4% year-on-year increase. The year-on-

year growth is especially notable when consider-

ing the contribution of EGP 702

million made by

Covid-19-related

testing during FY 2022. Excluding

Covid-19 contributions, IDH booked conventional

revenue growth of 42% year-on-year, up from EGP

2,903 million in FY 2022. IDH’s FY 2023 conventional

results were boosted by an impressive performance

in the second half of the year, as business across its

two largest markets of Egypt and Jordan recorded a

strong acceleration beginning in May 2023.

Starting Q1 2023, IDH has opted to stop reporting on its Covid-19-related revenues and test volumes due to their material insignificance to the

consolidated figures and to Egypt’s and Jordan’s country-level results. During last year (FY 2022), IDH had recorded EGP 702 million in Covid-19-related

revenues and had performed 1.7 million Covid-19-related tests.

Adjusted EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically an EGP 11.9

million one-off expense owed to the Egyptian government for vocational training, EGP 18.2 million in pre-operating expenses in Saudi Arabia, EGP 5.0

million impairment expense in Sudan due to the ongoing situation in the country, and an EGP 18.0 million impairment expense in goodwill and assets in

Nigeria.

Cash balance includes time deposits, treasury bills, current accounts, and cash on hand.

Covid-19-related revenue in FY 2022 includes EGP 63 million in concession fees paid by Biolab to Queen Alia International Airport and Aqaba Port as

part of its revenue sharing agreement.

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.

Conventional (non-Covid) tests include IDH’s full service offering, excluding Covid-19 related tests.

66 IDH 2023 Annual Report

Performance

Contract Segment (64% of Group revenue in 2023)

At the contract segment, consolidated revenues grew 26%

year-on-year, driven by higher test volumes and average

revenue per test. During the year, the contract segment’s

average number of tests per patient posted a record high

4.4, a result of both the normalisation of patient mix follow-

ing the Covid-19 pandemic, as well as the continued suc-

cess of IDH’s loyalty programme, which was introduced

in FY 2021. Meanwhile, conventional revenues at IDH’s

contract segment booked EGP 2,627 million in FY 2023, a

robust 47% year-on-year growth driven by 21% growth in

test volumes and a 22% increase in average revenues per

conventional test at the segment, respectively.

Walk-in Segment (36% of Group revenue in 2023)

In parallel, at the walk-in segment, consolidated rev-

enues declined a marginal 2% during FY 2023, record-

ing EGP 1,495 million, down from EGP 1,519 million in

Revenue Analysis

FY 2022 FY 2023 Change

Total Revenue (EGP mn) 3,605 4,123 14%

Conventional Revenue (EGP mn) 2,903 4,123 42%

Total Covid-19-Related Revenue (EGP mn) 702 - -100%

Contribution to Consolidated Results

Conventional Revenue 81% 100%

Total Covid-19-Related Net Sales 19% -

Test Volume Analysis

FY 2022 FY 2023 Change

Total Tests (mn) 32.7 36.1 10%

Conventional Tests Performed (mn) 31.0 36.1 17%

Total Covid-19-Related Tests Performed (mn) 1.7 - -100%

Contribution to Consolidated Results

Conventional Tests Performed 95% 100%

Total Covid-19-Related Tests Performed 5% -

Revenue per Test Analysis

FY 2022 FY 2023 Change

Total Revenue Per Test (EGP) 110 114 4%

Conventional Revenue Per Test (EGP) 94 114 22%

Covid-19-Related Revenue Per Test (EGP) 413 - -100%

Revenue Analysis: Contribution by Patient Segment

2023 Annual Report IDH 67

the previous year when Covid-19-related testing had

boosted results. Similar to the contract segment, aver-

age tests per patient grew 28% year-on-year to book 3.6

tests during FY 2023, setting another record high for the

Company. Conventional revenue at the walk-in segment

recorded EGP 1,495 million in FY 2023, increasing 34%

year-on-year. Conventional revenue growth at the seg-

ment was supported by a 33% year-on-year increase in

average revenue per test, while test volumes remained

unchanged compared to the previous year.

Detailed Segment Performance Breakdown

Walk-in Segment Contract Segment Total

FY22 FY23 Change FY22 FY23 Change FY22 FY23 Change

Revenue (EGP mn) 1,519 1,495 -2% 2,086 2,627 26% 3,605 4,123 14%

Conventional Revenue (EGP mn) 1,119 1,495 34% 1,784 2,627 47% 2,903 4,123 42%

Total Covid-19-Related Revenue

(EGP mn)

400 - -100% 302 - -100% 702 - -100%

Patients ('000) 2,592 1,788 -31% 6,129 6,724 10% 8,721 8,512 -2%

% of Patients 30% 21% 70% 79%

Revenue per Patient (EGP) 586 836 43% 340 391 15% 413 484 17%

Tests (‘000) 7,313 6,473 -11% 25,372 29,629 17% 32,685 36,102 10%

% of Tests 22% 18% 78% 82%

Conventional Tests (‘000) 6,462 6,473 0.2% 24,523 29,629 21% 30,985 36,102 17%

Total Covid-19-related tests (‘000) 851 - -100% 849 - -100% 1,700 - -100%

Revenue per Test (EGP) 208 231 11% 82 89 8% 110 114 4%

Conventional Revenue per Test

(EGP)

173 231 33% 73 89 22% 94 114 22%

Test per Patient 2.8 3.6 28% 4.1

4.4 6% 3.7 4.2 13%

Revenue Analysis: Contribution by Geography

Egypt (82.7% of Group revenue in 2023)

IDH’s home and largest market, Egypt, maintained the

robust performance seen starting in May 2023, record-

ing sustained top-line growth in the fourth quarter of

the year to close out FY 2023 with consolidated revenue

of EGP 3,411 million, up 18% year-on-year. Excluding

the significant contributions made by Covid-19-related

testing in FY 2022 (16% of Egypt’s revenue in FY 2022),

conventional revenue growth was even more impressive

at 40% for the year, boosted by an 18% increases both in

test volumes and average revenue per conventional test.

Al Borg Scan

IDH’s fast-growing radiology venture continued to

post impressive results throughout the second half of

the year, with revenues reaching EGP 155 million in

FY 2023, representing an 82% year-on-year increase.

Top-line expansion during the year was primarily due

to higher scan volumes, which rose 43% year-on-year

in FY 2023, partially due to the ramp up of opera-

tions at the venture’s newest branches. Additionally,

average revenue per scan increased 27% year-on-

year, reaching EGP 717, and further contributing to

revenue expansion. In September 2023, Al Borg Scan

inaugurated its seventh branch, located in Cairo’s

Nasr City neighbourhood. The launch of this latest

branch is directly in line with the Company’s long-

term strategy of expanding its presence in Greater

Cairo and cementing its position as a leader in the

country’s highly fragmented radiology market.

68 IDH 2023 Annual Report

Performance | Financial and Operational Review

House Calls

In the year ended 31 December 2023, IDH’s house

call service in Egypt continued to make a robust

contribution of 16% to total revenues in the country.

This remains significantly ahead of the service’s pre-

pandemic contribution, highlighting not only the

segment’s growth potential but also the effectiveness

of IDH’s investment and ramp up strategy, specifically

throughout the Covid-19 pandemic.

Wayak

During FY 2023, Wayak completed 177,000 orders,

representing a 33% year-on-year increase. On the

profitability front, the venture’s EBITDA losses con-

tinued to narrow steadily, recording EGP 28,000 in

FY 2023 versus the EGP 3.8 million in EBITDA losses

booked in FY 2022.

Detailed Egypt Performance Breakdown

EGP mn FY 2022 FY 2023 Change

Total Revenue 2,894 3,411 18%

Conventional Revenue 2,444 3,411 40%

Pathology Revenue 2,358 3,256 38%

Radiology Revenue 86 155 82%

Total Covid-19-related Revenue 450 - -100%

Contribution to Egypt Results

Conventional revenue 84% 100%

Pathology Revenue 82% 95%

Radiology Revenue 3% 5%

Total Covid-19-related revenue 16%

Jordan (14.7% of Group revenue in 2023)

In IDH’s second largest market, Jordan, IDH booked

consolidated revenue of JOD 14 million in FY 2023,

42% below last year’s figure (down 1% year-on-year

in EGP terms). The significant year-on-year decline

is wholly attributable to the high base effect resulting

from Covid-19-related testing in FY 2022, which had

significantly boosted last year’s consolidated top line.

Excluding this contribution, conventional revenues

recorded an 8% year-on-year expansion, supported

by an 8% rise in conventional test volumes. In EGP

terms, conventional revenues grew 68%, reaching

EGP 604 million in FY 2023. Jordanian growth in EGP

terms includes the significant impact from the trans-

lation effect due to multiple devaluations of the EGP

between comparable periods.

Detailed Jordan Performance Breakdown

EGP mn FY 2022 FY 2023 Change

Total Revenue 612 604 -1%

Conventional Revenue 359 604 68%

Total Covid-19-Related Revenues (PCR and Antibody) 253 - -100%

Contribution to Jordan Results

Conventional Revenue 59% 100%

Total Covid-19-Related Revenue (PCR and Antibody) 41% -

2023 Annual Report IDH 69

Revenue Contribution by Country

FY 2022 FY 2023 Change

Egypt Revenue (EGP mn) 2,894 3,411 18%

Conventional (EGP mn) 2,444 3,411 40%

Pathology Revenue (EGP mn) 2,358 3,256 38%

Radiology Revenue (EGP mn) 86 155 82%

Covid-19-related (EGP mn) 450 - -100%

Egypt Contribution to IDH Revenue 80.3% 82.7%

Jordan Revenue (EGP mn) 612 604 -1%

Conventional (EGP mn) 359 604 68%

Covid-19-related (EGP mn) 253 - -100%

Jordan Revenues (JOD mn) 23.9 14.0 -42%

Conventional (JOD mn) 12.9 14.0 8%

Jordan Revenue Contribution to IDH Revenue 17.0% 14.7%

Nigeria Revenue (EGP mn) 79 96 22%

Nigeria Revenue (NGN mn) 1,698 1,961 15%

Nigeria Contribution to IDH Revenue 2.2% 2.3%

Sudan Revenue (EGP mn) 20.3 11.4 -44%

Sudan Revenue (SDG mn) 547 220 -60%

Sudan Contribution to IDH Revenue 0.6% 0.3%

Average Exchange Rate

FY 2022 FY 2023 Change

USD/EGP 19.7 30.8 56.3%

JOD/EGP 27.7 43.1 55.6%

NGN/EGP 0.05 0.05 8.1%

SDG/EGP 0.04 0.05 38.7%

Nigeria (2.3% of Group revenue in 2023)

IDH’s Nigerian subsidiary, Echo-Lab, maintained the

growth momentum seen throughout the year, reporting

revenue growth of 15% in local currency terms and reach-

ing NGN 1,961 million in FY 2023. In EGP terms, Nigerian

operations booked top-line growth of 22% year-on-year,

with revenues coming in at EGP 96 million. Revenue

growth for the period was driven by 32% and 39% year-

on-year increases in average revenue per test in NGN and

EGP terms, respectively, as the Company continued to

implement strategic price hikes in response to inflation-

ary pressures in the country. It is also worth mentioning

that average revenue per test increases in EGP terms also

partially reflected the translation effect due to a weakened

EGP. Revenue growth for the year was achieved despite a

12% year-on-year decrease in test volumes, which stood

at 266,000 tests during FY 2023.

Sudan (0.3% of Group revenue in FY 2023)

Ongoing conflict in Sudan has significantly affected IDH’s

operations in the country, leading to the closure of 17 of

the Company’s 18 branches in the country since April

2023. During FY 2023, Sudanese operations booked rev-

enues of SDG 220 million, down 60% year-on-year com-

pared to FY 2022. In EGP terms, revenues stood at EGP

11 million, a 44% year-on-year decrease. IDH continues

to closely monitor the evolving situation, updating the

market with material developments as necessary.

70 IDH 2023 Annual Report

Performance | Financial and Operational Review

Patients Served and Tests Performed by Country

FY 2022 FY 2023 Change

Egypt Patients Served (mn) 7.6 8.0 5%

Egypt Tests Performed (mn) 29.5 33.4 13%

Conventional Tests (mn) 28.3 33.4 18%

Covid-19-Related Tests (mn) 1.2 - -100%

Jordan Patients Served (k) 890 372 -58%

Jordan Tests Performed (k) 2,789 2,424 -13%

Conventional Tests (k) 2,243 2,424 8%

Covid-19-Related Tests (k) 546 - -100%

Nigeria Patients Served (k) 149 132 -11%

Nigeria Tests Performed (k) 303 266 -12%

Sudan Patients Served (k) 70 14 -80%

Sudan Tests Performed (k) 139 40 -71%

Total Patients Served (mn) 8.7 8.5 -2%

Total Tests Performed (mn) 32.7 36.1 10%

Branches by Country

31 December 2022 31 December 2023 Change

Egypt 500 544 44

Jordan 23 27 4

Nigeria 12 12 -

Sudan 17 18 1

Total Branches 552 601 49

2023 Annual Report IDH 71

Cost of Goods Sold

IDH reported cost of goods sold amounting to EGP

2,598 million during FY 2023, a 21% year-on-year

increase compared to the previous year. As a share of

revenue, cost of goods sold recorded 63% during the

year, up from 59% one year prior. The increase in cost

of goods sold during the period was primarily driven

by higher raw material costs, increased direct salaries

and wages, and higher depreciation expenses.

Cost of Goods Sold Breakdown as a Percentage of Revenue

FY 2022 FY 2023

Raw Materials 20.4% 22.2%

Wages and Salaries 17.0% 18.8%

Depreciation and Amortisation 7.9% 8.8%

Other Expenses 14.2% 13.3%

Total 59.4% 63.0%

Direct Wages and Salaries by Region

FY 2022 FY 2023 Change

Egypt (EGP mn) 475 589 24%

Jordan (EGP mn) 116 155 33%

Jordan (JOD mn) 4.3 3.6 -16%

Nigeria (EGP mn) 18 27 49%

Nigeria (NGN mn) 392 576 47%

Sudan (EGP mn) 4 3 -33%

Sudan (SDG mn) 111 53 -52%

Raw material costs (35% of consolidated cost of goods

sold in FY 2023) continued to be the largest contributor

to cost of goods sold throughout FY 2023, recording EGP

914 million and expanding 24% year-on-year. During the

year, raw materials constituted 22% of revenues, up from

20% in FY 2022. Additionally, the Company recorded a

one-off expense of EGP 17.4 million related to the expiry

of Covid-19-related test kits, which also served to increase

raw material costs during the year.

Wages and salaries, including employee share of

profits (30% share of consolidated cost of goods

sold), remained the second largest contributor to cost

Direct depreciation and amortization costs (14% of

consolidated cost of goods sold) grew 27% year-on-

year in FY 2023, booking EGP 362 million. Increased

depreciation and amortization costs during the year

of goods sold during the year, increasing 26% year-

on-year to reach EGP 774 million. Higher wages and

salaries continued to reflect higher than usual salary

adjustments to compensate for unprecedented infla-

tion at the Group’s largest market, Egypt. Additionally,

direct wages and salaries were further inflated due to

the hiring of new staff across IDH’s network to sup-

port the roll-out of new branches, 49 of which were

launched during FY 2023. Finally, it is important to

highlight that the translation effect from salaries in

both Jordan and Nigeria continued to expand direct

wage and salaries expenses, reflecting the weakening

of the EGP throughout the year.

primarily reflect the roll-out of 49 additional branches

to IDH’s network, including the launch of Al Borg

Scan’s seventh radiology branch in September.

72 IDH 2023 Annual Report

Performance | Financial and Operational Review

Selling, General, and Administrative Expenses

FY 2022 FY 2023 Change

Wages and Salaries 197 282 43%

Accounting and Professional Services Fees 130 134 3%

Market – Advertisement Expenses 123 98 -21%

Other Expenses – Operation 112 143 28%

Depreciation and Amortisation 33 39 20%

Impairment Loss on Trade and Other Receivable 30 51 71%

Travelling and Transportation Expenses 17 27 62%

Impairment in Assets 2 7 266%

Impairment in Goodwill - 11 -

Provision for End of Service - - -

Provision for Legal Claims 4 3 -11%

Provision for Egyptian Government Training Fund for Employees - 12 -

Other income (18) (20) 16%

Total 630 787 25%

Other expenses (21% of consolidated cost of goods

sold) reached EGP 548 million during the year, increasing

23% year-on-year and constituting 13% of consolidated

revenues for the year. It is worth noting that the increase

in other expenses excludes EGP 63 million paid in con-

cession fees as part of Biolab’s agreement with Queen Alia

International Airport and Aqaba Port to provide Covid-19

testing to passengers in January and February of 2022.

When including these fees, IDH recorded an increase

in other expenses amounting to 7% year-on-year. The

increase in other expenses is mainly attributable to

higher repair and maintenance costs, cleaning expenses,

transportation expenses, and consulting fees, which con-

tinue to reflect both the effects of the devaluated Egyptian

Pound and higher costs associated with the expansion

of Al Borg Scan’s operations. Additionally, increased

gasoline prices, as well as repair and maintenance costs

in Nigeria, coupled with a persistent inflationary environ-

ment and a weaker Naira (versus the USD), continued to

push up total costs in the country.

Gross Profit

IDH recorded a gross profit of EGP 1,524 million in FY

2023, an increase of 4% year-on-year. The Company’s

gross profit margin stood at 37%, four percentage

points below the previous year due to the aforemen-

tioned increases in cost of goods sold during the year.

Selling, General, and Administrative

(SG&A) Expenses

SG&A outlays during FY 2023 stood at EGP 787 million,

growing 25% year-on-year. As a share of revenues, SG&A

outlays constituted 19% in FY 2023, up from 17% one year

prior. Higher SG&A expenses are mainly attributable to:

• Increased indirect wages and salaries, which came in at

EGP 273 million, a 38% year-on-year increase. During

FY 2023, indirect wages and salaries constituted 7%

of revenues, up from 5% one year prior. This increase

was driven by USD-denominated directors’ compen-

sations, the addition of a new board member during

the first quarter of the previous year (who received

compensation starting March 2022), higher salaries in

Jordan due to the translation effect, and an increase

in social security expenses. Increased social security

expenses (up by EGP 15.5 million year-on-year) also

weighed on indirect wages and salaries for FY 2023.

• Higher other expenses, which increased 26% year-

on-year. The increase in other expenses was mainly

driven by higher USD-denominated consulting and

accounting fees at the holding level.

• Non-recurring expenses, including a non-recurring

expense paid for the government’s vocational train-

ing fund, pre-operating expenses in Saudi Arabia,

a one-off expense in Sudan, and an impairment in

goodwill and assets in Nigeria, which amounted to

EGP 53 million in FY 2023.

2023 Annual Report IDH 73

Adjusted EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically an EGP 11.9 million

one-off expense owed to the Egyptian government for vocational training, EGP 18.2 million in pre-operating expenses in Saudi Arabia, EGP 5.0 million

impairment expense in Sudan due to the ongoing situation in the country, and an EGP 18.0 million impairment expense in goodwill and assets in Nigeria.

Adjusted EBITDA

Due to the nature of several non-recurring expenses

affecting IDH’s EBITDA-level profitability, the Com-

pany has elected to present an adjusted EBITDA

figure, along with its associated margin. Adjusted

EBITDA excludes several one-off expenses that weigh

down profitability. Namely, these expenses are an

EGP 11.9 million one-off expense owed to the Egyp-

tian government for vocational training (covering

the past five-year period), pre-operating expenses

in preparation for the launch of operations in Saudi

Arabia amounting to EGP 18.2 million, EGP 5.0 mil-

lion in impairment expenses in Sudan due to the

ongoing conflict in the country, and EGP 18.0 million

in impairment expenses in goodwill and assets in

Nigeria.

In FY 2023, the Company booked an adjusted

EBITDA

of EGP 1,192 million, increasing 2% year-

on-year and reflecting cost normalisation compared

to the previous year. Meanwhile, adjusted EBITDA

margin recorded 29%, four points below FY 2022 due

to higher SG&A outlays as discussed previously. It is

worth mentioning that adjusted EBITDA is adjusted

for several non-recurring expenses, including an

EGP 12 million non-recurring expense for a provi-

sion of 1% of Egyptian profits, in accordance with

article 134 of the labour law on Vocational Guidance

and Training issued by the Egyptian government in

2003. In accordance with the law, IDH’s Egyptian

operations are required to provide 1% of net profits

each year into a training fund. Integrated Diagnos-

tics Holdings plc has taken legal advice and consid-

ered market practices in Egypt relating to the law,

and more specifically, whether vocational training

courses undertaken by the Company’s Egyptian sub-

sidiaries suggest that obligations have been satisfied

by in-house training programmes provided by those

entities. Since the issuance of the law, IDH’s Egyp-

tian subsidiaries have not been requested by the

government to pay, nor have they voluntarily paid,

any amounts into the external training fund.

Adjusted EBITDA by Country

In Egypt, IDH booked an adjusted EBITDA of EGP

1,058 million, a 1% year-on-year increase compared

to FY 2022. Adjusted EBITDA margin recorded 31%,

a five-point year-on-year decrease. Lower adjusted

EBITDA profitability reflects higher SG&A outlays,

which increased 18% year-on-year and weighed

down on profitability during the year.

IDH’s Jordanian subsidiary, Biolab, posted an

adjusted EBITDA of JOD 3.6 million, down 34% year-

on-year in FY 2023 and yielding an adjusted EBITDA

margin of 26% (versus 23% in FY 2022). In EGP terms,

adjusted EBITDA came to EGP 157 million, up 16%

from FY 2022. The increase in adjusted EBITDA in

EGP terms is due to the translation effect following

the devaluation of the EGP in late FY 2022 and early

FY 2023. In Q4 2023, adjusted EBITDA recorded JOD

0.8 million in Q4 2023, nearly doubling the JOD 0.4

million booked in the comparable period of last year.

The Company’s adjusted EBITDA margin came in at

25%, up from 12% in Q4 2022. In EGP terms, Biolab

booked adjusted EBITDA of EGP 34 million, up from

EGP 14 million in Q4 2022.

In Nigeria, increasing inflationary pressures and an

expanded cost base resulted in widening adjusted

EBITDA losses, despite revenue growth throughout

the year. More specifically, adjusted EBITDA losses

expanded to NGN 498 million in FY 2023, from NGN

337 million in the previous year. During Q4 2023,

the Company booked an adjusted EBITDA loss of

NGN 204 million, down from NGN 215 million dur-

ing Q4 2022. In EGP terms, adjusted EBITDA losses

narrowed to EGP 7 million in Q4 2023, from EGP

12 million in the same period of the previous year,

partially reflecting the translation effect following

the weakening of the EGP.

In Sudan, adjusted EBITDA came in at SDG 21 million,

up from an EBITDA loss of SDG 2 million in FY 2022.

74 IDH 2023 Annual Report

Performance | Financial and Operational Review

Interest expenses on medium-term loans include EGP 23 million related to the Group’s facility with Ahli United Bank Egypt (AUBE).

Interest expenses on medium-term loans include EGP 23 million related to the Group’s facility with Ahli United Bank Egypt (AUBE). Meanwhile, the

Group’s facility with the Commercial International Bank (CIB) was fully repaid as of 5 April 2022.

Loan-related expenses on IFC facility represents commitment fees on the facility granted by IFC and Mashreq with a total value of USD 60 million. The

facility was cancelled in May 2023.

As announced on 27 July 2022, as part of IDH’s agreement with Hena Holdings Ltd and Actis IDH Limited (its two largest shareholders) in consideration

for the two shareholders agreeing to defer their right to receive their pro rata share of the Dividend Payment, IDH agreed to pay to each interest on the

outstanding amounts due at the rate of 10% per annum (with interest accruing on a daily basis) for a two-month period starting 27 July 2022. Payment to

both shareholders was successfully completed on 18 August 2022.

Interest Income / Expense

IDH’s interest income reached EGP 73 million during FY

2023, down from EGP 95 million during the previous year.

Lower interest income for the year was primarily a result

of lower cash balances due to the distribution of a record

cash dividend during last year.

Interest expense

stood at EGP 161 million, up 19%

year-on-year in FY 2023. Increasing interest expenses are

mainly due to:

• Higher interest on lease liabilities related to IFRS 16 due

to the addition of new branches to IDH’s network.

• Higher interest expenses following the CBE's decision

to increase rates by 1,100 bps since March 2022. It is

important to note that IDH’s interest bearing debt bal-

ance decreased to EGP 111 million as at 31 December

Regional EBITDA in Local Currency

FY 2022 FY 2023 Change

Egypt EBITDA EGP 1,031 1,046 1%

Margin 36% 31%

Egypt Adjusted EBITDA EGP 1,053 1,058 1%

Margin 36% 31%

Jordan EBITDA JOD 5.5 3.6 -34%

Margin 23% 26%

Nigeria EBITDA NGN (337) (1,023) 203%

Margin -20% -52%

Nigeria Adjusted EBITDA NGN (337) (498) 48%

Margin -20% -25%

Sudan EBITDA SDG (2) (76) -

Margin -0.3% -35%

Sudan Adjusted EBITDA SDG (2) 21 n/a

Margin -0.3% 10%

Interest Expense Breakdown

FY 2022 FY 2023 Change

Interest on Lease Liabilities (IFRS 16) 73.4 93.3 27%

Interest Expenses on Leases 21.4 25.5 19%

Interest Expenses on Borrowings

11.9 22.9 92%

Bank Charges 12.9 12.2 -6%

Loan-related Expenses on IFC facility

12.5 - -100%

Shareholder Dividend Deferral Agreement

3.4 - -100%

Fast Track Payment - 7.1 -

Total Interest Expense 135.5 161.0 19%

2023 from EGP 116 million at year-end 2022. Earlier in

the year, as part of IDH’s strategy to reduce foreign cur-

rency risk, the Company agreed with General Electric

(GE) for the early repayment of its contractual obliga-

tion of USD 5.7 million. To finance the settlement, IDH

utilised a bridge loan facility, with half the amount being

funded internally, while the other half (amounting to

EGP 55 million) was provided through a bridge loan

by Ahli United Bank – Egypt (AUBE). Interest expenses

related to the AUBE facility recorded EGP 23 million in

FY 2023. The bridge loan was fully settled in Q2 2023.

• Fast-track payments worth EGP 7.1 million, which

encompass discounts provided for the rapid payment

of receivables in FY 2023.

Foreign Exchange

IDH booked an EGP 88 million foreign exchange

gain in FY 2023, down 53% year-on-year and partially

reflecting intercompany balances revaluation.

Taxation

Tax expenses, which include both income and deferred

tax, recorded EGP 269 million in FY 2023, down 18%

Net Profit

IDH reported a net profit of EGP 468 million during FY

2023, down 11% year-on-year and yielding a net profit

margin of 11%. Lower net profitability for the year came

as a result of lower EBITDA profitability, coupled with

previously discussed decreases in interest income,

higher interest expenses, and several non-recurring

expenses.

Non-Recurring Expenses

IDH recorded several one-off expenses during the year,

namely:

• EGP 11.9 million for the provision of 1% of Egyptian

profits towards the Government Training Fund.

• EGP 18.2 million due to pre-operating expenses in

Saudi Arabia.

• EGP 5.0 million in impairment expenses due to the

ongoing conflict in Sudan.

• EGP 18.0 million in impairment expenses in good-

will and assets for operations in Nigeria.

Taxation Breakdown by Region

EGP Mn FY 2022 FY 2023 Change

Egypt 274.3 251.6 -8%

Jordan 21.8 17.1 -22%

Nigeria 30.6 -0.1 -100.3%

Sudan 0.4 0.5 24%

Total Tax Expenses 327.1 269.0 -18%

year-on-year from FY 2022. IDH’s effective tax rate

stood at 36%, two points below that of the previous year.

It is important to highlight that there is no tax payable

for IDH’s two holding-level companies. Meanwhile,

tax was paid from the Group’s operating subsidiaries

(Egypt 32%, Jordan 34%, Nigeria 0.2%).

Balance Sheet Analysis

Assets

Property, Plant, and Equipment

As of year-end 2023, IDH recorded property, plant, and

equipment (PPE) cost of EGP 2,554 million, increas-

ing from EGP 2,208 million at 31 December 2022.

The increase in CAPEX as a share of revenues during

FY 2023 was primarily driven by the addition of new

branches, renovations of existing branches, and head-

quarter improvements (constituting 7.1% of revenues),

as well as the translation effect related to Jordan,

Sudan, and Nigeria (constituting 0.3% of revenues).

76 IDH 2023 Annual Report

Performance | Financial and Operational Review

Accounts Receivable and Provisions

Accounts receivable as at year-end 2023 came in at EGP

570 million, a year-on-year increase of 44%. In parallel,

IDH’s receivables’ Days on Hand (DoH) recorded 134

days, up from 124 days as at 31 December 2022.

Provision for doubtful accounts recorded EGP 51

million in FY 2023, up 71% year-on-year. Increased

provisions for doubtful accounts reflect slower col-

lection rates due to increasing economic headwinds

and persistent inflation throughout IDH’s markets, in

particular its home and largest market, Egypt.

Total CAPEX Addition Breakdown – FY 2023

EGP Mn EGP mn % of Revenue

Leasehold Improvements/New Branches 202.7 4.9%

Al Borg Scan Expansion 92.0 2.2%

Total CAPEX Additions Excluding Translation 294.7 7.1%

Translation Effect 13.5 0.3%

Total CAPEX Additions 308.2 7.5%

Cash Breakdown

EGP Mn 31 Dec 2022 31 Dec 2023

Treasury Bills 293 133

Time Deposits 123 289

Current Accounts 382 392

Cash on Hand 18 21

Total 816 835

IDH’s net debt

balance came in at EGP 358 million as of the end of FY 2023, down 4% from EGP 373 million as at

year-end 2022.

EGP Mn 31 Dec 2022 31 Dec 2023

Cash and Financial Assets at Amortised Cost

816 835

Lease Liabilities Property (727) (828)

Total Financial Liabilities (Short-Term and Long-Term) (335) (240)

Interest Bearing Debt (Medium-Term Loans) (127) (125)

Net Debt Balance (373) (358)

Note: Interest Bearing Debt includes accrued interest for each period.

Inventory

IDH booked an inventory balance of EGP 375 million

as of the end of FY 2023, increasing from EGP 265

million one year prior. Meanwhile, Days Inventory

Outstanding (DIO) increased to 133 days, from 127

days at year-end 2022. Increased DIO is attributable to

management’s strategy of accumulating inventory to

hedge against inflation during the past year.

Cash and Net Debt

Cash balances and financial assets at amortised costs

at the end of FY 2023 reached EGP 835 million, up from

EGP 816 million at year-end 2022

The net debt balance is calculated as cash and cash equivalent balances, including financial assets at amortised cost, less interest-bearing debt (medium-

term loans), finance lease, and right-of-use liabilities.

As outlined in Note 18 of IDH’s Consolidated Financial Statements, some term deposits and treasury bills cannot be accessed for over three months and

are therefore not treated as cash. Term deposits, which cannot be accessed for over three months, stood at EGP 49 million at December 2023 (2022: EGP 60

million). Meanwhile, treasury bills not accessible for over three months stood at EGP 112 million at December 2023 (2022: EGP 107 million).

2023 Annual Report IDH

Lease liabilities and financial obligations on property

came in at EGP 828 million at year-end 2023, with the

increase primarily driven by the roll-out of an addi-

tional 49 branches over the past year.

Meanwhile, financial obligations related to equipment

stood at EGP 240 million as at the end of 2023, with

the decline attributable to IDH’s early repayment of its

obligations with General Electric (GE), in line with the

Company’s efforts to hedge against foreign currency

risk. Half of this settlement was financed internally,

while the remainder was financed through a bridge

loan facility from AUBE.

Finally, interest bearing debt

(excluding accrued

interest) reached EGP 111 million at year-end 2023,

down from EGP 116 million one year prior.

Liabilities

Accounts Payable

Accounts payable as at 31 December 2023 stood at

EGP 272 million, up from EGP 270 as at year-end 2022.

Meanwhile, Days Payable Outstanding (DPO) came in

at 113 days, down from 151 days one year earlier.

Put Option

The put option current liability stood at EGP 314 mil-

lion as at year-end 2023, down from EGP 440 million at

31 December 2022, and is related to:

• The option granted in 2011 to Dr. Amid, Biolab’s

CEO, to sell his stake (40%) to IDH. The put option

has been in the money and exercisable since 2016

and is calculated as seven times Biolab’s LTM

EBITDA minus net debt. Biolab’s put option liability

decreased following the significant decline in the

venture’s EBITDA for the period.

• The 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).

The put option non-current liability amounted to

EGP 43 million at the end of FY 2023, down from EGP

51 million at the same time last year, and is related

to the option granted in 2022 to Izhoor, IDH, and

Biolab as part of their JV agreement in Saudi Arabia.

The option allows the non-defaulting party, at its

sole and absolute discretion, to serve one or more

written notices to the defaulting party. The notices

enable the non-defaulting party to buy the default-

ing party’s shares at the fair price, sell its shares to

the defaulting party at the fair price, or request the

dissolution and liquidation of the JV company. It is

important to note that the put option, which grants

these rights to the non-defaulting party, does not

have a specified expiration date.

IDH’s interest bearing debt as at 31 March 2023 included EGP 172 million to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances

are excluding accrued interest for the period). It is worth noting that in order to finance the early repayment settlement with General Electric, the

Company utilised a bridge loan facility of EGP 55 million. The facility was withdrawn in Q1 2023 and settled in Q2 2023.

Accounts payable is calculated based on average payables at the end of each period.

78 IDH 2023 Annual Report

Performance | Financial and Operational Review

2023 Annual Report IDH 79

TASK FORCE ON CLIMATE-RELATED

FINANCIAL DISCLOSURES (TCFD)

RESPONSE REPORT

At IDH, we acknowledge the impossibility of operating

without impacting nature, but our goal is to minimise

negative effects and actively work towards reversing

past damage. We are committed to protecting and

restoring ecosystems as a crucial component of our

climate action efforts. As a testament to this commit-

ment, IDH has recently submitted its second report

in compliance with the TCFD regulations. In 2022,

as a first-time TCFD Reporter, we were committed

to implementing the recommendations of the TCFD

that aim to provide investors and other stakeholders

with useful information on climate-related risks and

opportunities that are relevant to our business. In our

second reporting, we were committed to closing a few

gaps, consolidating our action plan with clear dates to

close the remaining gaps and achieve full compliance

by the end of 2026.

We revisited our climate risk assessment, and, overall,

we believe that the risks and opportunities related

to climate change — in the short to medium term

(defined as the next five years) — remain low due to

the nature of our business (being a services business

operating in the healthcare sector). Our main emis-

sions relate to operating our 600+ centres in terms

of electricity utilised in lighting, air conditioning,

and diagnostic equipment. IDH’s Scope 3 emissions

encompass those associated with the manufacturing

of the machinery and materials utilised at our centres

and those associated with other travel/external test-

ing in the performance of our services. In the longer

term (defined as 10 years plus), the main risks/oppor-

tunities come from the impact of climate change as a

whole in the regions in which we operate (i.e. where

climate change results in certain areas becoming

uninhabitable).

Last year, the Group set out their first ever TCFD

report. In doing this, we set ambitious targets to

fully comply with the TCFD recommendations by

the end of 2026, as we had already published our

own first ESG report during 2022 and had appointed

external consultants to help us align this to the TCFD

requirements. While improvements have been made

during 2023, particularly in relation to the gover-

nance and management aspects, it has been difficult

to obtain reliable data for the metrics and scenario

analysis elements of TCFD, given the geographies

we operate in, the size of our branch network, and

the fact that this data had not been previously col-

lected. The Group has experienced, and continues

to experience, operational challenges in each of our

geographies as a result of external factors outside

the control of the Group, as highlighted elsewhere in

our report, which the company has had to respond

to. Given all this, we have revised our expected time-

frame for the completion of the remaining elements

of TCFD non-compliance from 31 December 2024

to 31 December 2026. We now have data for 33%

(2022:11%) of our branches and, therefore, while

we are improving the level of data, it will take longer

than initially expected to complete this exercise in

order for us to present relevant and reliable data.

We set out below more details on how we are seeking

to align with these recommendations, recognising

80 IDH 2023 Annual Report

Performance

that this will form an iterative process as we con-

tinue to develop our policies, processes, and dis-

closures over the coming years. As a second timer

TCFD reporter, we have been working since last year

with our external experts on closing the gaps in the

data and improving its accuracy and completeness.

Nevertheless, we believe that we still have a number

of areas of non-compliance and partial-compliance

with the TCFD requirements, as detailed in the fol-

lowing sections.

In this context, we have considered our “comply or

explain” obligation under the Financial Conduct

Authority’s Listing Rule 9.8.6R (8) and confirm that

we have made disclosures consistent with the TCFD

Recommendations and Recommended Disclosures

in this Annual Report and Accounts, except in the

following areas:

• Strategy – Describing the impact of climate-related

risks/opportunities on IDH's business and strategy

and describing the resilience of this under different

scenarios (e.g. a 2°C or lower scenario).

• Risk management – Describing IDH's processes for

managing climate-related risks and the process of

how these, and their identification, are integrated

into IDH's overall risk management.

• Metrics and targets – Disclosing the metrics used by

IDH to assess climate-related risks/opportunities,

disclosing Scope 1–3 emissions and the targets used

by IDH to assess performance against these targets.

We report below for the second time against the 11

recommended disclosures under four thematic

pillars set out in the TCFD’s recommendations, and

where we are not currently fully compliant with the

TCFD recommendations, we have set out our current

position and strategy and timeline for compliance.

We are currently considering the guidance included

within the TCFD’s all sector guidance. While this has

not yet been factored into our analysis or following

disclosures, we will be factoring this into our plans for

further compliance during the coming financial year,

with an aim to improve our discourse against these

requirements in the coming years.

2023 Annual Report IDH 81

Recommended

Disclosures

Response Status

Governance

a) Describe the

board’s oversight

of climate-related

risks and

opportunities.

compliant

In 2022, IDH developed a Sustainability Strategy for the years 2023

–2030 based on four pillars (Sound Gov-

ernance, Next Economy, Flourishing Society, and Liveable Planet). The work ensured that the Group could

reaffirm and review important points, such as mission and strategy, in addition to ensuring a strategic look

at the Group’s risks, which will be periodically reported to the Executive Management Team, Audit Com-

mittee, and Board of Directors. During the year, this was performed by the Board of Directors as a whole

and as part of the normal procedures around assessing the principal risks and uncertainties of the Group

and the wider opportunities and strategic goals of the Group, given the low risk/opportunities assessed

relating to climate risk/opportunity in the short-to-medium term.

Climate change forms one of the sub-pillars of Liveable Planet, where the following actions and targets

have been put in place: 1- building a comprehensive impact/risk assessment mechanism and adoption

of a climate scenario, 2- developing and adopting a corporate-wide GHG data management system, and

3- developing a Decarbonization Plan with clear and feasible carbon reduction targets, consistent with the

climate risk assessment results. While the pillars of this strategy have been agreed upon, we are currently

working on collating and validating the data required to monitor and report against these targets (which

also includes the data required to perform meaningful scenario analysis). The ESG strategy was dissemi-

nated to all functions and subsidiaries in 2023 with our aim to complete integration by the end of 2024. The

adoption and implementation of the strategy is expected to start by the end of 2024 and, therefore, further

reporting will be made on progress of this in our 2024 Annual Report.

In 2023, we established an ESG committee (Sustainability Steering Committee). The committee was

appointed by the CEO and the Board. The committee comprised representatives from key stakeholder

groups. The members of the steering committee were chosen based on their expertise, experience, and

ability to provide governance guidance and oversight on sustainability. Roles and responsibilities were

clearly assigned. The committee will oversee the Group’s approach to managing climate-related risks and

opportunities, along with the implementation of the Group’s sustainability strategy. It will provide strategic

guidance and oversight on IDH's sustainability and impact initiatives, including the development and

implementation of IDH's sector programmes and landscape initiatives. The committee reviewed and

approved IDH's annual sustainability report, which provides an overview of the organisation’s progress

on key sustainability metrics and initiatives. Additionally, it will help ensure that IDH's activities are

aligned with international sustainability standards and guidelines, including the United Nations' Sustain-

able Development Goals (SDGs) and the Paris Agreement on climate change. We will also establish a

formalised Environmental and Social Management System (ESMS) based on existing HSE policies and

procedures by 2024 and integrate ESG criteria into the internal audit system by 2025.

On the Board of Directors level, the Audit Committee will oversee and obtain regular updates from the

aforementioned management steering committee about climate change-related issues. The main topics

of discussion will revolve around the progress made against achieving the ESG Strategy’s targets and action

plans, including an update on the climate-related risks and opportunities. ESG and climate disclosure is

currently done through the Group’s annual sustainability report and general risk assessment processes,

developed in accordance with the GRI standards and includes the progress made against the strategy’s

goals and targets for addressing climate-related issues, and covering all GRI material indicators. While a

report was issued during 2022, this was not aligned to TCFD requirements and hence, going forward, we

will reflect on this for improvement during 2024.

82 IDH 2023 Annual Report

Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report

Recommended

Disclosures

Response Status

Governance b)

Describe

management’s

role in assessing

and managing

climate-related

risks and

opportunities.

Compliant

Day-to-day responsibility for the management and reporting on IDH’s sustainability related issues

in general and climate-related issues falls within the scope of the Investment Relations (IR) Depart-

ment and are directly supervised by the Group’s IR Director. The Group CFO authorises the yearly

sustainability budget and decarbonization action plans and projects, including energy efficiency

projects, fleet, and energy procurement. Specific climate initiatives will be managed by the relevant

department, including the Facilities, Supply Chain, and Procurement departments. Management

consider climate-related risks and opportunities in their future cash flow assessments; however,

given the aforementioned low risk, these have not had any material impact.

In 2021, the IR department assigned an external ESG consulting firm for the assurance of its first

sustainability report. In 2023, another external ESG consulting firm was assigned with a larger

scope comprising: 1- helping management and the Board develop the Group’s ESG Strategy;

2- quantifying the GHG emissions for the year 2022 and assisting in developing the Group’s ESG

and GHG data management system; and 3- the assurance of IDH’s second Sustainability Report

(ESG Report for 2022). Currently, we are working on implementing the strategy and decarboniza-

tion plan and assurance of IDH’s third Sustainability Report (expected to be published by 30 June

2024). The IR Department has assigned a main ESG focal point for the collection and monitoring of

climate-related issues. The IR focal point will be closely working with ESG (and climate) champions

at the different departments. All staff involved in the management of climate-related issues will

receive a one-day comprehensive training and a capacity building workshop on climate change

fundamentals, GHG quantification and identification, and assessment of climate-related risks and

opportunities.

Strategy a)

Describe the

climate-related

risks and

opportunities the

organisation has

identified over the

short, medium,

and long term.

Compliant

Overall assessment: Overall, the Board of Directors and management deemed that the risks

and opportunities relating to climate change are not signifciant, specifically those arising in the

short-to-medium term. This is on the basis that IDH is a service-related business operating in the

healthcare sector. The main suppliers of our equipment are blue-chip multinational companies,

and our operations are spread in over 601 branches across the four countries of operation as of 31

December 2023. However, we are committed to establishing a resilient, diverse, and responsible

supply chain. Therefore, by 2024, we will implement sustainable procurement guidelines and launch

a Sustainable Vendor database by 2025. Additionally, we will enhance our collaboration with local

diagnostic service providers by offering guidance and support to help them meet international

sustainability standards, building upon the IFC criteria screenings initiated before 2023. Further-

more, we will strengthen our efforts by introducing minimum ESG criteria for our suppliers by 2024,

aligning them with our existing IFC criteria screening system. Evolving from our current supplier

assessments, our goal is for all suppliers to adhere to the minimum ESG criteria established by

IDH by 2026. Moreover, we will ensure that 100% of newly contracted direct material expendi-

tures are tied to contracts incorporating social and environmental responsibility requirements.

IDH’s operations are not energy nor water-intensive, with less then 2% of total cost of operations

spent on energy and water consumption, making it less susceptible to climate risks and impacts

related to energy and water supply. In order to tackle policy and reputational risks, IDH has taken

actions relating to strategy development, sustainability reporting, and GHG quantification, and it has

put in place appropriate actions for developing practical and feasible decarbonization plans. The

aim is to have in place fully developed reporting and climate management systems by the end of

2026. The long-term risks, such as rising sea levels in more susceptible coastal cities and a possible

suspension of physical activities due to extreme precipitation events, will necessitate an appropriate

mitigation action plan to be put in place.

2023 Annual Report IDH 83

Recommended

Disclosures

Response Status

Strategy a)

Describe the

climate-related

risks and

opportunities the

organisation has

identified over the

short, medium,

and long term.

Compliant

Risks: The transition and physical risks associated with climate change have been initially identified

and qualitatively assessed. The following represent the initially identified risks on the short, medium,

and long terms.

Transition Risks:

The expected increase in electricity tariffs and fuel prices, and therefore the

increase in the expenses associated with energy consumption, represents the most relevant poten-

tial transition risk to IDH over the short term. The expenses associated with energy consumption

and operational costs in general are expected to increase. However, it is also expected that the tariff

increase will be gradually introduced to the Egyptian market, thus allowing sufficient time for impact

mitigation to take place. Changes in Policy were the second identified short-term transition risk.

The climate-related disclosure requirements and, accordingly, performance and progress towards

climate targets, including enhanced emissions-reporting obligations, are increasing significantly. In

this regard, IDH has started to take multiple steps, including the ESG Committee initiative, sustain-

ability reporting, GHG accounting, and decarbonization. By the end of 2026, the Group will have in

place a data management and sustainability (and climate) reporting system.

On the medium term, reputational risks will eventually arise if appropriate actions are not taken. How-

ever, it will be mainly affected by the overall ESG performance of the Group. Since IDH has already started

to put a strategy and an action plan in place and is planning to allocate sufficient and qualified human

resources in place, this impact has been also identified of low significance.

Physical Risks: Among the medium-term identified physical risks is the effects of water scar-

city on operational processes. The long-term risks, such as rising sea levels in more susceptible

coastal cities, such as Alexandria and Delta, and a possible reduction/suspension of physical

activities due to extreme precipitation events (storm and flooding), are of high significance and

will necessitate a mitigation action plan to be put in place.

Opportunities: Resource efficiency and access to new markets have been identified as the two main

climate-related opportunities for IDH.

Strategy b)

Describe the

impact of

climate-related

risks and

opportunities on

the organisation’s

businesses,

strategy, and

financial

planning.

Partially

Compliant

– expected

to be

compliant

by 31 Dec

2026.

As described above, the short-term identified risks and opportunities were found to be of

low significance (with negligible residual impacts after applying the planned mitigation

measures). Starting in 2024, and following the full integration of the ESG strategy, the ESG/

Sustainability Steering Committee will be routinely revisiting the initially identified climate

risks and reassessing their impact on a quarterly basis to take the appropriate mitigation

actions when they become of significant impact. This review process will begin in April 2024.

The following have been identified in the last reporting cycle as the main actions to be taken

to eliminate the residual impacts and to maximise the identified opportunities over the short

and medium terms:

• Develop a decarbonization plan focused on resource efficiency in terms of managing and

reducing energy and water consumption.

• Develop a corporate-wide ESG data management and monitoring system.

• Enhance ESG and climate disclosures. For the latter, the Group is exploring the possibility of

disclosing climate data through CDP.

Since the last reporting cycle, the following have been achieved:

• A detailed decarbonization plan has been developed. This focused on resource efficiency in

terms of managing and reducing energy and water consumption.

• We have developed a corporate-wide GHG data management and monitoring system, and we

are currently working on extending this system to cover all the essential ESG indicators by 31

December 2024.

• Related to climate disclosures, we have decided to postpone CDP disclosure to April 2025

(reporting on 2024 activities). By then, we would have a stronger climate management system in

place and would have covered 100% of our physical boundaries.

84 IDH 2023 Annual Report

Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report

Recommended

Disclosures

Response Status

Strategy c)

Describe the

climate-related

risks and

opportunities the

organisation has

identified over the

short, medium,

and long term.

Non-

compliant

– expected

to be

compliant

by 31 Dec

2026.

As previously reported, we confirm that we do not expect a significant change to our strategy as

a result of the initially identified transition climate risks. However, IDH is well-aware that for the

long-term risks, mostly physical ones, it will be necessary to develop new strategic actions. These

will be based on climate scenario analysis, which will be done by 2026 and reported upon in 2027

in order to more clearly understand the impacts of climate-related physical risks on its businesses,

strategies, and financial performance. Due to the complexity of this analysis, given IDH operates in

610+ branches across four countries, significant time will be required to collate and then validate

this data from which our scenario’s will be based. As IDH has never before been required to collate

or report this data, we have identified initial challenges in obtaining reliable data for all of our opera-

tions and, for this reason, we have, in 2023, employed an external ESG specialist firm to assist IDH's

management and the Board with this assessment.

Risk Manage-

ment a)

Describe the

organisation’s

processes for

identifying and

assessing climate-

related risks.

Compliant

Due to the low risk of climate-related impacts, we did not include a separate process in our 2022

annual report. The initial list of risks/impacts has been developed in 2023 and covered both

transition and physical risks. The work also included the development of an impact assessment

methodology and process tailored to IDH, which covers both physical and transitional risks and

opportunities. The list of risks and impacts was re-visited, and all risks were re-assessed in Decem-

ber 2023 and their significance confirmed. We plan to revisit the identified list of impacts and redo

the assessment in December 2024.

Risk Manage-

ment b)

Describe the

organisation’s

processes for

identifying and

assessing climate-

related risks.

Partially

compliant-

expected

to be

compliant

by 31 Dec

2026.

Due to the low risk/opportunities arising from climate change, as noted above, there were no sepa-

rate processes specifically for managing climate-related risks.

Going forward, as part of IDH’s new strategy and policy, processes are to be adopted to manage

climate-related risks, which will therefore be integrated into our business-as-usual processes. These

will include the below four areas:

1. Electricity

2. Policies

3. Water

4. Supply chain

Risk Manage-

ment c)

Describe the

organisation’s

processes for

identifying and

assessing climate-

related risks.

Partially

compliant

– expected

to be

compliant

by 31 Dec

2026.

Plans are set in place to conduct internal capacity building in order to achieve the above. Also, the

processes for identifying, assessing, and managing climate-related risks are yet to be integrated into

the organisation’s overall risk management, which is expected to be completed by the end of 2024.

2023 Annual Report IDH 85

Recommended

Disclosures

Response Status

Metrics and

Targets a)

Disclose the

metrics used by

the organisation

to assess climate-

related risks and

opportunities

in line with its

strategy and risk

management

process.

Partially

compliant

– expected

to be

compliant

by 31 Dec

2026.

In 2023, we are continuing to work with our previously appointed environmental consultancy to

quantify our GHG emissions, develop our ESG and carbon footprint reports, develop our environ-

mental policies, put in place our decarbonization plan, and monitor the development of our data

collection system. Our 2022 emissions were reported in our annual Sustainability Report and will

continue to do so in coming reports. In 2023, we started the planning phase of our sustainability

management system, designed to streamline data collection by generating reports based on input

data, eliminating the need to individually contact each department. All relevant sustainability data

will be included by departments within the system, and reports will be generated in a standardized

format. Throughout the year, each department will input its data into the system, and reports will

be generated accordingly. In Phase 1 of implementation in 2024, we will execute this process and

identify challenges through focal points. To date, the carbon footprint metric (CO

e) is the only met-

ric being identified and used by the organisation to assess climate-related risks and opportunities.

The identification process of other metrics will be finalized by 31 December 2026

and reported in

December 2027.

Metrics and

Targets b)

Disclose Scope

1, Scope 2, and,

if appropriate,

Scope 3 green-

house gas (GHG)

emissions, and

the related risks.

Non

compliant

– expected

to be

compliant

by 31 Dec

2026.

In 2022, we covered 11% of total operations. In 2023, we increased the coverage to 33%, and we are work-

ing on achieving 100% coverage by 31 December 2026 and reporting in line with TCFD requirements by

31 December 2027.

Metrics and

Targets c)

Describe the tar-

gets used by the

organisation to

manage climate

related-risks and

opportunities

and performance

against targets..

Partially

compliant

– expected

to be

compliant

by 31 Dec

2026.

As the baseline emissions were quantified in 2022, we enhanced our data collection in 2023. Our

next step is to adopt science-based climate targets for Scope 1, 2, and 3 GHG emissions starting

2024. Recognising the significance of setting appropriate targets and metrics, we have set a deadline

of 31 December 2026 for compliance with the TCFD. This is crucial, as reporting against these tar-

gets will require robust data for both the current and previous years

86 IDH 2023 Annual Report

Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report

2023 Annual Report IDH 87

Corporate Social Responsibility

IDH remains steadfast in its commitment to operating

in a manner that values and maintains the intercon-

nection between the growth of its business and the

communities it serves. In its home and largest market,

Egypt, IDH boasts a long history of community work

and assistance through its Moamena Kamel Founda-

tion. The foundation regularly provides medical assis-

tance, as well as many other services, to individuals

who cannot otherwise afford it. In parallel, the Com-

pany provides free, or heavily discounted, diagnostic

services to thousands of members of the community

every year. Throughout its operations, it also collabo-

rates with charitable organisations across the country

to provide medical services, nutrition, and education

to hundreds of underprivileged families, while sup-

porting the renovation and expansion of essential

medical facilities nationwide.

The Company is also an active community player in

its other geographies, hosting medical days in schools,

associations, and corporations, with the goal of raising

awareness on non-communicable diseases and their

prevention methods, while promoting healthy and

sustainable lifestyles. Biolab, IDH’s Jordanian subsid-

iary, is committed to supporting and initiating several

programmes that affect real change in the community,

launching social development programmes, medical

days, among several other initiatives. In Nigeria, Echo-

Lab remains dedicated to offering initiatives, including

health screenings in churches, local markets, and

colleges nationwide. Finally, in Sudan, Ultralab par-

ticipated in several community outreach programmes,

providing medical services for underserved com-

munities free of charge, in addition to post-graduate

educational and training opportunities for youth. It is

important to note that to safeguard the health of IDH’s

staff on the ground, community outreach initiatives

in Sudan were suspended in April 2023, following

the start of the ongoing civil conflict. The Company

remains committed to resuming its community work

once conditions on the ground allow for it.

Egypt

Moamena Kamel Foundation

Building on the Company’s guiding principle of provid-

ing leading medical assistance and services, at impec-

cable quality, to its communities, IDH views corporate

social responsibility (CSR) initiatives as an imperative

extension of its core operations.

The Moamena Kamel Foundation for Training

and Skill Development was founded in 2006 by Dr.

Moamena Kamel, Professor of Pathology at Cairo

University; founder of IDH subsidiary, Al Mokhtabar

Labs; and mother of CEO, Dr. Hend El Sherbini. In

line with its strong commitment to CSR initiatives, the

Company dedicates up to 1% of the net after-tax profit

of its subsidiaries, Al Borg and Al-Mokhtabar, to fund

the Foundation’s initiatives. In 2023, this amounted

to EGP 6.6 million (based on the Group’s net after-tax

profits for FY 2022), versus EGP 8.9 million in 2022.

The Foundation is primarily focused on impacting the

lives of the residents of Cairo’s Al Duweiqa community,

in addition to several other villages across Egypt. This is

achieved through the implementation of an integrated

programme and vision that encompass economic,

social, and healthcare development initiatives offering

several primary services, including:

• Women’s Empowerment

• Healthcare

• Social Development and Inclusion

• Education

• Nutrition

88 IDH 2023 Annual Report

Performance

Women’s Empowerment

Empowerment in “ينمطا صيحفا” – Breast

Awareness Campaign

Throughout 2023, IDH organised a total of nine ses-

sions raising awareness, celebrating Women’s Month,

and holding campaigns during Breast Cancer Detec-

tion Month, in collaboration with Baheya Hospital and

sponsored by Al Borg Scan.

As a result of these initiatives, the Company directly

impacted over 270 women through its sessions, with

71% of those in attendance being NGO beneficiaries

while an additional 25% were employees at different

companies across Egypt.

Healthcare

Supporting Kasr El Aini Hospital

Building on the successful relationship established in

2019, IDH and Al Kasr Al Aini have become integral

partners, with the hospital representing a large propor-

tion of the Company’s CSR efforts. In 2023, the Company

focused its support on the hospital’s Kidney Dialysis

Unit, providing it with the medical disposables needed

to continue treating underprivileged patients without

charge. Throughout the year, the Foundation supported

over 11,500 sessions.

Supporting the National Cancer Institution

One of the largest specialised national institutions

in the country, the National Cancer Institution, is in

need of constant support to continue caring for and

curing Egypt’s most in-need patients. Throughout the

year, IDH provided the institution with an anaesthesia

device to further enhance its capabilities and ensure a

safer experience for its patients.

Social Development and Inclusion

Supporting the Ibrahim Badran Convoys

In an effort to drive positive impacts across some of the

most underserved and in-need communities in Egypt,

IDH proudly partnered with the Ibrahim Badran Foun-

dation to provide medical support to remote areas of

Upper Egypt through the provision of diagnostic tests

at significantly discounted rates. Throughout the year,

IDH supported in 58 convoys, conducting more than

6,000 tests and helping in diagnosing and treating the

area’s most prevalent diseases, including anaemia,

paediatric parasitology, and dermatology.

Other Social Initiatives

• In November 2023, the Moamena Kamel Founda-

tion collaborated with the Egyptian Red Crescent to

raise awareness on family relationships, including

"Mother and Child Disagreements" in the Al Sayda

Eisha district, through a number of sessions titled,

“Disagree without Violence”. The sessions were

attended by over 70 members of the community.

• In June 2023, the Moamena Kamel Foundation

and Al Mokhtabar partnered with the Egyptian

Ministry of Labour to sponsor the “Safety Forum”

for those in the industrial sector. The forum was

meant to increase awareness on safety and occu-

pational health among companies in the health,

industry and tourism sectors. The forum also saw

the introduction of Al Mokhtabar and its Mega

Lab as one of the country’s leading examples of

occupational safety, adhering to the highest inter-

national safety standards.

2023 Annual Report IDH 89

Education

“Amaly” Training Programme for Fresh Graduates

The Amaly Programme for Chemists provides a quali-

fied chemist programme, relying on both theoretical

and practical training, for students of Cairo University’s

Faculty of Agriculture, specifically in the Arabic and

English Biotechnology Department. During 2023, the

programme completed five separate rounds, benefit-

ting a total of 135 students.

Al Kasr Al Aini Session Hall Renovation

During 2023, the Company completed the renovation

of Al Kasr Al Aini’s Department of Vascular Surgery ses-

sion hall. The hall accommodates a total of 40 students,

and it was in need of renovation and an equipment

upgrade to ensure it maintained its ability to effectively

train future medical experts. The Company provided

an ultrasound machine, curtains, an air conditioner,

and 40 student chairs as part of the renovation.

Nutrition

“Etameny” Project

Launched by IDH in collaboration with the Egyptian

Food Bank, the “Etameny” project, which translates

to “Rest Assured”, provides support to female-headed

households in Giza. In 2023, the programme provided

households with 10 months’ worth of food baskets to

boost food security, stability, and dietary diversity. In line

with this project, the Egyptian Food Bank also launched

an educational campaign to raise awareness about

healthy nutrition practices to women. During 2023, the

programme served over 11,000 people across Giza.

Other Nutrition Initiatives

• During 2023, the Moamena Kamel Foundation

established a nutritional awareness programme

for mothers and children, helping raise awareness

about proper nutrition and educating members of

the community on preventative measures for malnu-

trition. As part of the initiative, several sessions were

held in the Sayda Eisha Youth Centre and Al Sherok

NGO. The sessions were attended by over 65 women.

• A collaboration with Misr El Kheir Foundation that

resulted in the distribution of 3,000 food boxes,

with over 15,000 beneficiaries, across the Greater

Cairo area.

• A collaboration with the Egyptian Food Bank for the

distribution of 4,000 food boxes, with a total reach of

more than 20,000 beneficiaries, across Upper Egypt.

90 IDH 2023 Annual Report

Performance | Corporate Social Responsibility

Jordan

IDH’s subsidiary, Biolab, remains steadfast in its

support and initiation of programmes and events

set to leave lasting impacts on the communities it

serves. These initiatives raise awareness on non-

communicable diseases, encourage healthy lifestyle

choices, and educate beneficiaries on the importance

of preventive testing through well-organised events

in collaboration with governmental entities, corpora-

tions, and educational institutions across Jordan.

Healthcare

Community Events

Biolab organises several community events through-

out the year, centred around promoting healthy

lifestyles and increasing community engagement.

As part of these events, the Company distributes

pamphlets encouraging preventive examinations

and sharing information on healthy lifestyle choices.

Biolab also offered discounted Inbody free tests dur-

ing the community event, reaching over 200 benefi-

ciaries in total.

Health Awareness Days and Bazaars

Delivering on its commitment to giving back to the com-

munity, Biolab organises several health awareness days

around the country, offering haemoglobin and glucose

tests to members of the community. Throughout 2023,

the Company organised several health awareness days,

in partnership with the Ministry of Health (MoH),

several leading universities and schools in Jordan, and

leading medical associations in the country. In addition

to haemoglobin and glucose tests, Biolab also distrib-

uted vouchers granting discounts on Inbody free tests.

The events reached over 400 beneficiaries in total.

Medical Days and Corporate Health Fairs

Throughout the year, Biolab participated in corporate

medical days and health fairs in partnership with Amazon

and the US embassy, encouraging preventive testing and

raising awareness about non-communicable diseases to

employees. Throughout the events, the Company distrib-

uted vouchers for discounted testing, reaching approxi-

mately 250 employees across the two events.

2023 Annual Report IDH 91

Experienced professionals on

IDH’s Board

Non-Executive Board Members

CORPORATE

GOVERNANCE

92 IDH 2023 Annual Report

2023 Annual Report IDH 93

Corporate Governance

Board of Directors

As at 31 December 2023, IDH’s Board of Directors is

comprised of five non-executive members, includ-

ing the non-executive chairman and one executive

director, all of whom offer significant experience in

the healthcare market, MENA region, and investment

activities. On 18 January 2024, the Board appointed

Sherif El Zeiny as an Executive Director, Group

Financial Officer, and Vice President of Finance and

Strategies.

Lord St John of Blesto (Age 66)

Non-Executive Chairman and Chairman of the

Nomination Committee

Lord St John has been an active Crossbench member

of the House of Lords, UK Parliament, since 1978. He

serves on the boards of several listed and unlisted com-

panies, including Yellow Cake plc, Smithson Investment

Trust plc, Gulf Marine Services plc, Strand Hanson Ltd,

Airport Holdings Mauritius, Kneoworld UK Limited,

and GMS Resources Limited. He also holds mentoring

advisory roles with Farrant Group Ltd., Qredo Ltd.,

BetWay Ltd., Geobear Ltd, and ROC Technologies Ltd.

Lord St John has a strong interest in the charitable sec-

tor and serves as a trustee to several charities focused

on wildlife conservation, poverty reduction, education,

and healthcare. He graduated with a BA in Law and

BSocSc in Psychology from Cape Town University, a

BProc from the University of South Africa, and Masters

of Law (LLM) from the London School of Economics.

He practised as an attorney before his 25-year career in

financial services in the City of London.

Prof. Dr. Hend El Sherbini (Age 55)

Group Chief Executive Officer

Dr. Hend has been IDH Group’s Chief Executive Officer

since 2012 and, prior to that, served as the CEO of Al

Mokhtabar – Egypt’s oldest brand – between 2004

and 2012. She received her MBBCh and her Master’s

degree in Clinical and Chemical Pathology from Cairo

University in the early 1990s, and she also holds a Mas-

ter’s degree in Public Health from Emory University in

Atlanta. Dr. Hend completed her PhD in Immunology

from Cairo University in 2000, where she is also a pro-

fessor of clinical pathology at the university’s Faculty

of Medicine. She sits on the Board of American Society

of Clinical Pathology (Egypt) and consults on the inter-

national certification process. Dr. Hend completed an

Executive MBA from the London Business School in

2015 and was featured as one of Forbes' most powerful

women between 2016 and 2023.

94 IDH 2023 Annual Report

Corporate Governance

Sherif El Zeiny (Age 60)

Group Chief Financial Officer and Executive

Director

Mr. El Zeiny is a certified Board Director and Execu-

tive Partner with over three decades of experience in

financial management, business leadership, and cor-

porate strategy. He currently serves as Vice President

and Group Chief Financial Officer at IDH. Throughout

his career, he has filled several executive positions in

various leading regional and international corpora-

tions, most recently serving as Vice President and Chief

Financial Officer at Elsewedy Electric Group. Prior to

Elsewedy Electric Group, he held several positions at

Mentor Graphics MENA (currently Motor Siemens),

NCR Egypt, Siemens Egypt’s Energy and Automation

Division, and General Motors Egypt. Mr. El Zeiny holds

an MBA from the City University of Seattle, a Non-

Executive Director Diploma from the Financial Times,

and a BA in Accounting from Cairo University.

Hussein Choucri (Age 73)

Non-Executive Director and Chairman of the

Remuneration Committee

Mr. Choucri is the Chairman and Managing Director

of HC Securities and Investment, which he established

in May 1996. He currently sits on the boards of EDITA

Food Industries S.A.E, Fawry Banking and Payment

Technology Services Ltd. (Fawry), and the Egyptian

Center for Economic Studies (ECES). Mr. Choucri

served as the Managing Director of Morgan Stanley

from 1987 to 1993 and served as Advisory Director at

Morgan Stanley from 1993 to 2007. He received his

Management Diploma from The American University

in Cairo in 1978.

2023 Annual Report IDH 95

Richard Henry Phillips (Age 59)

Non-Executive Director

Mr. Phillips is a founding partner of Actis LLP, the

emerging markets private equity group. As Actis LLP is

one of the Company’s major shareholders, Mr. Phillips

is not considered by the Board as being independent.

He is the Head of Private Equity for Actis and is a mem-

ber of the Actis Investment Committee. Mr. Phillips

is a director on the board of a number of companies,

including Honoris United Universities, GHL Plc., Les

Laboratories Medis SA, and others. Mr. Phillips holds a

degree in Economics from the University of Exeter.

Dan Olsson (Age 58)

Non-Executive Director and Chairman of the

Audit Committee

Mr. Olsson has long and extensive international

experience in the diagnostic and healthcare services

sector, where he has served in a range of executive

positions — among others, as head of diagnostics in

the pan-European healthcare group Capio; CEO of

Unilabs, a pan-European diagnostic provider; and

CEO of Helsa, a Swedish healthcare group. He cur-

rently works as an independent advisor and holds

non-executive positions at Purch AB and Ambea AB

(Publ). Mr. Olsson has worked in the healthcare sec-

tor since 1999. Mr. Olsson studied Economics at the

University of Lund in Sweden.

96 IDH 2023 Annual Report

Corporate Governance | Board of Directors

Yvonne Stillhart (Age 56)

Independent Non-Executive Director

Ms. Stillhart is a seasoned Non-Executive Director,

bringing nearly two decades of extensive board-level

leadership experience in both listed and private enti-

ties across Europe, the Middle East, and Africa. Ms.

Stillhart holds positions as a Board Member, contrib-

uting her expertise to the Audit and Risk Committees

at UBS Asset Management Switzerland Ltd, Aberdeen

Private Equity Opportunities Trust Plc., and serves as

the Board Chairperson at EPE Capital Ltd. In Senior

Executive capacities, she co-founded and held execu-

tive leadership responsibilities at a leading private

equity manager in Switzerland. Her proficiency in

investment and finance expertise, proactive risk

management, and digital expertise were integral in

transforming growth-driven companies in a sustain-

able manner. Her qualifications include a Directors'

Certificate from Harvard Business School, a Qualified

Risk Director accreditation from the DCRO Institute,

and the ESG Competent Boards Certificate. Ms. Still-

hart is fluent in German, English, Spanish, and French.

2023 Annual Report IDH 97

Corporate Governance Report

The Board of Directors (the “Board”) is responsible for

providing strong leadership and effective decision-

making, safeguarding in the process the interests of all

shareholders of Integrated Diagnostics Holdings. Under

my chairmanship, the Board has maintained an unwav-

ering commitment to providing oversight and guidance

to senior management as the Group continues to execute

its regional growth strategy.

IDH is a Jersey-registered entity with a Standard List-

ing on the Main Market of the London Stock Exchange

(LSE) since May 2015 and a secondary listing on the

Egyptian Stock Exchange (EGX) since May 2021.

Given the Company’s standard listing on the LSE, it is

not required to comply with the requirements of the

2018 UK Corporate Governance Code (the “Code”)

as issued by the Financial Reporting Council. During

the year to 31 December 2023, the Board continued to

work towards a robust governance framework where

appropriate and applicable to IDH’s circumstances.

We are compliant with Financial Conduct Authority

Disclosure Guidance and Transparency Rules (DTR)

subchapters 7.1 and 7.2, which set out certain man-

datory disclosures: 7.1 concerns audit committees

and bodies carrying out equivalent functions, and 7.2

concerns corporate governance standards that are

included in the Directors Report or, in this case, as part

of the Strategic Review (DTR 7.2.1).

To that end, we have an Audit Committee as well as

Remuneration and Nomination Committees. The Board

may establish additional committees as appropriate

going forward. This Annual Report includes reports from

the Audit, Remuneration, and Nomination Committees.

Moreover, over the course of the past year, IDH has worked

on complying with EGX listing rules and UK listing rules,

in addition to the corporate governance requirements

that are set for foreign companies with dual listing.

The Board is committed to implementing best practices

in corporate governance, calling on both the expertise of

individual Directors and that of outside parties, including

legal counsel and global professional services firms.

Functioning of the Board

The Board met five times during the course of 2023.

Details of the individual Directors’ attendance is shown

on page 100. The Board has invested significant time

discussing and evaluating the Group’s strategy and pros-

pects for future growth and has held a separate strategy

day during the year, the outcome of which is presented

in our statement of strategy on page 54. We are confident

that we have in place the right strategy and management

team to deliver shareholder returns going forward.

Board Skills and Composition

Under its Articles of Association, the Group must have a

minimum of two Directors. While there is no maximum

number of Directors, the Board presently comprises

seven Board members. Sherif El Zeiny joined the Board

as Group Chief Financial Officer and Vice President of

Finance and Strategies in January 2024. Mr. El Zeiny’s

extensive experience in financial management and

business leadership, coupled with his proven tenure in

transforming businesses into regional leaders, provides

significant added value to the Board of Directors.

As at 31 December 2023, our Board comprised four

Non-Executive Directors, one Executive Director, and

the Chair who was independent upon appointment.

Together, the Directors offer IDH a world standard mix

of expertise in areas that include strategy, finance, and

medical diagnostics, as well as diverse experience in

Europe, the Middle East, and Africa. We have relevant

commercial and technical experience to help direct

the Group as it delivers on its strategy in a very techni-

cal field and across rapidly changing geographies. The

Board and their biographies are set out on pages 94 to

97 of this Annual Report and are summarised in the

following table.

98 IDH 2023 Annual Report

Corporate Governance

Leadership

We continue to operate on the basis of a clear division of

responsibilities between the role of the Chairman and

that of the Group Chief Executive. The Board continues to

believe that this segregation of roles remains appropriate,

taking into account the size and structure of the Group.

As Chairman, I ensure that the Board is effective in the

execution of all aspects of its role. The Group Chief Execu-

tive Officer, meanwhile, is responsible for managing the

day-to-day running of the business. In this, she is sup-

ported by a senior management team. The Group Chief

Executive and I have a good working relationship and

discuss matters of Group strategy and performance on a

regular basis. We also work together to ensure that Board

meetings cover relevant matters, including a quarterly

review of financial and operational performance (includ-

ing key performance indicators), and in partnership with

the Group Secretary ensure that all Directors:

• are kept advised of key developments;

• receive accurate, timely, and clear information upon

which to call in the execution of their duties; and

• actively participate in the decision-making process.

Agendas for meetings of the Board are reviewed and

agreed upon in advance to ensure each Board meeting is

efficiently run, allowing all Directors to openly and con-

structively challenge the proposals made by the Group’s

senior management. I am pleased to report that through-

out the year, each Director has properly exercised those

powers with which they have been vested by the Group’s

Articles of Association and relevant laws.

The Board operates under a Schedule of Matters

Reserved, which is annually reviewed. Matters reserved

to the Board means any decision that may affect the over-

all direction, supervision, and management of the Group,

including, but not limited to:

• approving annually a strategic plan and objectives

for the following year for the Group;

• approving any decision to cease to operate all or any

material part of the Group’s business or to enter into

any new business or geographic areas;

• monitoring the delivery of the Group’s strategy,

objectives, business plan, and budget;

• adopting or amending the Group’s business plan or

annual budget;

• approving the Group’s annual report and accounts

and quarterly financial statements and/or any

change in the accounting principles or tax policies of

any member of the IDH group and/or any change in

the end of the financial year of any member of the

Board of Directors of Integrated Diagnostics Holdings Plc

Name Position (Date of Appointment)

Lord St John of Bletso Non-Executive Chairman (12 January 2015)

Prof. Dr. Hend El Sherbini Executive Director, Group Chief Executive Officer (23 December 2014)

Hussein Choucri Non-Executive Director (12 January 2015)

Dan Olsson Non-Executive Director (12 January 2015)

Richard Henry Phillips Non-Executive Director (23 December 2014)

Yvonne Stillhart Independent Non-Executive Director (1 March 2022)

Sherif El Zeiny Executive Director, Group Chief Financial Officer (18 January 2024)

2023 Annual Report IDH 99

* Sherif El Zeiny was appointed on 18 January 2024.

IDH group, except as contemplated by the business

plan or annual budget, as required by law, or to com-

ply with a new accounting standard;

• any member of the IDH group declaring or paying

any dividend or distribution;

• approving the issue of all circulars, prospectuses,

listing particulars, and general meeting notices to

shareholders of the Group;

• ensuring the Group has effective systems of internal

control and risk management in place by (i) approv-

ing the Group’s risk appetite statements and (ii)

approving policies and procedures for the detection

of fraud, the prevention of bribery, and other areas

considered by the Board to be material;

• undertaking an annual review of the effectiveness of

the Group’s risk management and internal control

and reporting on that review in the Group’s annual

report. The review should cover all controls, includ-

ing financial, operational, and compliance controls

and risk management;

• carrying out a robust assessment of the principal

risks facing the Group, including those that threaten

its business, future performance, solvency, or liquid-

ity and to report on such assessment in the Group’s

annual report; and

• adopting or amending the Group’s environmental

policy and monitoring its delivery; and

• reviewing the Group’s overall corporate governance

arrangements and approving any changes thereto.

Apart from these reserved matters, the Board delegates

specific items to its principal committees, namely the

committees on Audit, Remuneration, and Nomination.

Each committee is authorised to seek any information it

requires from senior management.

A summary of the Board’s committees are set out from

page 101. Reports from the Chairmen of the Audit,

Remuneration, and nomination committees appear

starting pages 104, 108, and 110 of this Annual Report,

respectively.

Board Meetings During 2023

The Board met five times during the year, one of which

was held on an ad hoc basis to consider the Group’s

Budget. Details on our Directors’ attendance at Board

and committee meetings are shown in the table below. In

the event that any Director is unable to attend a meeting

of the Board or committee of which they are a member,

he or she receives the necessary papers, including agen-

das, meeting outcomes, and any documents presented

for review or information. Furthermore, I endeavour

to discuss with them in advance of the meeting to

obtain their views and decisions on the proposals to be

considered. Prior to Board meetings, all Non-Executive

Directors meet either by themselves, together with the

CEO, or with the entire Board. This time is usefully spent

enabling Board members to build rapport, share views,

and consider issues impacting the company, resulting in

improved board dynamics and better decision-making.

Table of Director Attendance at 2023 Meetings

Name Board Audit (a) Remuneration (c) Nomination

Number of Meetings 5 7 1 2

Directors:

Lord St John of Bletso 5 n/a n/a 2

Prof. Dr. Hend El Sherbini 5 n/a n/a n/a

Hussein Choucri 5 7 1 2

Dan Olsson 5 7 1 2

Richard Henry Phillips 5 n/a n/a n/a

Yvonne Stillhart 5 7 1 n/a

Sherif El Zeiny* n/a n/a n/a n/a

100 IDH 2023 Annual Report

Corporate Governance | Corporate Governance Report

Board Effectiveness

Having spent considerable time in both formal meet-

ings and in learning about the skills of our Directors

one-on-one — and drawing on my past experience as a

Director — I am confident that the Board has the skills,

talent, and industry knowledge it needs to effectively

deliver the Group’s agreed strategy. The Board, facilitated

by the Company Secretary, carries out regular internal

evaluations and considers the feedback from each Direc-

tor in setting the agenda and strategic direction of the

Company. In addition, training requirements for each

Director are considered, and the Board receives regular

updates from the Company Secretary or specific training

from external legal counsel as deemed appropriate.

It is my considered judgement that the Board receives

from senior management sufficiently detailed budgets,

forecasts, strategy proposals, reviews of the Group’s finan-

cial position and operating performance, and annual and

half yearly reports to ensure that it may be effective. This

enables us to effectively ask questions of senior manage-

ment and to hold discussions on the Group’s strategy

and performance. In 2023, senior management delivered

regular reports to the Board ahead of regularly scheduled

Board meetings.

Any concerns raised by Directors are clearly recorded

in the minutes of each meeting. I review Board min-

utes in my capacity as Chairman before these minutes

are circulated to all Directors in attendance and then

tabled for approval at the next meeting, at which time

any necessary amendments are made.

The Group has obtained customary directors’ and offi-

cers’ indemnity insurance, covering the Chairman and

the Non-Executive Directors.

The Board has delegated several areas of responsibility to

its committees. The composition of the Board’s commit-

tees was considered during the year.

Audit Committee

The Audit Committee is responsible for overseeing

IDH’s internal financial reporting and ensuring the

integrity of the Group’s financial statements. The Com-

mittee is also responsible for reviewing and monitor-

ing the effectiveness of the Group’s risk management

processes and internal controls, as well as for ensuring

that audit processes are robust.

At the date of this report, the following were the members of the Audit Committee:

Name Nomination

Dan Olsson Chairman of the Committee

Hussein Choucri Committee Member

Yvonne Stillhart Committee Member

More information on the Audit Committee is available in the Audit Committee Report on page 104 of this report.

Remuneration Committee

The Remuneration Committee is responsible for the remuneration for the services rendered by Directors and

select members of senior management.

At the date of this report, the following were members of the Remuneration Committee:

Name Nomination

Hussein Choucri Chairman of the Committee

Dan Olsson Committee Member

Yvonne Stillhart Committee Member

2023 Annual Report IDH 101

More information on the Remuneration Committee is available in the Remuneration Committee Report on page

108 of this report.

Nomination Committee

The Nomination Committee assists the Board in reviewing the structure, size, and composition of the Board. It is

also responsible for reviewing succession plans for the Directors, including the Chairman and Chief Executive and

other senior management.

Committee composition

The Nomination Committee comprises the below members:

Name Nomination

Lord St John of Bletso Chairman of the Committee

Hussein Choucri Committee Member

Dan Olsson Committee Member

The Nomination Committee comprises Non-Executive

Directors.

More information on the Nomination Committee is

available in the Nomination Committee Report on

page 110 of this report.

Investor Relations

Engagement with shareholders continues to be a key

function at both the senior management and the Board

levels. Our investor relations function held hundreds of

meetings with current and potential investors during

the course of the year. Management met with investors

at several investor conferences and roadshows during

2023, in addition to handling hundreds of one-on-one

call requests and queries throughout the year.

In 2023, we published three-month, half-year, and

nine-month reviewed results, in addition to audited

full-year results, and further released a trading update

on performance at the three-month periods. We intend

to continue publishing reviewed results for the first-,

second-, and third-quarter marks in 2024 to abide by

the Egyptian Exchange’s listing rules.

The Board communicates with shareholders through

public announcements disseminated via the London

Stock Exchange, analyst briefings, roadshows, and

press interviews. Copies of public announcements and

financial results are published on the Group’s website,

along with a number of other investor relations tools. It

is worth highlighting that the Group launched new cor-

porate and investor relations websites in 2018, offering

more comprehensive and better structured informa-

tion on the Group, along with additional shareholder

tools and a richer interface.

The Board receives regular updates from the senior

management team on the views of major shareholders

and on milestones in the investor relations programme.

We will continue throughout 2024 to grow our investor

relations programme to ensure that our shareholders

and stakeholders remain informed of the Group’s strat-

egy and ongoing financial and business performance.

On this note, I would like to announce that in Janu-

ary 2024, we welcomed Tarek Yehia as IDH’s new

Director of Investor Relations. Tarek brings with him

a wealth of experience in investor relations, commu-

nications, and corporate finance, spanning nearly 15

102 IDH 2023 Annual Report

Corporate Governance | Corporate Governance Report

years. Previously, he held senior investor relations

positions in several of Egypt’s forefront companies.

I am confident that Tarek’s unique experiences will

prove extremely valuable in furthering our investor

relations programme, ensuring timely communica-

tion of our results and strengthening the Company’s

relationship with its shareholders.

Annual General Meeting

We will hold our eighth Annual General Meeting

as a listed company on 29 May 2024 in London,

UK. Details of the AGM are included in the Notice

of Meeting that accompanies this Annual Report

and which is available on our website. At the

AGM, all of the Group’s Directors will retire and

submit themselves for re-election. The outcome

of the voting at the AGM will be announced

by way of London/Egypt Stock Exchange

announcements, and full details will be published

on the Company’s website shortly after the AGM.

Fair, Balanced, and Understandable

The Board recognises its duty to ensure that the

Annual Report and Accounts 2023, taken as a whole,

is fair, balanced, and understandable and provides

the information necessary for shareholders to assess

the performance, strategy, and business model of

the Group. The Board has placed reliance on the fol-

lowing to form this opinion: The process by which

the Annual Report and Accounts 2023 was prepared,

including detailed project planning and a compre-

hensive review process. The review of the Annual

Report and Accounts 2023 by the Committee, plac-

ing reliance on the experience of the Committee

members. Reports prepared by senior management

regarding critical accounting judgements and sig-

nificant accounting policies. Discussions with, and

reports prepared by, the external auditor. Regular

financial information received throughout the year,

including monthly KPIs reports. As detailed in the

Directors’ responsibility statement on page 116,

each of the Directors has confirmed that, to the best

of each person’s knowledge and belief, the Annual

Report and Accounts 2023, taken as a whole, is fair,

balanced, and understandable and provides the

information necessary for shareholders to assess

the Group’s position, performance, business model,

and strategy.

Lord St John of Bletso

Chairman

27 March 2024

2023 Annual Report IDH 103

Audit Committee Report

I am pleased to present the Audit Committee report

for the year ended 31 December 2023. This report is

intended to provide shareholders with an insight in to

how key topics were considered during the year, the

activities of the committee and how the committee

discharged its responsibilities in 2023.

The Audit Committee will meet not less than three

times a year. The Audit Committee comprises three

Non-Executive Directors who hold the necessary

competence in accounting and/or auditing, recent

financial experience, and have competence relevant

to the sector in which the Group is operating.

In addition to myself as Chair of the Committee, Hus-

sein Choucri and Yvonne Stillhart are also members of

the Committee. The Committee as a whole considers

it has the relevant financial experience in financial

and healthcare industry matters to carry out its duties

with the appropriate knowledge and challenge as set

out under the 2018 UK Corporate Governance Code

(“the Code”) as issued by the Financial Reporting

Council. The Committee has also been actively working

to ensure IDH’s financial reporting complies with EGX

rules and requirements set out for foreign companies

with a dual listing.

During 2023, the Audit Committee met seven (7) times.

The Committee members reviewed the integrity and

content of external financial reporting, risk management,

and internal controls and reported the findings and

recommendations to the Board. Outside of scheduled

meetings, the Audit Committee also communicated

regularly throughout 2023 with the Group Chief Financial

Officer and Vice President of Finance and Strategies, as

well as the external auditors. The external auditors are

invited to attend meetings of the Committee on a regular

basis. The Group Chief Financial Officer and Vice Presi-

dent of Finance and Strategies, who is a member of the

Board, also attends the meetings, and other members of

the senior management team attend as required; these

include the Director of Investor Relations, the Chief Inter-

nal Audit Director, and the Group Secretary.

There are also private meetings between the Audit

Committee and the external auditors outside the audit

timetable at which senior management is not present.

The Committee will continue with the practice of meet-

ing in private with the external auditors in the future.

FRC Audit Quality Review

The FRC is the UK’s independent regulator responsible

for promoting high-quality corporate governance and

reporting to foster investment. The FRC’s responsibili-

ties include independent monitoring of audits of listed

and certain other public interest entities performed by

firms registered to conduct audits in the UK by a Rec-

ognised Supervisory Body (further details are set out on

the FRC’s website). This monitoring is performed by the

FRC’s Audit Quality Review (AQR) team. The reviews of

individual audit engagements are intended to contrib-

ute to safeguarding and promoting improvement in the

overall quality of auditing in the UK.

Dan Olsson

Chairman of the Audit Committee

104 IDH 2023 Annual Report

Corporate Governance

During the year, we were informed that the Financial

Reporting Council (FRC) had selected the audit of IDH

plc’s December 2022 Annual Report and Accounts for

review by its AQR team as part of their routine sampling

activity. Audit quality review is undertaken by the FRC

as part of its annual inspection of audit firms. The FRC

review considered the audit of key areas of judgement

and estimation, including the application of key judge-

ment and assumptions for the expected credit loss

model, the audit of revenue, and the involvement of

the Group auditor in the component audits. The review

did not highlight any areas for improvement.

Roles and Duties of the Audit

Committee

The Audit Committee’s role is to assist the Board with

the discharge of its responsibilities in relation to finan-

cial reporting, including:

• reviewing the Group’s annual and half-year financial

statements and quarterly financial statements;

• reviewing the Group’s accounting policies and inter-

nal and external audits and controls;

• reviewing and monitoring the scope of the annual

audit and the extent of the non-audit work under-

taken by external auditors;

• advising on the appointment of external auditors

and reviewing the effectiveness of the internal audit,

internal controls, whistleblowing, and fraud systems

in place within the Group;

• ensuring that the quality of information on sustainabil-

ity factors, including on climate change, is comparable

and meets the standards of financial information.

• Oversee the Group's cybersecurity strategy ensuring it

is regularly updated and systematically adhered to.

The Board has ultimate responsibility for the Group’s

internal controls; however, they have delegated

oversight of the Group’s system of internal controls

to the Audit Committee so as to safeguard the assets

of the Group and the interests of shareholders. The

Audit Committee thus reviews the effectiveness of the

Group’s internal controls on an ongoing basis to ensure

the keeping of proper accounting records, safeguard-

ing the assets of the Group, and detecting fraud and

other irregularities. The Audit Committee reports back

to the Board with its findings and recommendations.

The Board has, accordingly, established that the

Group has in place internal controls to manage risk,

including:

• the identification and management of risk at the

level of operating departments by the heads of

those departments; and

• regular Board-level discussions of the major busi-

ness risks of the Group, together with measures

being taken to contain and mitigate those risks.

The Group’s principal risks and uncertainties and

mitigation for them are set out on pages 56–63 of this

Annual Report.

The Board has furthermore put in place a control

framework at the Group level that applies to all sub-

sidiaries, including:

• board approval of the overall Group budget and

strategic plans;

• a clear organisational structure delineating lines

of responsibility, authorities, and reporting

requirements;

• defined expenditure authorisation levels;

• a regular process for operational reviews at the

senior management level on a weekly, monthly, and

quarterly basis, covering all aspects of the business;

• a strategic planning process that defines the key

steps senior management must take to deliver on

the Group’s long-term strategy;

• a comprehensive system of financial reporting,

including weekly flash reports to management,

monthly reporting to management, and an annual

budget process involving both senior management

and the Board — the Board received reports on a

quarterly basis in 2023; and

2023 Annual Report IDH 105

Committee Member Meeting Attended

Dan Olsson 7

Hussein Choucri 7

Yvonne Stillhart 7

Significant Issues

The Audit Committee held regular meetings across the

period with the external auditors. In these meetings,

the external auditors presented their audit plan and

shared their assessment of financial statement risks.

Areas of risk and focus for the audit include revenue

recognition, procedures around management override

of controls, assessments of control over our subsidiar-

ies, and valuations of options over non-controlling

interests. Detailed discussions were held around cor-

porate governance and steps being taken to strengthen

the control environment.

During the year, the Audit Committee, external audi-

tors, and IDH’s management team agreed to record an

NGN 18 million impairment expense in goodwill and

assets in Nigeria, accounting for economic volatility in

the country and the anticipation of continued head-

winds into 2024. Meanwhile, IDH’s management team

in Nigeria continues to assess the impacts of economic

downturns in the country, putting in place strategies

for price increases to counteract persistent inflation

while prioritising patient retention and operational

expansion in the country.

Internal Auditor

The scope of the internal auditor encompasses, but is not

limited to, the examination and evaluation of the adequacy

and effectiveness of the Group’s governance, risk manage-

ment, and internal controls, as well as the quality of perfor-

mance in carrying out assigned responsibilities to achieve

the Group’s stated goals and objectives. This includes:

• Evaluating risk exposure relating to the achievement of

the Group’s strategic objectives.

• Evaluating the reliability and integrity of information

and the means used to identify, measure, classify, and

report such information.

• Evaluating the systems established to ensure compli-

ance with those policies, plans, procedures, laws, and

regulations, which could have a significant impact on

the Group.

• Evaluating the means of safeguarding assets and, as

appropriate, verifying the existence of such assets.

• Monitoring and evaluating governance processes.

• Reporting periodically on the internal audit activity’s

purpose, authority, responsibility, and performance

relative to its plan.

• Reporting significant risk exposures and control issues,

including fraud risks, governance issues, and other

matters needed or requested by the Board/Audit

Committee.

• as part of the reporting process in 2023, manage-

ment reviewed monthly and year-to-date actual

results against the prior year, against budget, and

against forecast. Any significant changes and

adverse variances are reviewed by the Group Chief

Executive and by senior management, and reme-

dial action is taken where appropriate.

Audit Committee Meetings During 2023

During 2023, the Audit Committee had seven (7) scheduled meetings. At each scheduled meeting, the Committee

considered the matters outlined above under the subheading “Roles and Duties of the Audit Committee”.

106 IDH 2023 Annual Report

Corporate Governance | Audit Committee Report

Recommendation

Ultimately, it is the Board’s responsibility to review

and approve the Group’s full-year and half-year

financial statements, as well as to determine that,

taken as a whole, the Annual Report is balanced,

understandable and provides the information neces-

sary for shareholders to assess the Group’s position

and performance, business model, and strategy. It is

the Audit Committee’s role to assist the Board in dis-

charging its responsibilities with regards to financial

reporting, as well as external and internal audits and

controls. Following a review of the process around the

annual audit and the content of the financial state-

ments, the Audit Committee advised the Board at its

meeting on 25 March 2024 that it is their opinion that

the financial statements as at 31 December 2023 pro-

vide a true and fair view of the financial performance

of the Group and recommend that it be adopted by

the Board and recommended to shareholders for

approval at the forthcoming Annual General Meeting.

Dan Olsson

Chairman, Audit Committee

27 March 2024

The Internal Auditor reports to the Audit Commit-

tee, and the Committee received four reports on the

findings of the internal audit in 2023. The Committee

also received a report from the Internal Audit on their

annual review of the system of internal control and risk

management. The Committee continues to monitor

and review the effectiveness and capabilities of the

Internal Audit during the year.

External Auditor Independence

PwC has acted as the Group’s external auditor through-

out the year. The auditors’ independence was consid-

ered by the Committee during the year and, following

careful consideration, it was agreed that the auditors

remained independent.

The Audit Committee reviewed the work completed

by the external auditors. The Audit Committee con-

firms that during 2023, PwC audit services amounted

to EGP 65.0 million (2022: EGP 38.4 million). The

external auditors' fees include those related to the

dual-listing of IDH’s shares on both the LSE and

the EGX, which necessitates the publishing of three

reviewed financial statements for 1Q, 2Q, and 3Q, in

addition to audited financial statements for the full

year in consolidated and standalone forms.

Non-audit fees paid during 2023 amounted to EGP 0.3

million (versus EGP 0.2 million in 2022).

External Auditor

Following consideration of the performance of the

auditors, the services provided during the year, and a

review of its independence and objectivity, the Com-

mittee has recommended to the Board the re-appoint-

ment of PwC as Auditor to the Company. As such, the

notice of the 2024 Annual General Meeting includes a

resolution, to be approved by shareholders, that PwC

be re-appointed as Auditor.

2023 Annual Report IDH 107

Remuneration Committee Report

In this report from the Remuneration Committee (the

“Committee”), I outline on behalf of my colleagues

and myself the basis on which Directors and select

members of senior management will be remunerated

for their service in 2023. A detailed discussion of the

basis on which the aforementioned (as well as one key

member of senior management) were remunerated for

their service in 2023 appears below.

Hussein Choucri

Chairman, Remuneration Committee

At the date of this report, the following were members of the Remuneration Committee:

Committee Member Meeting Attended

Hussein Choucri Chairman of the Committee

Dan Olsson Committee Member

Yvonne Stillhart Committee Member

Chairman Lord St John of Bletso is entitled to receive

an annual salary of USD 100,000. He is entitled to

the reimbursement of reasonable expenses. Non-

Executive Directors Hussein Choucri, Dan Olsson,

and Richard Henry Phillips, have been engaged by

the Group as Non-Executive Directors under letters of

appointment. Hussein Choucri is entitled to an annual

fee of USD 65,000, Dan Olsson is entitled to an annual

fee of USD 70,000, and Yvonne Stillhart is entitled to an

annual fee of USD 65,000. Richard Henry Philips will

not be entitled to receive any fee from the Group for

his role.

108 IDH 2023 Annual Report

Corporate Governance

Remuneration of Directors in 2023 (Audited)

Figures in EGP

Base Salary /

Fees 2023

Base Salary /

Fees 2022

Annual Bonus

2023^

Annual Bonus

2022^

Total 2023 Total 2022

Executive Director

Dr. Hend El

Sherbini

16,615,351 10,398,605 450,000 450,000 17,065,351 10,848,605

Non-Executive Directors

Lord St John of

Bletso

3,075,866 1,967,268 - 3,075,866 1,967,268

Hussein

Choucri

1,999,315 1,278,726 1,999,315 1,278,726

Dan Olsson 2,153,110 1,381,215 - 2,153,110 1,381,215

Yvonne Stillhart 1,999,315 1,065,605 - 1,999,315 1,065,605

Hussein Choucri

Chairman, Remuneration Committee

27 March 2024

The Non-Executive Directors are all entitled to the

reimbursement of reasonable expenses.

There are no taxable benefits, corporate pensions, or long-term incentive plans for the Company’s Directors.

Average US$:EGP exchange rate was 30.8 during 2023.

Dr. Hend El Sherbini receives part of her annual bonus in the form of an annual award amounting to EGP 450,000.

BOD members are not eligible for profit share distributions.

2023 Annual Report IDH 109

Nomination Committee Report

The Nomination Committee (the “Committee”)

introduced several key initiatives throughout 2023,

prioritising the implementation of safe succession

planning on both the Board and senior management

levels, promoting diversity within its ranks, and

ensuring the appropriate size and structure of the

Board of Directors to ensure its effectiveness. In this

report, I outline the key responsibilities and initia-

tives taken by the Committee to this end.

Activities for the year ended 31 December 2023:

• Reviewed the structure, size, and composition of

the Board and its Committees.

• Considered the independence of the Directors.

• Introduced a skills matrix.

• Agreed on the internal evaluation of the Board and its

Committees, facilitated by the Company Secretary.

• Considered the Board’s succession plans.

• Recommended the re-appointment of Directors at

the 2024 Annual General Meeting to the Board.

Role of the Nomination Committee

• Regularly reviewing the structure, size, and compo-

sition (including the skills, knowledge, experience,

and diversity) of the Board and its Committees

and making recommendations to the Board when

appropriate.

• Leading the process for new appointments to the

Board.

• Ensuring orderly succession planning to both the

Board and the senior management team and review-

ing it at least on an annual basis.

• Supporting the development of a diverse pipeline for

succession.

• Ensuring that there is a rigorous annual evaluation

of the performance of the Board, its Committees, the

Chair, and Individual Directors.

• As Chairman of the Committee, I will report to the

Board on the business carried out at the previous

Committee meeting and inform of any recommen-

dations made by the Committee.

Succession Planning: Board Level

In January 2024, the Committee supported the

recruitment and appointment of Sherif El Zeiny as

Group Chief Financial Officer, Vice President, and

Executive Director.

Succession planning: Senior Management

During the year, the Committee supported the

strengthening of the Executive Committee with

Samah El Saghier, Group Chief People and Culture

Officer; Tarek Yehia, Investor Relations Director; and

Sherif El Zeiny, Group Chief Financial Officer and

Vice President.

Diversity

We have increased our focus on succession and tal-

ent management for the Board and senior manage-

ment. The Committee plans to develop an orderly

Lord St John of Blesto

Chairman, Remuneration Committee

110 IDH 2023 Annual Report

Corporate Governance

succession plan for the Board's Non-Executive Direc-

tors. The Committee recognises that in order for the

Board to discharge its fiduciary duties, members

should possess a broad range of social, educational,

and professional backgrounds, as well as bring along

different skills, experiences, and cognitive strengths.

By consistently monitoring the diversity of our workplace

with a strict focus on merit, and while employing an

objective set of criteria, we ensure our ability to effectively

compete in the world’s increasingly diverse marketplace.

Our disclosures and statement on the diversity of our

Board, senior Board positions, and executive man-

agement in compliance with Listing Rule 14.3.33R

(1) (the “New Rules”) are set out below.

The New Rules Set the Following Targets:

• At least 40% of the Board are women;

• At least one of the senior Board positions (Chair,

Chief Executive Officer (CEO), Senior Independent

Director (SID), or Chief Financial Officer (CFO) is

a woman; and

• At least one member of the Board is from a minority

ethnic background (which is defined by reference

to the categories recommended by the Office of

National Statistics (ONS) as coming from a non-

white ethnic background).

The tables below show the data required to be pre-

sented by the New Rules. While the Group is not

currently in full compliance with all requirements,

we believe that we currently have the right people

fulfilling these executive roles, based on professional

background and experience.

While we do not believe it is appropriate to set strict

goals to comply with these targets at present, we

believe that the composition of the Board should

be driven by the specific needs and skill gaps of the

Group, and we continuously review our position on

the matter. Meanwhile, the Board is committed to

improving diversity in the workforce and will continue

to consider the matter as a key pillar in its succession

planning and recruitment process.

Board and Senior Management Composition by Sex

Sex Representation

Number of Board

members

Percentage of

the Board

Number of senior

positions on the

Board (CEO, CFO,

SID, and Chair)

Number in

executive

management

Percentage

of executive

management

Men

4 66.67% 1 9 60%

Women

2 33.33% 1 6 40%

2023 Annual Report IDH 111

Board and Senior Management Composition by Ethnic Background

Ethnic Representation

Number of Board

members

Percentage on

the Board

Number of senior

positions on the

Board (CEO, CFO,

SID and Chair)

Number in

executive

management

Percentage

of executive

management

White British or

other White (includ-

ing minority white

groups)

4 66.67% 1 _ _

Other ethnic groups,

including Arab

2 33.33%

100%

Notes:

1. All data is at 31 December 2023.

2. Sherif El Zeiny (male) was appointed as Board member in January 2024 and is excluded from the data.

3. Executive management is represented by all direct reports of the Chief Executive Officer in non-administrative roles. The role of the Company Secretary

is excluded as the role is outsourced to an external service provider.

4. Data is collected via self-reporting.

I look forward to meeting shareholders at the AGM on 29 May 2024.

Lord St John of Blesto

Chairman of the Nomination Committee

27 March 2024

112 IDH 2023 Annual Report

Corporate Governance | Nomination Committee Report

2023 Annual Report IDH 113

Directors’ Report

The statements and reviews on pages 4 to 63 comprise

the Strategic Report, which contains certain informa-

tion that is incorporated into this Directors’ Report by

reference, including indications as to the Group’s likely

future business developments.

Directors

The Directors who held office as at 31 December 2023

and up to the date of this report are set out on pages 94

to 97, along with their biographies. The remuneration

of the Board of Directors is set out in the Remuneration

Report on page 109.

Directors’ and Officers’ Liability Insurance and

Indemnification of Directors

Subject to the conditions set out in the Companies (Jer-

sey) Law 1991 (as amended), the Group has arranged

appropriate Directors’ and Officers’ liability insurance

to indemnify the Directors against liability in respect of

proceedings brought by third parties. Such provisions

remain in force at the date of this report.

Principal Activities

The Group’s principal activity is the provision of medi-

cal diagnostics services. An overview of the Group’s

principal activities is an integral component of the

Strategic Review included in this Annual Report begin-

ning on page 4.

Business Review and Future

Developments

A review of the development and performance of the

Group’s business forms an integral part of this Annual

Report in different sections, including the Chairman’s

Message (pages 14 to 16), Chief Executive’s Report

(pages 18 to 22), Strategic Report (beginning page 4),

and particularly the Performance section (beginning

on page 66). Financial statements for 2023 appear in the

Audited Financial Statements (starting on page 118).

Results and Dividends

The Group’s Results for 2023 are set out in the Audited

Financial Statements starting on page 118. While IDH

maintains its long-term dividend policy that sees

the Company return to shareholders the maximum

amount of excess cash after taking careful account of

the cash needed to support operations and expansions,

the Board of Directors has agreed that a dividend will

not be paid this year in light of the ongoing uncertainty

and lack of foreign currency availability in Egypt.

Principal Risks and Uncertainties

The principal risks and uncertainties that may affect

IDH’s business, as well as their potential mitigants, are

outlined on pages 56 to 63 of this Annual Report.

Share Capital

The Group has 600,000,000 ordinary shares, each with

a nominal value of USD 0.25. There are no other shares

in issue, other than ordinary shares.

Substantial Share Holdings

As at 31 December 2023, the Company ascertained

from its own analysis that the following held interests

of 3% or more of the voting rights of its issued share

capital:

114 IDH 2023 Annual Report

Corporate Governance

Substantial Share Holdings

Shareholder

Number of Voting Rights % of Voting Rights

Hena Holdings Ltd. 162,445,383 27.07

Actis IDH B.V. 126,000,000 21.00

International Finance Corporation

(IFC) and IFC MENA Fund

34,755,198 5.79

Fidelity Investments 21,068,972 3.51

T. Rowe Price International 20,607,367 3.43

Stewart Investors 18,038,382 3.01

Note (1): The table displays the top five shareholders in IDH across both exchanges (LSE and EGX).

Note (2): As at year-end 2023, 94.82 % of IDH’s shares were listed on the LSE, with the remaining 5.18% listed on the EGX. The table above demonstrates the

top six shareholders across both the LSE and EGX.

The Directors certify that there are no issued securities

that carry special rights with regard to control of the

Company. There are similarly no restrictions on voting

rights. Chief Executive Officer Dr. Hend El-Sherbini and

her mother, Dr. Moamena Kamel, jointly hold the shares

held by Henna holdings, which include the described

voting rights.

The Company has not been informed of any changes to

the above interests between 31 December 2023 and the

date of this Report.

Corporate Responsibility

The Group’s report on Corporate Responsibility is set out

on page 88.

Corporate Governance

The Group’s report on Corporate Governance is on pages

94 to 117.

Articles of Association

The Company’s Articles of Association set out the rights

of shareholders, including voting rights, distribution

rights, attendance at general meetings, powers of

Directors, proceedings of Directors, as well as borrow-

ing limits and other governance controls. A copy of

the Articles of Association can be requested from the

Group Company Secretary.

The Articles of Association may be amended by mem-

bers of the Company via special resolution at a General

Meeting of the Company. The Company is not seeking

any amendments at the forthcoming annual general

meeting.

Rules on the Appointment and

Replacement of Directors

Rules on the appointment and replacement of Directors

are set out in the Group’s Articles of Association, a copy

of which may be requested from the Group Company

Secretary.

Agreements Related to Change of Control

of the Group

In 2022, there was an agreement related to the IFC’s

USD-45-million loan agreement whereby within 60 days

2023 Annual Report IDH 115

of receipt of notice from IFC that a Major Shareholder

Event has occurred, IDH should prepay the aggregate

outstanding principal amount of the loan in full, together

with accrued interest and increased costs (if any) thereon

and all other amounts payable under the agreement,

including the amount payable under unwinding costs if

the prepayment is not made on an Interest Payment Date.

IDH's management has since decided to irrevocably

terminate the IFC loan agreement since the intended

purpose of the loan, which was to finance an acquisition

in Pakistan, was not realised and negotiations on the deal

were terminated.

Conflicts of Interest

No Directors took on additional significant commit-

ments during the year that impacted their ability to carry

out their duties. No contract with the Company or any

subsidiary undertaking of the Company in which any

Director was materially interested existed at the end of

the financial year.

Political Donations

The Group made no political donations in 2023 (2022: nil).

Financial Instruments

The Group’s principal financial instruments comprise

cash balances, balances with related parties, trade receiv-

ables and payables, and other payables and receivables

that arise in the normal course of business. The Group’s

financial instruments, risk management objectives, and

policies are set out in Note 3 and Note 5 to the Financial

Statements.

Employees

The Group has two (2) Executive Directors, namely the

Group Chief Executive, Dr. Hend El Sherbini, and the

Group Chief Financial Officer and Vice President of

Finance and Strategies, Sherif El Zeiny, as identified in

the Corporate Governance section. Their biographical

information appears on page 94 of this Annual Report,

and their compensation is reported in the Remuneration

Committee Report on page 109. IDH has service agree-

ments with the Group Chief Executive and with the Group

Chief Financial Officer and Vice President of Finance and

Strategies. Dr. Hend El Sherbini leads the Company’s

Executive Committee, which also includes all heads of

departments and meets every second week to review

and discuss performance, priorities, and upcoming

events in light of the Group’s strategic plans. In view of

the Company’s regional growth plans, IDH is committed

to building out its senior management team in prepara-

tion for a larger footprint. The Group and its subsidiaries

employed an average of 6,692 employees in 2023 (2022:

6,718) across Egypt, Jordan, Sudan, and Nigeria.

Creditor Payment Policy

Individual subsidiaries of the Group are responsible for

agreeing on the terms and conditions under which busi-

ness transactions with their suppliers are conducted. It is

the Group’s policy that payments to suppliers are made in

accordance with all relevant terms and conditions.

Going Concern

The Directors have considered a number of downside sce-

narios, including the most severe but plausible scenario,

for a period of 16 months from the signing of the financial

statements. They have also assessed the likelihood of any

key one-off payments arising, such as dividends or those

in respect of M&A activities. Under all of these scenarios,

there remains significant headroom from a liquidity and

covenant perspective. 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.

Due to the persistence of foreign currency shortages in

IDH’s home and largest market, Egypt, the Company’s

Board of Directors has decided not to distribute divi-

dends for the year ended 31 December 2023. Despite

this decision, management reiterates that its long-term

dividend policy, which sees the Company return to

shareholders the maximum amount of excess cash

after taking careful account of the cash needed to

support operations and expansions, has remained

unchanged.

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the Annual

Report and the financial statements in accordance with

applicable laws and regulations.

Company law requires the Directors to prepare finan-

cial statements for each financial year. Under that

law, the Directors have prepared the Group financial

statements in accordance with International Financial

Reporting Standards (IFRSs) as adopted by the Euro-

pean Union.

116 IDH 2023 Annual Report

Corporate Governance | Directors’ Report

Under Company law, Directors must not approve the

financial statements unless they are satisfied that they give

a true and fair view of the state of affairs of the Group and

of the profit or loss of the Group for that period. In prepar-

ing the financial statements, the Directors are required to:

• select suitable accounting policies and then apply

them consistently;

• state whether applicable IFRSs as adopted by the Euro-

pean Union have been followed, subject to any mate-

rial departures disclosed and explained in the financial

statements;

• make judgements and accounting estimates that are

reasonable and prudent; and

• prepare the financial statements on the going concern

basis, unless it is inappropriate to presume that the

Group will continue in business.

The Directors are responsible for safeguarding the

Group's assets and, hence, for taking reasonable steps

for the prevention and detection of fraud and other

irregularities.

The Directors are also responsible for keeping adequate

accounting records that are sufficient to show and explain

the Group’s transactions and disclose with reasonable

accuracy at any time the financial position of the Group

and enable them to ensure that the financial statements

comply with the Companies (Jersey) Law 1991.

The Directors are responsible for the maintenance and

integrity of the Group’s website. Legislation in the United

Kingdom governing the preparation and dissemination

of financial statements may differ from legislations in

other jurisdictions.

Directors’ Confirmations

Each of the Directors, whose names and functions are

listed in the Board of Directors section of the Annual

Report, confirms that, to the best of their knowledge:

• the Group financial statements, which have been

prepared in accordance with IFRSs as adopted by the

European Union, give a true and fair view of the assets,

liabilities, financial position ,and profit of the Group;

and

• the Financial and Operational Review includes a fair

review of the development and performance of the

business and the position of the Group, together with a

description of the principal risks and uncertainties that

it faces.

In the case of each Director in office at the date the Direc-

tors’ Report is approved:

• so far as the Director is aware, there is no relevant audit

information of which the Group’s auditors are unaware;

and

• they have taken all the steps that they ought to have

taken as a Director in order to make themselves aware

of any relevant audit information and to establish that

the Group’s auditors are aware of that information.

Annual General Meeting (AGM)

The Company will hold its 2024 AGM on 29 May 2024

in London, UK. The Board remains keen to encourage

engagement with shareholders. To that end, the Direc-

tors would like to invite questions from shareholders

in advance of and during the AGM. Should sharehold-

ers wish to submit questions to the Board prior to the

deadline for proxy voting, they can do so, and these will

be responded to on an individual basis. In addition, the

Board will offer shareholders the opportunity to dial into

the AGM, at which time they can also submit questions

to the Board.

Details of the AGM are included in the Notice of Meeting

that accompanies this Annual Report and which is avail-

able on our website.

At the AGM, all of the Group’s Directors will retire and

submit themselves for re-election.

The outcome of the voting at the AGM will be announced

by way of a London/Egypt Stock Exchange announce-

ments, and full details will be published on the Group’s

website shortly after the AGM.

Auditors

PwC have confirmed their willingness to act as the Com-

pany’s external auditors, and a separate resolution will

be proposed at the forthcoming AGM concerning their

re-appointment and to authorise the Board to agree their

remuneration.

By order of the Board,

Dr. Hend El Sherbini

Executive Director

27 March 2024

2023 Annual Report IDH 117

FINANCIAL

STATEMENTS

118 IDH 2023 Annual Report

2023 Annual Report IDH 119

Report on the audit of the financial statements

Opinion

In our opinion, Integrated Diagnostics Holdings plc’s group financial statements:

• give a true and fair view of the state of the group’s affairs as at 31 December 2023 and of its profit and cash

flows for the year then ended;

• have been properly prepared in accordance with International Financial Reporting Standards as adopted in

the European Union; and

• have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated

statement of financial position as at 31 December 2023; the Consolidated income statement, the Consolidated

statement of comprehensive income, the consolidated statement of cash flows, and the Consolidated statement of

changes in equity for the year then ended; and the notes to the financial statements, comprising material account-

ing policy information and other explanatory information.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and appli-

cable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit

of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit

of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities,

and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Stan-

dard were not provided.

Other than those disclosed in note 8.6, we have provided no non-audit services to the company or its controlled

undertakings in the period under audit.

Independent auditors’ report

to the members of Integrated

Diagnostics Holdings plc

Financial Statements

120 IDH 2023 Annual Report

Our audit approach

Context

Integrated Diagnostics Holdings plc (“IDH”) is a company incorporated in Jersey with shares listed on the Lon-

don Stock Exchange (“LSE”) and the Egyptian Exchange (“EGX”). PricewaterhouseCoopers LLP (“PwC UK”) are

appointed to audit the consolidated financial statements of IDH for the purposes of the requirements of the LSE

and Jersey Law. All trading operations of IDH are outside of the UK (generally in the Middle East and Africa).

Therefore, the role of PwC UK is predominantly that of a group auditor with other PwC network firms acting as

component auditors.

Overview

Audit scope

• Components were considered to be individual legal entities within the group. Full scope audits were per-

formed on 4 significant components which covered 97% of reported revenues and 97% of reported profit

before tax. The four components included the 3 main trading subsidiary companies in Egypt and the trading

subsidiary company in Jordan. These were selected due to their relative size.

• Additional testing was by the Group audit team performed on balances within subsidiaries that were not in

scope where these represented at least 5% of the consolidated balance and were above group materiality.

• Procedures over the consolidation, central areas including impairment testing, the Annual Report and con-

solidated financial statements were all performed by the group auditor.

Key audit matters

• Accuracy of revenue recognised from customers

Materiality

• Overall materiality: EGP 35,568,000 (2022: EGP 44,847,000) based on 4.5% of profit before tax and non-

recurring expenses in 2023 and 4.5% of profit before tax and fair value losses on financing US dollar dividends

in 2022.

• Performance materiality: EGP 26,676,000 (2022: EGP 33,635,000).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the

financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the

audit of the financial statements of the current period and include the most significant assessed risks of material

misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest

effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engage-

ment team. These matters, and any comments we make on the results of our procedures thereon, were addressed

in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do

not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

2023 Annual Report IDH 121

The key audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Accuracy of revenue recognised from customers

The Group reported revenue of EGP 4,122,506,000

from health diagnostics related activities, during the

year ended 31 December 2023. There is an inherent

risk around the accuracy of revenue recorded from

the services rendered, as revenue consists of a high

volume of transactions involving different products,

services, and pricing mechanisms.

Consequently, a significant portion of our audit effort

was directed towards testing the accuracy of revenue.

Refer to the following notes to the consolidated

financial statements for further details:

Note 3: Material accounting policy information and

other explanatory information

Note 6: Revenue

We performed audit procedures over this significant

area, which included a combination of tests of controls

and substantive procedures as described below:

• We obtained an understanding of the various

significant revenue streams and identified the

relevant controls, IT systems and reports.

• We assessed the Group’s revenue accounting

policies, including the key judgments and esti-

mates applied by management in consideration

of the requirements of IFRS 15.

• We performed manual controls testing and

substantive procedures, to verify accuracy of

revenue. This included testing the end-to-end

reconciliations of data records extracted from

the source system to the cash / credit balances

ledger.

• We used data analytic tools to assess the

reasonableness of the total value of the revenue

recorded based on price lists.

• We performed a reconciliation between revenue

transactions and cash collected and selected a

sample of the revenue transactions and tested

their accuracy and validity to underlying source

documentation.

• We also assessed the adequacy of the Group’s

disclosures in the consolidated financial state-

ments with respect to revenue.

Based upon the procedures performed above we

concluded that sufficient and appropriate audit

evidence was obtained in relation to this risk.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the

financial statements as a whole, taking into account the structure of the group, the accounting processes and

controls, and the industry in which it operates.

IDH is headquartered in Egypt, where the finance team manages the group operations and those of the Egyptian

subsidiaries. Jordan is the largest non-Egyptian operation. There are other operations in Sudan and Nigeria. The new

branches in Saudi Arabia were not operational in 2023. All of these operate under common systems and controls, but

with separate local management and finance teams reporting into the Egyptian head office team.

Independent auditors’ report

to the members of Integrated

Diagnostics Holdings plc

Financial Statements

122 IDH 2023 Annual Report

Components were considered to be individual legal entities within the group. There were 14 individual com-

ponents within the group (including the company). Those components which contributed the most significant

level of revenue and profit to the group tax were considered to be significant components. Full scope audits were

performed on these components (4 in total) which covered 97% of reported revenues and 97% of reported profit

before tax. The four components included 3 trading companies in Egypt and the trading company in Jordan.

We considered the out of scope components and the potential for material error. Additional procedures were

performed where the balances represented a significant proportion of the relevant consolidated balance (deemed

to be 5%) and the balance was above materiality.

For each individual Financial Statement Line Item (“FSLI”) we considered if sufficient coverage was obtained

from the combination of the above two areas. Sufficient coverage was deemed to be 45% for a normal risk, 55% for

an elevated risk and 65% for a significant risk. Based upon this final assessment no other areas were brought into

the scope of our audit.

For all other balances not included in the above, analytical review procedures and enquiries of management were

performed. We also considered if any other risk criteria would result in additional areas being included within the

scope of our audit. We concluded that, based upon the coverage obtained above and our understanding of the

group, that no further components or balances were included in our scope.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent of the potential impact of climate

risk on the group’s financial statements, and we remained alert when performing our audit procedures for any

indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate

risk on the group’s financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for

materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the

nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and

in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

2023 Annual Report IDH 123

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall group materiality EGP 35,568,000 (2022: EGP 44,847,000).

How we determined it

4.5% of profit before tax and non-recurring expenses

in 2023 and 4.5% of profit before tax and fair value

losses on financing US dollar dividends in 2022

Rationale for benchmark applied

We believe the benchmark being used in each year

is the key measure used by the shareholders and

management in assessing the performance of the

group in each year. It is widely accepted to use a

profit based benchmark when assessing materiality

for listed groups.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group

materiality. The range of materiality allocated across components was EGP 30,000,000 and EGP 15,000,000.

Certain components were audited to a local statutory audit materiality that was also less than our overall group

materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncor-

rected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in

determining the scope of our audit and the nature and extent of our testing of account balances, classes of transac-

tions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2022: 75%)

of overall materiality, amounting to EGP 26,676,000 (2022: EGP 33,635,000) for the group financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements,

risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount in the

middle of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit

above EGP 1,778,000 (2022: EGP 2,242,000) as well as misstatements below that amount that, in our view, war-

ranted reporting for qualitative reasons.

Independent auditors’ report

to the members of Integrated

Diagnostics Holdings plc

Financial Statements

124 IDH 2023 Annual Report

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s ability to continue to adopt the going concern basis of

accounting included:

• Discussing with management and those charged with governance the performance in 2023, the budgets for

2024 and beyond and the performance in the 2024 financial year to date. These discussions included the

impact of current events on management’s forecasts and the key drivers behind any expected changes to the

current level of performance;

• Comparing the forecasts profits and cash flows to the latest approved budgets and considering actual results

achieved in the year to date and sought evidence for any unexpected trends. We considered the level of

underperformance that would need to occur before there would be insufficient facilities. We considered the

competency of management to prepare accurate forecasts by reviewing past levels of budget accuracy;

• Validating management’s assessment of available cash and debt facilities to bank confirmations and commit-

ted debt facilities, including recalculating covenants and considering compliance with covenants or ability to

repay borrowings if required, based on management’s forecasts;

• Considered the severe but plausible downsides included in management’s model for reasonableness based

upon our understanding of the group and the likelihood of significant one off payments arising, such as settle-

ment of option payments;

• Testing the accuracy of the model containing management’s forecasted future financial performance and

cashflows;

• Considering the macroeconomic environment of the territories in which the group operates in and the impact

this could have on performance and cash flows; and

• Reviewing the disclosures made within the Annual Report for consistency with our audit work and compli-

ance with the respective legal and accounting requirements.

Based on the work we have performed, we have not identified any material uncertainties relating to events or

conditions that, individually or collectively, may cast significant doubt on the group’s ability to continue as a going

concern for a period of at least twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the

group’s ability to continue as a going concern.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the

relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements

and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the

financial statements does not cover the other information and, accordingly, we do not express an audit opinion

or, any form of assurance thereon.

2023 Annual Report IDH 125

In connection with our audit of the financial statements, our responsibility is to read the other information and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or our

knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent mate-

rial inconsistency or material misstatement, we are required to perform procedures to conclude whether there is

a material misstatement of the financial statements or a material misstatement of the other information. If, based

on the work we have performed, we conclude that there is a material misstatement of this other information, we

are required to report that fact. We have nothing to report based on these responsibilities.

Strategic report and Directors’ Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic

report and Directors’ Report for the year ended 31 December 2023 is consistent with the financial statements and

has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and its environment obtained in the course of the audit,

we did not identify any material misstatements in the Strategic report and Directors’ Report.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the

preparation of the financial statements in accordance with the applicable framework and for being satisfied

that they give a true and fair view. The directors are also responsible for such internal control as they determine

is necessary to enable the preparation of financial statements that are free from material misstatement, whether

due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s ability to continue

as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis

of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic

alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate, they could reasonably be expected to influ-

ence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures

in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,

Independent auditors’ report

to the members of Integrated

Diagnostics Holdings plc

Financial Statements

126 IDH 2023 Annual Report

including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is

detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance

with laws and regulations related to healthcare and employment legislation, and we considered the extent to

which non-compliance might have a material effect on the financial statements. We also considered those laws

and regulations that have a direct impact on the financial statements such as taxation law and legislation, the

Listing Rules and Companies (Jersey) Law 1991. We evaluated management’s incentives and opportunities for

fraudulent manipulation of the financial statements (including the risk of override of controls), and determined

that the principal risks were related to overstatement of revenues or the financial performance/position of the

group through inappropriate use of journal entries or manipulation of significant accounting estimates. The group

engagement team shared this risk assessment with the component auditors so that they could include appropriate

audit procedures in response to such risks in their work. Audit procedures performed by the group engagement

team and/or component auditors included:

• Discussions with management and those charged with governance regarding any known or suspected

instances of fraud, non-compliance with laws and regulations or claims being made against the group;

• Reviewing board minutes to ascertain the completeness of the above disclosures made to us;

• Auditing key management estimates and judgements, including assessment of compliance with the account-

ing requirements and validity of the estimates (underlying data and accuracy of past assumptions);

• Reviewing the disclosures within these consolidated financial statements for appropriateness based upon the

group’s legal and accounting requirements; and

• Testing journal entries made during the year, using a risk-based target testing approach, focusing on those

which impacted reported revenues or had unusual account combinations.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of

instances of non-compliance with laws and regulations that are not closely related to events and transactions

reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher

than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,

forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using

data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than

testing complete populations. We will often seek to target particular items for testing based on their size or risk

characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population

from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website

at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in

accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving

these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report

is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

2023 Annual Report IDH 127

Other required reporting

Companies (Jersey) Law 1991 exception reporting

Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the members on 2 July 2021 to

audit the financial statements for the year ended 31 December 2021 and subsequent financial periods. The period

of total uninterrupted engagement is 3 years, covering the years ended 31 December 2021 to 31 December 2023.

Other matter

In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule

4.1.14R, these financial statements will form part of the ESEF-prepared annual financial report filed on the

National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Techni-

cal Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report

will be prepared using the single electronic format specified in the ESEF RTS.

David Teager

(Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

East Midlands

27 March 2024

Independent auditors’ report

to the members of Integrated

Diagnostics Holdings plc

Financial Statements

128 IDH 2023 Annual Report

	Notes	2023	2022
Assets		EGP’000	EGP’000
Non-current assets
Property, plant and equipment	11	1,414,725	1,326,262
Intangible assets and goodwill	12	1,710,183	1,703,636
Right of use assets	25	683,025	622,975
Financial assets at fair value through profit and loss	14	-	18,064
Total non-current assets		3,807,933	3,670,937
Current assets
Inventories	15	374,650	265,459
Trade and other receivables	16	727,235	543,887
Financial assets at fair value through profit and loss	14	25,157	-
Financial assets at amortized cost	18	161,098	167,404
Cash and cash equivalents	17	674,253	648,512
Total current assets		1,962,393	1,625,262
Total assets		5,770,326	5,296,199
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	51,641
Put option reserve	19	(356,583)	(490,695)
Translation reserve	19	(82,341)	24,173
Retained earnings	19	1,280,287	783,081
Equity attributable to the owners of the Company		2,678,900	2,154,096
Non-controlling interests	2	421,888	292,885
Total equity		3,100,788	2,446,981
Non-current liabilities
Provisions	21	17,758	3,519
Borrowings	24	67,465	93,751
Other financial obligations	25	891,350	914,191
Non-current put option liability	23	42,786	51,000
Deferred tax liabilities	9	374,729	321,732
Total non-current liabilities		1,394,088	1,384,193
Current liabilities
Trade and other payables	22	637,761	701,095
Other financial obligations	25	176,704	148,705
Current put option liability	23	313,796	439,695
Borrowings	24	43,680	22,675
Current tax liabilities	28	103,509	152,855
Total current liabilities		1,275,450	1,465,025
Total liabilities		2,669,538	2,849,218
Total equity and liabilities		5,770,326	5,296,199

The accompanying notes on pages 134-184 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 27 March 2024 by:

Dr. Hend El Sherbini Hussein Choucri

Chief Executive Officer Independent Non-Executive Director

Consolidated statement of

financial position

As at 31 December 2023

2023 Annual Report IDH 129

Consolidated income statement

For the year ended 31 December 2023

	Notes	2023	2022
		EGP’000	EGP’000
Revenue	6	4,122,506	3,605,047
Cost of sales	8.1	(2,598,159)	(2,142,984)
Gross profit		1,524,347	1,462,063
Marketing and advertising expenses	8.2	(211,623)	(213,151)
Administrative expenses	8.3	(510,393)	(398,533)
Impairment loss on trade and other receivable	16	(51,255)	(29,914)
Other (expenses)/income	8.4	(13,314)	11,726
Operating profit		737,762	832,191
Net fair value losses on financial assets at fair value through profit or loss	8.9	-	(142,950)
Finance costs	8.7	(160,983)	(135,586)
Finance income	8.7	160,577	299,992
Net finance (costs)/income	8.7	(406)	164,406
Profit before income tax		737,356	853,647
Income tax expense	9	(268,993)	(327,064)
Profit for the year		468,363	526,583
Profit attributed to:
Owners of the Company		510,304	541,110
Non-controlling interests		(41,941)	(14,527)
		468,363	526,583
Earnings per share	10
Basic and diluted		0.85	0.90

The accompanying notes on pages 134-184 form an integral part of these consolidated financial statements.

Financial Statements

130 IDH 2023 Annual Report

Consolidated statement of

comprehensive income

For the year ended 31 December 2023

	2023	2022
	EGP’000	EGP’000
Net profit for the year	468,363	526,583
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations	(7,206)	69,081
Other comprehensive income for the year, net of tax	(7,206)	69,081
Total comprehensive income for the year	461,157	595,664
Attributable to:
Owners of the Company	403,790	414,553
Non-controlling interests	57,367	181,111
	461,157	595,664

The accompanying notes on pages 134-184 form an integral part of these consolidated financial statements.

2023 Annual Report IDH 131

Consolidated statement of

cash flows

For the year ended 31 December 2023

	Note	2023	2022
Cash flows from operating activities		EGP’000	EGP’000
Profit before tax		737,356	853,647
Adjustments for:
Depreciation of property, plant and equipment	11	259,455	206,993
Depreciation of right of use assets	25	134,033	103,099
Amortisation of intangible assets	12	7,750	7,251
Unrealised foreign exchange gains and losses	8.7	(87,798)	(188,442)
Fair value losses on financial assets at FV through profit or loss		-	142,950
Finance income	8.7	(72,779)	(95,371)
Finance Expense	8.7	160,983	135,586
Loss/(gain) on disposal of PPE		(734)	200
Impairment in trade and other receivables	16	51,255	29,914
Impairment in goodwill		11,265	1,755
Impairment in assets		6,705	-
Equity settled financial assets at fair value		(7,093)	(7,594)
ROU Asset/Lease Termination		(512)	305
Hyperinflation		-	(16,179)
Change in Provisions	21	14,238	(569)
Change in Inventories		(104,909)	(30,159)
Change in Trade and other receivables		(198,078)	(53,445)
Change in Trade and other payables		(99,191)	(166,130)
Cash generated from operating activities before income tax payment		811,946	923,811
Taxes paid		(268,283)	(715,082)
Net cash generated from operating activities		543,663	208,729
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		2,366	10,212
Interest received on financial asset at amortised cost		73,316	95,897
Payments for acquisition of property, plant and equipment		(323,439)	(299,762)
Payments for acquisition of intangible assets		(2,490)	(9,076)
Payments for the purchase of financial assets at amortised cost		(243,563)	(267,819)
Proceeds from the sale of financial assets at amortized cost		249,868	1,603,611
Payment for purchase of global depository receipts (short-term investment)	8.9	-	(1,011,376)
Proceeds from sale of global depository receipts (short-term investments)	8.9	-	868,426
Net cash (used in)/generated from investing activities		(243,942)	990,113
Cash flows from financing activities
Proceeds from borrowings	27	71,630	40,081
Repayment of borrowings	27	(76,911)	(21,721)
Proceeds loan received from related party	26	-	17,025
Repayment loan paid to related party	26	-	(17,025)
Payments of lease liabilities	27	(94,854)	(71,635)
Payment of financial obligations	27	(144,278)	(29,206)
Dividends paid		-	(1,411,752)
Interest paid	27	(138,390)	(119,308)
Bank charge paid		(19,294)	(12,909)
Cash injection by owner of non-controlling interest		74,748	8,763
Paid cash to non-controlling interest		(3,112)	-
Net cash flows used in financing activities		(330,461)	(1,617,687)
Net (decrease) increase in cash and cash equivalents		(30,740)	(418,845)
Cash and cash equivalents at the beginning of the year		648,512	891,451
Effect of exchange rate		56,481	175,906
Cash and cash equivalents at the end of the year	17	674,253	648,512

Non-cash investing and financing activities disclosed in other notes are:

• acquisition of right-of-use assets – note 25

• Put option liability – note 23

The accompanying notes on pages 134-184 form an integral part of these consolidated financial statements.

Financial Statements

132 IDH 2023 Annual Report

Consolidated statement of changes in equity

For the year ended 31 December 2023

		Share						Total	Non-
	Share	premium	Capital	Legal	Put option	Translation	Retained	attributed	Controlling	Total
EGP’000	Capital	reserve	reserves	reserve*	reserve	reserve	earnings	to	interests	Equity
As at 1 January 2023	1,072,500	1,027,706	(314,310)	51,641	(490,695)	24,173	783,081	2,154,096	292,885	2,446,981
Profit / (loss) for the year	-	-	-	-	-	-	510,304	510,304	(41,941)	468,363
Other comprehensive (expense)/ income for the year	-	-	-	-	-	(106,514)	-	(106,514)	99,308	(7,206)
Total comprehensive income	-	-	-	-	-	(106,514)	510,304	403,790	57,367	461,157
Transactions with owners in their capacity as owners
Impact of hyperinflation	-	-	-	-	-	-	(13,098)	(13,098)	-	(13,098)
Movement in put option liabilities for the year	-	-	-	-	134,112	-	-	134,112	-	134,112
Paid share from non-controlling interests	-	-	-	-	-	-	-	-	(3,112)	(3,112)
Acquisition of non-controlling interests without	-	-	-	-	-	-	-	-	74,748	74,748
change in control
Total	-	-	-	-	134,112	-	(13,098)	121,014	71,636	192,650
At 31 December 2023	1,072,500	1,027,706	(314,310)	51,641	(356,583)	(82,341)	1,280,287	2,678,900	421,888	3,100,788
As at 1 January 2022	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
Profit for the year	-	-	-	-	-	-	541,110	541,110	(14,527)	526,583
Other comprehensive income for the year	-	-	-	-	-	(126,557)	-	(126,557)	195,638	69,081
Total comprehensive income	-	-	-	-	-	(126,557)	541,110	414,553	181,111	595,664
Transactions with owners in their capacity as owners
Dividends	-	-	-	-	-	-	(1,304,805)	(1,304,805)	(106,947)	(1,411,752)
Impact of hyperinflation	-	-	-	-	-	-	(4,200)	(4,200)	(1,555)	(5,755)
Movement in put option liabilities for the year	-	-	-	-	465,702	-	-	465,702	-	465,702
Acquisition of non-controlling interests without	-	-	-	-	-	-	-	-	8,763	8,763
change in control
Total	-	-	-	-	465,702	-	(1,309,005)	(843,303)	(99,739)	(943,042)
At 31 December 2022	1,072,500	1,027,706	(314,310)	51,641	(490,695)	24,173	783,081	2,154,096	292,885	2,446,981

* 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

2023 Annual Report IDH 133

Notes to the Consolidated

Financial Statements

For the year ended 31 December 2023

(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 2023 were authorised for issue in accordance with a resolution of

the directors on 27 March 2024. Integrated Diagnostics Holdings plc “IDH” or “the company” is a public company

incorporated in Jersey. Has been established according to the provisions of the Companies (Jersey) law 1991 under

No. 117257. The registered office address of the Company is 1IFC 5, St. Helier, Jersey, JE1 1ST, Channel Islands. 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 group 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 oper-

ates are in Egypt, Jordan, Nigeria, Sudan and Saudi Arabia.

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

Financial Statements

134 IDH 2023 Annual Report

2. Group information

Information about subsidiaries

The consolidated financial statements of the Group include:

Principal

activities

Country of

Incorporation

% Equity

interest

Non-Controlling

interest

2023 2022 2023 2022

Al Borg Laboratory Company

(“Al-Borg”)

Medical diagnostics

service

Egypt 99.3% 99.3% 0.7% 0.7%

Al Mokhtabar Company for Medical

Labs (“Al Mokhtabar”)

Medical diagnostics

service

Egypt 99.9% 99.9% 0.1% 0.1%

Medical Genetic Center

Medical diagnostics

service

Egypt 55.0% 55.0% 45.0% 45.0%

Al Makhbariyoun Al Arab Group

Medical diagnostics

service

Jordan 60.0% 60.0% 40.0% 40.0%

Golden Care for Medical Services

Holding company of

SAMA

Egypt 100.0% 100.0% 0.0% 0.0%

Integrated Medical Analysis Company

(S.A.E)*

Medical diagnostics

service

Egypt 100.0% 99.6% 0.0% 0.4%

SAMA Medical Laboratories Co.

(“Ultralab medical laboratory “)

Medical diagnostics

service

Sudan 80.0% 80.0% 20.0% 20.0%

AL-Mokhtabar Sudanese Egyptian Co.

Medical diagnostics

service

Sudan 65.0% 65.0% 35.0% 35.0%

Integrated Diagnostics Holdings

Limited

Intermediary holding

company

Caymans

Island

100.0% 100.0% 0.0% 0.0%

Dynasty Group Holdings Limited

Intermediary holding

company

England and

Wales

51.0% 51.0% 49.0% 49.0%

Eagle Eye-Echo Scan Limited

Intermediary holding

company

Mauritius 77.18% 77.18% 22.82% 22.82%

Echo-Scan**

Medical diagnostics

service

Nigeria 100.0% 100.0% 0.0% 0.0%

WAYAK Pharma Medical services Egypt 99.99% 99.99% 0.01% 0.01%

Medical Health Development*** Medical services Saudi Arabia 51% - 49% -

*In the financial period of 23, Al Mokhtabar, a medical laboratory, acquired a 0.4% ownership share in Integrated Medical Analysis (S.A.E). In connection

with this acquisition, Al Mokhtabar made a payment of 3,112K to non-controlling interest. This transaction resulted in Al Mokhtabar becoming the full owner

of the stake by the end of the year 2023.

** The group consolidate “Echo scan” a subsidiary based in Nigeria despite of 39.4% indirect ownership.

for more details refer to note 4.1.

*** On March 8, 2023, the Group completed the establishment of Medical Health Development, a limited liability company based in Saudi Arabia with a total

stake of 51% directly and indirectly through one of the Group’s subsidiaries, where Integrated Diagnostics Holdings (IDH) owns 30% and Al Makhbariyoun Al

Arab Group (“Biolab”)-Jordan a subsidiary owns 21%., The group consolidate “Medical Health Development” a subsidiary based in Saudi Arabia

despite of 42.51% indirect ownership for more details refer to note 4.1.

Non-Controlling interest

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

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

Proportion of equity interest held by non-controlling interests:

Country of

incorporation 2023 2022

Medical Genetic Center Egypt 45.0% 45.0%

Al Makhbariyoun Al Arab Group Jordan 40.0% 40.0%

SAMA Medical Laboratories Co. " Ultra lab medical laboratory " Sudan 20.0% 20.0%

AL-Mokhtabar Sudanese Egyptian Co. Sudan 35.0% 35.0%

Al Borg Laboratory Company Egypt 0.7% 0.7%

Dynasty Group Holdings Limited England and Wales 49% 49%

Eagle Eye-Echo Scan Limited Mauritius 22.82% 22.82%

Medical Health Development Saudi Arabia 49% -

2023 Annual Report IDH 135

The summarised financial information of these subsidiaries is provided below. This information is based on

amounts before inter-company eliminations.

Medical

Genetic Center

Al Makhbariyoun

Al Arab Group

(Hashemite

Kingdom of

Jordan)

Alborg

Laboratory

Company

Other

individually

immaterial

subsidiaries

Dynasty

Group

EGP’000 Total

EGP’000 EGP’000 EGP’000 EGP’000 EGP’000 EGP’000

Summarised statement of

Income for 2023:

Revenue - 604,025 1,449,344 2,065,051 96,394 4,214,814

(loss)/Profit (107) 32,811 183,045 387,628 (54,740) 548,637

Other comprehensive

(expense)/income

- 65,142 - (3,606) 131,234 192,770

Total comprehensive

(expense)/income

(107) 97,953 183,045 384,022 76,494 741,407

(loss)/Profit allocated to non-

controlling interest

(48) 13,124 1,296 (9,597) (12,514) (7,739)

Other comprehensive income/

(expense) allocated to non-

controlling interest

- 26,333 - (847) 71,847 97,333

Medical

Genetic Center

Al Makhbariyoun

Al Arab Group

(Hashemite

Kingdom of

Jordan)

Alborg

Laboratory

Company

Other

individually

immaterial

subsidiaries

Dynasty

Group

EGP’000 Total

EGP’000 EGP’000 EGP’000 EGP’000 EGP’000 EGP’000

Summarised statement of

financial position as at 31

December 2023:

Non-current assets

670 494,904 751,597 681,583 51,913 1,980,667

Current assets

1,801 254,412 405,125 830,799 (6,623) 1,485,514

Non-current liabilities

(27) (202,510) (406,229) (302,827) (3,189) (914,782)

Current liabilities

(15,409) (187,663) (224,305) (316,886) (24,911) (769,174)

Net (liabilities)/assets (12,965) 359,143 526,188 892,669 17,190 1,782,225

Net (liabilities)/assets

attributable to non-controlling

interest

(5,837) 143,657 3,724 39,780 4,579 185,903

Financial Statements

136 IDH 2023 Annual Report

Medical

Genetic

Center

Makhbariyoun

Al Arab Group

Alborg

Laboratory

Company

Other

subsidiaries

with

immaterial

NCI

Dynasty

Group Total

EGP’000 EGP’000 EGP’000 EGP’000 EGP’000 EGP’000

Summarised statement of

Income for 2022:

Revenue 383 611,840 1,210,716 2,348,371 78,864 4,250,174

(loss)/Profit (10,339) 57,917 266,201 470,492 (54,602) 729,669

Other comprehensive

(expense)/income

- 134,909 - (3,796) 248,726 379,839

Total comprehensive

(expense)/income

(10,339) 192,826 266,201 466,696 194,124 1,109,508

(loss)/Profit allocated to non-

controlling interest

(4,655) 23,167 1,884 555 (11,913) 9,038

Other comprehensive income/

(expense) allocated to non-

controlling interest

- 53,964 - (876) 140,041 193,129

Medical

Genetic

Center

Makhbariyoun

Al Arab Group

Alborg

Laboratory

Company

Other

subsidiaries

with

immaterial

NCI

Dynasty

Group Total

EGP’000 EGP’000 EGP’000 EGP’000 EGP’000 EGP’000

Summarised statement of

financial position as at 31

December 2022:

Non-current assets 670 367,404 710,836 775,581 121,770 1,976,261

Current assets 1,909 247,636 428,668 1,212,429 14,130 1,904,772

Non-current liabilities (27) (164,478) (516,784) (351,111) (11,286)

(1,043,686)

Current liabilities (15,409) (189,371) (244,970) (449,373) (33,181)

(932,304)

Net (liabilities)/assets (12,857) 261,191 377,750 1,187,526 91,433 1,905,043

Net (liabilities)/assets

attributable to non-controlling

interest

(5,788) 104,476 2,674 (993) 16,608 116,977

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 man-

dates that fair value accounting is required which is related to financial assets and liabilities measured at fair value.

2023 Annual Report IDH 137

New standards and interpretations adopted

The Group has applied the following amendments for the first time for their annual reporting period commencing

1 January 2023:

• Insurance Contracts IFRS 17

• Definition of Accounting Estimates - Amendments to IAS 8

• Deferred Tax Related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12

• Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

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

There has been one amendment that has been applied for the first time in the current year that has had an impact

on the financial statement disclosures. The amendments to IAS 1 and IFRS Practice Statement 2 Making Material-

ity Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy

disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful

by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement ti

disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality

in making decisions about accounting policy disclosures. The amendments have had an impact on the Group’s

disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the

Group’s consolidated financial statements.

New standards and interpretations not yet adopted

Certain new accounting standards, amendments to accounting standards and interpretations have been pub-

lished that are not mandatory for 31 December 2023 reporting period and have not been early adopted by the

company. These standards, amendments or interpretations are not expected to have a material impact on the

group in the current or future reporting periods and on foreseeable future transactions.

Going concern

These consolidated financial statements have been prepared on the going concern basis. On 31 December 2023,

the Group had (cash and cash equivalent balance plus treasury bills / deposits minus borrowing) amounting to

KEGP 724,206. 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. We have conducted mul-

tiple sensitivity analyses to assess the impact of inflationary pressures and potential currency evaluation for the

next 16 months. We did not consider the Biolab put option since it is improbable that the option will be exercised

refer to (note 23). We assume no dividends are expected to be paid during the period for which going concern is

being assessed or those in respect of merger and acquisition ‘M&A’ activity. Under all of these scenarios, there

remains significant headroom from a liquidity and covenant perspective. 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 2023. Control is achieved when the Group is exposed, or has rights, to variable returns from its involve-

ment with the investee and has the ability to affect those returns through its power over the investee.

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

Financial Statements

138 IDH 2023 Annual Report

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 consis-

tency with the policies adopted by the group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated state-

ment of income statement of comprehensive income, statement of changes in equity and statement of financial

position respectively.

ii. Changes in ownership interests

The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with

equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of

the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between

the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a

separate reserve within equity attributable to owners of the group.

When the group ceases to consolidate or equity account for an investment because of a loss of control, joint control

or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying

amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently

accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previ-

ously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly

disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive

income are reclassified to profit or loss.

If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained,

only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to

profit or loss where appropriate.

3.2. Material accounting policy information and other explanatory information

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.

2023 Annual Report IDH 139

The excess of the:

• consideration transferred,

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

• acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net iden-

tifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable

assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their

present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate

at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

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 lev-

els for which there are separately identifiable cash inflows which are largely independent of the cash inflows from

other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an

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

c) Fair value measurement

The Group measures financial instruments such as non-derivative financial instruments and contingent consid-

eration assumed in a business combination at fair value at each balance sheet date.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value

is categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

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

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement

is directly or indirectly observable.

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement

is unobservable.

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group

determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on

the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the

nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

The fair value less any estimated credit adjustments for financial assets and liabilities with maturity dates less

than one year is assumed to approximate their carrying value. The fair value of financial liabilities for disclosure

purposes is estimated by discounting the future contracted cash flows at the current market interest rate that is

available to the Group for similar transactions.

Financial Statements

140 IDH 2023 Annual Report

d) Revenue recognition

Revenue represents the value of medical diagnostic services rendered in the year and is stated net of discounts. The

Group has two types of customers: Walk-in patients and patients served under contracts. For patients under contracts,

rates are agreed in advance on a per-test, client-by-client basis based on the pricelists agreed within these contracts.

The following steps are considered for all types of patients:

1. Identification of the Contracts: written contracts are agreed between IDH and customers. The contracts

stipulate the duration, price per test and credit period.

2. Determining performance obligations are the diagnostics tests within the pathology and radiology services.

The performance obligation is achieved when the customer receives their test results, and so are recognised

at point in time.

3. Transaction price: Services provided by the Group are distinct in the contract, as the contract stipulates the

series of tests’ names/types to be conducted along with its distinct prices.

4. Allocation of price to performance obligations: Stand-alone selling price per test is stipulated in the 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 12 months from the time they are awarded. The value of points to

be provided is based on the expectation of what level will be redeemed in the future before their 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 or have expired.

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

2023 Annual Report IDH 141

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 oper-

ates (‘the functional currency’). The Group’s consolidated financial statements are presented in Egyptian Pounds,

being the reporting currency of the main Egyptian trading subsidiaries within the Group and the primary eco-

nomic environment in which the Group operates.

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) Hyperinflationary Economies

The financial statements of “SAMA Medical Laboratories Co. and AL-Mokhtabar Sudanese Egyptian Co.” report

their financial statements in the currency of a hyperinflationary economy. In accordance with IAS 29 financial

reporting in Hyperinflationary Economies, the financial statements of those subsidiaries were restated by apply-

ing the consumer price index at closing rates in December 2023 Nil (2022 December, 65,137) before they were

included in the consolidated financial statements.

h) 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.

Financial Statements

142 IDH 2023 Annual Report

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.

i) 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 when-

ever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisa-

tion method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embod-

ied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as

changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in

the statement of income in the expense category that is consistent with the function of the intangible assets. The

Group amortises intangible assets with finite lives using the straight-line method over the following periods:

• IT development and software 4-5 years

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either indi-

vidually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine

whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is

made on a prospective basis.

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over

interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the

fair value of the non-controlling interest in the acquire.

Goodwill is stated at cost less any accumulated impairment losses. For the purpose of impairment testing, good-

will acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of

CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the

goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal

management purposes. the impairment assessment is done on an annual basis.

2023 Annual Report IDH 143

Brand

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

indefinite useful life.

The Group brand names are considered to have indefinite useful life as the Egyptian brands have been established

in the market for more than 40 years and the health care industry is very stable and continues to grow.

The brands are not expected to become obsolete and can expand into different countries and adjacent businesses,

in addition, there is a sufficient ongoing marketing efforts to support the brands and this level of marketing effort

is economically reasonable and maintainable for the foreseeable future.

Impairment of intangible assets

The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impair-

ment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable

amount, which is the higher of its fair value less costs of disposal and its value in use.

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

The value in use calculation is based on a discounted cash flow (“DCF”) model. Realisable value is based on the

market value of the CGU or their underlying assets.

The cash flows are derived from the budget for the next five years and do not include restructuring activities that

the Group is not yet committed to or significant future investments that will enhance the asset’s performance of

the CGU being tested.

We test for impairment at the smallest grouping of CGUs at which a material impairment could arise or at the

lowest level at which goodwill is monitored. References to testing being performed at a CGU level throughout the

rest of the financial statements is referring to the grouping of CGUs at which at the test is performed. The grouping

of CGUs is shown in note 13 where the assumptions for the impairment assessment are disclosed.

I) Financial instruments – initial recognition and subsequent measurement

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

equity instrument of another entity.

i) Financial assets

Classification

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

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

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

• those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms

of the cash flows.

For investment is equity instrument measured at fair value, gains and losses will either be recorded in income state-

ment 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).

Financial Statements

144 IDH 2023 Annual Report

Recognition and derecognition

According to the standard purchases and sales of financial assets are recognised on trade date, being the date

on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to

receive cash flows from the financial assets have expired or have been transferred and the group has transferred

substantially all the risks and rewards of ownership.

Measurement

At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not

at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the

financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash

flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the group’s business model for managing the asset and

the cash flow characteristics of the asset. There are three measurement categories into which the group classifies

its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent

solely payments of principal and interest, are measured at amortised cost. Interest income from these finan-

cial assets is included in finance income using the effective interest rate method. Any gain or loss arising on

derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with 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.

2023 Annual Report IDH 145

Equity instruments

The group subsequently measures all equity investments at fair value. Where the group’s management has elected to

present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value

gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments

continue to be recognised in profit or loss as other income when the group’s right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of income

as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are

not reported separately from other changes in fair value.

Impairment

The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments

carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been

a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted by

IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

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

Disclosures for significant estimates and assumptions Note 4.2

Financial assets Note 5

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 seg-

ments based on credit risk characteristics, age of customer relationship.

Loss rates are based on actual credit loss experience over the past three years. These rates are multiplied by scalar

factors to reflect differences between economic conditions during the period over which the historical data has been

collected, current conditions and the Groups view of economic conditions over the expected lives of the receivables.

ii. Financial liabilities

Initial recognition and measurement

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified at

FVTPL if it is classified as held for trading, financial liabilities at FVTPL are measured at fair value and net gains

and losses including any interest expenses are recognised in profit or loss.

Put options included in put option liabilities are carried at the present value of the redemption amount in accor-

dance with IAS 32 in regard to the guidance on put option on an entity’s own equity shares. The group has written

put options over the equity of its (Bio Lab,Echo Scan and Medical Health Development) 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 within the put option reserve and this is in line

with paragraph 23 of IFRS 10.

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.

Financial Statements

146 IDH 2023 Annual Report

The Group’s financial liabilities include trade and other payables, put option liabilities, borrowings, and other

financial obligations .

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms,

or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the

derecognition of the original liability and the recognition of a new liability. The difference in the respective carry-

ing amounts is recognised in the statement of income.

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:

Disclosures for significant assumptions and estimates Note 4.2

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 writ-

ten down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax

discount rate that reflects current market assessments of the time value of money and the risks specific to the

asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no

such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated

by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared

separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast

calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project

future cash flows after the fifth year.

2023 Annual Report IDH 147

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 impair-

ment 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 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 indi-

cate 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 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.

Financial Statements

148 IDH 2023 Annual Report

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 obli-

gation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or

all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised

as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is

presented in the statement of profit or loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that

reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provi-

sion due to the passage of time is recognised as a finance cost.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation

using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to

the obligation. The increase in the provision due to passage of time is recognised as a finance cost.

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.

2023 Annual Report IDH 149

q) Segmentation

The Group has five operating segments based on geographical location rather than two operating segments based

on service provided and considered as one reportable segment due to having similar characteristics.

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 com-

mencement date, discounted using the incremental borrowing rate for the IFRS 16 calculations. This is set based

upon the interest rate attached to the groups financing and adjusted, where appropriate, for specific factors such

as asset or company risk premiums.

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

• fixed payments, including in-substance fixed payments;

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

commencement date.

• amounts expected to be payable under a residual value guarantee, and

• the exercise price under a purchase option that the Group is reasonably certain to exercise,

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

and

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

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there

is a change in future lease payments arising from a change in an index or rate, there is a change in the Group’s

estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assess-

ment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance

fixed lease payment.

Financial Statements

150 IDH 2023 Annual Report

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. Key judgments and critical accounting 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 holds the majority of the share capital

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 is able to consolidate its subsidiaries, Echoscan in Nigeria and Medical Health Development in Saudi

Arabia, despite owning only 39.4% and 42.51% indirect ownership, respectively. This is due to several reasons:

1. The group exercises control over all intermediate entities that connect the parent company to Echoscan and

Medical Health Development.

2. The group has a technical service agreement in place, which grants them the authority to direct and oversee

the operations of the subsidiaries in Nigeria.

3. The appointment of Dr. Amid Abdelnour as CEO in Saudi Arabia further strengthens the group’s ability to

control the subsidiary.

Despite not having majority ownership, the group’s control over the intermediate entities, technical service agree-

ment, and CEO appointment allows them to exercise control in their financial statements.

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 state-

ments were prepared. Existing circumstances and assumptions about future developments, however, may change

due to market changes or circumstances arising that are beyond the control of the Group. Such changes are

reflected in the assumptions when they occur.

2023 Annual Report IDH 151

Impairment of intangible assets

The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impair-

ment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable

amount, which is the higher of its fair value less costs of disposal and its value in use.

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

calculation is based on a discounted cash flow (“DCF”) model. The exception to this was Echo Scan where the realis-

able value was greater than the value in use, therefore, the recoverable amount was based on the realisable value.

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 to be utilised within one year. A contract liability is recognised for the points awarded

at the time of the sale based on the expected level of redemption. At 31 December 2023 the level of points accumu-

lated by customers which had not expired was equivalent to 189MEGP. 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 60

MEGP out of the total potential amount that could be redeemed is likely to be utilised by customers. If the points

utilised during the year were 10% more than estimated, this would result in an additional charge of 6m EGP.

Impairment of financial assets

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates.

The group uses judgement in making these assumptions and selecting the inputs to the impairment calculation,

based on the group’s history and existing market conditions, as well as forward-looking estimates at the end of

each reporting period. Details of the key assumptions and inputs used are disclosed in note 16.

5. Financial assets and financial liabilities

2023 2022

EGP’000 EGP’000

Cash and cash equivalents (Note 17) 674,253 648,512

Term deposits and treasury bills (Note 18) 161,098 167,404

Trade and other receivables (Note 16) 685,050 509,806

Total financial assets 1,520,401 1,325,722

2023 2022

EGP’000 EGP’000

Trade and other payables (Note 22) 556,563 628,313

Put option liability (Note 23) 356,582 490,695

Financial obligations (Note 25) 1,068,054 1,062,896

Loans and borrowings (Note 27) 125,439 127,420

Total other financial liabilities 2,106,638 2,309,324

Total financial instruments* (586,237) (983,602)

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

Financial Statements

152 IDH 2023 Annual Report

The fair values of financial assets and liabilities are considered to be equivalent to their book value.

The fair values measurements for all the financial assets and liabilities have been categorized as Level 3, it is fair

value can’t be determined by using readily observable measures and Echo-Scan put option (note 23) has been

categorized as Level 3 as the fair value of the option is based on un-observable inputs using the best information

available in the current circumstances, including the company’s own projection and taking into account all the

market assumptions that are reasonably available.

Financial instruments risk management objectives and policies

The Group’s principal financial liabilities are trade and other payables, put option liabilities, borrowings and other

financial liabilities. The Group’s principal financial assets include trade and other receivables, financial assets at

amortised cost, financial asset at fair value and cash and cash equivalents that derive directly from its operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s overall risk management program

focuses on the unpredictability of markets and seeks to minimize potential adverse effects on the Group’s financial

performance. The Group’s senior management oversees the management of these risks. The Board of Directors

reviews and agrees policies for managing each of these risks, which are summarised below.

The board provides written principles for overall risk management, as well as written policies covering specific

areas, such as foreign exchange risk, interest rate risk, and credit risk, use of derivative financial instruments and

non-derivative financial instruments, and investment of excess liquidity.

-Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of

changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other

price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include

borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at 31 December 2023 and 2022. The sen-

sitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest

rates of the debt and the proportion of financial instruments in foreign currencies are all constant.

The analysis excludes the impact of movements in market variables on provisions, and the non-financial assets and

liabilities of foreign operations. The following assumptions have been made in calculating the sensitivity analysis:

• The sensitivity of the relevant consolidated income statement item is the effect of the assumed changes in

respective market risks. This is based on the financial assets and financial liabilities held at 31 December 2023

and 31 December 2022.

-Interest rate risk

The Group is trying to minimize its interest rate exposure, especially in Egypt region, which has seen several

interest rate rises over the year. Minimising interest rate exposure has been achieved partially by entering into

fixed-rate instruments.

2023 Annual Report IDH 153

Exposure to interest rate risk

The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of

the group is as follows:

2023 2022

EGP’000 EGP’000

Fixed-rate instruments

Financial obligations (note 25) 1,068,054 1,062,896

Loans and borrowings (note 24) 16,694 -

Variable-rate instruments

Loans and borrowings (note 24) 94,451 116,426

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 945k (2022: EGP 1,164K). This analysis assumes that all other vari-

ables, remain constant.

-Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of

changes in foreign exchange rates.

The Group operates internationally and is exposed to foreign exchange risk arising from various currency expo-

sures, primarily with respect to the US Dollar, Sudanese Pound, the Jordanian Dinar, Nigerian Naira and Saudi

Riyal. Foreign exchange risk arises from the Group’s operating activities (when revenue or expense is denomi-

nated 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:

31-Dec-23

Assets Liabilities

Cash

and cash

equivalents

Other

assets

Total

assets Put option

Finance

lease

Trade

payables

Total

liability

Net

exposure

US 22,698 - 22,698 - (49,290) (28,767) (78,057) (55,359)

JOD - - - (301,383) - - (301,383) (301,383)

SAR - - - (42,786) - - (42,786) (42,786)

Financial Statements

154 IDH 2023 Annual Report

31-Dec-22

Assets Liabilities

Cash

and cash

equivalents

Other

assets

Total

assets Put option

Finance

lease

Trade

payables

Total

liability

Net

exposure

13,112 - 13,112 - (299,128) (8,840) (307,968) (294,856)

JOD - - - (439,695) - - (439,695) (439,695)

The following is the exchange rates applied:

Average rate for the year ended

31-Dec-23 31-Dec-22

US Dollars 30.76 19.67

Euros 33.31 20.59

GBP 38.35 24.02

JOD 43.12 27.71

SAR 8.20 5.24

SDG 0.05 0.04

NGN 0.05 0.05

Spot rate for the year ended

31-Dec-23 31-Dec-22

US Dollars 30.84 24.70

Euros 34.04 26.27

GBP 39.26 29.70

JOD 43.42 34.78

SAR 8.22 6.57

SDG 0.05 0.04

NGN 0.03 0.06

At 31 December 2023, if the Egyptian Pound had weakened/strengthened by 40% against the US Dollar with all

other variables held constant, total equity for the year would have increased/decreased by EGP (22.14m) (2022:

EGP 118m), 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 2023.

At 31 December 2023, 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 (30m)

(2022: EGP (44m)), 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 2023.

At 31 December 2023, if the Egyptian Pound had weakened / strengthened by 10% against the Saudi Riyal with

all other variables held constant, total equity for the year would have increased/decreased by EGP (4m), mainly

as a result of foreign exchange gains/losses and translation reserve on translation of SAR -denominated financial

assets and liabilities as at the financial position of 31 December 2023.

2023 Annual Report IDH 155

- Price risk

The group’s exposure to equity securities price risk arises from investments held by the group and classified in the

balance sheet as at fair value through profit or loss (FVPL) (note 14).

- Credit risk

Credit risk is the risk a financial loss to the Group if a customer or counterparty to a financial instrument fails to

meet its contractual obligations and it arises principally from under the Groups receivables. The Group is exposed

to credit risk from its operating activities (primarily trade receivables) and financial assets at amortised cost, such

as term deposits and treasury bills.

Credit risk is managed on a group basis, except for credit risk relating to accounts receivable balances. Each local

entity is responsible for managing and analysing the credit risk for each of their new clients before standard pay-

ment and delivery terms and conditions are offered. Credit risk arises from cash and cash equivalents, derivative

financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers,

including outstanding receivables and committed transactions.

The cash balance and financial assets at amortized cost within the group is held within financial institutions, 76%

with a rating of B- ,6% is rated at least A and 18% is rated at least Aa3.

Trade receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. How-

ever, management also considers the factors that may influence the credit risk of its customer base, including the

default risk associated with the industry and country or region in which customers operate. Details of concentra-

tion of revenue are included in the operating segment note (see Note 6).

The risk management committee has established a credit policy under which each new customer is analysed

individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are

offered and credit limit is set for each customer. The Group’s review includes external ratings, if available, financial

statements, industry information and in some cases bank references. Receivable limits are established for each

customer and reviewed quarterly. Any receivable balance exceeding the set limit requires approval from the risk

management committee. Outstanding customer receivables are regularly monitored and the average general

credit terms given to contract customers are 45 - 60 days.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition,

a large number of minor receivables are grouped into homogenous groups and assessed for impairment collec-

tively. The calculation is based on actual incurred historical data and expected future credit losses. The Group

does not hold collateral as security. That maximum exposure to credit risk is disclosed in note 16.

Cash and cash equivalents

Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department

in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties

and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group’s

Board of Directors on an annual basis and may be updated throughout the year subject to approval of the Group’s

management. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through

a counterparty’s potential failure to make payments.

The maximum exposure to credit risk at the reporting date is the carrying value of cash and cash equivalents

disclosed in Note 17.

Financial Statements

156 IDH 2023 Annual Report

- Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of

finance leases and loans.

The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undis-

counted cashflows:

31 December 2023 1 year or less 1 to 5 years

more than 5

years Total

Financial obligations 291,342 1,054,902 166,965 1,513,209

Put option liabilities 313,796 42,786 - 356,582

Borrowings 60,199 83,211 - 143,410

Trade and other payables 556,563 - - 556,563

1,221,900 1,180,899 166,965 2,569,764

31 December 2022 1 year or less 1 to 5 years

more than 5

years Total

Financial obligations

285,962 1,030,750 227,715 1,544,427

Put option liabilities

439,695 51,000 - 490,695

Borrowings

41,681 119,673 - 161,354

Trade and other payables

628,313 - - 628,313

1,395,651 1,201,423 227,715 2,824,789

Cash flow forecasting is performed in the operating entities of the group and aggregated by group finance. Group

finance monitors rolling forecasts of the group’s liquidity requirements to ensure it has sufficient cash to meet

operational needs. Such forecasting takes into consideration the group’s compliance with internal financial posi-

tion ratio targets and, if applicable external regulatory or legal requirements – for example, currency restrictions.

The group’s management retain cash balances in order to allow repayment of obligations in due dates, without

taking into account any unusual effects which it cannot be predicted such as natural disasters. All suppliers and

creditors will be repaid over a period not less 30 days from the date of the invoice or the date of the commitment.

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 five operating segments based on geographical location, with the Group’s Chief Operating Deci-

sion Maker (CODM) reviewing the internal management reports and KPIs of each geography. The CODM does not

separately review assets and liabilities of the group by reportable segment.

2023 Annual Report IDH 157

The Group operates in five geographic areas, Egypt, Sudan, Jordan, Nigeria and Saudi Arabia. As a provider of

medical diagnostic services, IDH’s operations in Sudan are not subject to sanctions. The revenue split adjusted

EBITDA split (being the key profit measure reviewed by CODM), impairment loss on trade receivables and net

profit and loss between the five regions is set out below.

Revenue by geographic location

For the year ended

Egypt

region

Sudan

region

Jordan

region

Nigeria

region

Saudi

Arabia Total

31-Dec-23 3,410,720 11,367 604,025 96,394 - 4,122,506

31-Dec-22 2,894,042 20,301 611,840 78,864 - 3,605,047

Adjusted EBITDA by geographic location

For the year ended

Egypt

region

Sudan

region

Jordan

region

Nigeria

region

Saudi

Arabia Total

31-Dec-23

1,058,254 1,107 157,306 (24,623) - 1,192,044

31-Dec-22

1,052,881 (196) 136,195 (17,087) - 1,171,793

Impairment loss / (reversed of impairment) on trade receivables by geographic location

For the year ended

Egypt

region

Sudan

region

Jordan

region

Nigeria

region

Saudi

Arabia Total

31-Dec-23 45,268 5,013 - 974 - 51,255

31-Dec-22 27,734 3 (628) 2,805 - 29,914

Net profit and loss by geographic location

For the year ended

Egypt

region

Sudan

region

Jordan

region

Nigeria

region

Saudi

Arabia Total

31-Dec-23 530,207 (1,735) 33,813 (72,536) (21,386) 468,363

31-Dec-22 514,353 16,978 53,065 (57,813) - 526,583

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

2023 2022

EGP’000 EGP’000

Profit from operations 737,762 832,191

Property, plant and equipment and right of use depreciation 393,488 310,092

Amortization of Intangible assets 7,750 7,251

EBITDA 1,139,000 1,149,534

Nonrecurring items* 53,044 22,259

Adjusted EBITDA 1,192,044 1,171,793

* Nonrecurring items

IDH recorded several one-off expenses during the year, namely:

2023 2022

EGP’000 EGP’000

Transactions fees related to aborted Pakistan acquisition - 22,259

The Egyptian government for vocational training 11,865 -

Pre-operating expenses in Saudi Arabia 18,196 -

Impairment expenses due to the ongoing conflict in Sudan 5,013 -

Impairment expenses in goodwill and assets for operations in Nigeria 17,970 -

53,044 22,259

Financial Statements

158 IDH 2023 Annual Report

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

Saudi

Arabia Total

31-Dec-23 3,091,485 3,848 609,699 47,639 55,262 3,807,933

31-Dec-22 3,039,930 14,993 494,244 121,770 - 3,670,937

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 share-

holders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The repatriation of a declared dividend from Egyptian group entities are subject to regulation by Egyptian authori-

ties. The outcome of an Ordinary General Meeting of Shareholders declaring a dividend is first certified by the

General Authority for Investment and Free Zones (GAFI).

Approval is subsequently transmitted to Misr for Central Clearing, Depository and Registry (MCDR) to distribute

dividends to all shareholders, regardless of their domicile, following notification of shareholders via publication

in one national newspapers.

The Group monitors capital on the basis of the net debt to equity ratio. This ratio is calculated as net debt divided

by total equity. Net debt is calculated as (short-term and long-term financial obligation plus short-term and long

term borrowings) less cash and cash equivalents and financial assets at amortised cost.

2023 2022

EGP’000 EGP’000

Financial obligations (note 25) 1,068,054 1,062,896

Borrowings (note 27) 125,439 127,420

Less: Financial assets at amortised cost (note 18) (161,098) (167,404)

Less: Cash and cash equivalents (Note 17) (674,253) (648,512)

Net debt 358,142 374,400

Total Equity 3,100,788 2,446,981

Net debt 11.6% 15.3%

No changes were made in the objectives, Policies, or processes for managing capital during the years ended 31

December 2023 and 31 December 2022.

2023 Annual Report IDH 159

8. Expense

Included in consolidated income statement are the following:

8.1 Cost of sales

2023 2022

EGP’000 EGP’000

Raw material 875,296 703,693

Cost of specialized analysis at other laboratories 38,765 30,756

Wages and salaries 773,565 613,495

Property, plant and equipment, right of use depreciation and Amortisation 362,230 284,740

Other expenses 548,303 510,300

Total 2,598,159 2,142,984

8.2 Marketing and advertising expenses

2023 2022

EGP’000 EGP’000

Advertisement expenses 98,034 123,442

Wages and salaries 65,580 54,750

Property, plant and equipment depreciation 718 739

Other expenses 47,291 34,220

Total 211,623 213,151

8.3 Administrative expenses

2023 2022

EGP’000 EGP’000

Wages and salaries 216,037 142,689

Property, plant and equipment and right of use depreciation 38,290 31,864

Transactions fees related to aborted Pakistan acquisition - 22,259

Other expenses 256,066 201,721

Total 510,393 398,533

Financial Statements

160 IDH 2023 Annual Report

8.4 Other expenses and income

2023 2022

Other expenses EGP’000 EGP’000

Impairment in assets (6,705) (1,830)

Impairment in goodwill (11,265) -

Provision for end Of Service (331) -

Provision for legal claims (3,496) (3,950)

Provision for Egyptian Government Training Fund for employees (11,865) -

Total (33,662) (5,780)

2023 2022

Other income EGP’000 EGP’000

Other income 20,348 17,506

Total 20,348 17,506

Other expenses and income (13,314) 11,726

8.5 Expenses by nature

2023 2022

EGP’000 EGP’000

Raw material 875,296 703,693

Wages and Salaries 1,055,182 810,934

Property, plant and equipment, right of use depreciation and amortisation 401,238 317,343

Advertisement expenses 98,034 123,442

Cost of specialized analysis at other laboratories 38,765 30,756

Transportation and shipping 100,850 87,490

Cleaning expenses 78,400 74,290

Call Center 27,874 32,976

Hospital Contracts 69,342 14,357

Consulting Fees 170,319 142,012

Transactions fees related to aborted Pakistan acquisition - 22,259

Utilities 59,915 49,453

License Expenses 46,583 30,492

Other expenses 298,377 315,171

Total 3,320,175 2,754,668

2023 Annual Report IDH 161

8.6 Auditors’ remuneration

The group paid or accrued the following amounts to its auditor for the financial year ended 31 December 2023 and

2022 and its associates in respect of the audit of the financial statements and for other services provided to the group.

2023 2022

EGP’000 EGP’000

Fees payable to the Company’s auditor for the audit of the Group’s annual

financial statements

49,217 28,919

The audit of the Company’s subsidiaries pursuant to legislation 15,779 9,443

Assurance services* 308 197

65,304 38,559

*Assurance services relate to review of Corporate Governance report in Egypt that is required to be performed by the auditor.

8.7 Net finance (costs) / income

2023 2022

EGP’000 EGP’000

Interest expense (141,688) (122,677)

Bank Charges (19,295) (12,909)

Total finance costs (160,983) (135,586)

Interest income 72,779 95,371

Gain on hyperinflationary net monetary position - 16,179

Net foreign exchange Gain 87,798 188,442

Total finance income 160,577 299,992

Net finance (cost) / income (406) 164,406

8.8 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:

2023 2022

Medical

Administration

and market Total Medical

Administration

and market Total

Number of

employees

5,435 1,257 6,692 5,428 1,290 6,718

2023 2022

EGP’000 EGP’000

Medical

Administration

and market Total Medical

Administration

and market Total

Wages and salaries 710,515 253,729 964,244 566,385 185,628 752,013

Social security costs 49,786 24,386 74,172 36,053 8,925 44,978

Contributions to defined

contribution plan

13,264 3,502 16,766 11,057 2,886 13,943

Total 773,565 281,617 1,055,182 613,495 197,439 810,934

Details of key management remuneration are provided in note 26 and details of amounts paid to directors are

included in the Remuneration Committee Report.

Financial Statements

162 IDH 2023 Annual Report

8.9 Fair value losses on financial assets at fair value through profit or loss

During 2023 the group didn’t invest in Global Depositary Receipt (GDR) tradable in stock exchanges. In the third

quarter of 2022 the ALmokhtabar and Alborg companies invested in Global Depositary Receipts (GDR) tradable

in stock exchanges, where the companies purchased 27,304 million shares, EGP 1,011.4 M from the Egyptian Stock

Exchange and sold them during the same period on the London Stock exchange at USD 45.8 M excluding the

transaction cost.

Number of

shares’000 2023 2022

EGP’000 EGP’000

listed equity securities Shares bought 27,304 - (1,011,376)

Shares sale 27,304 - 868,426

- (142,950)

9. Income tax

a) Amounts recognised in profit or loss.

2023 2022

EGP’000 EGP’000

Current year tax (216,425) (210,477)

WHT suffered - (122,731)

Current tax (216,425) (333,208)

DT on undistributed reserves (50,004) 46,554

DT on reversal of temporary differences (2,564) (40,410)

Total Deferred tax (52,568) 6,144

Tax expense recognized in profit or loss (268,993) (327,064)

b) Reconciliation of effective tax rate

The company is considered to be a UK tax resident, and subject to UK taxation. Dividend income into the com-

pany is exempt from taxation when received from a wholly controlled subsidiary, and costs incurred by the com-

pany are considered unlikely to be recoverable against future UK taxable profits and therefore form part of our

unrecognised deferred tax assets. Our judgement on tax residency has been made based on where we hold board

meetings, our listing on the London Stock Exchange and interactions with investors, and where our company

secretarial function is physically based. Our external company secretarial function manages a number of activities

of our parent and its board. Board meetings are chaired in London and are now largely taking place physically in

London with the expectation of one physical board meeting a year in Cairo.

2023 2022

EGP’000 EGP’000

Profit before tax 737,356 853,647

Profit before tax multiplied by rate of corporation tax in Egypt of 22.5%

(2022: 22.5%)

165,905 192,071

Effect of tax rate in UK of 23.5% (2022: UK 19%) (2,335) 1,871

Effect of tax rates in Jordan, Sudan, and Nigeria of 21%, 30% and 30%

respectively (2022: 21%, 30% and 30%) ; and Saudi Arabia with a rate of 20%

(4,188) (3,317)

Tax effect of:

Deferred tax not recognised 37,684 19,960

Deferred tax arising on undistributed dividend 50,004 76,177

Non-deductible expenses for tax purposes - employee profit share 14,075 16,653

Non-deductible expenses for tax purposes - other 7,848 23,649

Tax expense recognised in profit or loss 268,993 327,064

2023 Annual Report IDH 163

Deferred tax

Deferred tax relates to the following:

2023 2022

Assets Liabilities Assets Liabilities

EGP’000 EGP’000 EGP’000 EGP’000

Property, plant and equipment (39,552) - (35,804)

Intangible assets (111,033) - (109,118)

Undistributed reserves from group

subsidiaries

(226,875) - (176,871)

Tax Losses 2,731 61 -

Total deferred tax assets – (liability) 2,731 (377,460) 61 (321,793)

(374,729) (321,732)

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:

2023

Net Balance 1

January

Deferred tax

recognized in

profit or loss

Effect of

translation to

presentation

currency WHT tax paid

Net Balance

31 December

Property, plant

and equipment

(35,804) (3,319) (429) - (39,552)

Intangible assets (109,118) (1,915) - - (111,033)

Undistributed

dividend

from group

subsidiaries

(176,871) (50,004) - - (226,875)

Tax losses 61 2,670 - - 2,731

(321,732) (52,568) (429) - (374,729)

2022

Net balance

at 1 January

Deferred tax

recognised in

profit or loss

Effect of

translation to

presentation

currency WHT tax paid

Net balance

31 December

Property, plant

and equipment

(28,925) (6,315) (564) - (35,804)

Intangible assets (105,358) (3,760) - - (109,118)

Undistributed

dividend

from group

subsidiaries

(223,425) (76,177) - 122,731 (176,871)

Tax losses 25,559 (30,335) 4,837 - 61

(332,149) (116,587) 4,273 122,731 (321,732)

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 2023 for the

country the liabilities and assets has arisen. The enacted tax rate in Egypt is 22.5% (2022: 22.5%), Jordan 21% (2022:

21%), Sudan 30% (2022: 30%) and Nigeria 30% (2022: 30%).

Financial Statements

164 IDH 2023 Annual Report

* Undistributed reserves from group subsidiaries

The Group’s dividend policy is to distribute any excess cash after taking into consideration all business cash

requirements and potential acquisition considerations. The expectation is to distribute profits held within sub-

sidiaries of the Group in the near foreseeable future. During 2015 the Egyptian Government imposed a tax on

dividends at a rate of 5% of dividends distributed from Egyptian entities. On September 30, 2020, the Egyptian

government issued a law to increase the tax rate to 10%. As a result, a deferred tax liability has been recorded for

the future tax expected to be incurred from undistributed reserves held within the Group which will be taxed

under the new legislation imposed and were as follows:

2023 2022

EGP’000 EGP’000

Al Mokhtabar Company for Medical Labs 72,642 44,640

Alborg Laboratory Company 42,514 31,035

Integrated Medical Analysis Company 86,917 83,277

Al Makhbariyoun Al Arab Company 24,802 17,919

226,875 176,871

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.

2023 2023 2022 2022

Gross Amount Tax Effect Gross Amount Tax Effect

EGP’000 EGP’000 EGP’000 EGP’000

Impairment of trade receivables

(Note 16)

183,070 41,191 136,981 30,821

Impairment of other receivables

(Note 16)

8,509 1,915 8,604 1,936

Provision for legal claims (Note 21) 5,561 1,251 3,519 792

Tax losses* 500,171 122,047 382,999 93,768

697,311 166,404 532,103 127,317

Unrecognized deferred tax asset 166,404 127,317

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

2023 Annual Report IDH 165

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

2023 2023 2022 2022

Gross Amount Tax Effect Gross Amount Tax Effect

Company Country EGP’000 EGP’000 EGP’000 EGP’000

Integrated Diagnostics

Holdings plc

Jersey 418,561 104,639 325,155 81,289

Dynasty Group

Holdings Limited

England

and Wales

11,445 2,175 11,359 2,158

Eagle Eye-Echo Scan

Limited

Mauritius

278 42 1,839 276

WAYAK Pharma Egypt 24,767 5,573 20,564 4,627

Medical Genetic

Center

Egypt 15,264 3,435 15,156 3,410

Golden care Egypt 8,470 1,906 8,926 2,008

Medical health care

Saudi

Arabia

21,386 4,277 - -

500,171 122,047 382,999 93,768

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:

2023 2022

Profit attributable to ordinary equity holders of the parent for basic

earnings EGP’000

510,304 541,110

Weighted average number of ordinary shares for basic and dilutive

EPS’000

600,000 600,000

Basic and dilutive earnings per share EGP’000 0.85 0.90

Earnings per diluted share are calculated by adjusting the weighted average number of shares by the effects result-

ing from all the ordinary potential shares that causes this dilution.

The Company has no potentially dilutive shares as of the 31 December 2023 and 31 December 2022, therefore; the

earnings per diluted share are equivalent to basic earnings per share.

Financial Statements

166 IDH 2023 Annual Report

11. Property, plant and equipment

Land &

Buildings

Medical,

& electric

equipment

Leasehold

improvements

Fixtures,

fittings &

vehicles

Building &

Leasehold

improvements

in construction

Payment on

account Total

EGP’000 EGP’000 EGP’000 EGP’000 EGP’000 EGP’000 EGP’000

Cost

At 1 January 2022 380,883 824,628 335,203 95,966 15,937 6,761 1,659,378

Additions* 38,275 179,954 114,235 25,287 17,258 3,853 378,862

Hyper inflation - 6,628 - - - - 6,628

Disposals - (6,877) (523) (8,617) - - (16,017)

Exchange differences 7,803 107,534 53,675 20,559 246 - 189,817

Transfers - - 4,852 - (4,852) - -

At 31 December 2022 426,961 1,111,867 507,442 133,195 28,589 10,614 2,218,668

Additions 31,772 174,589 99,977 18,841 28,091 268 353,538

Hyper inflation - (13,098) - - - - (13,098)

Disposals - (4,981) (506) (2,139) - - (7,626)

Exchange differences 2,136 (13,483) 19,660 5,271 (70) - 13,514

Transfers - - 18,383 - (18,383) - -

At 31 December 2023 460,869 1,254,894 644,956 155,168 38,227 10,882 2,564,996

Depreciation and impairment

At 1 January 2022 53,490 333,806 177,230

33,044 - - 597,570

Depreciation charge for the year 6,765 131,569 58,404 10,255 - - 206,993

Disposals - (3,414) (457) (1,734) - - (5,605)

Exchange differences 1,323 51,908 26,528 13,689 - - 93,448

At 31 December 2022 61,578 513,869 261,705 55,254 - - 892,406

Depreciation charge for the year 7,169 152,583 83,522 16,181 - - 259,455

Disposals - (3,890) (443) (1,661) - - (5,994)

Exchange differences 564 (8,393) 5,558 (30) - - (2,301)

Impairment* - 1,480 3,466 1,759 - - 6,705

At 31 December 2023 69,311 655,649 353,808 71,503 - - 1,150,271

Net book value

At 31-12-2023 391,558 599,245 291,148 83,665 38,227 10,882 1,414,725

At 31-12-2022 365,383 597,998 245,737 77,941 28,589 10,614 1,326,262

*For one of the Group’s CGUs “”Echo Scan”” an impairment loss of EGP 6.7M has been recorded as a result of the decreased value of PPE. This impairment loss in the carrying value of the assets to reflect their realisable amount is recorded as an

impairment expense in the financial statements. Further details on the impairment are made within note 13.

2023 Annual Report IDH 167

12. Intangible assets and goodwill

Goodwill Brand Name Software Total

EGP’000 EGP’000 EGP’000 EGP’000

Cost

At 1 January 2022 1,260,965 383,909 77,394 1,722,268

Additions - - 9,076 9,076

Effect of movements in exchange

rates

30,858 11,642 6,366 48,866

At 31 December 2022 1,291,823 395,551 92,836 1,780,210

Additions - - 2,490 2,490

Effect of movements in exchange

rates

13,144 7,910 4,032 25,086

At 31 December 2023 1,304,967 403,461 99,358 1,807,786

Amortisation and impairment

At 1 January 2022 4,552 372 58,477 63,401

Impairment* 1,755 - - 1,755

Amortisation - - 7,251 7,251

Effect of movements in exchange

rates

66 9 4,092 4,167

At 31 December 2022 6,373 381 69,820 76,574

Impairment* 11,265 - - 11,265

Amortisation - - 7,750 7,750

Effect of movements in exchange

rates

80 11 1,923 2,014

At 31 December 2023 17,718 392 79,493 97,603

Net book value

At 31 December 2023 1,287,249 403,069 19,865 1,710,183

At 31 December 2022 1,285,450 395,170 23,016 1,703,636

* The Group has identified an impairment indicator on the goodwill associated with the Medical Genetics Center company in both 2022 and 2023, as well as the

Echo Scan CGU in 2023. This is primarily due to the company’s negative free cash flow and EBITDA.

Financial Statements

168 IDH 2023 Annual Report

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

Goodwill acquired through business combinations and intangible assets with indefinite lives are allocated to the

Group’s CGUs as follows:

2023 2022

EGP’000 EGP’000

Al Makhbariyoun Al Arab Group (“Biolab”)

Goodwill 90,872 72,783

Brand name 39,684 31,785

130,556 104,568

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* - 16,290

- 16,290

Balance at 31 December 1,690,318 1,680,620

* The Group has recorded an impairment in relation to Echo-Scan in Nigeria as a result of its history of recording losses at a cash flow and EBITDA level. The

value in use was considered lower than the realisable value of the assets the Group had and therefore this was used as the recoverable amount, as the value in use

could not be guaranteed to be positive given the history of making losses. The realisable value was largely based on the value of PPE and totalled EGP 43,283k

compared to a carrying value of the CGU of EGP 61,253k. Therefore, goodwill of EGP 11,265k has been fully impaired with an additional impairment of EGP

6,705k recorded on PPE.

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 assessment of the Group’s

CGUs. The assessment was carried out based on business plans provided by IDH.

2023 Annual Report IDH 169

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

2023

Bio Lab Al-Mokhtabar Al-Borg

Average annual patient growth rate from

2024 -2028

5% 8% 5%

Average annual price per test growth rate

from 2024 -2028

5% 11% 11%

Annual revenue growth rate from 2024

-2028

10% 16% 17%

Average gross margin from 2024 -2028 41% 44% 37%

Terminal value growth rate from 1

January 2028

3% 5% 5%

Discount rate 17% 25% 25%

2022

Bio Lab Al-Mokhtabar Al-Borg Echo-Scan

Average annual patient growth rate

from 2023 -2027

5% 8% 8% 21%

Average annual price per test growth

rate from 2023 -2027

0% 6% 7% 5%

Annual revenue growth rate from

2023 -2027

3% 13% 13% 33%

Average gross margin from

2023 -2027

46% 51% 45% 81%

Terminal value growth rate from

1 January 2027

3% 5% 5% 4%

Discount rate 19% 25% 25% 28%

Management have compared the recoverable amount of CGUs to the carrying value of CGUs. The recoverable

amount is the higher of value in use and fair value less costs of disposal. In the exercise performed and the assump-

tions noted above the value in use was noted to be higher than the fair value less costs of disposal. The exception to

this was Echo-Scan where the realisable value was greater than the value in use as noted above and therefore the

recoverable amount was based on realisable value.

During 2023, excluding Echo-Scan, management has conducted a business plan projection with the support of

a management expert (Alpha Capital), with the assumptions above used to calculate the net present value of

future cashflows to determine recoverable amount. The projected cash flows from 2024- 2028 have been based

on detailed forecasts prepared by management for each CGU and a terminal value thereafter. Management have

used experience and historical trends achieved to determine the key growth rate and margin assumptions set out

above. The terminal value growth rate applied is not considered to exceed the average growth rate for the industry

and geographic locations of the CGUs that had a recoverable amount based on value in use.

As a sensitivity analysis, Management considered a change in the discount rates of 2% increase to reflect addi-

tional risk that could reasonably be foreseen in the marketplaces in which the Group operates. This did not result

in an impairment under any of the CGUs that had a recoverable amount based on value in use.

Management has also considered a change in the terminal growth rate by 1% decrease to reflect additional risk,

This did not result in an impairment under any of the CGUs that had a recoverable amount based on value in use.

Financial Statements

170 IDH 2023 Annual Report

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/(impairment) between carrying value and recoverable amount is as follows:

Company

Recoverable

amount

CGU carrying

value

Headroom/

(Impairment)

EGP’000 EGP’000 EGP’000

Almokhtabar 3,449,092 1,649,728 1,799,364

Alborg 2,215,534 1,600,213 615,321

Al Makhbariyoun Al Arab 1,071,711 654,342 417,369

Echo Scan 43,283 61,253 (17,970)

14. Financial asset at fair value through profit and loss

2023 2022

EGP’000 EGP’000

Non-current equity investments - 18,064

Current equity investments 25,157 -

Balance at 31 December 25,157 18,064

*On August 17, 2017, Al Makhbariyoun 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, 2023,

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 400,000) plus 20% annual IRR.

2023 Annual Report IDH 171

15. Inventories

2023 2022

EGP’000 EGP’000

Chemicals and operating supplies 374,650 265,459

374,650 265,459

During 2023, EGP 875,296 K (2022: EGP 703,693K) was recognised as an expense for inventories, this was recognised

in cost of sales. The major balance of the raw material is represented in the Kits, slow-moving items of those Kits are

immaterial. It is noted that day’s inventory outstanding (based on the average of opening and closing inventory)

stands as 133 days at 31 Dec 2023.

The COVID-19 pandemic had a significant impact on inventory, leading to impairment in 2023. Specifically, there

was an impairment of kit materials related to COVID-19, resulting in an amount of EGP 17,372K. This is a notable

increase compared to the previous year when no impairment was recorded. Additionally, there was an impairment

of inventory in the Sudan region, totalling EGP 1,529K, also showing an increase from the previous year’s absence of

impairment. the specific challenges faced in the Sudan region.

16. Trade and other receivables

2023 2022

EGP’000 EGP’000

Trade receivables – net 569,738 395,220

Prepayments 42,185 34,081

Due from related parties note (26) 5,037 5,930

Other receivables 108,521 106,363

Accrued revenue 1,754 2,293

727,235 543,887

As at 31 December 2023, the expected credit loss related to trade and other receivables was EGP 191,580K (2022:

EGP 145,586K). Below show the movements in the provision for impairment of trade and other receivables:

2023 2022

EGP’000 EGP’000

At 1 January 145,586 109,768

Charge for the year 51,255 29,914

Exchange differences (5,261) 5,904

At 31 December 191,580 145,586

The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk

of loss (historical customer’s collection, Customers’ contracts conditions) and applying experienced credit judge-

ment. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default.

Expected credit loss assessment is based on the following:

1. The customer list was divided into 9 sectors,

2. Each sector was divided according to customers aging,

3. Each sector was studied according to the historical events of each sector. According to the study conducted,

the expected default rate was derived from each of the aforementioned period,

4. General economic conditions.

Financial Statements

172 IDH 2023 Annual Report

The results of the quarterly assessment will increase/decrease the percentage allocated to each period. Balances

overdue by at least one year are fully provided for. On a quarterly basis, IDH revises its forward-looking estimates

and the general economic conditions to assess the expected credit loss.

Impairment of trade and notes receivables

The requirement for impairment of trade receivables is made through monitoring the debts aging and reviewing

customer’s credit position and their ability to make payment as they fall due. An impairment is recorded against

receivables for the irrecoverable amount estimated by management. At the year end, the provision for impairment

of trade receivables was EGP 183,070K (31 December 2022: EGP 136,981K). This is lower than the amount of EGP

191,580k (31 December 2022: EGP 145,586k) as that amount also includes provision on other receivables.

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 7,528K. This analysis assumes that all other variables

remain constant.

The following table provides information about the exposure to expected credit loss (ECL) for trade receivables

from individual customers for the nine segments at:

31-Dec-23

Weighted

average loss

rate

Gross

carrying

amount

Loss

allowance

EGP’000 EGP’000 EGP’000

Current (not past due) 2.42% 227,746 (5,507)

1–30 days past due 6.41% 115,230 (7,389)

31–60 days past due 8.13% 95,834 (7,790)

61–90 days past due 13.53% 49,489 (6,694)

91–120 days past due 14.56% 35,089 (5,109)

121–150 days past due 16.47% 24,383 (4,017)

More than 150 days past due 71.48% 205,037 (146,564)

31-Dec-22

Weighted

average loss

rate

Gross

carrying

amount

Loss

allowance

EGP’000 EGP’000 EGP’000

Current (not past due) 1.11% 174,249 (1,927)

1–30 days past due 4.06% 85,072 (3,451)

31–60 days past due 4.55% 65,470 (2,982)

61–90 days past due 13.61% 32,563 (4,433)

91–120 days past due 18.12% 25,868 (4,688)

121–150 days past due 27.81% 19,275 (5,360)

More than 150 days past due 88.00% 129,704 (114,140)

As at 31 December, the ageing analysis of trade receivables is as follows:

EGP’000 EGP’000 EGP’000 EGP’000 EGP’000

Total < 30 days 30-60 days 61-90 days > 90 days

2023 569,738 330,080 88,044 42,795 108,819

2022 395,220 253,943 62,488 28,130 50,659

2023 Annual Report IDH 173

17. Cash and cash equivalents

2023 2022

EGP’000 EGP’000

Cash at banks and on hand 412,561 399,957

Treasury bills (less than 3 months) 21,461 185,513

Term deposits (less than 3 months) 240,231 63,042

674,253 648,512

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits and trea-

sury bills are made for varying periods of between one day and three months, depending on the immediate cash

requirements of the Group, and earn interest at the respective weighted average rate. Of the above Short-term

deposits, EGP 210,000k (2022: EGP 20,000k) relates to amounts held in Egypt with a weighted average rate of

16.40% (2022: 11.93%), EGP 20,103k (2022: EGP 34,777k) relates to amounts held in Jordan with a weighted aver-

age rate of 5.00% (2022: 4.50%) and EGP 10,128k (2022: EGP: 8,265k) relates to amounts held in Nigeria with a

weighted average rate of 5.6% (2022:7%). Treasury bills are denominated in EGP and earn interest at a weighted

average rate of 24.95% (2022: 15.76%) per annum.

18. Financial assets at amortised cost

2023 2022

EGP’000 EGP’000

Term deposits (more than 3 months) 49,244 60,200

Treasury bills (more than 3 months) 111,854 107,204

161,098 167,404

The maturity date of the fixed term deposit and treasury bills is between 3–12 months. Treasury bills are denominated

in EGP and earn interest at an effective rate of 25.34% (2022: 14.09%) per annum. Of the above Term deposits, EGP

17,126k (2022: EGP 6,626k) relates to amounts held in Egypt with a weighted average rate of 5.17% (2022: 5.19%) and

EGP 32,118k (2022: EGP 53,574k) relates to amounts held in Jordan with a weighted average rate of 5.38% (2022: 4.24%)

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.

31-Dec-23 31-Dec-22

In issue at beginning of the year 600,000,000 600,000,000

In issue at the end of the year 600,000,000 600,000 ,000

The table below shows the number of shares held by Hena Holdings Limited and Actis IDH BV as well as how

many shares are then held which are floating and not held by companies that do not have individuals on the board

of the Group.

Ordinary

Ordinary share capital Name

Number of

% of

contribution

Par

value

Hena Holdings Limited 162,445,383 27.07% 40,611,346

Actis IDH B V 126,000,000 21.00% 31,500,000

Free floating 311,554,617 51.93% 77,888,654

600,000,000 100% 150,000,000

Financial Statements

174 IDH 2023 Annual Report

Capital reserve

The capital reserve was created when the Group’s previous parent company, Integrated Diagnostics Holdings LLC –

IDH (Caymans) arranged its own acquisition by Integrated Diagnostics Holdings PLC, a new legal parent. The balances

arising represent the difference between the value of the equity structure of the previous and new parent companies..

Legal reserves

Legal reserve was formed based on the legal requirements of the Egyptian law governing the Egyptian subsidiar-

ies. According to the Egyptian subsidiaries’ article of association 5% (at least) of the annual net profit is set aside to

from a legal reserve. The transfer to legal reserve ceases once this reserve reaches 50% of the entity’s issued capital.

If the reserve falls below the defined level, then the entity is required to resume forming it by setting aside 5% of

the annual net profits until it reaches 50% of the issued share capital.

Put option reserve

Through acquisitions made within the Group, put option arrangements have been entered into to purchase the

remaining equity interests in subsidiaries from the vendors at a subsequent date. At acquisition date an initial

put option liability is recognised and a corresponding entry recognised within the put option reserve. After initial

recognition the accounting policy for put options is to recognise all changes in the carrying value of the liability

within put option reserve. When the put option is exercised by the vendors the amount recognised within the

reserve will be reversed.

Translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the

financial statements of foreign subsidiaries.

20. Distributions made and proposed

2023 2022

EGP’000 EGP’000

Cash dividends on ordinary shares declared and paid:

Nil per qualifying ordinary share (2022: US$ 0.116) - 1,304,805

- 1,304,805

After the balance sheet date, the following dividends were proposed by

the directors (the dividends have not been provided for):

- -

21. Provisions

Provision for

end Of Service

Provision

for Egyptian

Government

Training Fund

for employees

Provision for

legal claims Total

EGP’000 EGP’000 EGP’000 EGP’000

At 1 January 2023 - - 3,519 3,519

Provision made during the year 331 11,865 3,496 15,692

Provision used during the year - - (771) (771)

Provision reversed during the year - - (683) (683)

Effect of translation currency 1 - - 1

At 31 December 2023 332 11,865 5,561 17,758

Current - - - -

Non- Current 332 11,865 5,561 17,758

2023 Annual Report IDH 175

Provision for

end Of Service

Provision

for Egyptian

Government

Training Fund

for employees

Provision for

legal claims Total

EGP’000 EGP’000 EGP’000 EGP’000

At 1 January 2022 - - 4,088 4,088

Provision made during the year - - 3,950 3,950

Provision used during the year - - (3,997) (3,997)

Provision reversed during the year - - (522) (522)

At 31 December 2022 - - 3,519 3,519

Current - - - -

Non- Current - - 3,519 3,519

Egyptian Government Training Fund for employees

According to Article 134 of the Labor Law for Vocational Guidance and Training issued by the Egyptian govern-

ment in 2003, Al-Borg, Almokhtabar and Integrated Medical Analysis Company shall comply with the require-

ments stipulated in this law to provide 1% of net profits each year in the training fund.

End Of Service

As per Article 88 of the Labor Law in Saudi Arabia, in the event of the termination of an employee’s service, the

company is required to settle the wages owed within one week. Conversely, if the employee terminates the con-

tract, the company is obligated to fulfil their rights within two weeks.

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 2023.

22. Trade and other payables

2023 2022

EGP’000 EGP’000

Trade payables 271,741 269,782

Accrued expenses 178,499 241,060

Due to related parties note (26) 5,962 25,058

Other payables 112,750 98,204

Deferred revenue 59,918 60,948

Accrued finance cost 8,891 6,043

637,761 701,095

23. Put option liability

2023 2022

EGP’000 EGP’000

Current put option - Al Makhbariyoun Al Arab 301,383 439,695

Current put option - Eagle Eye-Echo scan 12,413 -

313,796 439,695

2023 2022

EGP’000 EGP’000

Non-current put option - Eagle Eye-Echo scan - 51,000

Non-current put option - Medical Health Development 42,786 -

42,786 51,000

Financial Statements

176 IDH 2023 Annual Report

Put option - Al Makhbariyoun Al Arab Group

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

the put liability within equity.

Through the historical acquisitions of Al 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 2023. It is important to note that the put option liability is treated as

current as it could be exercised at any time by the NCI. However, based on discussions and ongoing business

relationship, there is no expectation that this will happen in next 21 months. The option has no expiry date.

Put option - Eagle Eye-Echo scan

IFC has the option to put its shares 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 12 million was calculated as the valuation as at 31 December 2023 (2022; EGP 51m). In line with appli-

cable accounting standards with IAS 32 the entity has recognised a liability for the present value of the exercise

price of the option price.

Put option - Medical Health Development

Based on the agreement made on October 27th, 2022, between Business Flower Holding LLC, Integrated Diag-

nostics Holdings plc and Al Makhbariyoun Al Arab there is a clause that in cases of bankruptcy and defaulting, a

non-defaulting party is entitled to implement any of the following options for a defaulting party’s share without

reference to it:

A. sell to the Non-Defaulting Party its Shares at the Fair Price of such Shares.

B. buy the Non-Defaulting Party’s Shares at the Fair Price of such Shares.

C. requesting the dissolution and liquidation of the Company.

It’s important to note that the put option, which grants these rights to the non-defaulting party, does not have a

specified expiration date.

The company has not yet commenced its operations, the group has recognized a put option as a liability in the

non-current assets. This put option represents a 49% share of non-controlling interest in the total equity, amount-

ing to EGP 43 million. The valuation was determined as of December 31, 2023. Following the IAS 32 accounting

standard, the entity has recorded a liability for the present value of the exercise price of the option.

2023 Annual Report IDH 177

24. Borrowings

The terms and conditions of outstanding loans are as follows:

Currency Nominal interest rate Maturity 31 Dec 23 31 Dec 22

AUB – BANK EGP CBE corridor rate*+1% 26 January 2027 94,451 116,426

AUB – BANK EGP Secured 5% 3 March 2024 13,121 -

Bank: Sterling BANK NGN Secured 19% 26-May 2024 3,573 -

111,145 116,426

Amount held as:

Current liability 43,680 22,675

Non- current liability 67,465 93,751

111,145 116,426

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 radiol-

ogy segment. As at 31 December 2023 only EGP 124.9M had been drawn down from the total facility available with

EGP 30.4M had been repaid. Loan withdrawal availability period was extended till July 2023 and the loan will be

fully repaid by January 2027.

The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:

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

“Financial leverage”: total bank debt divided by net equity

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

“Debt service ratio”: cash operating profit after tax plus depreciation for the financial year less annual

maintenance on machinery and equipment adding cash balance (cash and cash equivalents) divided by total

financial payments.

“Cash operating profit”: Operating profit after tax, interest expense, depreciation and amortization, is calcu-

lated 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 2023 corridor rate 20.25% (2022: 17.25%)

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

Financial Statements

178 IDH 2023 Annual Report

IDH opted to reduce its exposure to foreign currency risk by agreeing with General Electric (GE) for the early

repayment of its dollar obligation. The Group agreed to settle this balance early for USD 3.55 million, payable in

EGP, equivalent to EGP 110 million and made this repayment in March 2023.

To finance the settlement, IDH utilized a bridge loan facility, with half of the amount (EGP 55 million) being

funded internally and the other half (EGP 55 million) provided by a loan from Ahly United Bank – Egypt, this credit

facility was fully repaid in two instalments of EGP 28.5M in May and a final instalment of EGP 26.5M in June 2023.

25. Financial obligations

The Group leases property and equipment. Property leases include branches, warehouse, parking and adminis-

tration buildings. The leases typically run for average period from 5-10 years, with an option to renew the lease

after that date. Lease payments are renegotiated with renovation after the end of the lease term to reflect market

rentals. For certain leases, the Group is restricted from entering into any sub-lease arrangements. The property

leases were entered into as combined leases of land and buildings.

Adding to remaining agreement signed in 2015, to service the Group’s state-of-the-art Mega Lab. The agreement

periods are 5 and 8 years which is deemed to reflect the useful life of the equipment. If the minimum annual

commitment payments are met over the agreement period ownership of the equipment supplied will legally

transfer to the IDH. The finance asset and liability has been recognised at an amount equal to the fair value of

the underlying equipment. This is based on the current cost price of the equipment supplied provided by the

suppliers of the agreement. The averaged implicit interest rate of finance obligation has been estimated to be

10.3%. 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

2023 2022

EGP’000 EGP’000

Balance at 1 January 622,975 462,432

Addition for the year 157,482 214,846

Depreciation charge for the year (134,033) (103,099)

Terminated Contracts (5,170) (13,564)

Exchange differences 41,771 62,360

Balance at 31 December 683,025 622,975

b) Other Financial obligations

Future minimum financial obligation payments under leases and sales purchase contracts, together with the pres-

ent value of the net minimum lease payments are, as follows:

2023 2022

EGP’000 EGP’000

*Financial liability– laboratory equipment 240,015 335,470

*Lease liabilities building 828,039 727,426

1,068,054 1,062,896

2023 Annual Report IDH 179

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

At 31 December 2023

Minimum

payments Interest Principal

2023 2023 2023

EGP’000 EGP’000 EGP’000

Less than one year 291,342 114,638 176,704

Between one and five years 1,054,902 295,586 759,316

More than 5 years 166,965 34,931 132,034

1,513,209 445,155 1,068,054

At 31 December 2022

Minimum

payments Interest Principal

2022 2022 2022

EGP’000 EGP’000 EGP’000

Less than one year 285,962 137,257 148,705

Between one and five years 1,030,750 314,656 716,094

More than 5 years 227,715 29,618 198,097

1,544,427 481,531 1,062,896

c) Amounts other financial obligations recognised in consolidated income statement

2023 2022

EGP’000 EGP’000

Interest on lease liabilities 93,298 73,393

Expenses related to short-term lease 10,540 87,962

Financial Statements

180 IDH 2023 Annual Report

26. Related party transactions disclosures

The significant transactions with related parties, their nature volumes and balance during the period 31 December

2023 and 2022 are as follows:

2023

Related Party Nature of transaction

Nature of

relationship

Transaction

amount of

the year

Amount due

from / (to)

EGP’000 EGP’000

ALborg Scan (S.A.E)*

Expenses paid on

behalf

Affiliate** (351) -

International Fertility (IVF)**

Expenses paid on

behalf

Affiliate*** (1,771) -

H.C Security Provide service

Entity owned by

Company’s board

member

6 (93)

Life Health Care Provided service

Entity owned by

Company’s CEO

855 3,373

Dr. Amid Abd Elnour Put option liability

Bio. Lab C.E.O and

shareholder

138,312 (301,383)

Current account

Bio. Lab C.E.O and

shareholder

19,542 (466)

International Finance corporation

(IFC)

Put option liability

Echo-Scan

shareholder

38,587 (12,413)

International Finance corporation

(IFC)

Current account

Echo-Scan

shareholder

623 -

Integrated Treatment for Kidney

Diseases (S.A.E)

Rental income

Entity owned by

Company’s CEO

217 1,664

Medical Test analysis 591

HENA HOLDINGS LTD

shareholders'

dividends deferral

agreement

shareholder (590) (2,963)

ACTIS IDH LIMITED

shareholders’

dividends deferral

agreement

shareholder (485) (2,440)

Business Flowers Holding Put option liability shareholder - (42,786)

(357,507)

2023 Annual Report IDH 181

2022

Related Party Nature of transaction

Nature of

relationship

Transaction

amount of

the year

Amount due

from /to

EGP’000 EGP’000

ALborg Scan (S.A.E)*

Expenses paid on

behalf

Affiliate - 351

International Fertility (IVF)**

Expenses paid on

behalf

Affiliate 4 1,771

H.C Security Provide service

Entity owned by

Company’s board

member

220 (99)

Life Health Care Provide service

Entity owned by

Company’s CEO

424 2,518

Dr. Amid Abd Elnour Put option liability

Bio. Lab C.E.O and

shareholder

481,665 (439,695)

Current account

Bio. Lab C.E.O and

shareholder

(20,008) (20,008)

International Finance corporation

(IFC)

Put option liability

Echo-Scan

Shareholder

(15,963) (51,000)

International Finance corporation

(IFC)

Current Account

Echo-Scan

Shareholder

12,292 (623)

Integrated Treatment for Kidney

Diseases (S.A.E)

Rental income 116 1,290

Medical Test analysis

Entity owned by

Company’s CEO

381

Dr. Hend El Sherbini***

Loan

arrangement

CEO** 17,025 -

HENA HOLDINGS LTD

shareholders’

dividends deferral

agreement

shareholder (2,373) (2,373)

ACTIS IDH LIMITED

shareholders’

dividends deferral

agreement

shareholder (1,955) (1,955)

Total (509,823)

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

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

*** During the year 2022, Dr. Hend (C.E.O) granted a loan to IDH Cayman amounting to USD 750K. and the loan was settled by Al Mokhtabar on behalf of IDH

Cayman for EGP 17m at the prevailing exchange rate of US$/EGP 22.70 . The loan was not interest bearing.

During 2022 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 17,745,953 in year 2022.

During the year payments relating to lease obligations of Biolab were made to entities considered to be related

parties due to the interest in them held by Dr Amid Abd Elnour. Payments made during 2023 were JOD 240,991

(EGP 10,392,148) and during 2022 were JOD 241,038 (EGP 6,679,163).

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have

been no guarantees provided or received for any related party receivables or payables. For the year ended 31

December 2023, the Group has not recorded any impairment of receivables relating to amounts owed by related

parties (2022: nil). This assessment is undertaken each financial year through examining the financial position of

the related party and the market in which the related party operates.

Financial Statements

182 IDH 2023 Annual Report

IDH opts to pay approximately 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 2023 EGP 6,631 K (2022: EGP 8,934 K) was paid to the founda-

tion by the IDH Group in relation to profits earned for companies Al Borg and Al Mokhtabar in the prior year.

Compensation of key management personnel of the Group

Key management people can be defined as the people who have the authority and responsibility for planning,

directing, and controlling some of the activities of the Company, directly or indirectly.

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related

to key management personnel.

2023 2022

EGP’000 EGP’000

Short-term employee benefits 68,621 48,078

Total compensation paid to key management personnel 68,621 48,078

27. Reconciliation of movements of liabilities to cash flows arising from

financing activities

EGP’000

Other loans,

borrowings and

accrued interest

Other

financial

obligation

Balance at 1 January 2023 127,420 1,062,896

Proceeds from loans and borrowings 71,630 -

Repayment of borrowings (76,911) -

Payment of liabilities - (239,132)

Interest paid (19,612) (118,777)

Exchange differences - 62,391

Total changes from financing cash flows (24,893) (295,518)

New agreements signed in the period - 187,581

Terminated contracts during the year - (5,682)

Interest expense 22,912 118,777

Total liability-related other changes 22,912 300,676

Balance at 31 December 2023 125,439 1,068,054

EGP’000

Other loans,

borrowings and

accrued interest

Other

financial

obligation

Balance at 1 January 2022 105,694 760,674

Proceeds from loans and borrowings 40,081 -

Repayment of borrowings (21,721) -

Payment of liabilities - (100,841)

Interest paid (24,513) (94,795)

Exchange differences - 122,376

Total changes from financing cash flows (6,153) (73,260)

New agreements signed in the period - 293,946

Terminated contracts during the year - (13,259)

Interest expense 27,879 94,795

Total liability-related other changes 27,879 375,482

Balance at 31 December 2022 127,420 1,062,896

2023 Annual Report IDH 183

28. Current tax liabilities

2023 2022

EGP’000 EGP’000

Debit withholding Tax (Deduct by customers from sales invoices) (10,412) (26,166)

Income Tax 87,835 162,773

Credit withholding Tax (Deduct from vendors invoices) 8,762 7,719

Other 17,324 8,529

103,509 152,855

29. Post Balance Sheet Events

• In January 2024 Al Borg repaid EGP 13.4m of due borrowings.

• On 1 February 2024, interest rates were hiked a further 200 basis points to 21.75%. Significant improvements

in the country’s economic situation and outlook were recorded starting in late February and early March 2024,

following the signing of a historic USD 35 billion agreement between the Egyptian government and Abu Dhabi’s

sovereign wealth fund, ADQ, granting the latter development rights to Ras El Hekma on Egypt’s North Coast.

Following the announcement, the black-market rate decreased significantly settling in the low 50 to the US

Dollar range. This is expected to be just the first in a series of announcements and initiatives aimed at attracting

FX and investments back into the country.

• On 6 March 2024, the Central Bank devalued the Egyptian Pound, settling at nearly EGP 49.5 to the US Dollar at

official bank rates, compared to the EGP 30.85 which had remained nearly unchanged for the past year. Follow-

ing the decision, the Central Bank increased interest rates by another 600 basis points, reaching 27.75%.

• On the heels of the devaluation, Egypt and the International Monetary Fund (IMF) finalized an agreement,

securing an expanded loan package of USD 8 billion. At the same time, in 2024 the Egyptian government is

looking to raise over USD 6 billion from its privatization program through the sale of stakes in government

and military-owned businesses to private local and foreign investors. Combined, these are set to cover Egypt’s

short-term financing needs for the coming three to four years.

Financial Statements

184 IDH 2023 Annual Report