ENHANCING THE QUALITY OF LIFE 2020 ANNUAL REPORT STRATEGIC REPORT Introduction 4 Section 172 statement 6 Non-financial information statement 7 Report profile 8 Performance summary 10 At a glance Business overview MEDICLINIC’S 12 Market overview 14 Business model CORE PURPOSE 16 Investment case 18 Value added statement IS TO ENHANCE 19 Five-year summary Performance and outlook THE QUALITY 20 Chair’s Review 28 Group Chief Executive Officer’s Report 36 Strategy, goals and progress OF LIFE 44 Continuum of care 46 Stakeholders summary 50 Clinical services overview 62 Sustainable development overview 78 Group Chief Financial Officer’s Report 92 Divisional Report – Hirslanden 100 Divisional Report – Mediclinic Southern Africa 106 Divisional Report – Mediclinic Middle East Risk management 114 Viability statement 116 Emergency preparedness summary 119 Risk management, principal risks and uncertainties GOVERNANCE AND REMUNERATION REPORT 128 Chair’s Introduction 130 Board of Directors 136 Group Executive Committee 138 Corporate Governance Statement 170 Audit and Risk Committee Report 184 Clinical Performance and Sustainability Committee Report 188 Nomination Committee Report 194 Remuneration Committee Report 221 Statement of Directors’ Responsibilities FINANCIAL STATEMENTS 224 Group financial statements 330 Company financial statements ADDITIONAL INFORMATION 348 Shareholder information 351 Company information 352 Forward-looking statements 353 Glossary of terms To find out more visit: www.mediclinic.com CONTINUUM OF CARE Expansion across the continuum of care will widen the Group’s service focus, improve accessibility and create the opportunity to form a lasting relationship with clients. 44 50 CLINICAL QUALITY More than 75 clinical indicators are measured monthly across the divisions to identify trends and opportunities for improvement. MEDICLINIC CITY HOSPITAL DIVISIONAL REPORTS Across all three divisions there are opportunities to grow in existing markets, expand into new markets and become an integrated healthcare provider. 92 MEDICLINIC INTERNATIONAL PLC 2020 ANNUAL REPORT 1 STRATEGIC REPORT Care for our client is ingrained into three of Mediclinic's organisational values: being client centred, trusting and respectful, and patient safety focused. Dr Ronnie van der Merwe Group Chief Executive Officer The Vermont Oxford Network (‘VON’) is an international non-profit collaboration of more than 1 300 hospitals to improve neonatal care globally with data-driven quality STRATEGIC REPORT improvement and research. Currently 30 Mediclinic Introduction Southern Africa and six Mediclinic Middle East facilities 4 Section 172 statement participate. At Hirslanden, neonatal intensive care is 6 Non-financial information statement handled by cantonal and university teaching facilities. 7 Report profile 8 Performance summary 10 At a glance Business overview 12 Market overview 14 Business model 16 Investment case 18 Value added statement 19 Five-year summary Performance and outlook 20 Chair's Review 28 Group Chief Executive Officer's Report 36 Strategy, goals and progress 44 Continuum of care Refer to the 2020 Clinical Services Report at 46 Stakeholders summary annualreport.mediclinic.com for more information. 50 Clinical services overview 62 Sustainable development overview 78 Group Chief Financial Officer's Report 92 Divisional Report – Hirslanden 100 Divisional Report – Mediclinic Southern Africa 106 Divisional Report – Mediclinic Middle East Risk management 114 Viability statement 116 Emergency preparedness summary 119 Risk management, principal risks and uncertainties MEDICLINIC INTERNATIONAL PLC 2 2020 ANNUAL REPORT STRATEGIC REPORT STRATEGIC MEDICLINIC INTERNATIONAL PLC 2020 ANNUAL REPORT 3 STATEMENT OF DIRECTORS’ PERFORMANCE OF THEIR STATUTORY DUTIES IN ACCORDANCE WITH SECTION 172(1) OF THE COMPANIES ACT 2006 INTRODUCTION • Stakeholder engagement, by way of the Clinical The board of directors of Mediclinic International plc Performance and Sustainability Committee, is discussed (‘Mediclinic’ or the ‘Company’) (the ‘Board’ or ‘Board of biannually at Board meetings. The discussion is supported Directors’) collectively, and its directors individually, believe by a framework which sets out Mediclinic’s stakeholders; that they have acted in a manner which they consider, in the various stakeholder engagement mechanisms and good faith, would be most likely to promote the success of their effectiveness; key topics and concerns for each the Company to the benefit of all its stakeholders. stakeholder group; and how their interests and the matters set out in Section 172 have been considered in Below steps illustrate how the Board has met its Board deliberations and decision-making. obligations as required by Section 172 of the United • The Board approved the revised Mediclinic Group Kingdom (‘UK’) Companies Act 2006 (the ‘Act’) (‘Section Strategy and new Group Sustainable Development 172’). It is noted that the Board believes these actions Strategy which focus on long-term value creation. were guided by Mediclinic’s organisational culture which • In the context of the revised Mediclinic Group Strategy; promotes behaviour that is client centred, trusting and the new Company purpose; and the standardisation respectful, patient safety focused, performance driven and and refinement of the organisational culture, the annual team orientated. Acting in the best interest of stakeholders workforce engagement survey tests the extent to which is key to pursuing the Company’s purpose to enhance the the workforce understands and identifies with the quality of life. Company’s culture. The results of the survey are reported to the Board as part of the biannual workforce • The Board agenda has been revised to include a engagement report. reminder of the directors’ duties under Section 172 • The Board designated an existing non-executive director, at each meeting. Mr Danie Meintjes, as a responsible person to convey • Committee Chairs are available and welcome workforce feedback (as consolidated via multiple engagement with shareholders, as was demonstrated channels) to the Board and shareholders. The designated during the year by the Chair of the Remuneration non-executive director will monitor and oversee that Committee in the development of the Group’s new there are effective feedback processes in place to inform Remuneration Policy. the workforce on how their input was communicated and Further information on the above and how the Board engages with and/or promotes engagement with the wider stakeholder group by the Company, including a number of case studies highlighting specific examples of engagement and relevant actions, can be found in the following sections of this Annual Report: • the Business model on page 14; • Stakeholders summary on page 46; • ‘Employee engagement’ and ‘Ethics, anti-bribery and anti-corruption’ in the Sustainable development overview on page 73 and 77 respectively; MEDICLINIC INTERNATIONAL PLC 4 2020 ANNUAL REPORT STRATEGIC REPORT STRATEGIC Management’s daily COVID-19 dashboard was circulated to the Board on a regular basis from February 2020 onwards. considered by the Board. The designated non-executive Report and the directors’ authority to allot shares, and on director works closely with the Group Chief Human the revised Remuneration Policy. Resources and Corporate Development Officer in • The Board received regular updates on the effect of the accordance with an established work plan. The designated COVID-19 pandemic on Mediclinic, its employees and non-executive director reports to the Board on workforce the communities in which the Group operates; and on engagement twice annually at specified Board meetings. responses by local health authorities and governments. The first report to the Board was presented in September Dr René Toua, the Group Chief Clinical Officer, is 2019, with a second report in May 2020. responsible for coordinating the Company’s emergency • In May 2019, the Board of Directors approved a long-term preparedness and response. Dr Toua presented updates Diversity and Inclusion Strategy for meeting the Group’s at each Board meeting in February and March 2020. In strategic goals by way of a diverse and inclusive Board of addition, management’s daily COVID-19 dashboard was Directors and workforce. With due regard for the interests circulated to the Board on a regular basis from February of employees across the Group, priority areas were 2020 onwards. The interests of employees were reflected in identified per division and an implementation framework the decisions taken by the Board in relation to the FY21 was approved. budget, the final dividend for FY20 and remuneration • A thorough and independent process was conducted to arrangements for employees and the executive directors. identify a successor to the current Chair of the Board. After The interests of employees, patients and communities were candidates’ skills, experience and values were taken into also reflected in the decision by the executive and non- account, Dame Inga Beale was appointed Chair Designate. executive directors (together with the divisional Chief She demonstrated a clear understanding of the Group’s Executive Officers [‘CEOs’]) to donate 30% of their salaries strong culture and values, and will also align readily with or fees for three months to South Africa’s Solidarity Fund the business. Core to these matters are Mediclinic’s or other similar charities in the countries in which Mediclinic stakeholder commitment to deliver sustainable high-quality