01 02 Governance 03 04 The following table sets out details of total remuneration for the Chief Executive Officer, Mr Gamkrelidze, for the year ended 31 December 2018 and his discretionary compensation as a percentage of maximum opportunity. 2015 2016 2017 2018 Single total figure of remuneration (US$) 1,205,387 1,330,797 1,297,055 1,024,388 Discretionary compensation as a percentage of maximum opportunity (%) 100 95 85 50 Note: 1 Maximum opportunity is 100% of total salary (cash salary and deferred share salary). Total salary for 2018 and 2017 is set forth in the table above. Basis for determining Mr Gamkrelidze’s discretionary deferred share compensation The number of discretionary deferred shares granted to Mr Gamkrelidze in a given year is dependent on both Group performance and his achievements of the KPIs set for him by the Remuneration Committee. The following table details the KPIs set for Mr Gamkrelidze in respect of 2018, as well as his performance against these. Key performance measure “KPI” 2018 target 2018 performance FINANCIAL Achieving agreed Group revenue, EBITDA • Revenue target: GEL 863.5 million • Revenue: GEL 850 million and free cash flow targets. • EBITDA targets: GEL 140 million • EBITDA: GEL 132.3 million • Operating cash flow: GEL 108.5 million • Operating cash flow: GEL 99.6 million Achieving revised targets for increased • Gross margin 2018: 32.9% • Gross margin: 31.6% efficiency, measured by improvements • Net margin 2018: 7.7% • Net margin: 6.9% in gross and net margin and ROIC. • ROIC 2018 (unadjusted): 11.1% (adjusted for one-offs and FX) • ROIC 2018 (adjusted): 14.1% • ROIC (unadjusted): 11.0% • ROIC 2018 (adjusted): 13.9% CLINICAL Drive forward the quality culture within the • Ensure that all hospital and clinic CEOs • For each of the three Clinical KPIs, there was Group by implementing and monitoring key deliver continuous performance improvement but not to the extent expected measures across the business. improvement against a series of quality to meet the target. Therefore, some actions indicators within their targeted KPIs that have been rolled over into 2019. are regulary ontored and assessed by senior management. • Assist the Medical Director to implement a number of initiatives that measure and improve a hospital’s quality performance, against the most important quality dimensions, on a monthly basis. • Ensure that Senior Doctors’ performance is measured in relation to a number of quality indicators, benchmarked across the Group. STRATEGIC DEVELOPMENT Driving through the agreed Growth Strategy. • Develop the Management Fee • No appropriate opportunities were available. related business. • Implement plans for increased • Medical tourism plan for2018 was met. Medical Tourism. • Drive forward the Outpatient Strategy. • Outpatient client acquisition is on track. Ensure that the Group IT Strategy supports • Particular emphasis to be placed on • Medical Ordering and Ambulatory EMR the overall Group Strategy as well as optimising opportunities for Digital finalised; implementation and hospital operational performance. Platforms and Integration between roll-out is ongoing. Healthcare and Pharma. • Doctor booking system, ePrescriptions, Payroll & HRMS process automation was implemented. • The Company’s new digital healthcare platform (“DHP”) is being developed; a delay in launch of the first iteration. 101