Georgia Healthcare Group PLC Annual Report 2018 Strategic Report Resources and responsibilities Resources and responsibilities Improving the quality of healthcare in Georgia and delivering excellent and consistent standards of care to our patients, is central to our mission and to our purpose. As one of the largest employers in Georgia, we recognise our role in ensuring our impact on the environment is minimised and our role as an employer of choice. We recognise that GHG’s contribution to we have a responsibility and a duty not only to our shareholders and patients, but to society Sustainable Development more widely, and we take this responsibility seriously. Goals In this section, we set out the initiatives we have in place to meet this responsibility and the progress we are making on these initiatives. “ Countries around the world have committed to implementing Sustainable This section of the strategic report constitutes the Group’s Non-Financial Information Development Goals (“SDGs”). Statement, in accordance with sections 414CA and 414CB of the Companies Act. The Implementation of UHC is a key element information to be disclosed under section 414CB has been included in the section below, of goal number 3 “to ensure healthy lives with the exception of a description of the Group’s business model, and principal risks and promote well-being for all, at all ages.” and uncertainties which can be found on pages 2 to 65 and 53 to 59 respectively. GHG is helping the Government of Georgia to achieve SDG 3 with a strategy GHG is helping transform healthcare in Georgia that promotes greater access to Back in 2008, when we decided to enter the healthcare market and to improve the overall healthcare, while providing financial quality of healthcare in the country, the market was in need of significant investment, with a protection to the most vulnerable groups. vast network of decaying hospital infrastructure across the nation, an oversupply of depreciated GHG is addressing the medical skills hospitals, beds and doctors and a damaging undersupply of nursing staff. Recognising that it gap, and it is offering essential services did not have the resources to adequately solve these problems on its own, the Georgian including maternal, new-born, child health, government launched a “privatisation initiative” and invited the private sector to help overhaul infectious and non-communicable the industry. The Group decided to participate in the programme and in 2008 opened its first diseases treatments in the communities hospital with the aim of modernising the healthcare infrastructure, closing the service gaps where Georgians live and work. As GHG in the country that forced patients to seek treatment abroad and increasing the overall quality expands the availability of quality primary of care that had declined sharply in the past decades. care at outpatient polyclinics, it can help control costs and reduce premature Over the last ten years, GHG has spent nearly GEL 750 million (US$300 million) on upgrading mortality from non-communicable Soviet era facilities that were in a decrepit state. It built new hospitals and clinics that were diseases through prevention.” – Read outfitted with modern equipment. Between 2015 and 2018, GHG spent about GEL 3 million more in IFC’s case study published on per year training medical staff. GHG by clicking: https://www.ifc.org/wps/ w cm/connect/industry_ext_content/ifc_ Today, GHG is the largest healthcare service provider, pharmaceuticals retailer and wholesaler, external_corporate_site/health%20 and medical insurance provider in the Georgian market. The Group operates a network of and%20education/resources/case%20 clinics and hospitals, pharmacies, a laboratory and medical insurance business. Read more study_ghg. about our business model on page 10. GHG’s health ecosystem generates synergies across all of its segments, resulting in a better patient experience. For decades, Georgia struggled with high rates of mortality. In 1995, infant mortality was 41.6 per 1,000 live births. Investing in the sector has resulted in tremendous improvement in mortality rate in recent years. Under-5 mortality rate per 1,000 live births, Georgia 0–1 mortality rate per 1,000 live births, Georgia 35.0 30.0 26.4 28.7 25.5 28.0 24.7 24.0 18.9 16.9 21.0 15.6 16.7 18.0 13.8 14.6 15.6 13.2 17.0 10.9 10.2 10.7 11.1 12.0 9.5 8.6 9.0 9.6 7.0 5.0 0 0 2008200920102011 2012 201320142015 20162017 2008200920102011 2012 201320142015 20162017 Source: Geostat Source: Geostat 40