Strategic Report 01 Strategy 02 03 04 Principal risks and uncertainties Principal risks and uncertainties The Board has performed a robust assessment of the principal risks facing the Group taking into account the Group’s strategic objectives, business model, operations, future performance, solvency and liquidity. All principal risks identified by the Board may have an impact on our The order in which the principal risks and uncertainties appear does business strategic objectives. These principal risks are described in the not denote their order of priority. It is not possible to fully mitigate table that follows, together with the relevant strategic business against all of our risks. Any system of risk management and internal objectives, key risk drivers/trends and the mitigation actions we have control is designed to manage rather than eliminate the risk of failure taken. It is recognised that the Group is exposed to risks wider than to achieve business objectives and can only provide reasonable and those listed. We disclose those we believe are likely to have the not absolute assurance against material misstatement or loss. greatest impact on our business at this moment in time and which have been the subject of debate at recent Board, Audit or Clinical Quality and Safety Committee meetings. Principal Risk/Uncertainty Key Drivers/Trends Mitigation Compliance The Group operates across the healthcare There are periodic changes to applicable We engage in constructive dialogue with ecosystem and is subject to a complex regulations, including the UHC. regulatory and Governmental bodies, where spectrum of laws, regulations and codes. possible, on potential changes to legislation. Our healthcare service business includes The Group operates in an emerging and a network of different hospitals and a We have policies, procedures and controls to developing market in which legislation is nationwide chain of polyclinics, each of fulfil our compliance obligations, for example, evolving and there may be further changes which must comply with extensive specific Infection Control Management, Quality which may affect the Group’s business. requirements, including documentation Management, Sentinel Event Management, processing and maintenance requirements. Waste Management, Fire Safety Management Impact and Radiation Safety Management. Non-compliance with applicable laws, Regulatory authorities (the Social Services regulations, codes, authority or regulatory Agency and the state agency for supervision We have extensive process management requirements, including those specific to tax, of medical activities) conduct periodic systems in place that aim to ensure that the insurance or healthcare, or the settling of inspections of Group hospitals and clinics in processes are carried out to a consistent disputes or lawsuits, could lead to financial order to determine compliance with relevant standard and in compliance with Georgian detriment, penalties, increased costs of regulatory requirements, and have imposed regulatory requirements. operations, censure, regulatory investigation penalties for errors and non-compliance and reputational impact. in the past. Through a team of experienced practitioners and a Quality Control Unit, we carry out Inadequate record-keeping or documentation The Group is involved in contractual and regular internal audits. Their programme of medical matters and patient data could other disputes and litigation. and audit results are reviewed by the Clinical lead to medical or administrative errors and Quality and Safety Committee every quarter. regulatory breaches which could impact our Georgia’s existing anti-monopoly legislation Outcomes and changes to process are financial performance. may have an impact on our acquisitions as circulated throughout the Group. we will be required to seek prior approval from the Competition Authority to proceed Through a Regulatory Risks Unit, we perform with certain future acquisitions. a consolidated review of all key regulatory compliance risks within the network of the Group’s clinics, analyse and report on findings identified as a result of past inspections carried out by the unit as well as by the Regulatory Authorities, and prepare detailed action plans for individual clinics in order to mitigate risk of future non-compliance. We involve our Legal department in every material contract, contractual disputes and litigation. The Tax Unit of our Finance department follows changes in tax legislation and initiatives, checks compliance with respective rules and is involved in contract execution processes. 53