Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility
• Human Resources
• Corporate Governance

Social Achievements

• Organised simultaneous runs in Moscow, Ufa and Samara in cooperation with the Give Life Foundation to raise money for treatment of seriously ill children across Russia.
• Held a ‘Blood Donor Day’ at Lapino hospital, with 60 donors producing 24 litres of blood.
• Organised a charity event for orphans, providing gifts and warm winter clothes.

Governance Achievements

• Maintained full compliance with the UK Corporate Governance Code since its London IPO.
• Established a remuneration committee, an audit committee and a nomination committee.

Climate Goals & Targets

Environmental Challenges

• Weaker rouble putting pressure on operations due to higher prices for imported supplies and medicines.
• FX volatility.
• Risk of not being able to find a sufficient number of medical employees.
• General standard of medical education in Russia falling short of the standards set by private clinics.

Mitigation Strategies

• Adjusted prices for some of the most material-intensive services.
• Renegotiated a number of dollar contracts into roubles.
• Switched to domestic contractors.
• Investing in programmes to raise the level of qualifications of medical personnel.
• Focus on students at leading medical universities.
• Significant on-the-job training and continuing medical education.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Corporate Governance Code

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility
• Corporate Governance
• Risk Management
• Sustainable Development

Environmental Achievements

• Reduced paper consumption by transitioning to electronic document flow (30% of document flow is now electronic)
• Maintained ISO 14001:2004 and ISO 50001:2011 certifications

Social Achievements

• Held 363 open days in clinics and hospitals, hosting over 12,300 visitors
• Participated in 36 partner events with over 11,000 attendees
• Held 94 webinars with over 1,600 attendees
• Provided 7,327 IVF cycles under MHI and 253 patients with high-technology medical assistance
• Implemented customer satisfaction (CSAT) score system for phone consultations and quality hotline
• Implemented a whistle-blowing policy

Governance Achievements

• Full compliance with the UK Corporate Governance Code
• Established an audit committee, a remuneration committee, and a nomination committee

Climate Goals & Targets

Environmental Challenges

• Challenging demographics in Russia affecting delivery rates
• Rapid business development requiring effective monitoring and control
• Regional expansion risks related to ROI and payback periods
• Challenges in recruiting qualified medical professionals
• Credit risk, operational risk, and liquidity risk
• Potential changes in governmental attitudes and policies towards private medicine
• Potential deterioration of the macroeconomic environment in Russia
• Russian business environment risks (sanctions, economic uncertainty, credit availability)
• Russian tax environment risks (frequent changes in legislation, varying interpretations)

Mitigation Strategies

• Strong IVF performance supporting delivery volumes
• Centralized significant business functions (budgeting, financial control, etc.)
• Established a clear division of responsibilities for key business processes
• Opened clinics in regions before building hospitals to understand market dynamics
• Prioritized regions with existing outpatient clinics or large populations
• Invested in programs to improve medical personnel qualifications
• Prioritized investment in programs that improve the qualifications of medical personnel throughout Russia
• Strong relations with government at federal and regional levels
• Monitored Russian and global economic environment and adapted strategies
• Constantly sought new ways of increasing efficiency in monitoring business processes and internal controls
• Implemented energy conservation measures
• Introduced energy-efficient equipment
• Monitored water consumption and repaired leaks
• Maintained electronic document flow
• Retained duly licensed and certified contractors for hazardous waste disposal
• Implemented motivational incentives to attain maximum productivity
• Adhered to principles of respect for human rights and anti-discrimination
• Implemented transparent procurement procedures

Supply Chain Management

Responsible Procurement

• Equal opportunities for participation in tenders
• Prioritizing direct procurement from official representatives in Russia
• Improving quality control of procured goods
• Switching to medium- and long-term supply contracts
• Cataloguing and unification of materials

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 14001:2004, ISO 50001:2011

Environmental Metrics

ESG Focus Areas

• Sustainable Development
• Corporate Social Responsibility
• Human Resources
• Supply Chain Management
• Environmental Impact
• Workplace Safety

Environmental Achievements

• Increased energy efficiency measures implemented across facilities.
• Improved waste management procedures, including central procurement of medicines and use of electronic trading platform.
• Compliance with Russian Federation waste management legislation for medical industry.

Social Achievements

• Opened a new multi-disciplinary hospital in Samara, creating jobs.
• Continued expansion of regional hospital network, bringing high-quality services to more regions.
• Implemented professional development programs for 1,100 employees.
• Hosted 290 open days at facilities, with over 8,100 visitors.
• Conducted 63 webinars and online events.
• Provided 8,387 IVF cycles under Mandatory Health Insurance.
• Gave 510 patients high-technology medical assistance.
• Completed long-term share incentive program for senior management.

Governance Achievements

• Full compliance with the UK Corporate Governance Code.
• Established remuneration, audit, and nomination committees.
• Implemented a whistle-blowing policy.

Climate Goals & Targets

Environmental Challenges

• Challenging demographic situation in Russia.
• Growing competition in IVF segment.
• Risk of changes in governmental attitudes and policies towards private medicine.
• Macroeconomic risks affecting business.
• Challenges in forecasting return on investment in regional expansion.
• Difficulty in attracting and retaining qualified personnel in regions.
• Financial risks including credit, operational, and liquidity risks.
• Reputational risks related to medical services.
• Uncertainties related to the Russian business and tax environments.

Mitigation Strategies

• Continued expansion of hospital network to weather demographic challenges.
• Expansion of IVF services on a commercial basis to offset decline in volumes.
• Constant monitoring of macroeconomic and political risks.
• Rigorous investment decision-making process for regional expansion.
• Improved recruitment process, better working conditions, and employee training programs.
• Implementation of new control measures and improvement of existing ones.
• Strong relations with government at federal and regional levels.
• Introduction of new system controls and optimized work with media to reduce reputational risk.
• Cooperation with regulatory bodies of Great Britain for London Stock Exchange requirements.

Supply Chain Management

Responsible Procurement

• Central procurement of medicines.
• Use of special electronic trading platform.
• Strict control of procurement activities.
• Consistent contract format.
• Diversification of suppliers (Russian and international).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Guidelines, Core option, EU’s 2014/95/EU directive

Certifications: ISO 14001-2004, ISO 50001:2011

Environmental Metrics

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Governance Achievements

• Since September 2012, the Board of Directors established the operation of the following three committees: the Audit Committee, the Nomination Committee and the Remuneration Committee.
• Since 2012, the Company has maintained full compliance with the UK Corporate Governance Code.

Climate Goals & Targets

Environmental Challenges

• The Group operates in a highly regulated industry and is subject to supervision by federal and local authorities. As a result, the Group would be significantly affected by material changes to the existing, or implementation of additional, government regulations in Russia.
• The reputation, expertise and professionalism of the Group’s medical personnel are instrumental to the Group’s ability to attract new and repeat patients. The Group’s operating success depends on its medical personnel providing high-quality healthcare services throughout the Group’s medical network.

Mitigation Strategies

• The Board of Directors has the overall responsibility for the establishment and supervision of the Company's risk management framework. Details in relation to principal risks and uncertainties and steps taken to manage these risks and uncertainties are presented in Notes 23 and 25 of these consolidated financial statements.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: KPMG Limited

Environmental Metrics

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Quality of Service Provision
• Employee Well-being
• Environmental Sustainability
• Supply Chain Management
• Governance

Environmental Achievements

• Reduced energy consumption by 17% in clinics and increased by 16% in hospitals (electricity); reduced fuel consumption by 17% in clinics and increased by 15% in hospitals (electricity)
• Reduced water consumption by 4% in clinics and increased by 29% in hospitals

Social Achievements

• Helped purchase equipment for kindergarten 364 in Novosibirsk
• Held conferences for reproductive specialists in Lapino, Ufa, Samara, and Volgograd
• Organized Christmas and New Year events for children, including a Wish Tree initiative
• Provided training programs for nurses and doctors
• Awarded more than 50 employees for their fight against COVID-19

Governance Achievements

• Maintained full compliance with the UK Corporate Governance Code
• Established Audit, Nomination, and Remuneration Committees

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on operations and financial performance
• Risk of incorrect hazardous waste disposal
• Risk of substantial increase in energy consumption and decrease in energy efficiency
• Risk of substantial increase in water consumption
• Risk of increased paper consumption
• Statutory restrictions related to employment
• Insufficient availability of Company’s care services facilities
• Deterioration of the Group’s relations with staff
• Discrimination
• Work under compulsion
• Remuneration discrimination
• Risk of corrupt actions and payments to government authorities
• Risk of bribery of the Group’s employees for the benefit of third parties
• Risk of deteriorating epidemiological situation, increased risk of infectious disease transmission among medical personnel
• Risk of external factors impacting the ability of MD Medical Group facilities and staff being able to provide treatment to COVID-19 patients

Mitigation Strategies

• Implemented energy-saving measures
• Improved hazardous waste disposal procedures
• Monitored water and heat supply pipelines
• Fulfilled requirements of the Electronic Government programme
• Monitored changes in relevant legislation
• Expanded the geography of its presence, opening new facilities
• Monitored employee engagement and satisfaction levels
• Developed continuous medical education
• Implemented a zero-tolerance policy on discrimination and compulsion
• Implemented a strict policy on bonuses and rewards
• Ensured interaction with regulatory authorities is fully documented
• Implemented transparent procurement procedures
• Provided healthcare professionals with personal protective equipment
• Opened a new healthcare facility for COVID-19 patients
• Followed international best practice and healthcare authority guidance when treating COVID-19 patients

Supply Chain Management

Responsible Procurement

• Emphasis on supplier experience and product quality
• Shared values and work ethics
• Centralized procurement
• Identification of alternative materials
• Direct contracts with producers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 14001-2004, ISO 50001:2011

Environmental Metrics

Governance Achievements

• Maintained full compliance with the UK Corporate Governance Code since 2012.
• Established and operates an Audit Committee, a Nomination Committee, and a Remuneration Committee.

Climate Goals & Targets

Environmental Challenges

• Economic and financial market risks in the Russian Federation, including sanctions imposed by the US, EU, and other countries.
• Elevated economic uncertainty due to sanctions, partial mobilization, and the ongoing COVID-19 pandemic.
• Reduced liquidity and high volatility in capital markets.
• Volatility of the Ruble exchange rate and key interest rate.
• Decreased foreign and domestic direct investments.
• Difficulties in making payments for Russian Eurobond issuers.
• Significant reduction in the availability of debt financing.
• Limited access to international stock and debt capital markets.

Mitigation Strategies

• Maintaining sufficient cash and other highly liquid current assets to manage liquidity risk.
• Monitoring interest rate and exchange rate fluctuations and acting accordingly.
• Implementing risk management policies and systems to identify, analyze, and mitigate risks.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS-EU