nmc health plc 
 
2013 annual report 
 
  1 
 
 
 
contents 
 
 
section        page number 
 
overview 
 
financial summary and highlights     2   
 
chairman’s letter       4 
 
2013 at a glance       6   
 
 
group strategic report 
 
 
ceo review        8   
  
uae economy and healthcare market     9 
 
our business model       11 
 
our strategy        13 
 
business overview       19   
  
financial review       27 
 
principal risk factors       31 
 
corporate social responsibility      35    
 
 
governance 
 
board of directors       46   
  
directors report       51 
 
corporate governance report      56  
 
directors’ remuneration report      74 
 
 
consolidated 2013 financial statements    99 
       
 
 
 
 
  2 
 
 
financial summary and highlights 
 
 
financial summary  
usm unless stated fy2013 fy2012 growth  
    
group    
revenue 5509 4901 124 
gross profit 1855 1603 157 
gross profit margin 337 327 98bps 
ebitda 929 796 167 
ebitda margin 169 162 62bps 
net profit 691 598 157 
net profit margin 126 122 36bps 
 
earnings per share us 0367 0343 70 
dividend per share gbp pence 44 41 73 
    
 
normalised operating cashflow 851 353 1412 
total capital expenditure additions in the year 827 1189 305 
capital expenditure relating to four capital projects 
announced at ipo 722 823 123 
    
    
total cash  2687 2575 44 
total debt 3324 3036 95 
net debt  637 461 380 
    
 
 
divisional performances    
healthcare revenue 2893 2516 150 
healthcare ebitda 
 817 682 198 
healthcare ebitda margin 282 271 113bps 
healthcare occupancy 647 605 420bps 
    
distribution revenue 3002 2711 107 
distribution ebitda 299 262 141 
distribution ebitda margin 100 97 30bps 
 
notes  
 normalised operating cash flow is a nonifrs line item and is equivalent to net cash from 
operating activities 
 total cash is represented by bank deposits and bank balances and cash  
 total debt is a nonifrs line item and includes short term and revolving working capital facilities 
required for the operation of the distribution division but excludes accounts payables and 
accruals amounts due to related parties employee end of service benefit and other payable 
 net debt is a nonifrs line item and is total cash less total debt both as defined above 
 
  3 
 
 
 
fy2013 financial highlights – a year on year comparison 
 group revenues increased by 124 to us5509m  
 healthcare division revenue increased by 150 to us2893m
1
 
 distribution division revenue grew by 107 to us3002m
2
 
 ebitda increased by 167 to us929m 
 ebitda margin improved by 62bps to 169 
 net profits increased by 157 to us691m 
 net profit margins appreciated by 36bps to 126 
 earnings per share eps amounted to us0367 
 proposed dividend payout ratio is maintained at 20 of profit after tax amounting to gbp
3
  
44 pence per share 
 total capital expenditure reached us827m 305 lower
4
 
 net debt reached us637m as the group continued to advance its ongoing healthcare 
projects 
 replacement of term loan facility during the period will result in an average estimated annual saving 
of us2m during the five year term of the new facility net of a oneoff charge of us34m in relation to 
the previous jp morgan syndicated loan fully provided for in 2013  
 
fy2013 business highlights  a year on year comparison 
  healthcare division’s patients increased by 95 to 21m 
 revenue per patient from healthcare services increased by 56 to reach us 1116 
 hospital bed occupancy rates reached 647 an improvement of 420bps despite a 135 
increase in operational beds to 261 
 doctor’s employed reached 503 an increase of 198 
 distribution division increased its product portfolio by 87 to 71215 stock keeping units 
sku 
 sales and marketing personnel at the distribution division grew 144 to 605 
 nmc day surgery in mohamad bin zayed city commenced operations in july 2013 
 dubai authorities adopted mandatory healthcare insurance in november 2013 with 
implementation starting in 2014 
 
 
                                                 
1
 before intercompany elimination 
2
 before intercompany elimination 
3
 british pound  
4
 includes  us722m on capital projects  4 
 
 
chairman’s letter 
 
dear shareholder 
 
when i wrote to shareholders this time last year with the publication of our 2012 annual report i set out a 
number of achievements which had made 2012 a momentous year of change and achievement for nmc 
health plc  
 
i am pleased to report that again this year many key milestones have been achieved specifically the year 
has seen strong growth with your company following the strategy set out at the time of its ipo in april 2012 
moreover shareholder value has increased significantly during the year group revenue increased from 
us4901m in 2012 to us5509m in 2013 ebitda at group level also improved from us796m to 
us929m in the latest financial year 
 
financial stability 
 
in june 2013 the company announced that it had successfully completed the replacement of its existing 
syndicated bank loan with the help of j p morgan although no additional funds were raised the proceeds 
of the replacement syndicated bank loan have enabled the company to restructure its existing loans 
streamline its financing by reducing the number of loans reduce its cost of funds and create additional 
headroom to ensure that the group is more conservatively financed the reduction in cost of funds is 
estimated to generate average savings of us2m per annum over the next four financial years which will 
have a significant positive effect on the company’s net profit and eps  
 
capital projects 
 
the year has not been without its challenges in relation to the group’s capital projects the group’s 
progress on certain projects within its capital development programme has been slower than expected with 
both the brightpoint women’s hospital and our new dip general hospital having encountered construction 
delays these facilities are expected to open in h1 2014 however our first new facility since ipo the 
nmc day surgery centre in mohammed bin zayed city opened in part in july 2013 and is performing as 
expected our most ambitious capital project the 250 bed hospital being built in the expanding abu dhabi 
suburb of khalifa city is on track to open in h1 2015 finally we also announced in 2013 the launch of a 
medical centre in al ain this project is progressing well  
 
operating divisions 
 
in the healthcare division occupancy rates and outpatient numbers across all of our specialty hospitals 
continue to improve and the group continues to increase the range of specialty procedures that its clinical 
teams undertake during the year our healthcare division also signed a memorandum of understanding 
with oxford fertility unit this joint venture arrangement to provide specialist ivf services at our new 
brightpoint women’s hospital will be a welcome addition to our range of specialist services 
 
the private healthcare market in the uae has been growing steadily in recent years and the board expect 
this to continue the announcement in november 2013 of the introduction of mandatory insurance for 
residents of dubai will help to underpin the growth potential in the uae private healthcare market as our 
healthcare division has existing operations across both abu dhabi and dubai your company is well placed 
to benefit from the rollout of mandatory health insurance in dubai and in the future across the remainder 
of the uae     
 
in the distribution division performance has continued to improve with an increasing number of product 
lines distributed on behalf of our very supportive suppliers general macroeconomic conditions continue to 
indicate good growth levels for the division  
 
corporate governance 
 
during the year your board has continued to assist management in the wider aspects of corporate 
governance where there have been a number of changes in uk regulations and “best practice” standards 
affecting uk listed companies in addition the previous board committee framework has changed with the 
establishment of a clinical governance committee under the guidance of its chair heather lawrence the 
committee will monitor the key areas of clinical risk quality and safety and will work alongside the audit 
committee to ensure key clinical risks facing the group are monitored and where necessary mitigated  5 
 
work has progressed on the establishment of integrated it systems a new hospital information system 
will start to be rolled out in 2014 and the group’s new enterprise resources planning “erp” financial 
system will be operational in h1 2014 and will help simplify administration processes these key 
improvements in the group’s internal controls are important aspects of nmc’s risk mitigation strategy    
 
board changes 
 
during the year there were a number of changes affecting the board jonathan bomford was appointed to 
the board in june 2013 jonathan a chartered accountant is our new independent nonexecutive 
director and chairman of the audit committee and brings sound financial experience to both the audit 
committee and the board as well as experience of working in the gulf region justin jewitt ceased to be a 
director in june 2013 and the board would like to thank him for his contribution during his time as a 
director of the company and chairman of the audit committee 
 
in addition mr keyur nagori was appointed as an alternate director to his excellency saeed bin butti in 
june 2013 
 
on 24 february 2014 he saeed bin butti resigned as a director of the company on the same date he 
saeed nominated mr abdul rahman basaddiq to be appointed as a director of the company and his 
appointment was approved by the board the board would like to thank his excellency for his significant 
contribution to the company and welcome mr basaddiq to the board 
 
dividend 
 
given the good performance of the company and the continued financial stability of the group your board 
plans to submit a resolution to shareholders at the 2014 annual general meeting authorising payment of a 
cash dividend of 44 pence per share this is approximately 20 of profit after tax a level unchanged 
from the amount which shareholders approved in relation to the 2012 financial year
 
 
executive remuneration 
 
the remuneration committee under the chairmanship of lord clanwilliam has been reviewing the 
structure of executive remuneration a new short term incentive plan has been implemented for the 2013 
financial year and a long term incentive plan is proposed for 2014 both of these plans which are 
described more fully in the directors’ remuneration report are designed to focus and incentivise 
management on the long term value of your company and align them with any value change experienced 
by shareholders in the company over the longer term   
 
management and staff 
 
economic conditions in the uae are favourable but dr shetty his management team and staff across the 
group have had to continue to work hard through a continuing period of significant change to achieve 
strong results on your behalf the board greatly appreciates the continued commitment energy and 
goodwill which they have shown in the last 12 months and would like to thank them all for their respective 
contributions  
 
outlook 
 
your board continues to view the outlook for the group with confidence and enthusiasm and looks forward 
to a period of continued well financed growth 
 
 
 
h j mark tompkins 
nonexecutive chairman  6 
 
2013 at a glance      
 
 
 
 
 
 nmc health’s revenue reached 
us5509m in 2013 
 124 revenue growth year on year two 
percentage points higher than last year’s 
growth  
 
 
 
 ebitda increased to us929m in 2013 
167 year on year 
 ebitda margins 169 in 2013 62bps 
year on year  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 net profit increased to us691m in 2013 
157 year on year  
 net profit margins npm were slightly 
higher in 2013 at 126 36bps 
 
  7 
 
 
 
 
 adjusted operating cash flow 
for the group amounted to 
us884m in fy2013 1104 
higher than fy2012 
 key drivers include higher 
ebitda lower change in net 
working capital and lower 
maintenance capex 
 
 
 
 
note adjusted operating cash flow excludes changes 
in amounts due fromto related parties 
 
 
 
 more effective management of 
working capital reduced the 
net working capital to sales 
ratio by 396bps in fy2013 
 
 
 
 
 net debt reached us637m as 
the group continued to 
advance its ongoing 
healthcare projects 
 us722m was spent as 
capital expenditure 
 
 
 
 
 
 shareholders equity increased 
by 172 to us3862m in 
fy2013   8 
 
group strategic report 
 
ceo review   
 
since the very beginning of this business as a small pharmacy and two doctor clinic nearly forty years 
ago in abu dhabi nmc has been a story of commit evolve and grow this commitment is towards 
our patients and their wellbeing our quality and affordability our staff and their performance and our 
country and its people yet without the vision and drive of the founders and leaders of the uae our 
successful journey would not have been possible  
 
in the second year following nmc health’s listing on the premium segment of the london stock 
exchange main market as the first uae company to successfully pursue this avenue i am truly proud 
to report on our continued success – as a company management and team encompassing all nmc 
staff on the ground here in the uae  
 
this success is demonstrated through our double digit topline growth and ebitda margin 
appreciation in fy 2013 we delivered a 124 topline growth year on year nearly 200bps higher 
than 2012 as revenues reached us5509m we successfully opened the nmc day surgery centre 
in mohammed bin zayed city in july 2013 while the major additions to our healthcare portfolio will be 
introduced in 2014 and 2015  
 
ebitda reached us 929m in fy 2013 – equating to a 167 year on year growth a rate expansion 
of 372bps compared to 2012 group ebitda margins increased by 62bps compared to 2012 and 
closed the year at 169  
 
the devotion and hard work of management and employees at nmc achieved a new milestone in 
2013 as nmc healthcare crossed the 2m annual patient mark for the first time we increased our 
operational bed capacity by 135 year on year to 261 nevertheless group hospital occupancy 
increased by 420bps to 647  we continued to strengthen our human resources and added 83 new 
doctors during the year 
 
similar efforts in the distribution division yielded an increase in stock keeping units sku’s of 87 
in 2013 with the total number of products offered by nmc reaching 71215 in this division we 
enhanced our sales promotion and marketing capabilities by adding 132 new people in those specific 
areas  
 
we have continued to face some challenges in relation to the progression of our capital projects 
programme but we are taking steps to mitigate similar problems arising in the future we are also in 
the process of implementing two new major it systems which will establish a suitable it infrastructure 
for the group in the future  
 
we expect the strong performance of the uae economy to continue in 2014 with a positive effect on 
both our divisions we are particularly excited about the emirate of dubai’s decision in late 2013 to 
begin rollingout mandatory healthcare insurance for all its residents this year according to the dubai 
health authority dha around 66 of the emirate’s residents are without healthcare insurance 
nmc health already has two hospitals and a day surgery in dubai in addition we plan to open a 60 
bed general hospital in dubai investment park dip in h1 2014 in the abu dhabi market we plan to 
open brightpoint women’s hospital the first private sector women’s hospital with a 100 bed capacity  
 
finally i would like to thank our shareholders and my fellow members of the board of directors for 
their continued support throughout the past year  
 
 
dr b r shetty 
 
  9 
 
 
uae economy and healthcare market 
 
 
 
 uae has one of the fastest growing economies in a 
rapidly expanding region 
 pace of growth is nearly twice the global average  
 high growth rate from high base gdp per capita 
 
 
 
source world bank latest 
 
 
 
 
 
 uae gdp per capita is among the highest in the 
world 
 exceeds several major developed world economies 
 
 
 
 
source world bank latest 
 
 
 
 growing economy high living standards ease of 
doing business and limited language barriers attract 
expatriates for work 
 uae population is one of the fastest growing in the 
world at 31 in 2012 
 uae population cagr 19612012 is over 9  
  
source world bank 
 
  10 
 
 
 
 
 
 considerable room for growth in health expenditure 
per capita in the uae 
 more mature economies with comparable gdp per 
capita have significantly higher healthcare 
expenditure  
 expenditure likely to increase with mandatory 
healthcare insurance implementation in dubai and 
potentially other emirates in the future implemented 
in abu dhabi since 2007 
 
source world bank 
 
 
 despite considerable investments into the uae’s 
healthcare infrastructure the extraordinarily high 
population growth rate has left a substantial 
opportunity for continued healthcare sector growth 
 uae has an estimated 11 beds per 1000 in 
population considerably below the global average of 
around three 
 
source world bank haad dha 
 
 
 the uae has one of the highest gdp per capita 
levels in world 
 few countries with similar income levels have so few 
beds1000 
 recognizing the need for additional investments in 
healthcare the uae government continues to take 
initiatives to encourage private sector participation 
 
source world bank haad dha  11 
 
our business model 
 
 
established in 1975 nmc health plc is now the leading private sector healthcare operator in the 
united arab emirates with a nationwide network of hospitals and operations in the country the 
group also operates a uae wide distribution and wholesale business  
 
 
 
healthcare services 
 
through our healthcare services division we provide people in the uae with a range of high quality 
outpatient and inpatient services across our facilities our facilities range from the larger specialty 
hospitals to medical centres in addition we have retail pharmacies mainly selling pharmaceuticals 
prescribed by our doctors to our patients either within or in the immediate vicinity of our healthcare 
services facilities our comprehensive care approach maximises patient convenience and increases 
revenue contribution to our business   
 
while we serve both insured and selfpaying patients the overwhelming majority of our healthcare 
division’s revenue is generated through insured patients in return for the services rendered to insured 
patients we submit claims to insurance companies to collect the remainder of our fees usually 
insured patients have some copay element which is paid directly when services are delivered to 
them at our facilities  
 
pricing of our healthcare services is typically negotiated on an annual basis with the insurance 
companies we work with and may differ between the various insurance plans offered in the market in 
contrast prices of the majority of pharmaceutical products sold in our pharmacies are regulated and 
set by the uae ministry of health 
 
nmc hospitals are currently covered by the majority of the approximately 40 insurance companies 
operating in the uae including the largest market participants these companies have either a direct 
relationship with us or through the 13 third party administrators tpas who currently provide private 
medical insurance into the abu dhabi market 
 
our healthcare division also provides operational and management services to third party owned 
healthcare services assets in return for our services we receive a contracted management fee by the 
asset owner typically the fee received is partially tied to a set of preagreed performance metrics 
incorporating either qualitative andor quantitative operational targets we currently have one 
management contract with the uae ministry of presidential affairs pertaining to a general hospital in 
umm al quwain in the northern emirates  
 
 
 
  12 
 
product distribution 
 
nmc’s distribution division is now one of the largest in the uae and it offers products across several 
segments including fmcg
5
 pharmaceuticals scientific equipment and food  
 
nmc counts among its clients uae government entities the largest uae retailers pharmacies and 
hospital operators we supply our customers with a portfolio of globally and locally established brands 
and products with enduser demand in the uae we ensure our customers receive quality products in 
a timely manner with the required support services our distribution capabilities are supported by a 
network of strategically located warehouses and a fleet of distribution vehicles ensuring timely 
delivery to our customers across the country products are overwhelmingly sold on credit with 
payments collected based on agreed terms our pricing of these products includes a markup over 
the product cost to generate a profit and to cover import costs and duties registration administration 
and fees distribution expenses credit costs and in certain cases marketing costs pharmaceuticals 
are the only segment where pricing is widely regulated by the uae ministry of health  
 
only registered domestic distributors a locally established company like nmc are entitled by 
customs authorities to import products into the country principals suppliers contract nmc as their 
distributor to gain access to the uae market through a reputable partner with a long trackrecord 
established distribution channels and infrastructure and strong financial standing every individual 
brand and product has to go through an approval and registration process with local authorities before 
being allowed to be sold in the country nmc facilitates this process and ensures local requirements 
are met the majority of agreements with our principals are on exclusive basis all agreements are 
registered with the government   
 
nmc procurement is on a principal basis in the majority of cases nmc takes the inventory and 
collection risk of the product that it buys and sells acting as a principal rather than an agent 
enhances nmc’s margins at the expense of increasing the group’s risk profile our agreements are 
almost exclusively operated on a credit basis with the number credit days agreed with our principals
                                                 
5
 fast moving consumer goods  13 
 
our strategy 
 
 
strategy historic opportunity drives focused healthcare expansion 
 
the highly positive macro environment coupled with nmc’s longtrack record experience and 
reputation for quality care drives our determined expansion in the uae through the utilization of our 
2012 ipo proceeds longterm loans and cash flows from operations we aim to maximise our growth 
and market position at this historic inflection point in the uae healthcare sector presented by the 
impact of mandatory insurance adoption  
 
nmc’s primary strategic objective is to extend the operational reach of its healthcare services through 
the development of a hub and spoke model in the key emirates of the uae with mandatory medical 
insurance this will be achieved by organic and inorganic means in what remains a highly fragmented 
private sector thus bringing our services to thousands of new patients 
 
 
we also aim to continue expanding our distribution division through organic means and with limited 
additional capital expenditures focusing mainly on new product additions to our growing portfolio and 
increased market penetration 
 
healthcare division adding 410 beds in abu dhabi and dubai 
 
the initial growth plan post ipo and the largest in nmc’s history is almost entirely organic with 
nearly us330m deployed into developing three hospitals and an equal number of medical 
centresday surgeries in the country’s main population centres  with this expansion plan we aim to 
take the total number of nmc’s licensed hospital beds from 310
6
 as of 2013 to 720
7
 in 2015 a 132 
growth the addition of two medical centres and a day surgery is further strengthening our huband
spoke model  
 
note e  estimated 
projects under development 
 
                                                 
6
 nmc health had 261 operational beds as of december 2013 out of 310 licensed bed capacity spare capacity 
was mainly in our most recent hospital addition al ain city specialty hospital 
7
 this refers to the total licensed capacity in all our facilities when the three new hospitals are completed and 
open however we will not commence operations with the full licensed capacity nmc will adopt a phased 
introduction of the bed capacity in the new hospitals the current plan is to start operation with 50 beds out 
of 100 at brightpoint womens hospital 30 beds out of 60 at dip general hospital and with 75 beds out of 
250 in khalifa city hospital  14 
 
we announced five development projects as part of our ipo and a further new facility in al ain in h1 
2013 
  
project opening licensed 
bed capacity 
starting 
bed 
capacity 
city location total 
budgeted 
capital 
expenditure 
us 
br medical suites july 2012 na na dubai dhcc 9m 
nmc day surgery centre in 
mohammed bin zayed city 
july 2013 na na abu 
dhabi 
mbzc 15m 
brightpoint women’s hospital early h1 
2014 
100 beds 50 abu 
dhabi 
city centre 70m 
dubai investment park 
general hospital 
early h1 
2014 
60 beds 30 dubai dip 30m 
al ain medical centre h2 2014 na na al ain sanaiya   7m 
khalifa city hospital h1 2015 250 beds 75 abu 
dhabi 
khalifa city 200m 
total  410 155   3310m 
 
 
notes   br medical suites was acquired 
 dhcc is dubai healthcare city 
 mbzc is mohammed bin zayed city 
 dip is dubai investment park 
  
to date we have completed the acquisition of br medical suites in dubai healthcare city dhcc 
and the development of the nmc day surgery centre in mohammed bin zayed city mbzc in abu 
dhabi apart from delays on brightpoint womens’ hospital and dubai investment park general 
hospital all other developments are in progress for opening on a phased basis in 2014 and 2015 full 
details of the progress of the relevant projects is set out on page 24 of the business overview 
 
post completion of this organic expansion plan nmc will have 550 licensed beds in abu dhabi 
including 100 in al ain city and 170 in dubai our 2012 development plan prioritised abu dhabi – as 
the only market at the time with mandatory healthcare insurance a major catalyst for investment 
returns however we highlight that nmc’s healthcare division is operationally present in four emirates 
abu dhabi includes al ain city dubai sharjah and umm al quwain which account for around 
85 of the uae population  
 
 
 
  15 
 
 
 
 
note e  estimated the above bed capacity is that estimated to be available to the group by end 
2015  
 
we believe that the new healthcare facilities will extend nmc health’s lead as the largest private 
sector operator in the uae with a nationwide hubandspoke model centred around the 250 bed 
khalifa city hospital and our specialty hospitals in the largest cities as a result nmc will be serving 
patients through an extended network of hospitals day surgeries and medical centres on uae 
regional level down to local and community levels  
 
 
  16 
 
nmc health’s patient service network 
 
 
 
 
note  
aash  al ain specialty hospital  
aamc  al ain medical centre  
adsh  abu dhabi specialty hospital  
bwh  brightpoint women’s hospital 
brmc  br medical suites  
dgh  dubai general hospital  
dipgh  dubai investment park general hospital  
dsh  dubai specialty hospital  
mbzmc  nmc day surgery centre in mohammed bin zayed city  
shjmc  sharjah medical centre  
 
volumes raising specialisation 
 
our hospitals and medical facilities received over 2m patient visits in 2013 amongst the highest for 
any private healthcare group in the uae higher volumes allow us to reinforce and elevate quality and 
diversity of services at nmc health we are able to support the introduction of more subspecialties  
higher complexity procedures through crossreferrals between our network – leading to higher value
added services and increasing our competitive advantages note that most of the private sector 
competition in the uae are made up of single hospital operations typically with limited volume flow 
beyond standard services often rendering increased specialisation difficult operationally demanding 
and financially unfeasible  
 
with increased volumes we have been able to expand our service offering enhance our competitive 
advantages reduce loss of patient spend due to unavailability of services and thus increase revenue 
per patient 
 
strategic market segments 
 
we seek to expand our addressable market through new facilities and geographic locations of our 
services and attracting all major insurance categories rather than confine nmc’s market to smaller 
but higher value per patient segments we are keen not to price existing or future nmc medical 
facilities out of any major insurance category albeit select future assets will have a more premium 
positioning such as our highly specialized brightpoint women’s hospital we view the brightpoint 
women’s hospital as an extension of our patient and service segment diversification strategy the  17 
 
hospital is expected to benefit from substantial referrals through our growing abu dhabi network and 
as part of our increased specialisation we have signed a memorandum of understanding to create a 
jointventure with the highly reputable british firm oxford fertility unit to provide ivf services at the 
new hospital 
 
hiring for growth  
 
recruitment and retention of clinical practitioners is undoubtedly one of the major challenges with 
such a sizeable expansion program especially in a country with a shortage of medical staff and 
overwhelmingly reliant on an expatriate work force and in a global market where the availability of 
qualified clinicians is limited  we mitigate this risk through our hr capabilities and longterm 
experience in international hiring we also have longterm partnerships with recruitment firms in 
several markets including the philippines for nursing staff uae healthcare authorities have also 
established supervised exam and testing centres for the required licensing in key markets such as 
india and the philippines for nurses  
 
for physicians the process is more demanding with licensing and associated exams performed only 
in the uae it typically takes around six months to gain the right to practice medicine in the uae 
some countries and medical boards are exempt from this process we constantly evaluate and 
shortlist potential physician candidates to fill new openings and reduce recruitment lead time our 
priority is to add new capacity to the market by hiring externally rather than deplete the limited 
domestic pool of predominantly expatriate staff and encourage extraordinary wage inflation uae has 
an estimated 11 doctors per 1000 inhabitants compared to a global average close to 3   
 
our external hiring also emphasizes our nmc brand centric approach to our service as opposed to 
the doctorbrand centric alternative we focus on attracting patients to the quality of service 
synonymous with nmc as an institution the vast majority of our clinical staff are compensated 
through a fixed salary model with elements of incentivisation and not revenue sharing – we strongly 
believe that puts quality of service first 
 
our recruitment capabilities are best demonstrated through the recent operation  management 
contract awarded to us by the ministry of presidential affairs to manage and operate the 205bed 
sheikh khalifa general hospital in umm al quwain uae we were awarded the contract in early q4 
2012 started outpatient services at the beginning of december of the same year by december 2013 
we had nearly 517 staff operating the hospital  
 
 
healthcare management services  
 
the operation and management of third party hospitals is a new but attractive business for us it is a 
very asset light model which we are keen to expand to complement our core operations we are 
extremely proud of having been selected to perform this role by the uae ministry of presidential 
affairs for the 205 bed hospital in umm al quwain  
 
we view our selection as a testimony and recognition of our capabilities and the quality of our 
services to date we have made very good progress at the umm al quwain hospital and client 
feedback has been excellent  
 
inhospital pharmacies winwin strategy 
 
with our pharmacies we complement our comprehensive care approach and as a result we capture 
the maximum proportion of revenue streams associated with patient visit to our hospitals as a result 
our pharmacies are located either within or in the immediate vicinity of our hospitals convenience 
and proximity coupled with the fact that pharmaceutical prices are fixed by the ministry of health 
means most patients visiting our hospitals would opt to purchase any pharmaceuticals required from 
our retail outlets  
 
the company has no plans to pursue the retail pharmacy business outside this context we currently 
operate eight pharmacies and expect to open one in each of our new facilities   18 
 
distribution – a rewarding legacy business 
 
in addition to our healthcare services business nmc health is one of the top distributors and 
wholesalers in the country for leading international brands and products in the areas of 
pharmaceuticals fmcg food and scientific equipment amongst others  
 
while we envisage minimal investments in this part of our business we expect growth to continue to 
be driven by 
 
 positive macro environment  
 rollout of mandatory medical insurance in dubai with positive impact on pharmaceuticals 
and medical products  
 sizeable expansion of retail space and tourism in the country affecting our non
pharmaceutical business 
 entry of generics into the pharmaceutical sector and  
 our introduction of new products    
nmc’s trackrecord strong management seamless integration of the distribution business 
established supplier and customer networks logistics infrastructure and the fact that it is a listed 
company with highlevels of disclosure allowing unparalleled insight for prospective partners to our 
strong financial standing – are all key factors in our capability to attract established global brands to 
the uae via the exclusive distributor model prevalent in the country another competitive advantage 
of our distribution division is its access to over 500 doctors at nmc and its retail pharmacies providing 
a direct market for the supply of pharmaceutical and medical equipment products   19 
 
business overview 
 
operational review 
 
healthcare division 
 
nmc health’s healthcare services operations span abu dhabi al ain dubai sharjah and umm al 
quwain together these emirates and cities account for nearly 85 of uae residents we operate 
four hospitals two day surgeries a medical centre and eight inhospital pharmacies  in addition the 
group operates a fifth hospital on behalf of the uae ministry of presidential affairs the 205 bed 
sheikh khalifa general hospital in umm al quwain under an operations and management contract 
initiated in q4 2012  
 
healthcare division operations in 2013 
 
detail nmc abu dhabi nmc sp dubai nmc al ain nmc dubai nmc sharjah br med mbzc total
established 1975 2004 2008 1999 1996 2011 2013 na
emirate abu dhabi dubai abu dhabi dubai sharjah dubai abu dhabi na
city abu dhabi dubai al ain dubai sharjah dubai abu dhabi na
area dow ntow n nahda dow ntow n deira corniche dhcc mbzc na
ow nedleased leased ow ned leased leased leased leased leased
category specialty hospital specialty hospital specialty hospital general hospital medical centre day surgery day surgery na
accreditation jci jci jci – – – –
revenue usd 000 100837              55947                48097                12225              10290           2577          906             230879  
grow th yoy 12 16 21 5 16 113 na 16
revenuepatient 108                     164                     117                     62                     67                  269             48               112         
grow th yoy 7 4 8 6 8 17 na 6
capacity
licensed beds 100 100 100 10 –  na 310
operational beds 100 91 60 10 –  na 261
grow th yoy 0 21 33 0 na na na 13
spare capacity 0 9 40 0 na na na 16
staff 1345                  709                     603                     262                   173                35               95               3222
patients
inpatients 20564 8648 8312 1295  na na 38819
outpatients 916124 332538 403486 196448 152487 9582          19041        2029706
total 936688 341186 411798 197743 152487 9582 19041 2068525
grow th yoy 5 12 12 2 26 480 na 10
bed occupancy 79 54 60 44 na na na 647
change yoy 1060bps 160bps 430bps 580bps na na na 420bps
 
 
 
 
the uae’s strong gdp growth coupled with the increased population due to the continued influx of 
expatriates to the growing economy had a positive effect on the performance of the healthcare 
division  
 
in addition we have sought to increase referrals from community clinics towards our specialty 
hospitals our marketing team launched several initiatives to engage with the residential 
communitycorporates including holding health awareness sessions and lectures we have also 
worked to increase our engagement with the medical community to showcase our capabilities  
 
keeping in mind that a large proportion of outpatients in the uae visit standalone private sector 
clinics lacking inpatient capacity we have sought to encourage these thirdparty operators to refer 
patients to our hospitals meanwhile we have continued to invest in new equipment and technologies 
to complement our service offering and medical staff efforts  
 
in july 2013 we also supplemented our healthcare assets with the opening of the nmc day surgery 
centre in mohammed bin zayed city one of the fastest growing suburbs of abu dhabi city this 
facility began receiving its first patients in july 2013 and will act as a referral centre to our growing 
abu dhabi network thus extending the operational reach and addressable market of abu dhabi 
specialty hospital initially and eventually also brightpoint women’s hospital and khalifa city 
hospital  
  
operational gearing our continued drive to enhance our service offering with new higher value added 
subspecialties supported by our growing volumes and the entry into third party hospital operation  20 
 
and management are additional contributing factors to the strong performance of the healthcare 
division in 2013 
 
healthcare division revenue and patients 
 
 
 
 
the healthcare division reported us2893m of revenues in 2013 150 year on year division 
ebitda amounted to us817m 198 year on year with an ebitda margin of 282 113bps 
year on year average revenue per patient reached us112 6 year on year supported by a 
combination of price increases and improved service mix effect as we continue to enhance our 
offering of higher value added subspecialties  
 
healthcare division revenue per patient and ebitda 
 
 
 
note revenue per patient is based on contribution from our healthcare services excluding the contribution from the operation 
 management contract on the sheikh khalifa hospital in uaq it also excludes the contribution from five out of our eight 
pharmacies specifically those located around the hospitals rather than within them 
 
excluding the government hospital managed by nmc the division had a total of 261 operational beds 
135 year on year out of an unchanged 310 licensed beds as we continued to phasein beds 
mainly in our dubai specialty and al ain specialty hospitals  
 
we have a 158 spare system capacity measured in beds which we expect to gradually phase into 
our operations in 2014 and 2015 out of 49 beds yet to become operational 40 are in our most recent 
hospital al ain specialty hospital and nine are in dubai specialty hospital we expect the continued 
growth in al ain as demonstrated by the hospital’s performance to date to absorb the remainder of 
our spare bed capacity in the next couple of years mandatory healthcare insurance adoption in dubai 
this year coupled with growing network referrals from our existing and new healthcare facilities in 
dubai should allow dubai specialty hospital to increase its operational beds     
 
 
 
  21 
 
healthcare division operational beds and occupancy rates 
 
 
 
 
 
as our revenue continued to grow at rapid pace we enhanced our service ability and revenue 
generating capacity through the increase in total healthcare division staff by 183 in fy 2013 to 
3400 we increased the number of doctors to 503 by year end 2013 198 year on year  
 
healthcare division staff 
 
  
 
 
divisionwide bed occupancy reached 647 420bps year on year despite the rise in operational 
beds during the year by 135 the main reasons behind the improvement in occupancy rates at our 
hospitals include 
 patient count increase to almost 21m 95 year on year  
 expansion in the proportion of our total patients who are inpatients to 31 8bps year on 
year and  
 higher average length of stay alos  
 
a like for like comparison based on last year’s deployed operational bed capacity and fy2013 
utilisation would have yielded an occupancy rate well above the 70 level compared to the 605 in 
fy2012  
 
we continue to regard full bed occupancy for medical facilities in the uae to be around 75 as 
opposed to 9095 often experienced in other countries the population leveraged reality in the uae 
with around 85 of residents being expatriates does create higher resident seasonal volatility this is 
typically manifested through extended departuresholidays to home country for working expatriates 
up to one month and even longer for nonworking family members particularly during the summer 
season in addition we highlight that our occupancy figures exclude day surgery patients as the 
occupancy calculation we adopt only includes patients staying overnight consequently we are 
rapidly approaching full occupancy even before the effects from further rollout of universal medical 
insurance beyond the emirate of abu dhabi hence our investment in new capacity  
 
  22 
 
abu dhabi specialty hospital 
 
abu dhabi specialty hospital the group’s first ever hospital has evolved from being a very small 
building in the 1970’s to a tower on the same land plot with adjacent buildings it is located in the 
densely populated centre of abu dhabi city this remains the largest patient recipient within the nmc 
network the facility continues to provide a wide range of specialties and had its joint commission 
international jci accreditation renewed in 2013 with nearly 40 years of service in the very same 
area of the city this hospital has built a noteworthy reputation for quality amongst the abu dhabi 
population  
 
reported revenues increased by 12 to us101m in 2013 compared to the preceding year the total 
number of patients reached 937k 5 year on year with an average revenue per patient amounting 
to us108 7 year on year occupancy increased by 1060bps year on year to reach 79  the 
highest amongst all nmc healthcare assets 
 
al ain specialty hospital 
 
nmc health inaugurated the al ain specialty hospital in the second largest city within the emirate of 
abu dhabi in 2009 this expansion was encouraged by the adoption of mandatory healthcare 
insurance in abu dhabi in the immediately preceding years al ain specialty hospital had the jci 
accreditation of its quality and service levels renewed for a further three year period in 2012 
 
being our most recent hospital addition we have been gradually introducing this facility’s capacity – 
starting with 12 operational beds moving up to 45 in 2012 and with 60 beds as of yearend 2013 as 
part of our organic expansion and capital projects programme we are also in the process of 
developing a medical centre in al ain’s sanaiya area which holds a high concentration of industrial 
establishments we believe this will further expand the operational reach and market of the hospital 
by bringing nmc closer to high population areas and increasing referrals to the specialty hospital 
 
al ain specialty hospital’s performance has been continuously improving with revenues reaching 
us48m in 2013 21 year on year revenue per patient increased to us117 8 year on year 
and occupancy rose to 60 430bps year on year despite the 33 increase during the year in 
operational beds 
 
dubai specialty hospital 
 
opened in 2004 the dubai specialty hospital is well situated in the growing residential area of al 
nahda on the dubaisharjah border which enables the hospital to take advantage of referrals not 
only from both the dubai general hospital and sharjah medical centre but also from certain targeted 
sections of the population of the northern emirates this location has helped the hospital grow 
significantly since opening the facility continues to provide a wide range of specialties dubai 
specialty hospital had its jci accreditation for its quality and service levels renewed for a further 
three year period in 2012  
 
the recent decision by dubai authorities to initiate the roll out of mandatory healthcare insurance 
starting early 2014 is expected to further support the growth of this facility in the coming years dubai 
health authority dha has reported that nearly two thirds of dubai residents are uninsured 
suggesting a potential phased growth of up to 200 in insured residents over the coming years 
dubai specialty hospital will soon see further support from the nmc dip general hospital located on 
the other side of dubai 
 
dubai specialty hospital’s performance has been continuously improving with revenues reaching 
us56m in 2013 16 year on year revenue per patient increased to us164 4 year on year 
and occupancy declined to 54 160bps year on year slightly effected by the increase in operational 
beds at the facility from 75 to 91 beds 21 year on year  
 
 
 
 
  23 
 
dubai general hospital 
 
dubai general hospital was established in 1999 this 10 bed facility is located in the highly populated 
area of deira the hospital acts as a referral centre to the nmc dubai specialty hospital which is a 
short distance away 
 
dubai general hospital’s revenues reached us122m in 2013 5 year on year revenue per 
patient increased to us62 6 year on year and occupancy reached 44 580bps year on year 
 
sharjah medical centre 
 
this multi specialist medical centre was opened in 1996 and is located on the busy commuter route 
along the corniche in sharjah since the facility was upgraded in 2010 from a clinic to a medical 
centre offering increased specialities such as radiology and minor procedures revenue has increased 
significantly the group also benefits from referrals made from this facility to the dubai specialty 
hospital 
 
this medical centre saw a 26 year on year increase in patients with revenues reaching us 103m 
16 year on year meanwhile revenue per patient declined to us670 8 year on year as we 
expanded our services by offering lower fee procedures 
 
br medical suites 
br medical suites is a highend specialty day surgery located in dubai healthcare city it is 
specifically designed to attract highly experienced doctors from around the world to carry out 
minimally invasive surgery and other procedures within its modern international standard facility the 
group acquired br medical suites for a consideration of us9m paid in cash on 1 july 2012 
 
during fy 2013 the facility generated revenues of us 26m and received 9582 patients 480 
year on year revenue per patient was around us 269 while the facility’s total revenues increased 
revenue per patient declined by 17 mainly due to the introduction of new services historically this 
day surgery has been focused on highcomplexity and high value procedures as we widened the 
service offering the revenue per patient has declined  
 
unlike our other healthcare assets this day surgery is overwhelmingly focused on utilisation by 
external doctors consequently its revenues were accounted for net of the external doctor’s share  
 
nmc day surgery centre in mohammed bin zayed city  
this facility in the rapidly growing abu dhabi suburb known as mohammed bin zayed city mbzc 
began receiving its first outpatients in july 2013 nmc day surgery centre in mohammed bin zayed 
city will act as a referral centre to our growing abu dhabi hospital network thus extending the 
operational reach and addressable market of abu dhabi specialty hospital initially and eventually 
also brightpoint women’s hospital and khalifa city hospital 
 
the facility has seen strong monthly growth in patient numbers since opening and we expect this 
trend to continue as we open new sections of the day surgery centre in addition we expect to open a 
pharmacy in the same building in 2014 which should support revenue growth 
 
revenue amounted to just under us1m with over 19000 patients and us48 in revenue per patient 
 
third party hospital operations  management 
 
nmc health provides operation and management services to third party healthcare asset owners and 
developers our management service contract to date is for the 205 bed sheikh khalifa general 
hospital in umm al quwain which we are managing on behalf of the uae ministry of presidential 
affairs since q4 2012 this is a five year contract in return for an annual management fee based on 
qualitative as opposed to financial metrics we believe this is the first such contract to manage a large 
government healthcare facility awarded by a government department to a local uae business this 
demonstrates the confidence in nmc’s significant healthcare experience and capabilities 
 
  24 
 
capital projects  
 
nmc health’s expansion plans as announced during the ipo in 2012 included five new healthcare 
assets three of the assets which included the lease redesign and equipping of existing buildings 
are 
 
 brightpoint women’s hospital 100 bed in abu dhabi 
 
 nmc day surgery centre in the mohammed bin zayed city suburb of abu dhabi opened in 
july 2013 and  
 
 dubai investment park dip general hospital 60 bed 
  
 
in addition a fourth medical facility is being developed the 250 bed hospital in the khalifa city suburb 
of abu dhabi however in this case the building is an entirely new development owned and 
contracted by nmc health finally the plans also included the acquisition of br medical suites 
completed in 2012 a specialist day surgery centre in dubai health care city dhcc 
 
the group faced significant challenges in 2013 to progress the construction of certain of its new 
facilities particularly those requiring the redesign and fitout of existing buildings  
 
the brightpoint women’s hospital which was originally planned to open in august 2012 has been 
particularly complex refit and construction slower than expected following a number of delays we are 
now expecting the facility to open in h1 2014 similarly the dip general hospital construction has 
been delayed on several occasions and we have also had licensing delays we are now expecting the 
facility to open in h1 2014  
 
as a result of the delays experienced we have introduced new processes for future projects 
including 
 
 appointment of an external project manager for our larger future projects and 
 enhanced our tendering process to ensure that appropriately experienced contractors are 
appointed in the future 
 
we are also reviewing our internal project management structure and will be making changes to 
further enhance quality in this area  
 
the construction of khalifa city hospital is progressing well with the concrete structure of the building 
now complete we continue to target receiving the first patients at this facility starting h1 2015 the 
sanaiya day surgery centre in al ain is on track to open in h2 2014 inline with our previous 
guidance on this project the building is being adapted internally and equipped for healthcare 
services with good progress so far 
 
as a result of the delays in the opening of certain facilities additional costs in respect of loan interest 
and leases have been capitalised had these facilities opened in line with original plan these costs 
would have been expensedother than these items the delays have not resulted in an increase in 
budgeted capital costs 
distribution division 
 
topline growth in the distribution division accelerated to 107 year on year in 2013 compared to 
7 year on year growth between 2011 and 2012 demonstrating the positive impact by the 
 
 expansion of the uae economy  
 growing population  
 rise in tourism  
 substantial increase in retail space  
 addition of new products to our offering and  
 positive efforts of the distribution division team in growing product sales  
  25 
 
the division generated revenues of us 3002m 107 year on year in fy2013 with 71215 
sku’s
8
 87 year on year ebitda margins continued to expand on operational gearing 
increased efficiencies and economies of scale ebitda reached us 299m in 2013 141 year on 
year with ebitda margins exceeding last year by 30bps to reach 100 as of yearend 2013  
 
distribution division’s revenue and ebitda contribution  
 
  
 
 
fmcg remained the largest segment with 39 of the distribution division’s 2013 revenues a two 
percentage point reduction in proportional contribution compared to 2012 food  catering delivered 
the strongest segmental growth and increased its proportional contribution to 118 of the division’s 
revenues almost three percentage points higher than in 2012 
 
                                                 
8
 stock keeping unit  26 
 
distribution division’s segment contribution fy2012 and 2013 
 
fy2012 fy2013 
 
 
 
 
it 
  
the group has operated in recent years with legacy it systems which as a smaller private company 
were appropriate for the needs of the group following a review of the group’s it requirements the 
board agreed capital investment in two new primary group systems 
 
a hospital information system his  
the current his system operating within nmc is a homegrown system which has been 
operating successfully over many years continuing developments in the regulatory framework in 
the uae healthcare system as well as additional monitoring and reporting requirements which 
the group feels that it requires as the business grows has resulted in a decision to implement a 
new his 
 
the group has chosen to implement a third party system which is already operating successfully 
within the uae regulatory structure the implementation will commence in 2014 and is expected 
to be completed by 2015 the company feels that the new system will be robust enough to deal 
with the demands of significant growth of the business   
 
b enterprise resources planning erp financial system   
it was reported in the 2012 annual report that the company planned to implement a new 
financial it system during 2013 implementation of the new system commenced in 2013 but 
completion will now be delayed following management’s decision to switch from instant “golive” 
to a phased roll out of the new it system to enable full testing and the integration of the new 
oracle version we anticipate the implementation of the new erp system will be completed in 
the first half of 2014 initial indications from the implementation programe have been 
encouraging  
 
the company has been aware of the need to improve its it infrastructure and is on track to deliver 
new it systems across the group the implementation of new it systems always presents 
organisations with a significant challenge and implementing two new primary systems within the 
group will be no exception however the management team and the board feels that now is an 
opportune time to be implementing a new it infrastructure as the group prepares for significant 
growth in the coming years this investment in new technology will help to reduce an element of 
manual intervention and improve reporting and therefore the company’s internal control environment 
 
 
 
 
  27 
 
financial review    
 
nmc health delivered a strong performance in 2013 at both the group and divisional level 
consolidated group revenues increased from us4901m in fy2012 to us5509m in fy2013 a 
growth of 124 after elimination of us386m of intragroup trading revenue consolidated group 
ebitda improved from us796m in fy2012 to us929m in fy2013 a growth of 167 
 
group net profit reached us691m in fy2013 yielding earnings per share eps of us 0367 
compared to us0343 for the same period in 2012 excluding the effects of oneoff items ipo costs 
of us34m in 2012 and writeoff of unamortised finance fees of us34m in 2013 the increase in 
eps would have been us 0390 in 2013 representing an adjusted increase of 137 
 
healthcare division 
revenue in the healthcare division increased from us 2516m in fy2012 to us2893m in fy2013 
a growth of 150 ebitda increased from us 682m in fy2012 to us817m in fy2013 a growth 
of 198 ebitda margin improved from 271 in fy2012 to 282 in fy2013 
 
distribution division 
within the distribution division revenues increased from us2711m in fy2012 to us 3002m in 
fy2013 a growth of 107 ebitda increased from us262m in fy2012 to us299m in fy2013 a 
growth of 141 ebitda margin improved from 97 in fy2012 to 100 in fy2013 
 
capital expenditure 
capital expenditure incurred for the year was us827m fy2012 us1189m this encompassed 
us722m on the group’s capital projects the group also incurred us73m on equipment required 
across the existing operations 
 
the company was able to capitalise certain expenses in accordance with ifrs and the company’s 
accounting policies we expect this to continue in relation to costs for example lease costs arising 
during the construction of future projects although preoperating expenses were nil in the year to 31 
december 2013 we expect a small level of preoperating costs which will be expensed in the 2014 
financial year as a result of the opening of new facilities  
 
as a result of the delays in the opening of certain facilities discussed in “business overview” 
additional costs in respect of loan interest and leases have been capitalised had these facilities 
opened in line with original plan these costs would have been expensed other than these items the 
delays have not resulted in an increase in budgeted capital costs 
 
a table outlining original estimated capital expenditure and other budgeted costs for each of our 
current development projects and a further table setting out costs to date on these projects is set out 
below 
 
all usm budget actuals 
project budgeted 
capital costs 
capital costs capitalised 
expenses 
accounting 
adjustment  
for lease 
rentals 
total 
capital 
costs 
brightpoint womens’ hospital 70 698 53 193 944 
khalifa city specialty hospital 200 465 32 0 497 
nmc day surgery centre llc 15 92 10 24 126 
nmc dubai investment park llc 30 104 12 40 156 
total 315 1359 107 257 1723 
 
notes  
1 prior to commencement of development of the existing four capital projects management had an expectation that 
there would be an element of expense incurred before the new facilities were opened which would be written off 
through the income statement following a review certain of these costs have been capitalised in line with the 
company’s accounting policies for example lease rent paid and finance costs the group expects such costs will 
continue to be capitalised on these projects during the construction phase  
  28 
 
2 the lease in respect of brightpoint contains a rent free period as well as specified rent increases in line with ifrs 
and the company’s accounting policies the rental cost of the lease has been adjusted to appropriately account for 
these items over the length of the lease accounting policies stipulate that the total lease value for the full lease period 
is divided evenly over the years  
 
3 apart from the projects mentioned above the group had spent us9m on the acquisition of br medical suites 
during the last financial year as part of the projects announced during the ipo 
 
4 the group has not spent any amount towards the development of the al ain medical centre as at 31december
2013 
 
the company has reviewed all significant capital expenditure projects including the delayed projects 
for impairments and have concluded that the projects have sufficient headroom and that none of the 
assets are impaired 
cash 
net cash inflow from operating activities for the 2013 financial year was us851m compared with 
us353m for the comparative period in 2012 this was mainly due to 
 
 improved performance of the group and 
 effective management of working capital  
 
including funds held on deposit cash as at 31 december 2013 was at us2687m compared to us 
2575m at the end of fy 2012 the company had allocated the funds raised through the ipo as well 
as through the jp morgan syndicated loan against the capital cost of the five expansion projects 
announced during the ipo as a result together with positive operating cashflow the company is well 
financed to complete its capital expenditure program  
 
as expected the group had a net debt position of us637m at 31 december 2013 compared with 
us461m at 31 december 2012 as the group continues with its capital project development 
program and the company’s cash is committed to such projects the level of net debt is expected to 
increase during fy 2014 
 
  29 
 
movement in net debt 
the movement in cash and the level of capital expenditure have had a significant effect on the 
movement in net debt during the 2013 financial year a summary of the principal drivers is shown as 
follows 
 
 
movement of net debt 
total debt as at 1 january 
2013 
3036 
total cash as at 1 january 
2013 
2575 
net debt as at 1 january 
2013 
461 
            
add    add        
jp morgan loan 2250 operational cash inflow 851     
    finance incomes 53     
    jpm loan 2250     
            
      3154     
less   less       
jp morgan loan repayments 214 
other bank facilities  
refinancing net movement 
1748     
other bank facilities  
refinancing net movement 
1748 finance fee 34     
    jpm loan repayments 214     
    
additions  disposals to 
property 
786     
    finance costs 145     
    dividends paid 115     
            
      3042     
            
total debt as at 31 december 
2013 
3324 
total cash as at 31 december 
2013 
2687 
net debt as at 31 december 
2013 
637 
 
working capital  
working capital for our two operating business divisions is funded differently due to the nature of their 
business models the group is able to fund its working capital requirements for its healthcare division 
from operational cash flow and we do not expect this position to change in the 2014 financial year  
 
in relation to our distribution division the working capital requirement is dependent on a number of 
factors including the timing of receipt of debtors and the timing of payment of creditors as well as 
inventory flow during the year and the timing of reimbursement of promotional expenses agreed with 
our principals in relation to the sale and marketing of their products the distribution division requires 
external working capital facilities throughout the year the level of which is dependent on business 
seasonality these working capital facilities are arranged through a number of banking providers and 
in general terms the level of working capital required is between 3040 of the group’s total debt 
facilities 
 
long term debt facilities 
a five year debt facility of up to us 300m was made available to the group during the year by a 
syndicate of lenders led by jp morgan chase bank to refinance high interest bearing credit lines  a 
total of us 225m has been drawn down from this facility to date  the cost of funds for this facility is 
30 over one month libor this rate is substantially lower than the credit lines replaced we expect 
this change to yield a total saving of around us 10m over the five year tenure of the loan compared 
to the previous arrangement net of the one off of us34m written off in the current year of 
unamortised finance costs  
  30 
 
the total debt of the group excluding accounts payable and accruals was us3324m as at 31 
december 2013 compared to us3036m on 31 december 2012 
 
finance costs and income 
total finance costs for 2013 were us143m compared to us 137m in 2012 this was mainly on 
account of the increased utilization of working capital lines commensurate with the increase in the 
activity levels in both the group’s operating segments the group’s replacement of high interest 
bearing credit lines during the year limited to some extent the increase in finance costs  
 
dividend 
the board is proposing to continue with its policy of annual dividend payments of between 20 and 
30 of profit after tax outlined in the company’s ipo prospectus in 2012 the board is therefore 
recommending that a final dividend of 44 pence per share be paid in cash in respect of the year 
ended 31 december 2013 fy2012 41 pence per share 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  31 
 
principal risks and uncertainties 
 
the board consider the identification and mitigation of material risks and uncertainties faced by the 
group as a key issue to be monitored at all levels of the organisation the senior management team 
ensure that operational management consider risk as part of their day to day activities this is 
considered to be particularly key for nmc as a group working in a regulated environment 
  
in order to monitor the group’s business and strategic plans on a more formal basis the management 
team has with the assistance of the group’s internal auditors crowe horwath reviewed and re
assessed the strategic and key risks faced by the group these risks the potential effect of these 
risks on the group and the mitigation of those risks is analysed in the following table it should be 
noted that the order that these risks are expressed in the table do not reflect an order of magnitude as 
regards their potential impact on the group 
 
 
risks and uncertainties potential impact mitigation 
   
economic and political risk 
  
a change in the political and 
regulatory environment 
reduction in population 
resulting from departure of 
expats from the country 
 
loss of customers and revenue 
streams 
 
disruption to delivery of service 
or inability to provide products 
and services  
diverse multicultural population 
with significant percentage of 
expats providing local services 
 
each division is diverse in 
nature 
 
traditional stability in uae  
   
working capital 
insufficient free cash flow 
borrowings headroom or 
material changes to supplier 
payment terms  
 
 
reduced liquidity and access to 
working capital funds 
 
inability to complete capital 
projects 
 
disruption to revenue streams 
and loss of supplier base 
management continually 
monitor cash headroom and 
borrowings 
 
all capital expenditure for key 
capital projects is fully financed 
 
five year debt facilities and 
working capital facilities 
available from a number of 
international banks  
 
working capital facilities not 
fully utilised and the group’s 
low leverage levels provide 
additional borrowing capability if 
required 
 
strong banking and supplier 
relationships  32 
 
 
   
management succession and 
depth 
the lack of depth of 
experienced senior 
management coupled with the 
lack of sufficient succession 
capabilities where the business 
has traditionally been reliant on 
a few individuals 
inability to complete announced 
capital projects 
 
loss of key business and 
regulatory relationships 
 
inability to manage the 
businesses effectively affecting 
the long term future of the 
group 
the group has an established 
succession planning framework 
within the business beneath 
senior management level 
 
senior management have a 
long track record and shown 
ability to manage change 
 
nmc board comprises highly 
experienced members with a 
proven track record 
   
external interests 
potential conflicts of interest 
and time conflicts in relation to 
the other significant business 
interests of senior management  
loss of focus on the nmc 
business 
 
potential for operational 
inefficiencies 
 
potential for intercompany 
contractual arrangements not 
being operated on an arms
length basis 
the company has a 
professional management team 
whose primary focus and 
commitment is on the 
company’s activities 
 
senior management 
involvement in other business 
interests are as investors or 
board oversight only and not as 
part of management within 
those third party businesses   
 
the company has a process in 
place to record all related party 
transactions which arise and 
these are detailed in the notes 
to the financial statements 
   
capital projects risk 
failure to deliver key projects 
on time or on budget 
revenue growth less than 
expected 
 
failure to deliver return on 
investment 
 
delayed lead time to new facility 
profitability and positive cash 
flow affecting the group’s 
financial position 
 
potential for impairment of 
assets 
capital projects fully monitored 
by the management team and 
the project team 
 
board review progress on 
capital projects and revised 
financial projections on a 
regular basis 
   
competitor environment 
new significant entrants into the 
uae healthcare market given 
government focus on healthcare 
in uae 
loss of market share resulting 
in a loss of revenue and lower 
margins 
 
access to future expected 
growth in uae healthcare 
expenditure reduced 
the regulatory environment in 
the uae is a significant barrier 
to entry and limits competitor 
expansion across different 
emirates 
 
nmc has first mover advantage 
in the healthcare sector and is 
listed as a public company 
creating greater visibility and 
acceptance of standards  33 
 
 
recruitment 
loss of specialist medical 
professionals as a result of 
wage inflation and increased 
healthcare provision in the uae 
increased operational costs 
 
may reduce the ability of the 
group to provide certain 
services to patients 
 
potential loss of reputation 
we have a good recruitment 
process with wide international 
connections and have attracted 
doctors from 21 different 
countries 
 
management team have a 
proven track record of operating 
within an environment of high 
wage inflation previously 
 
our doctor attrition rate remains 
very low which we believe 
indicates the level of dedication 
our doctors have for the 
success of the business 
   
clinical risk 
unforeseen significant clinical 
negligence leading to significant 
damages loss of patient 
confidence and potential 
criminal proceedings 
significant reputational damage 
 
financial losses as a result of 
fines andor financial awards 
made against the group 
 
risk of loss of operating 
licenses and quality standard 
accreditations 
the business and our doctors 
have a continuous focus on 
delivering high levels of service 
 
all doctors are monitored by 
virtue of rigorous licensing  
procedures which operate in the 
uae 
 
the healthcare division is a 
regulated business and the 
group’s three principal hospitals 
have international quality 
standards accreditation 
 
we have a series of ethical and 
standards committees for 
monitoring clinical governance 
with the business 
 
we have medical malpractice 
insurance to cover any awards 
of financial damages 
   34 
 
 
   
legal and regulatory risk 
failure to comply with 
applicable health authority 
regulatory requirements and 
unanticipated regulatory 
changes and working within a 
changing and developing legal 
environment different to what 
shareholders would be used to 
in other parts of the world 
risk of loss of operating 
licenses and quality standard 
accreditations 
 
risk of extended legal 
processes in a legal system 
where an element of proof is not 
required before a legal claim is 
pursued within the court 
 
reduced revenue or operating 
efficiency as a result of 
regulatory changes 
we have a good relationship 
with all of our regulators and 
quality standard accrediting 
bodies 
 
our regulators and quality 
standard accrediting bodies 
review and visit our facilities 
periodically to ensure 
compliance with regulations 
 
the management team ensures 
that the business is operated in 
an ethically appropriate way 
and that all employees are 
aware of the group’s code of 
business ethics with which they 
must comply 
   
cultural 
a very small entrepreneurial 
management team which has 
faced significant changes in 
business process as a result of 
the company’s ipo 
significant increase in financial 
and operational process and 
reporting required internally and 
externally stretching 
management bandwidth 
 
management inexperience in 
the listed company environment 
may affect both the team’s 
focus on operational matters or 
lead to company valuation 
erosion as a result of poor 
investor relations 
the company has a very 
experienced board of directors 
who monitor financial and 
operational matters regularly 
and advise on listed company 
and strategic matters 
 
the company has a team of 
very experienced external 
advisers who assist and provide 
advice to the management team 
in external reporting matters 
 
the company has a company 
secretary with significant uk plc 
experience to assist with the 
process of change management 
required following ipo 
material contracts 
cancellation of the 
management services contract 
for umm al quwain due to 
contracted obligations non
performance or legal changes in 
uae  
reputational damage within the 
uae 
 
financial impact as a result of 
loss of revenue and ebitda 
as a result of any loss of the 
contract  
 
 
senior management continually 
monitor performance at the 
facility and under the terms of 
its management contract 
 
we have a good relationship 
with the ministry of presidential 
affairs and our regulators and 
continue to meet key quality 
standards required under our 
management contract  
 
there is a regular reporting 
review mechanism and 
meetings to monitor progress 
under the terms of our contract 
 
 
  35 
 
corporate social responsibility 
 
 
human rights responsibilities 
 
the nmc group is committed to being a responsible corporate citizen this mission is headed by our 
ceo dr b r shetty who is one of the pioneers in the private healthcare sector in the uae and 
founded nmc with the philosophy of ‘affordable quality healthcare for all’ the right to medical 
assistance and treatment is the basic right of each human and this is the ideology that each person at 
nmc abides by and follows  this is in line with the united nations universal declaration of human 
rights 1948 which states that everyone has the right to a standard of living adequate for the health 
and wellbeing of himself and of his family including food clothing housing and medical care and 
necessary social services  we take forward this mission by following ethical human rights practices 
at all levels of our business including our employees our patients and our stakeholders 
 
since our inception in 1975 nmc has continually provided affordable quality health care to its patrons 
and as we enter the 40
th
 year of our operations in the uae we intend that our endeavours to serve 
the community will grow stronger and better nmc encounters over 2 million patients annually across 
all its facilities which are spread throughout the uae and we are dedicated to making a positive 
difference in the lives of each person who walks in through nmc doors to be able to touch 
thousands of lives each day increases our responsibility towards our patients as well as our 
employees who serve as the lifeline of our organisation  
 
patients 
 
over the last four decades nmc health has believed in the philosophy of ‘healthcare for everyone’ – 
irrespective of nationality income level or socioeconomic demographic nmc is one of the few large 
hospital chains in the uae that accepts patients from virtually all health insurance plans from the top 
end plans for higher income groups to the lowest end plans meant for blue collar workers  
 
nmc’s patient base mirrors the demographic makeup of the uae we are now touching the lives of 
nearly 6000 patients a day from all walks of life who represent the many nationalities that reside in 
the uae and whose families have been nmc patrons for more than a generation   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
nmc healthcare operates or manages hospitals and medical centres in the largest cities and across 
four of the emirates of the uae in terms of locations our facilities are accessible to over 85 of the 
country’s population we are the only private healthcare provider in the country that has such a broad 
presence across the country  36 
 
quality of care for our patients is of utmost importance  
 
we have 3 priorities which are  
 
– safe facilities 
– clinical excellence 
– patient experience 
 
we follow the international patient safety goals and have joint commission international 
accreditation in each of our three specialty hospitals our medical practitioners and staff are 
dedicated to maintaining the high level of patient safety and quality of medical care that we promise  
 
nmc health’s distribution business nmc trading has a number of pharmaceutical medical 
representatives and medical equipment salespersons who remain in close contact with the doctors 
and biomedical and administrative teams in hospitals medical centres and pharmacies across the 
uae the business imports and distributes essential pharmaceuticals medical equipment and 
consumables of high quality and ensures they are readily available to healthcare institutions 
 
employees 
at nmc health we consider our human resources as our biggest assets our employees not only 
serve as our partners in serving the community but are also our brand ambassadors who take 
forward and enhance our mission and vision for a better tomorrow   
 
diversity 
as at 31 december 2013 the group had grown its employee base across all its business operations 
to 5356 employees we employ individuals of 49 different nationalities and offer an approach of 
employment without discrimination  
 
a comparison of the split of employees by gender within the different business groups and different 
levels within the nmc group is set out in the following table  
 
  37 
 
  
gender comparision study 
facilities categories total  
gender percentage 
male  female male  female 
  nmc board of directors 7 6 1 86 14 
  senior management team 5 4 1 80 20 
 
 grand total 5356 3297 2059 62 38 
corporate office 
total  corporate office 149 110 39 74 26 
corporate management 35 32 3 91 9 
corporate staff  114 78 36 68 32 
reliance infotech 
 total  reliance infotec 47 42 5 89 11 
reliance  management 5 4 1 80 20 
reliance staffs 42 38 4 90 10 
healthcare 
total  healthcare  3400 1648 1752 48 52 
healthcare management 37 30 7 81 19 
doctors 503 333 170 66 34 
staff nurses 996 191 805 19 81 
technicians  pharmacist 439 238 201 54 46 
healthcare  others 1425 856 569 60 40 
distribution 
total  distribution 1760 1497 263 85 15 
distribution management 127 115 12 91 9 
distribution staffs 1633 1382 251 85 15 
 includes two executive directors and five senior management personnel but excluding nonexecutive directors  38 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in our efforts to offer a worklife balance all our staff members are provided with the option of free 
company accommodation or an accommodation allowance this allows them to stay close to their 
place of work and to cut the time spent in commuting to and from work  this also contributes to 
providing better care to our patients since oncall doctors can be at the patient’s side from their home 
within minutes in case of an emergency  
 
nmc health also extends additional benefits to its employees including offering all its female 
employees over the age of 40 free mammogram screening at all our hospitals during the breast 
cancer awareness month nmc runs a number of fitness events and sports clubs including cricket 
and volleyball teams 
 
nmc health employees are eligible for discounted rates for most services within our medical facilities 
and can also take advantage of discounted prices for the fmcg and food products that are 
distributed by nmc trading nmc health celebrates events and conducts cultural and social 
gatherings for its employees such as the cultural programs conducted every year on the occasion of 
international nurses’ day nmc annual day and uae national day among many other such 
occasions these events serve as a great platform for our employees to bring forth their creative side 
as well as interact with their colleagues in an informal environment  
 
community 
 
nmc health believes that community outreach programmes are an ideal way to contribute towards 
enhancing the health of the society and the nation  along with providing medical assistance and 
treatment to our patients nmc undertakes hundreds of community initiatives over the year including 
blood donation camps health awareness programs free health screenings and hygiene workshops 
among others the following section will provide a few examples of our community health awareness 
program 
 
nmc’s give blood give life initiative july 2013 
continuing with its endeavour to provide compassionate and quality healthcare nmc specialty 
hospital abu dhabi organised a blood donation drive in collaboration with the abu dhabi blood 
bank the give blood give life themed voluntary blood donation drive was organised to raise 
awareness for the need of safe blood and blood products this was the second drive in 2013 to 
generate awareness amongst our staff and to help prevent blood shortage issues in the country 
  39 
 
 
 
world heart day  september 2013 
 
 nmc healthcare conducted one of the largest public awareness and education drives in the 
uae on heart diseases and cardiac care where almost 10000 people received free health 
check – ups comprising of blood pressure body mass index bmi blood glucose and 
cholesterol measurements  the weeklong initiative that ran from 23 – 29 september 2013 
was carried out at all nmc centres across abu dhabi dubai al ain and sharjah as well as 
high – footfall areas such as shopping malls 
 nmc cardiologists provided vital information on heart health through interviews and health 
tips on popular radio arabic hindi malayalam and tamil channels 
 apart from our own facilities our health teams also visited private companies as well as 
government ministries and public entities to conduct these checkups for their employees 
 as a result of this campaign a large number of people became more aware of cardiovascular 
risks and understood the importance of regular checkups genetic anomalies available 
treatments and ways to better their heart health  
  40 
 
 
 
nmc breast cancer awareness drive october 2013 
 
nmc healthcare organised a breast cancer awareness drive for the employees of companies where 
nmc’s gynaecologists conducted interactive sessions including tips for selfexamination to generate 
awareness regarding breast cancer its early warning signs selfdetection and treatment and battling 
the stigma against the disease 
 
diabetes retinopathy campaign november 2013 
– keeping in mind the significance of world diabetes day on 14 november 2013 nmc 
specialty hospital in dubai and abu dhabi conducted a two day diabetes retinopathy 
screening camp where over 500 diabetics underwent screening 
– nmc healthcare has been routinely conducting such diabetic retinopathy screening camps  
this socially responsible event serves as an avenue for diabetics to come forward for a free 
screening and thus helps spread awareness of eye complications related to diabetes 
adnic yas run december 2013 
nmc healthcare supported the adnic yas run in december 2013 as health partners almost 2600 
runners of all ages took part in the third annual adnic yas run 2013 nmc healthcare as ‘health 
partners’ not only offered medical and ambulance support for the runners but also offered free 
medical tests and health screening programs including blood glucose blood pressure body mass 
index and random cholesterol tests as well as interactive sessions  
 
mamacare   
nmc healthcare conducts free counselling and prenatal classes for expectant parents each week in 
all its specialty hospitals this program called mamacare involves education talks from 
gynaecologists neonatologists and paediatricians diet planning by our dieticians and pregnancy and 
post natal exercises with exercise physiotherapists this program is open to anyone and is conducted 
probono by nmc healthcare 
 
nmc health index december 2013 
 
being the uae’s trusted healthcare partner since 1975 nmc took it upon itself to commission a 
research document that would give a deeper insight of the health conditions of the residents of uae 
and to raise awareness about the country’s health issues with this intention in mind nmc launched 
the nmc health index to  
 evaluate the importance of healthcare in the country 
 be an indicator of the physical social and emotional wellbeing of uae society 
 help people be more informed on factors that can enhance wellbeing in daily life and make 
healthier choices 
 engage in the public health debate and develop solutions to tackle health issues in the uae  41 
 
for the nmc health index we surveyed 1054 adults aged 18 in the uae exploring perceptions of 
health and wellness where mixed modes  online and computerassisted personal interviewing 
capi were used for data collection the survey which was available in english and arabic included 
a set of questions to evaluate the physical social and emotional health score of the respondents 
quotas based on uae government statistics were assigned for age gender and nationality to reflect 
the population 
 
a few interesting findings resulted from the survey 
 the majority of respondents 65  feel that having a healthy lifestyle is not wholly 
within their control 
 
 
 
 
 
 
 
 
 
 
 
 
 
 overall three in ten 31 either smoke some form of tobacco or drink alcohol 
weekly 
 
 
 
 
 
 
 
 
  
 
 
 
 one in ten 9 has never visited a doctor for any medical reason while three in four 
76 say the healthcare system in the uae is better than other countries 
 
this is the first health index of its kind in the uae with nmc providing market leading benchmarking 
for future research in the healthcare sector we plan to make this index a continuous effort to 
contribute towards improving the overall health not only physical but also the happiness quotient as 
well as social wellness of the residents of uae  
 
environment 
nmc understands the significance of healthy living and takes great care in creating and maintaining a 
sustainable environment for generations to come some of the initiatives made by nmc to contribute 
to the cause of a healthier environment are 
 
 
 men 32 are five times 
more likely than women 
6 to smoke tobacco  
 21 smoke tobacco  42 
 
 nmc health supported the cleanup uae campaign organised by the emirates 
environmental group an environmental programme devoted to environmental conservation 
and sustainability through the years the campaign has grown in strength and popularity 
garnering support from the government and private organisations nmc proudly supported the 
campaign this year with 22 volunteers from the hospital participating in the environmental 
programme we firmly believe in a cleaner greener and more sustainable environment – not 
just for a healthier today but a happier tomorrow as well 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 nmc health in its efforts to being an ecofriendly organisation practices safe disposal of 
medical waste to maintain a less infection prone environment in its facilities and offices 
complementing these efforts is developing environment health and safety ehs policies 
and procedures conducting audits inspections and incident investigations and ensuring 
continuous improvement of the nmc ehs management system and processes  our aim 
remains to remove or reduce the susceptibility of risk of fatalities occupational diseases and 
disorders disabling and other injuries healthcare associated infections spread of 
antimicrobial resistance and significant environmental incidents 
 
 the introduction of eclaims for health insurance has significantly reduced the amount of 
printed paper submitted in our monthly invoices to insurance paying companies we also 
encourage recycling of paper used internally to reduce consumption of paper 
 
  43 
 
business ethics 
the group is proud of the values with which it conducts its business activities and encourages all of 
its employees to uphold these values and the highest levels of business ethics and personal integrity 
in all types of transactions and interactions in this respect the group has the following policies in 
place which all employees of the group are subject to 
 
code of business conduct and ethics 
this code sets out how employees should act in a range of different areas including  
 potential conflicts of interest  
 dealing with matters fairly as regards competitors suppliers customers and colleagues 
 maintaining confidentiality in all areas of the business 
 compliance with all laws and regulations  
 the protection and proper use of group assets 
 
antibribery anticorruption gifts and entertainment policy 
this policy sets out the rules and obligations of employees in relation to 
 the offer or acceptance or the engagement in any activity that gives the appearance of 
accepting or accepting a bribe 
 the offer or acceptance of gifts or entertainment 
 prohibition of facilitation payments 
 any payment of charitable contributions or political donations 
 the procedure for engaging any third parties 
 
the board also operates a gifts and entertainment policy applicable to the directors of the company 
 
all employees have been provided with a copy of these policies as well as guidelines relating to 
them and are aware of the significance of these policies to the group the company also ran a 
series of workshops to explain these policies to employees in more detail in 2012 new employees 
receive training on all company policies and procedures as part of their induction program a copy of 
the policies is included on the company’s employee intranet    
 
given the principal activities of the group nmc healthcare employees are issued with specific 
guidance in relation to attendance at pharmaceutical conferences and clinical training events 
employees of nmc trading are also specifically made aware as part of their training activities of the 
potential issues which may arise ethically in their dealings with our distribution division’s principals 
and customers 
 
the group also has in place a whistleblowing procedure which is made aware to all employees of the 
group and is available on the company’s website wwwnmcae   
 
 
 
the group strategic report set out on pages 8 to 43 has been approved by the board and is signed 
on its behalf by 
 
 
dr b r shetty 
ceo 44 
 
 
governance 
 
the board is responsible for and committed to ensuring that procedures are in place so that good 
standards of corporate governance are operated at all levels in the group in accordance with the 
guidance and principles set out in the uk corporate governance code published by the financial 
reporting council in september 2012 the “code” the code can be found on the financial 
reporting council website frcorguk 
 
in the 2012 annual report the group stated that good progress had been made on the governance 
environment during the period since the company’s ipo and that this would continue into the new 
financial year this has indeed been the case the management team and the board supported by 
the audit committee have continued to review the governance and control environment ensuring that 
governance processes are documented and implemented and where appropriate continue to 
improve this corporate governance report describes how the board has applied corporate 
governance principles during the 2013 financial year  
 
both the board and the senior management team encourages appropriate levels of governance for a 
company listed on the premium segment of the london stock exchange whilst respecting where 
possible business processes acceptable in the group’s country of operation the board believes that 
progress has been made in relation to the governance structure during the year 
 
compliance with the uk corporate governance code 
 
the board has reviewed the company’s compliance against the provisions of the code  
 
since the company’s ipo in april 2012 the board has continued to seek to ensure that board and 
governance processes evolve appropriately and in a manner which protects the interests of the 
company and all of its shareholders there are a number of provisions of the code that the company 
has not complied with during the year these provisions are stated and an explanation of non
compliance provided either below or within this governance section 
 
 provision a41 of the code the company did not have a senior independent director from 
27 june 2013 for the remainder of the 2013 financial year after mr justin jewitt ceased to be 
a director of the company this was a result of the appointment of a new nonexecutive 
director jonathan bomford to the board and a preference to allow mr bomford to transition 
into his new role prior to choosing the most appropriate candidate to become senior 
independent director the board have subsequently appointed jonathan bomford as the 
senior independent nonexecutive director with effect from 21 january 2014 and the 
company is therefore now compliant with this code provision 
 
 appraisals and evaluation processes the board has not to date undertaken a formal and 
rigorous annual evaluation of its own performance and that of its committees and individual 
directors this was due to the relatively short period of time that the board has been 
constituted the company therefore did not comply with provisions b6 b61 and b63 of the 
code during 2013 the board is currently assessing its preferred process for proceeding with 
such an evaluation which it intends to undertake in the first half of 2014 similarly the non
executive directors did not meet during 2013 to appraise the chairman’s performance 
therefore the company also did not comply with provision a42 of the code the 
independent nonexecutive directors did however meet in january 2014 to appraise the 
chairman’s performance which is the start of the formal board and directors appraisal 
process which is currently being implemented the board intends to comply with provisions 
a42 b6 b61 and b63 of the code by the end of the first half 2014 financial year 
 
 provision b21 b22 and b24 of the code mr jonathan bomford was appointed by the 
board with effect from 27 june 2013 the decision to appoint mr bomford was considered by 
the board as a whole and the nominations committee did not operate a formal process in 
relation to his appointment the company therefore did not comply with the provisions of 
b21 b22 and b24 of the code further details are provided on page 57 furthermore 
during the year to 31 december 2013 whilst the board have reviewed proposals for and  45 
 
discussed the implementation of a senior management succession plan although this 
process has not been finalised as a result of the board’s primary focus on the group’s 
governance and overall control environment processes a formal senior management 
succession plan is expected to be implemented in 2014 and the nominations committee will 
meet to consider the effectiveness of such plan thereafter the company was therefore not 
compliant with part of provision b2 of the code during the period under review 
 
 provision b42 of the code the chairman did not meet with each director to consider their 
training and development needs during 2013 however a formal process has commenced in 
early 2014 in this respect  it was considered appropriate that the implementation of this 
process be introduced in conjunction with new board and director evaluation processes 
which are currently being implemented as outlined above 
 
 provision c31 of the code the chairman was a member of the audit committee during the 
year but resigned from the committee in december 2013 the reasons for his membership of 
the audit committee are set out on page 63 the company intends to be compliant with this 
provision for the 2014 financial year onwards  
 
 
unless otherwise stated above or in the corporate governance report the board believes that it has 
been compliant with the remaining provisions of the code for the 2013 financial year 
  46 
 
board of directors and senior management 
 
board of directors 
 
mr h j mark tompkins – independent nonexecutive chairman aged 73 rc cgc nc 
mr h j mark tompkins was appointed to the board of nmc health plc in march 2012 and is the 
chairman of the board and of the nominations committee mr tompkins has significant public 
company experience having previously served on a total of 11 publicly listed company boards 
including five on nyse nasdaq or junior market us exchange boards and four london stock 
exchange primary market or aim boards a number of these listed companies operated in various 
aspects of the healthcare sector 
 
mr tompkins was nonexecutive chairman of allied healthcare international inc one of the uk’s 
leading providers of domiciliary care and healthcare staffing services from 2007 to 2009 serving as a 
director from 2005 to 2009 from 2005 to 2008 he also served as nonexecutive chairman of 
healthcare enterprise group plc an international healthcare products company which was listed on 
the aim market in london mr tompkins served as conseiller special aupres du conseil 
d’administration of sodexo sa from november 2010 to august 2012 after serving as a non
executive director from 2002 to 2010 and a member of its audit committee for six of those eight 
years other previous directorships have included abbey healthcare group inc and apria healthcare 
group inc prior to his nonexecutive director roles mr tompkins served as the chief executive 
officer of compagnie financiere haussmann a publicly listed company in france involved in property 
development investment and management  
 
mr tompkins began his career in investment banking in 1964 with samuel montagu  company now 
hsbc from 1965 to 1971 he was a management consultant with booz allen hamilton inc 
working on assignments in the uk continental europe and the us mr tompkins returned to 
investment banking joining slater walker securities group from 1972 to 1974 he subsequently 
entered into international realestate development from 1974 to 1987 investing in both residential and 
commercial assets across the middle east the united states and europe  
 
since 1987 he has been focussed on financing small and medium sized enterprises whilst also 
contributing at board level of a number of listed companies 
  
khalifa bin butti – executive vicechairman aged 34 
mr bin butti was appointed to the board of nmc health plc in july 2011 mr bin butti has significant 
financial and investment experience in the middle east and europe 
 
born in 1979 khalifa bin butti bin omeir is the first son of butti bin omeir whose father omeir bin 
yousef was one of the first prominent businessmen in abu dhabi khalifa bin butti completed his 
secondary education in england and graduated with a concentration in finance from suffolk university 
in boston 
 
he joined the abu dhabi national oil corporation adnoc in 2003 working in the financial 
department where his educational background uniquely positioned him to succeed and gain further 
insight into the financial industry of abu dhabi  
 
in 2006 khalifa butti was appointed to the position of chairman  ceo of brokerage house 
securities llc bringing extensive financial and business experience he is also the major 
shareholder of brokerage house securities llc  
 
his financial acumen and years of experience in the international and mena public and private equity 
markets led him to establish another addition to his consortium which is khalifa butti bin omeir 
kbbo group this includes one financial which is registered under the fsa regulation in the uk 
with operations in the uk china uae saudi arabia kuwait jordan and other areas in the middle 
east despite the global financial crisis the entity has registered profits from day one which enabled 
the company to distribute dividends from their first financial quarter khalifa bin butti is also the single 
largest individual shareholder of one financial 
  47 
 
khalifa bin butti holds several roles in well established firms including the role of chairman for kbbo 
group bin butti international holding infinite investment bhs llc and one financial dmcc 
london he is also a board member of centurion investment 
 
dr br shetty – chief executive officer aged 71  
dr shetty was appointed to the board of nmc health plc in july 2011 dr shetty has been involved in 
the private healthcare and pharmaceutical sectors since these were established in the uae nearly 40 
years ago   
 
dr br shetty is the founding partner of nmc he received the order of abu dhabi in 2005 the 
highest civilian award for contribution to the development of the community and the cause of the 
emirate as well as the padma shri award from the government of india in january 2009 he is a 
member of the advisory board of the financial sector of the dubai economic department the 
chairman of the abu dhabi indian school the founder and vice president of the swiss business 
council the founder of the australian business council the canadian business council the 
netherlands business group and the philippines business council he is also a member of the 
executive panel of dubai’s pharmaceutical and health equipment trading business group under the 
dubai chamber of commerce and industry the expresident of the abu dhabi cricket council and 
was the managing director of the abu dhabi cricket club since its inception in 1989 until 2006  
 
dr shetty trained as a pharmacist he received a doctorate degree from georgia state university 
atlanta usa and was invited by the harvard business school to attend its owner president 
management programme he holds a controlling interest in the alexandria new medical centre in 
egypt  
 
mrs heather lawrence obe  independent nonexecutive director aged 64 ac rc cgc nc 
mrs lawrence obe was appointed to the board of nmc health plc in march 2012 and is the 
chairman of the clinical governance committee mrs lawrence has significant operational 
experience in the healthcare sector as well as operating on a number of uk governmental boards 
 
mrs lawrence has over 20 years’ experience as a chief executive officer in the hospital and 
healthcare sector from 2000 to july 2012 she served as ceo of the chelsea and westminster 
hospital which gained nhs foundation trust status in 2006 prior to 2000 she served as ceo of 
north hertfordshire nhs trust from 1996 to 2000 and hounslow and spelthorne community and 
mental health trust from 1989 to 1996 
 
mrs lawrence chaired the ukwide negotiations for the staff and associate specialists sas doctors 
contract during 2004 to 2006 and chaired the “agenda for change” threeyear pay deal for non
medical staff on behalf of nhs employers during 2006 to 2009 she has also served as a 
commissioner for the uk prime minister’s commission for the future of nursing and midwifery and 
was a founding member of the dr foster global comparators founders board which is an initiative 
to share comparative health data with other leading medical institutions in various countries to 
improve clinical quality  
 
mrs lawrence originally trained as a nurse at st mary’s hospital paddington and is a chartered 
fellow of the institute of personnel management  
 
she was appointed by secretary of state for health as a nonexecutive director of monitor the nhs 
regulator in july 2012 
 
mrs lawrence was awarded an obe in the 2010 new year honours list for her services to 
healthcare 
 
lord clanwilliam – independent nonexecutive director aged 53 ac rc cgc nc 
lord clanwilliam was appointed to the board of nmc health plc in march 2012 and is the chairman 
of the remuneration committee he has significant business experience in the middle east and on 
the boards of overseas companies listed on the london stock exchange  
 
lord clanwilliam is an international businessman and highlevel government and financial 
communications specialist possessing over 30 years of business and political experience across a 
broad range of sectors including mining drilling oilfield services and operational management and  48 
 
consultancy during his career lord clanwilliam has established an extensive network of senior level 
governmental and institutional contacts across the middle east the united kingdom and eastern 
europe he is currently chairman of eurasia drilling company a drilling and workover company 
operating in eurasia and listed on the premium segment of the london stock exchange he is also a 
nonexecutive director of polyus gold ojsc a russian gold mining company listed on the premium 
segment of the london stock exchange lord clanwilliam is the founding partner and chairman of 
gardant communications limited a political strategic financial and litigation communications 
company based in london and senior advisor to milio international limited a british owned and 
operated commodities and logistics company  
 
lord clanwilliam graduated from eton college in 1978 and from the royal military academy 
sandhurst in 1979 after which he served for four years with the 1st battalion coldstream guards  
 
jonathan bomford fca  independent nonexecutive director aged 65 ac rc cgc nc 
mr bomford was appointed to the board of nmc health plc in june 2013 and is the chairman of the 
audit committee he is a chartered accountant and has significant accounting financial and audit 
experience gained principally in the middle east and east africa 
 
mr bomford is a qualified chartered accountant who spent 24 years with ernst  young in a number 
of roles in the middle east and east africa including abu dhabi riyadh dubai and jeddah for his 
last 15 years with ernst  young he was a partner with a number of international clients across a 
range of sectors including healthcare oil banking and construction  
 
in 2000 mr bomford retired from ernst  young and since then has undertaken a number of roles 
including a board member of an agricultural trust funding agricultural projects and an official mentor 
providing business advice and services to clients of the prince’s trust   
 
given his strong financial expertise mr bomford was appointed as chairman of the audit committee 
upon his appointment to the board  
 
abdulrahman basaddiq – nonexecutive director aged 65 
 
mr basaddiq is a fellow of the institute of chartered accountants in england  wales fca and a 
licensed auditor and consultant in the uae he trained and qualified as a chartered accountant with 
ernst  young london and spent over 25 years with ernst  young in the uk and the gcc 15 of 
those as an equity partner during his period at ey abdulrahman served as the managing partner of 
their riyadh and abu dhabi offices in addition to responsibilities as uae country partner in charge  
 
during his tenure in riyadh he oversaw the development and implementation of the only saudisation 
program within the profession in the kingdom at the time he also served as an elected member of 
the firm’s executive committee for some eight years in addition to serving on the human resources 
committee for a number of years  
 
mr basaddiq spent over 12 years with a number of gulf based diversified groups across multiple 
jurisdictions and sectors including healthcare global public and private equities venture capital real 
estate investment development and construction steel trading and fabrication in addition to food 
manufacturing retail and packaging he also spent over five years serving on two audit committees 
chairing one of them in addition to oversight responsibilities in the development of audit committees 
and the related internal audit functions of other entities which have grown in size and complexity to 
comply with the ever increasing governance and other regulatory demands 
 
 
  
 
ac – member of the audit committee 
rc – member of the remuneration committee 
cgc  member of the clinical governance committee  
nc  member of the nominations committee  49 
 
senior management  
 
mr binay shetty 
chief operating officer  
 
since 2010 mr binay shetty has been overseeing operations of nmc health’s healthcare and 
distribution divisions he is also closely involved with the hr marketing it and projects units of the 
organisation  
 
prior to his current role he was an executive director of nmc healthcare llc with responsibility for 
strategic planning and governance and the management of new projects  
 
he holds a bachelor of science in business administration with specialisations in finance and 
entrepreneurship from boston university massachusetts usa 
 
he is always challenging himself and his team to work towards better healthcare delivery and to 
support the team of highly trained medical professionals at nmc health in providing the best 
outcomes for their patients born and raised in abu dhabi binay is well accustomed to the culture of 
the uae as well as india 
 
 
dr c r shetty 
group medical director 
 
dr chandrakumari raghuram shetty is the group medical director of nmc health along with her 
husband dr b r shetty she has been a pioneer in establishing and developing the private 
healthcare sector in the uae 
 
dr shetty has been instrumental in establishing centers of excellence in various units of nmc 
healthcare  she has been actively involved in the conception planning design execution and 
management of various healthcare facilities besides driving critical healthcare initiatives  under her 
leadership nmc specialty hospitals in abu dhabi dubai and al ain have received accreditation from 
the joint commission international jci   
 
dr shetty supervises a diversified multicultural workforce within nmc health comprising of over 500 
doctors and 3000 medical staff in her present role dr shetty chairs various committees including 
governance infection control patient rights care of patients quality and facility management  
 
despite of her wide ranging responsibilities dr shetty remains rooted to the basic ethos of the 
healthcare profession of providing quality care with a human touch to all patients by continuing to 
remain as a practicing physician for over three decades   
 
mr prasanth manghat 
chief financial officer 
 
mr prasanth manghat has 14 years of experience in management of treasury and banking functions 
corporate finance accounting and financial reporting activities  
 
prasanth has been a part of the nmc health group for 11 years and spearheaded nmc healthcare’s 
successful listing on the premium segment of the london stock exchange in april 2012 the first 
company so to do raising us 187 million  
 
prior to joining nmc health he has worked as credit  operations head with kotak mahindra 
finance one of the leading nonbanking financial institutions in india 
 
prasanth is a fellow member of the institute of chartered accountants of india fca and a member 
of the association of chartered certified accountants in the uk he is a bachelor of science 1995 
from mg university kerala india  
 
prasanth was honored with the “cfo of the year” award in 2012 by icaew middleeast he was 
also conferred with the prestigious award for “excellence in finance” by the institute of chartered  50 
 
accountants of india abu dhabi chapter in nov 2012 and “professional excellence award in the 
healthcare sector” by icai uae dubai chapter in may 2013 
 
mr roy cherry 
head of strategy  investor relations 
 
mr roy cherry works closely with the ceo and the executive vice chairman on nmc health’s 
strategy he also leads the investor relations efforts  
 
roy’s career includes pwc transaction services where he advised on feasibilities and ma 
transactions with a combined transaction value exceeding usd10bn across a variety of sectors 
including healthcare he previously headed the equity research department at shuaa capital in 
dubai one of the region’s first and most acclaimed equity research teams roy played an important 
role on several regional ipos including saudi catering nmc health deyaar dp world and royal 
jordanian airlines  
 
immediately prior to joining nmc health roy was with saudi fransi capital where he was the head 
of research  advisory department he holds a bsc in management from the university of london 
in addition to english he is a fluent speaker of both arabic and swedish  
 
mr simon watkins 
group company secretary 
  
mr simon watkins is group company secretary of nmc health plc simon joined nmc health in may 
2012 shortly after the group’s ipo and is responsible to the board for the group’s listing obligations 
all governance matters affecting the group and with the chairman for ensuring that the board 
operates effectively  
 
simon has over 20 years’ experience as a company secretary principally within uk companies 
having a london stock exchange listing on either the main market or on aim previous experience 
includes deputy group secretary of rank group plc and four years as group company secretary of 
lastminutecom plc simon’s primary experience in the last 14 years has been within businesses 
focussed on strategic and acquisitive growth 
 
simon is an associate member of the uk institute of chartered secretaries and administrators 
  51 
 
directors’ report 
 
the directors of nmc health plc the “group” or the “company” are pleased to submit their annual 
report and audited financial statements of the group and the company for the financial year ended 
31 december 2013 
 
information in the group strategic report on pages 8 to 43 which constitutes a fair review of the 
business required by the companies act 2006 and in the corporate governance report on pages 56 
to 73 is incorporated into this directors’ report by reference 
 
the details of salaries bonuses benefits and share interests of directors are shown in the 
remuneration report on pages 74 to 98 
 
results and dividends 
the group results are shown in the consolidated statement of comprehensive income on page 103  
profit after taxation for the year was us691m 2012 us598m factors influencing the results are 
discussed in the business overview and financial review on pages 19 to 30  
 
no interim dividend was declared during the period subject to shareholder approval a final dividend 
of 44p per share 2012 41p is proposed to be paid on 3 july 2014 to shareholders on the 
company’s share register on 30 may 2014  
 
future developments 
the group’s strategy and potential future development are outlined in the group strategic report on 
pages 8 to 43 
 
composition of the board 
the following have served as directors of the company during the 2013 financial year 
 
director position date of 
appointment 
date ceased to be a 
director if applicable 
    
mr h j mark tompkins nonexecutive 
chairman 
7 march 2012  
his excellency saeed bin butti nonexecutive 
director 
20 july 2011 24 february 2014 
mr khalifa bin butti executive vice 
chairman 
20 july 2011  
dr b r shetty chief executive 
officer 
20 july 2011  
mr jonathan bomford nonexecutive 
director 
27 june 2013  
lord clanwilliam nonexecutive 
director 
7 march 2012  
mrs heather lawrence nonexecutive 
director 
19 march 2012  
mr justin jewitt nonexecutive 
director 
7 march 2012 27 june 2013 
 
mr abdulrahman basaddiq was appointed as a director of the company on 24 february 2014 no 
other directors have been appointed to serve during the period from 1 january 2013 to 31
 
december 
2013 or subsequently  
 
share capital 
there have been no changes to the issued share capital of the company during the year the issued 
share capital as at 1 january 2013 and at 31 december 2013 is £18571428 divided into 
185714286 shares of 10p each as at the date of this report the company has not issued any 
options over the company’s share capital 
  52 
 
at the annual general meeting held in 2013 shareholders approved an authority for the board to be 
permitted in certain circumstances to purchase its own shares this authority has not been used  
 
under the articles of association of the company all ordinary shares have equal rights to dividends 
and capital and to vote at general meetings of the company there are no restrictions on the size of 
holding nor on the transfer of shares which are both governed under the terms of the articles of 
association and relevant legislation the directors are not aware of any agreements between holders 
of the company’s shares that may result in restrictions on the transfer of securities or in voting rights  
 
principal shareholders 
as at 24 february 2014 the company is aware of the following significant shareholdings in the 
ordinary shares of the company 
 
shareholder number of shares  of issued share 
capital held 
nature of holding 
    
he saeed bin butti 53466559 288 direct 
dr b r shetty 37742409 203 direct 
mr khalifa bin butti 19059842 103 direct 
infinite investment llc 14072024 76 direct 
 
political donations 
neither the company nor any subsidiary company in the group made any political donations during 
the year ended 31 december 2013 
 
whilst the company has no intention of making formal political donations in the future the board 
acknowledge that given the wide interpretation of such donations certain business events in which 
the company or any of its subsidiaries or the board may wish to participate may be caught under the 
formal definition of political donations the company will therefore again be seeking approval from 
shareholders at this year’s annual general meeting for a small approved limit for “political donations” 
for use in such circumstances if this is approved by shareholders the board will provide full details of 
any such payments made in the next annual report  
 
contracts of significance with directors 
under uae law and regulations with the exception of certain specific areas designated by the 
government as such all land must be held legally by a uae national in addition all healthcare 
facility and pharmacy operating licences may only be held legally by a uae national and not a body 
corporate as a result some of the property owned beneficially by the group and all the group’s 
medical facility and pharmacy licences are held legally in the name of either he saeed bin butti 
previously a director of the company or mr khalifa bin butti a director of the company       
 
related party transactions 
details of related party transactions are included in note 28 of the financial statements on pages 136 
to 138 
 
post balance sheet events 
the company’s subsidiary nmc healthcare llc entered into a renewed lease of 27 years with     
municipality of abu dhabi for the site on which the group’s new khalifa city specialty hospital is 
being constructed there were no other events which would have a material effect on the 
consolidated statement of financial position between 31 december 2013 and the date of this report 
 
going concern 
the group has two diverse operating divisions both of which operate in a growing market the board 
have undertaken an assessment of the future prospects of the group and the wider risks that the 
group is exposed to in its assessment of whether the group should adopt the going concern basis in 
preparing its financial statements the board has considered 
 
operating risk the board receives monthly management reports covering key operational 
matters monthly comparison to budget and updated forecasts on a half yearly basis for the full 
financial year to ensure that the business is trading in line with its expectations the 
management team prepare a group budget for each financial year and a cashflow forecast for  53 
 
the following 18 months which allows the board to monitor the financial position of the group 
and to consider appropriate risks which the business may face from a financial perspective 
 
financing risk the company has worked to structure its debts for the medium and long term 
as well as utilising short term facilities to meet the group’s working capital requirements the 
funds raised as a result of the share issue undertaken at ipo in april 2012 and the us300m 
five year syndicated term debt facility of which us225m has been drawn down to date are 
more than sufficient to fund the group’s material capital projects the group has banking 
arrangements through a spread of local and international banking groups debt covenants are 
reviewed by the board each month the board believes that the level of cash in the group the 
spread of bankers and the improved debt facility terms agreed during 2013 mitigates the 
financing risks that the group faces from both its capital expenditure program and in relation to 
working capital requirements 
 
customer and supplier risk both the healthcare and distribution divisions have continued their 
positive growth trends all major financial and nonfinancial kpis showed good improvement 
during 2013 in the healthcare division trade receivables are monitored regularly provisions 
made where necessary and the group has no history of significant bad debts in the 
distribution division the increase in revenue and product flow has an adverse effect on the 
group’s working capital position trade receivables are monitored regularly and management 
maintain a close working relationship with all major suppliers to monitor performance as well as 
signs of financial risk the board has reviewed the business plan for 2014 as well as considered 
growth forecasts for the healthcare sector in uae and considers the group’s future forecasts 
to be reasonable 
 
impairment risk the board has considered the carrying value of inventories accounts 
receivable and property and equipment and concluded that there are no indicators of material 
impairment of these items and therefore no material cash flow impact associated with any loss 
in those areas 
 
in its review the board considered other areas of potential risk including regulatory risk insurance 
and legal risks and potential areas of contingent liability and found no matters which are likely to affect 
the viability of the group in the medium term   
 
the directors therefore continue to adopt the going concern basis in the preparation of the financial 
statements  
 
financial risk management objectives 
the financial risk management objectives and policies of the group are included in note 29 to the 
financial statements on pages 138 to 142 
 
greenhouse gas emissions 
the group has not collected data as required under the companies act 2006 strategic and 
directors’ reports regulations 2013 in relation to its greenhouse gas emissions during 2013  
 
the company is aware of its responsibilities to the environment the company is aware that the 
climate in which its businesses operates is extremely hot when compared with other parts of the 
world the group’s medical facilities are particularly reliant on cooling to ensure a safe environment 
for our patients and employees 
 
the measuring of greenhouse gas emissions or other environmental indicators is largely not prevalent 
within businesses in the uae the group has therefore not had experience of having to consider 
environmental matters or its gas emissions previously the company considers that its primary areas 
for review in relation to the effect that the group has on the environment is as follows 
 
 the group’s electricity usage which given the focus on healthcare operations is significant 
 the use of air conditioning and in particular the use of gases within cooling systems which 
given the location of the businesses in an extremely hot climate will be higher than other 
countries in the world  54 
 
 the use of vehicle fuels particularly with regards to the vehicle fleet used in the distribution 
division in an environment where the distribution of product throughout the uae can only be 
made via the country’s road network  
 
the company has commenced a project to ensure that data in relation to the group’s consumption of 
greenhouse gases is collected for 2014 onwards but it hasn’t been practical for the group to collect 
and publish historical data in relation to the 2013 financial year   
 
annual general meeting 
the annual general meeting of nmc health plc will be held at allen  overy llp one bishops 
square london e1 6ad on thursday 26 june 2014 at 200 pm  
 
further details of the resolutions to be proposed at the annual general meeting are set out in the 
separate notice of meeting circular which accompanies this annual report and audited financial 
statements 
 
auditors 
directors’ statement as to disclosure of information to auditors 
  
the directors who were members of the board at the time of approving the directors‘ report are set 
out on page 51 having made enquiries of fellow directors and of the company‘s auditor each of 
these directors confirms that  
 
 to the best of each director‘s knowledge and belief there is no information that is 
information needed by the group‘s auditor in connection with preparing their report of which 
the company‘s auditor is unaware and  
 each director has taken all the steps a director might reasonably be expected to have taken 
to be aware of relevant audit information and to establish that the company‘s auditor is aware 
of that information 
 
ernst  young llp have confirmed that they are willing to be reappointed as auditor for the financial 
year ending 31 december 2014 as reported in the 2012 annual report the company agreed a basis 
for audit fees for a three year period 2014 and agreed subject to their annual reappointment by 
shareholders that ernst  young llp would remain as auditor to the group for that period the audit 
committee now expect that ernst  young llp will remain as auditor to the group for 2015 after 
which an audit tender process is proposed   
 
statement of directors responsibilities 
 
the directors are responsible for preparing the annual report the directors’ remuneration report 
and the financial statements in accordance with applicable law and regulations 
 
the directors are required by company law to prepare financial statements for the group and the 
company in accordance with the international financial reporting standards as adopted by the 
european union “ifrs”  
 
the financial statements are required to present fairly for each financial period the company’s 
financial position financial performance and cash flows in preparing the group and parent company 
financial statements the directors are also required to 
 
 properly select and consistently apply accounting policies 
 present information including accounting policies in a manner that provides relevant 
reliable comparable and understandable information 
 provide additional disclosures when compliance with the specific requirements in ifrs is 
insufficient to enable users to understand the impact of particular transactions other events 
and conditions on the entity’s financial position and financial performance 
 make an assessment of the company’s ability to continue as a going concern 
 
the directors confirm that they have complied with the above requirements in preparing the financial 
statements the directors also confirm that they consider the annual report and accounts taken as a  55 
 
whole is fair balanced and understandable and provides the information necessary for shareholders 
to assess the company’s performance business model and strategy 
 
the directors are responsible for keeping proper accounting records that are sufficient to show and 
explain the company’s transactions and disclose with reasonable accuracy at any time the financial 
position of the company and to enable them to ensure that the financial statements comply with the 
companies act 2006 the directors are also responsible for safeguarding the assets and hence for 
taking reasonable steps for the prevention and detection of fraud and other irregularities and for the 
preparation of a directors’ report and directors’ remuneration report which comply with the 
requirements of the companies act 2006 
  
the directors are responsible for the maintenance and integrity of the company’s website legislation 
in the united kingdom governing the preparation and dissemination of financial statements differs 
from legislation in other jurisdictions 
 
we confirm to the best of our knowledge 
 
 the financial statements prepared in accordance with the international financial reporting 
standards as adopted by the eu give a true and fair view of the assets liabilities financial 
position and profit or loss of the company and the undertakings included in the consolidation 
taken as a whole 
 the strategic report includes a fair review of the development and performance of the 
business and the position of the company and the undertakings included in the consolidation 
taken as a whole together with a description of the principal risks and uncertainties they face 
 
 
 
 
the directors’ report was approved by the board on 24 february 2014 and are signed on behalf of 
the board by 
 
 
 
 
simon watkins 
group company secretary 
 
nmc health plc registered in england and wales number 7712220 
23 hanover square london w1s 1jb 
 
 
  56 
 
corporate governance report 
 
 
governance framework 
 
the company operates within a traditional governance framework 
 
chairman 
 
 
………………………board………………………………………… 
 
 
group company secretary  board committees   senior 
independent             independent  
nonexecutive director 
 
 
  audit committee 
 
  remuneration committee 
 
  clinical governance committee 
 
  nominations committee 
 
 
ceo and senior management 
 
the roles and responsibilities of each of the individuals and groups above and their role in the overall 
governance framework are set out in the remainder of this governance section  
 
how the board operates 
 
the role of the board 
 
the board is responsible to shareholders for the overall conduct of the group’s business and the 
performance of management and of the group the board has the powers and duties as set out in 
the company’s articles of association and the relevant regulations applicable to the company as a 
registered public listed company registered in england and wales  
 
the board is primarily responsible for 
 determining the strategic direction of the group 
 approving major capital projects acquisitions and divestments 
 setting the annual budget 
 monitoring the financial performance of the group against its targets 
 approving annual and halfyear results and monitoring shareholder communications 
 promoting good governance within the group and seeking to ensure that the company meets its 
responsibilities towards all stakeholders and 
 demonstrating leadership and focussing on matters that affect shareholder value  
 
the board seeks at all times to ensure that there is an appropriate balance between short term and 
long term considerations and objectives of the group  
  57 
 
the company has an agreed formal schedule of matters reserved for the board which includes 
approval of strategic plans financial statements budgets material investment decisions acquisitions 
and divestments the board has overall responsibility for the effectiveness of the group’s systems of 
internal control and is assisted by the audit committee in this respect 
 
as part of the terms of their appointment each director agreed that they will act collectively with the 
rest of the board to ensure the success of the group the board delegates authority in relation to 
matters which it has not reserved to the ceo who is responsible for delivering the company’s 
strategic objectives 
 
board composition  
 
the names of the directors and their biographical details are set out on pages 46 to 48  
 
the board of the company comprises seven directors six of whom have served throughout the year 
 
 the nonexecutive chairman 
 two executive directors 
 one nonindependent nonexecutive director 
 three independent nonexecutive directors one of whom was appointed during the year 
 
the nonexecutive chairman and the three independent nonexecutive directors are all uk based 
the two executive directors and the nonindependent nonexecutive director are based in abu 
dhabi the senior independent director with effect from 21 january 2014 is jonathan bomford who 
is available to shareholders should they have any concerns that they do not wish to raise with the 
company or the chairman directly the senior independent director can be contacted through the 
registered office of the company at 23 hanover square london w1s 1jb    
 
the board considers that the extensive and diverse business cultural and operational experience of 
the independent nonexecutive directors and their uk listed company experience ensures that 
appropriate corporate governance procedures are considered in all aspects of group decision making 
and control these attributes also enable them to bring independent judgement to bear on issues of 
 
 strategy including constructively challenging the strategic direction of the group 
 scrutinising and challenging the performance of the group 
 assessing risk and controls operating within the group and in its decision making and 
 standards of conduct and governance and other matters presented to the board  
 
 
process for board changes during the year and diversity 
 
mr jonathan bomford was appointed by the board on 27 june 2013 the decision to appoint mr 
bomford was considered by the board as a whole and the nominations committee did not operate a 
formal process in relation to his appointment the company did therefore not comply with the 
provisions of b21 b22 and b24 of the code mr bomford is a chartered accountant having 
previous significant financial experience as a senior partner with ernst  young in the middle east 
region including the uae given the lack of formal financial expertise on the audit committee prior to 
june 2013 and mr bomford’s financial and culturally aware background in the region the board 
considered it appropriate to appoint him to the board and as chairman of the audit committee 
notwithstanding that a nominations committee process was not undertaken mr bomford met various 
members of the board prior to the consideration of his appointment as a director as a result given 
his particular experience no external search was undertaken as a result of mr bomford’s 
appointment the board considers that the company now more fully complies with the requirement of 
provision c31 of the code in relation to financial expertise on the audit committee  
 
the constitution of the current board is diverse in terms of gender and in relation to its cultural and 
racial mix the board will consider both gender and cultural balance when reviewing whether the 
future makeup of the board is appropriate to ensure the group is managed appropriately on behalf of 
shareholders however neither the board nor the group businesses have formal diversity policies in  58 
 
place in relation to board and employee appointments the board considers that in addition to 
considering gender and race in relation to future board appointments it is important to consider the 
appropriate skills and character of potential new directors to ensure that the board acts effectively on 
behalf of shareholders  
 
the uae does not have legislation in relation to gender or racial equality but is a culturally and 
racially diverse country with many different nationalities working across all sectors of the country’s 
workforce given local practice the group does not believe that it is appropriate to have a formal 
diversity policy in the region within which it operates however its recruitment processes ensure that 
the most appropriate candidate is appointed to each available role having consideration of his or her 
experience skills and with consideration as to how the new employee would fit culturally into the team 
into which they are recruited  
  
board independence 
 
for the purposes of the code the board considers mr mark tompkins mr jonathan bomford lord 
clanwilliam and mrs heather lawrence to be independent  
 
the independent nonexecutive directors met separately to the other directors on five occasions as 
well as having a number of other adhoc meetings and discussions during the year during their 
meetings the independent nonexecutive directors discussed various board related matters and 
other matters which given their position as independent directors they considered were of interest to 
them 
 
the board did not classify his excellency saeed bin butti who served during the 2013 financial year 
as an independent director for the purposes of the code because of his significant shareholding in 
the company however his excellency has a detailed knowledge of the uae and its culture as well 
as having good connections within abu dhabi both of which were of significant value to the group 
and the board 
 
tenure of independent nonexecutive directors 
 
provision b11 of the code suggests that length of tenure is a factor in determining the independence 
of nonexecutive directors the table below therefore shows how long each of the independent non
executive directors have been members of the board 
 
 date of appointment full term years to 
2014 agm 
considered to be 
independent by the 
board 
    
h j mark tompkins 7 march 2012 2 yes 
jonathan bomford 27 june 2013 1 yes 
lord clanwilliam 7 march 2012 2 yes 
heather lawrence 19 march 2012 2 yes 
 
 
key roles and responsibilities in the governance structure 
 
the roles of the chairman and chief executive officer “ceo” are separate  
 
 chairman 
the chairman was appointed to the board in march 2012 in anticipation of the company’s 
ipo the chairman is responsible for the proper functioning of the company’s board of 
directors who oversee the strategic direction of the group including 
 
 the effective operation and governance of the board 
 setting the agenda and coordinating the style and tone of board discussions 
 ensuring the directors receive accurate and timely information 
  59 
 
 
 chief executive officer 
the chief executive officer is responsible for identifying with the senior management team 
opportunities that are deemed appropriate and in line with the board’s strategic objectives he 
is also responsible for delivering the key strategic objectives set by the board the chief 
executive officer is assisted in this task by the senior management team who meet regularly 
to review the performance of the business the progress of key capital projects new 
development opportunities as well as other material matters arising within the business 
members of senior management attend board meetings as appropriate to highlight and 
debate with the board developments within their areas of responsibility 
 
 senior independent director 
the senior independent director acts as a sounding board for the chairman and serves as 
an intermediary for the other directors as required the senior independent director is 
available to shareholders if they have concerns which they have not managed to resolve 
through the normal channels of the chairman or the executive directors or who feel that 
such contact is inappropriate for the concerns that they may have   
 
 group company secretary 
the group company secretary acts as secretary to the board and to the board committees 
he assists the chairman in ensuring that all directors have full and timely access to all 
relevant information and in organising induction programmes for new directors the group 
company secretary is responsible for ensuring that the correct board procedures are 
followed and advises the board on corporate governance matters the appointment and 
removal of the group company secretary is a matter for the board as a whole 
 
the biographical details of the chairman ceo and senior independent director can be found 
on page 4648 the biographical details of the group company secretary can be found on 
page 50 
 
conflicts of interest 
given the history of the group as a private business the board is aware of the interest that the 
executive directors have in other businesses in which they have invested any conflicts of interest 
that may arise are monitored by 
 
 the list of the other interests of each executive director being circulated to the board at each 
of its board meetings 
 each of the directors are asked to confirm that they have no other interests which would 
conflict them for the purposes of any item to be discussed at the meeting where such conflict 
is reported the respective director is not permitted to take part in the consideration of that 
matter by the board 
 each director discloses to the board any related party transactions in which they are 
connected and such transactions are reported in the group’s financial statements 
 
whilst directors on the board have other business interests the board do not consider that these nor 
the time commitment that they require materially affects the ability of such directors to undertake 
their role or comply with their statutory obligations directly or through their designated nominees  
 
board meetings 
 
the company secretary supports the chairman in finalising the agenda for each board meeting and 
ensuring that appropriate papers are provided from the management team in a timely manner for 
circulation in advance of board and committee meetings this is to ensure that fully informed 
decisions can be reached  
 
the board considers the following standard matters at each of its board meetings 
 
 operational performance through the ceo’s report 
 financial performance including monitoring current and forecast trading cash and debt levels 
against its expectations presented through the cfo report  60 
 
 progress being made on the group’s key capital development projects 
 legal and regulatory matters 
 investor relations including an update in relation to activity in the company’s shares and 
principal movements of its shareholders 
 
during the course of the 2013 financial year the board has also considered as appropriate 
 
 the group’s halfyear and fullyear results  
 interim management statements 
 updates from the chair of discussions held at each of the board committees 
 the proposed budget for the following financial year 
 the group’s future strategy 
 monitoring the progress of succession planning procedures which are in the process of being 
implemented in relation to senior management of the group 
 the changes made in the corporate governance environment 
 the replacement of the group’s term debt facility 
 changes in the way in which the group’s capital development projects are managed 
 changes proposed by management to the group’s it environment including a new hospital 
information system and a new financial system the implementation of which are both 
underway 
 
board effectiveness 
 
 director induction 
on appointment directors have the benefit of a personalised induction programme which is 
undertaken during the first few months of their tenure as a director each induction 
programme covers a number of different areas including 
 
 briefings and presentations from management to understand the business operations 
and financial drivers 
 their legal and regulatory responsibilities as directors 
 opportunities to visit the group’s key facilities and new capital development project 
locations 
 meeting privately with the company’s key advisors  
 
 board information and professional development 
 
the directors maintain an appropriate dialogue amongst themselves and with senior 
management which ensures that nonexecutive directors are kept up to date with major 
developments in the group’s business  
 
following an initial induction process it is important that the nonexecutive directors meet 
with management and undertake visits to operational facilities each year in order to further 
understand the way the business operates and any change within the business each of the 
neds have visited the uae a number of times in 2013 with particular emphasis on 
monitoring progress in relation to the company’s key capital projects and to oversee the 
implementation of improving controls and governance within the group  
 
as part of their overall training and development needs all of the nonexecutive directors 
have attended externally provided seminars and discussion forums relating to their areas of 
board responsibility during the period and also met individually with a number of industry 
specialists to increase their current knowledge of key investment issues in the healthcare 
sector given the significant changes in the governance framework and reporting 
requirements for companies listed on the premium segment of the london stock exchange 
all of the directors have either attended specific seminars or received presentations and 
documentation covering all aspects of corporate governance 
 
all directors also received a comprehensive file of documents towards the end of 2013 
designed to increase their specific knowledge of the implementation of new governance 
requirements for london stock exchange premium listed companies  61 
 
 
in early 2014 a formal process of reviewing each directors’ training and development needs 
has commenced this review undertaken by the chairman with individual directors will set 
the framework for each directors’ professional development in any particular financial year 
 
 performance evaluation 
 
as mentioned above the board did not undertake an evaluation of its own performance 
during the year to 31 december 2013 it is the board’s intention to formally evaluate the 
performance of directors individually and collectively during the first half of the 2014 financial 
year and to advise shareholders of the findings of that review in the 2014 annual report and 
audited financial statements 
 
 reelection of directors 
 
all of the directors of the company submit themselves for reelection at the annual general 
meeting of the company to be held on 26 june 2014 with the exception of jonathan bomford 
who will seek election at his first annual general meeting as required by the company’s 
articles of association each resolution for reelection of a retiring director or the election of a 
new director will be proposed as a separate resolution whilst a formal performance 
evaluation has not taken place the board have confirmed that the contributions made by 
each director to board deliberations continues to be effective and that the shareholders of the 
company should support their reelection or election  
 
 independent advice 
 
each of the directors is permitted to obtain independent legal advice at the company’s 
expense in the performance of their duties as directors this would normally be managed 
through the group company secretary  
 
all directors and the board as a whole also have access to the advice and services of the 
group company secretary who under the chairman’s direction is responsible for ensuring 
that good board procedures are followed  
 
 indemnification of directors 
 
the company has put in place a directors and officers liability insurance policy which 
provides all board members with insurance cover in respect of liabilities that may arise 
against the directors collectively or individually the directors do not benefit from any form of 
qualifying third party indemnities made by the company 
 
 
board committees 
 
the board has established an audit committee a remuneration committee a clinical governance 
committee and a nominations committee further details in relation to these committees are set out 
on pages 63 to 73 the terms of reference of each committee are available on our website at 
wwwnmcaeir  
 
 board and board committee attendance in the 2013 financial year 
 
during the period under review the board met on nine occasions six of these meetings were 
scheduled as full periodic board meetings and three meetings were either brief meetings on 
matters requiring board approval or adhoc matters which arise scheduled periodic board 
meetings are planned in each financial year to be split where possible evenly between 
london and abu dhabi 
 
 
  62 
 
the attendance of the directors at each of the board and committee meetings during the 
period was as follows 
 
 
director board 
meetings 
note 
audit 
committee 
remuneration 
committee 
clinical 
governance 
committee 
     
mr h j mark tompkins 89 33 33 22 
he saeed bin butti 09    
mr khalifa bin butti 69    
dr b r shetty 99    
mr jonathan bomford 44 22 11 11 
lord clanwilliam 99 44 33 12 
mrs heather lawrence 99 44 33 22 
mr justin jewitt 55 22 22 11 
mr keyur nagori alternate 
director to he saeed bin butti 
35    
 
note the number of meetings that each director could have attended during the period 
under review is noted in brackets the nominations committee did not meet during the year 
  
during 2013 given his other commitments he saeed bin butti was not able to attend any of 
the board meetings held his excellency kept up to date with key matters relating to the group 
outside of the formal board meeting environment through meetings with other board directors 
his valuable time commitment to the board and the group and fulfilment of his duties as a 
director of the company were provided in this way given his other commitments during the 
year his excellency decided to appoint an alternate mr keyur nagori who attended the 
majority of the board meetings held since his appointment in june 2013 mr nagori also 
attended a number of board meetings as an invited attendee before his formal appointment 
as an alternate director his excellency contributed to the board process and to the 
effectiveness of the formal board process through his alternate on 24 february 2014 he 
saeed resigned as a director of the company and nominated mr abdulrahman basaddiq to 
be appointed as a director the broad approved his nomination on 24 february 2014 
  63 
 
audit committee report 
 
o audit committee chairman foreword 
 
this is the first audit committee report since my appointment as audit committee chairman 
following my appointment in june 2013 my induction process included elements specifically 
connected to financial and key risks matters which are increasingly important in the 
governance environment  
 
2013 has seen significant changes in various aspects of uk listed company reporting 
requirements and i am pleased to report that both management and the audit committee 
have been committed to ensuring that they have a good understanding of these new 
requirements this report sets out the work of the committee significant matters addressed 
by the committee during the year and the responsibilities of and work undertaken by the 
external and internal auditors 
 
o the audit committee 
 
 membership 
 
the audit committee has consisted entirely of independent nonexecutive directors during the 
year under review the audit committee members who have served during the year are 
 
audit committee 
member 
position period of membership during 2013 
jonathan bomford  audit committee 
chairman and financial 
expert  
member and chairman of audit 
committee from 27 june 2013 until end of 
the year 
lord clanwilliam independent non
executive director 
member of audit committee throughout 
the year 
heather lawrence independent non
executive director 
member of audit committee throughout 
the year 
hj mark tompkins independent non
executive chairman 
member of audit committee from 
beginning of the year until 14 december 
2013 
justin jewitt previous audit committee 
chairman 
member and chairman of audit 
committee from beginning of the year 
until 27 june 2013 
 
 
during the 2013 financial year until 27 june 2013 there were no chartered accountants on 
the audit committee during this period the chairman of the audit committee mr jewitt and 
its members had general financial experience gained through their previous employment and 
board experience  
 
from 27 june 2013 to the date of this report the new chairman of the committee and the 
committee’s financial expert is mr jonathan bomford mr bomford is a chartered accountant 
and his biographical details and experience are set out on page 48 of the annual report   
 
on 14 december 2013 mr tompkins resigned as a member of the audit committee code 
provision c31 of the uk corporate governance states that the chairman of the company 
should not be a member of the audit committee following the company’s ipo in 2012 it 
was decided that it would be appropriate for all the independent nonexecutive directors to 
be members of the audit committee as the group implemented new policies and procedures 
and enhanced its corporate governance environment following the change of audit 
committee chairman in june 2013 mr tompkins remained on the committee to assist the 
new committee chairman during the transition period following his appointment but in 
compliance with best practice as determined by the code mr tompkins has now resigned as 
a member of the committee  
   64 
 
 key role and responsibilities 
 
the key role of the committee is to ensure that the integrity of published financial information by 
the company and the effectiveness of both external and internal audit processes are 
appropriate to ensure that the interests of all shareholders are protected 
 
the audit committee assists the board in 
 
 discharging its responsibilities with regard to financial reporting external and internal 
audits and controls 
 reviewing the company’s financial results announcements annual report and audited 
financial statements 
 monitoring the independence and extent of the nonaudit work undertaken by the 
external auditors 
 making recommendations to the board on the appointment of external auditors and the 
level of their remuneration 
 reviewing the effectiveness of the company’s internal audit activities and  internal 
policies 
 overseeing the group’s compliance processes and 
 undertaking reviews of the group’s internal controls and risk management systems  
 
the audit committee is required to report regularly to the board of directors in relation to its 
findings on the above the ultimate responsibility for reviewing and approving the company’s 
annual report and audited financial statements and the half yearly reports remains with the 
directors of the company 
 
 committee meetings 
 
the audit committee met formally four times during the year which will be the normal frequency 
in a given financial year unless otherwise as requested by any member of the committee the 
meetings are scheduled to align with the group’s reporting timetable with planning meetings in 
advance of both the halfyear review and fullyear audit and approving meetings shortly in 
advance of the announcement of the group’s halfyear and fullyear results 
 
meetings are normally attended by the chairman of the company the chief executive officer 
the chief operating officer the chief financial officer and the head of strategy and investor 
relations the group company secretary acts as secretary to the committee the committee 
also meets separately with the external auditors the internal auditors and management with the 
other parties not present 
 
 main activities of the committee during the year 
 
during the year the committee has focussed significantly on areas of corporate governance 
and management of risk the listing of the company on the london stock exchange has 
required significant change management in the group in particular in the way that formal 
reporting is undertaken to the board and the formal documented policies and procedures 
within the businesses  
 
the significant items which the audit committee focussed on and discussed during the year 
included 
 
 the implementation plan for the new erp financial accounting system the group is in 
the process of implementing a new accounting it system which is designed to ensure a 
less manual working environment than has previously been in existence when the group 
was in private ownership implementation of the new system commenced in 2013 but 
completion will now be delayed following management’s decision to switch from instant 
“golive” to a phased rollout of the new it system to enable full testing and the 
integration of the new oracle version  the revised implementation plan for the rollout of 
the new system was reviewed by internal audit who found that there are no material 
concerns in relation to the implementation of the new system the new financial system  65 
 
is in the process of being rolled out into the group’s operations and will be fully functional 
by the end of h1 2014  
 
 revenue recognition 
the group has a number of revenue streams across both its healthcare and distribution 
businesses whilst the group ordinarily acts as principal in relation to its sales there are 
a number of areas within both businesses where the recognition of revenue has been 
reviewed to ensure that the correct treatment of principal versus agency revenue has 
been adopted in all business areas there is a risk that incorrect accounting treatment 
could be adopted within a particularly business unit for example agency revenue being 
treated as principal revenue any error of this nature would affect the revenue and not 
the ebitda of the group the audit committee has reviewed the different treatment 
adopted by management in each relevant business unit and is comfortable with the 
accounting for revenue across the group 
 
 trade receivables and other receivables 
the time taken for payers to settle invoices in the uae is generally longer than would 
normally be expected in other parts of the world in addition within the healthcare 
division the vast majority of healthcare customers settle their invoices through medical 
insurance claims the group therefore experiences delays in payment as a result of the 
time taken to process claims through insurance companies and to arrange settlement of 
the claim in the distribution business payment delays are experienced from bulk retail 
sales customers and delays in processing bulk discounts and rebates achieved from key 
customers have an additional effect on receivables and working capital the level of both 
trade and other receivables has been improving following a number of actions 
undertaken by management but this will continue to be a key focus for the audit 
committee particularly to ensure that adequate bad debt provisioning is made 
 
 the internal audit programme  this was designed to review areas of the business which 
the committee determined to be of the highest risk to the group’s operations and the 
mitigation of those risks the internal audit programme is working well and importantly 
has been helpful to both the committee and to management due to the group’s stage of 
development the internal audit plan has to date been partly transaction based rather 
than wholly strategic based from 2014 onwards the internal audit plan will be strategic 
risk based to ensure that those areas of key and strategic risks are more closely and 
independently monitored this transition of methodology will be closely monitored during 
2014 
 
 the implementation of new reporting and additional corporate governance requirements 
having prepared the company’s inaugural annual report as a listed company for the 
2012 financial year the implementation of so many new regulations and governance 
provisions after just one year as a listed company and after a period of significant 
governance change throughout the group has been a challenge which the audit 
committee and the board wished to prepare for members of the audit committee the 
cfo and the group company secretary have all attended seminars and met with 
advisers to consider to effect of the new environment on the group’s governance 
environment and on the 2013 annual report the board have also received a 
comprehensive pack of all documents making up the governance framework with which 
the group should comply as well as attended a presentation on the same from the 
external auditors 
 
during the 2014 financial year the audit committee is intending to continue to closely monitor 
the rollout of the group’s new financial system which the committee sees as the one key 
element of the group’s future internal control environment  
 
o internal control 
 
the committee has reviewed the process by which the group evaluates its control environment 
the cfo provides a report each year to the audit committee on the effectiveness of internal 
controls and confirms to the committee whether or not he is aware of any significant fraud that 
may have occurred within the business the internal auditors also undertake a review across a  66 
 
wide range of control areas to give the audit committee and the board assurance on the internal 
control environment 
o risk management 
 
the risk management process is primarily driven by scrutiny of the register of significant risks 
which is retained and reviewed by management and the internal auditors this risk register 
which is produced in discussions with the group’s operating facilities is the basis for the list of 
principal risks and uncertainties which are set out on pages 31 to 34 whilst the internal auditors 
already focus on areas of key risks identified by the business the risk management of the group 
and the maintenance of the register of significant risks will be enhanced further by the change in 
methodology of the internal audit programme which as outlined above will be a more strategic 
risk based approach from 2014 
 
o internal audit 
 
a review of the work undertaken by the group’s internal auditors is an agenda item for each 
audit committee meeting the internal auditors report to the committee their findings together 
with action plans to resolve any matters which they believe require to be addressed the action 
plans are graded with key high risk matters taking priority to be resolved  
 
 
o external audit and auditor independence 
 
the committee believes that the effectiveness of the external audit is dependent on the 
identification of key risks during the financial year under review ernst  young llp hereinafter 
referred to as ey produces and discusses with the committee a detailed audit plan identifying 
these key risks and the work to be done to test management’s assumptions and accounting 
treatment in these areas  
 
the committee meets separately with the external auditors to ensure that an independent 
dialogue is maintained in relation to monitoring key business and financial risks and to ensure 
that management have not restricted the scope of their audit the audit committee chairman 
also meets with the lead audit partner on a number of occasions during the year outside the 
formality of audit committee meetings 
 
the committee discusses separately with management matters arising from the audit process 
and also to assess their view of the effectiveness of the audit work being undertaken  
 
the committee has not undertaken a formal review of the effectiveness of the external audit 
although discussions were held at the june 2013 audit committee meeting where a review of 
any fy2012 audit recommendations was undertaken the audit in relation to the 2012 financial 
year was the company’s first as a listed company and management and the external auditors 
discussed the audit process including matters which had worked well and areas of improvement 
in audit process for fy2013  
 
the committee believes that it will be appropriate to undertake a formal review of the 
effectiveness of the external audit following the company’s second audit as a listed company 
which has just completed this review will be undertaken in advance of the interim review for 
fy2014  
 
 auditor fees and appointment 
 
ey were appointed as auditor to the company at the time of the company’s ipo in april 
2012 as reported in the 2012 corporate governance report the company agreed a basis 
for audit fees for the three year period of 2012 2013 and 2014 and agreed that subject to 
their annual reappointment by shareholders ey would remain as auditors to the group for 
those financial years the level of audit fees paid in relation to the 2013 financial year is set 
out in note 125 to the consolidated financial statements 
 
the committee has considered further its intentions in relation to the tender of the provision 
of external audit services following a review of new guidance in the year  having considered  67 
 
this guidance the committee believes that the earliest that a tender for the provision of 
external audit service is likely to be undertaken will be subsequent to the 2015 financial year 
end audit 
 
 nonaudit fees 
 
during fy2013 the level of nonaudit fees excluding the fees for the halfyear review 
amounted to a total of us 01m this figure is much reduced from fy2012 as the amount 
in that year included us49m paid to ey or its associate firm in the uae in relation to fees 
for their role as reporting accountants in relation to the company’s ipo the fy2013 non
audit fees were paid to ey or its associate firm in the uae in relation to a number of one
off projects in assisting the nmc finance team with a number of business process related 
matters and for tax compliance services the audit committee believe that the level of non
audit fees in 2013 were acceptable in the first full financial year following the company’s 
ipo 
 
the audit committee has adopted a nonaudit fees policy whereby it will only permit such 
fees in circumstances where they feel that use of the auditor firm is necessary appropriate 
or efficient and has delegated authority to the cfo to agree such projects subject to a strict 
cap on fees in relation to each financial year 
 
 auditor independence 
 
the audit committee formally reviewed the independence of the company’s auditor ey 
during the period under review the review took account of the relationship between 
management and the audit team the processes that ey have in place internally to ensure 
objectivity and independence and also the level of nonaudit fees incurred during the year  
 
as part of this review the committee reviewed the potential threats to auditor independence 
as a result of 
 
 auditor selfinterests being those areas where the auditor may have a financial or other 
interest in the company 
 auditor selfreview being areas where the results of nonaudit services are reflected in 
the amounts included or disclosed in the financial statements 
 management threats which may occur if partners or employees of the auditor take 
decision on behalf of management and 
 other threats such as familiarity and intimidation 
 
the audit committee is satisfied that in all areas sufficient safeguards were adopted by the 
auditor and that the independence of ey and of the audit engagement partner had not been 
compromised there is no limitation of liability in the terms of appointment of the auditor for 
the audit of the company’s financial statements 
 
 
 
jonathan bomford fca 
on behalf of the audit committee  68 
 
clinical governance committee 
 
the clinical governance committee was established by the board in june 2013 to provide 
assurance to shareholders that the key operational risks of the business are considered by a 
committee of the board and to ensure that the key risk of clinical care and quality associated 
with the group’s healthcare business is independently monitored  
 
the committee has consisted entirely of independent nonexecutive directors during the period 
under review the clinical governance committee members who have served during the year 
are 
 
clinical 
governance  
committee 
member 
position period of membership during 2013 
heather lawrence clinical governance 
committee chair 
member and chair of clinical governance 
committee since its establishment 
lord clanwilliam independent non
executive director 
member of clinical governance 
committee since its establishment 
hj mark tompkins independent non
executive chairman 
member of clinical governance 
committee since its establishment 
jonathan bomford  independent non
executive director 
member of clinical governance  
committee from 27 june 2013 until the 
end of the year 
justin jewitt previous independent 
nonexecutive director 
member of clinical governance 
committee from its establishment until 27 
june 2013 
 
meetings of the committee will be scheduled for three times per financial year in addition to 
the clinical governance committee members the group medical director chief operating 
officer and vice president – quality and standards attend each meeting the group 
company secretary is secretary to the committee 
 
o key role and responsibilities 
 
the key role of the committee is to oversee governance structures processes and controls in 
place within the group healthcare operations this is to ensure that the risks associated with 
clinical care are mitigated in the interests of the company and its stakeholders including 
shareholders 
 
specific responsibilities of the committee include  
  
  ensuring processes and controls are in place across the nmc healthcare hospitals to 
promote safety and excellence in patient care and manage risks arising from clinical care on a 
continuing basis 
  review the systems of clinical governance monitoring that they operate effectively and that 
action is being taken to address any areas of concern 
  review clinical performance indicators quarterly to gain assurance and 
 review compliance to local health authority requirements and standards 
 
the establishment of the clinical governance committee was undertaken as a result of an 
appreciation of the clinical risks faced by the group as a result the committee is a key aspect of the 
group’s internal control environment  
 
the chair of each of the audit committee and the clinical governance committee therefore intend 
during 2014 to consider the ways in which the two committees interact providing an overall control 
and governance framework to manage the group’s key risks  
 
heather lawrence obe 
for and on behalf of the clinical governance committee  69 
 
remuneration committee  
 
the remuneration committee consists entirely of independent nonexecutive directors  further 
details of the remuneration committee its membership and its role and responsibilities is set out in 
the remuneration report on pages 74 to 98 
 
nominations committee 
 
the nominations committee has consisted entirely of independent nonexecutive directors during the 
year under review the nominations committee members who have served during the year are 
 
nominations 
committee 
member 
position period of membership during 2013 
hj mark tompkins nominations committee 
chairman 
member and chairman of nominations 
throughout the year 
lord clanwilliam independent non
executive director 
member of nominations committee 
throughout the year 
heather lawrence independent non
executive director 
member of nominations committee 
throughout the year 
jonathan bomford  independent non
executive director 
member of nominations committee from 
27 june 2013 until the end of the year 
justin jewitt previous audit committee 
chairman 
member of nominations committee from 
beginning of the year until 27 june 2013 
 
 
the nominations committee has a role to assist the board in 
 
 reviewing and making recommendations to the board in relation to its structure size and 
composition 
 reviewing succession planning in place for senior management 
 determining the appropriate skills and characteristics required of directors identifying 
individuals qualified to become board members and recommending such individuals to the 
board 
 recommending individuals to be considered for election as directors at the next annual 
general meeting of the company or to fill vacancies and 
 preparing a description of the role and capabilities required for a particular appointment 
 
the committee will also undertake annual reviews of the composition of the board and assess 
various attributes of each board member including reviewing annually the time required from a non
executive director and assesses whether he or she contributes effectively and demonstrates 
commitment to the role 
 
the nominations committee did not meet during 2013 but did meet early in 2014 a full senior 
management succession planning process is underway and the committee met to consider this 
process and to ensure that a rigorous succession plan is being implemented the committee will 
meet further in 2014 to review progress on the succession planning implementation as well as the 
results of a board appraisal and any effect the results of that appraisal has on the structure of the 
board 
 
other than in relation to specific matters which the nominations committee will be required to 
discuss it is expected that the nominations committee will meet at least once in each financial year 
or otherwise as requested by any member of the committee the committee would expect to meet to 
consider appropriate candidates to fill any vacancy created on the board should such a vacancy arise 
or be considered appropriate given other skills and experience on the board the duties and activities 
of the committee during the year will be disclosed in the company’s annual report and audited 
financial statements each year 
 
 
  70 
 
shareholder engagement 
the company is committed to communicating with shareholders and stakeholders and to be available 
to meet with shareholders who require additional explanation of any matter which is of concern to 
them 
 
the chairman and senior independent nonexecutive director are also available either through 
contacting the company secretary or at the company’s annual general meeting to discuss any 
matters within their areas of responsibility or where individuals do not feel it is possible to discuss 
these matters with management  
 
during 2013 the company has increased its formal program of investor interaction including oneto
one meetings with institutional investors investor days and attendance at investor conferences as 
part of this increasing shareholder interaction the company appointed a full time executive during 
2013 mr roy cherry as head of strategy and investor relations  
 
 
in relation to the year ended 31 december 2013 the company issued its half year unaudited results 
two interim management statements and a preclose trading update prior to entering the close period 
at the end of each of the  half year and full year periods  
 
aside from direct shareholder meetings the principal ongoing communication with shareholders will 
be through the publication of the company’s annual report and audited financial statements interim 
results and interim management statements together with the opportunity to question the board and 
committees at the agm financial results presentations are made available on the company’s 
investor relations website shareholders are encouraged to attend the agm and if unable to do so 
are encouraged to vote by proxy the chairman and other board members meet regularly with the 
company’s brokers andor other healthcare sector specialists to remain up to date with shareholder 
views and sector developments the chairman has also met with or spoken to a number of the 
company’s principal shareholders and discussed with them their views on the company 
 
the company has an investor relations section on its corporate website wwwnmcae this has been 
and will continue to be updated regularly with information that the company considers relevant to its 
investors additionally the company continues to communicate with the market in respect of the 
group’s performance and prospects through the release of appropriate press announcements and 
other updates 
 
internal control and risk management 
 
 financial and operational reporting 
 
the group has for nearly 40 years grown into a substantial business and a leader in the 
provision of private healthcare as well as operating a substantial distribution business in 
the united arab emirates the group is a regulated business operating many clinical and 
quality controls processes not unusually for a group which was until recently a private 
business whilst the financial and operational performance was monitored closely by the 
senior management team prior to ipo formal written policies and governance procedures 
were not what might have been expected of a company listed on the premium segment of 
the london stock exchange  
 
as reported in the 2012 corporate governance report the management team with the 
support of the audit committee has been progressively incorporating additional key internal 
controls into its financial and operational processes as part of an overall process to improve 
the governance structure within the group and to improve the group’s formal internal 
control processes  
 
the internal control environment has improved further in the year with 
 
 the implementation of new policies and procedures covering all aspects of the 
group’s accounting policies and controls and 
 the group’s internal audit function being in place for a full financial year 
  71 
 
other than items connected with the implementation of the group’s new financial accounting 
system which is now due to be implemented in h1 2014 all financial reporting procedures 
recommendations made at the time of the company’s ipo have been implemented  
 
the key elements of the groups’ internal controls are as follows 
 
 an annual budget and updated longterm forecasts for the group that identifies risks and 
opportunities which are reviewed and approved by the board 
 
 a monthly executive meeting at which the senior management team review group 
financial and operational performance progress on capital projects and other principal 
functional areas of the business 
 
 a system of internal monthly operational and financial reporting which includes monthly 
comparison of results and against budget and forecast a review of kpis each discussed 
with additional management commentary and the reporting of key matters arising within 
the business during the month under review the group has a very flat organisational 
hierarchy resulting in an easy flow of information throughout the organisation structure 
communication of exceptional items happens naturally 
 
 a defined process for controlling capital expenditure including appropriate authorisation 
levels which is monitored and approved by the board as appropriate 
 
 medical directors’ meetings to monitor clinical governance procedures 
 
 the establishment of the clinical governance committee at which the committee on 
behalf of the board independently review performance against a range of key kpis 
based on clinical quality and safety metrics and thus acts as mitigation against clinical 
risks   
 
 an effective independent internal audit program which independently assists 
management in identifying key risks to the group and monitors those risks through a 
program agreed with both management and the audit committee 
 
 an appropriate approach to decentralisation within the group each healthcare facility 
has a medical director and head of administration who are accountable for the operation 
of the facility both healthcare and distribution divisions are managed through 
fundamental activities of planning executing and checking the strategic direction of all 
operations is governed by the corporate office all banking treasury and payment 
processing is centralised in the group finance function but accounting for payments is 
decentralised the management team believes that these divisions of responsibility 
provide a natural check and balance across all internal control areas 
 
 the delegation of authority provides that very few individuals within the organisation 
have payment approval authority access to cash is also restricted to very few 
individuals all material payments are restricted to the senior management team  
 
 risk appetite 
 
the senior management team and the board have considered their business approach to 
risk the board acknowledges that elements of risk are inherent within all business 
operations and that the group’s approach should be to encourage the exploitation by 
management of appropriate profitable business opportunities but through controlled and 
disciplined business and financial activities 
 
the healthcare division operates a zero tolerance policy to the taking of risk in relation to 
clinical and safety matters the group operates in an emerging market which means that 
by definition the natural risk profile of the group’s business and financial operations is 
moderate to high the board’s approach in reviewing the group’s operations is to ensure 
that this natural risk profile is not increased above this level the board’s governance and 
risk mitigation processes are set and operated accordingly   72 
 
 approach to risk mitigation 
 
as a regulated business the group operates within a framework of managing all elements 
of risk which arise within the group as a result there are a number of ways in which the 
company monitors its keys risks 
 
in 2012 the company appointed crowe horwath as internal auditors to the group the 
internal auditors report directly to the chairman of the audit committee but work in 
conjunction with the cfo their initial reports to the audit committee are received and 
discussed at audit committee meetings twice a year in june and december 
 
the significant risks faced by the group were reviewed prior to the company’s ipo and 
again by the internal auditors in conjunction with management towards the end of 2013  
 
the work undertaken by the internal auditors alongside the improvements undertaken in 
the formal documenting of policies and procedures and the current implementation of new it 
systems are the main focus of the audit committee as it seeks to improve the mitigation of 
risks associated with the group’s internal control environment 
 
the key strategic and business risks faced by the group the potential effect and the 
mitigation of those risks are set out on pages 31 to 34 the consideration by the 
management team of the key risks faced by the group is crucial to the work which will be 
undertaken by the internal auditors during 2014 the internal auditors have discussed with 
management and have obtained agreement of the audit committee their planned areas of 
focus during the coming financial year 
 
following the completion of each review the internal auditors identify areas for remedial 
action and the required action plans are discussed and agreed with management the 
internal auditors present the reviews and the agreed management plans for any remedies to 
the audit committee and then monitor the implementation of any required changes on 
behalf of the audit committee the audit committee reports to the board on internal audit 
matters 
 
during the year the clinical governance committee was established aside of financial 
risks the board is aware that as a significant healthcare business it is subject to a range of 
risks related to clinical care and quality the work of the clinical governance committee 
and how it fits into the group’s overall control environment and risk mitigation is set out on 
page 68   
 
 effectiveness of internal controls 
 
the board has overall responsibility for the group’s systems of internal control and on 
behalf of the board the audit committee has been engaged in the process of ensuring that 
management have established continuous processes for identifying evaluating and 
managing the risks the group faces these processes include the reporting from the finance 
department on group performance the work of the internal auditors and issues identified by 
the external auditors to the extent covered by their audit work the board is responsible for 
monitoring the ongoing effectiveness of these systems and for conducting a formal annual 
review of the effectiveness of the group’s internal controls  
 
a system of internal controls is designed to manage rather than eliminate the risk of failure 
to meet business objectives and is designed to provide reasonable but not absolute 
assurance against material misstatement or loss 
 
in reviewing the effectiveness of the internal controls in place during the year  the audit 
committee considered amongst other matters manual controls in place the independence 
of the separate operating units the delegation of authority the balance of centralised and 
decentralised systems and the reporting process in relation to exceptional items 
 
 
  73 
 
the audit committee has noted that the group does not operate under a fully integrated 
high end it environment and therefore an element of manual intervention is prevalent within 
the group the board has approved the implementation of a new hospital management 
system which together with the implementation of the new erp financial system in the first 
half of 2014 will result in a new integrated it system becoming fully functional during the 
2014 financial year 
 
the group continues to enhance its internal control practices and environment and as part 
of that progression have also implemented formal policies and procedures in relation to 
accounting policies and controls in 2013 
 
the audit committee on behalf of the board has reviewed the effectiveness of the group’s 
systems of internal controls for the 2013 financial year in light of the key elements of the 
group’s internal controls outlined above given the additional internal controls that have 
been incorporated into the group’s financial and operational reporting process such that 
sufficient internal controls were in place to monitor the group’s key risks the board 
believes having evaluated the effectiveness of the disclosure controls and procedures that 
these were effective during the period covered by this report the board also believes that 
the process undertaken by the board and the audit committee to monitor the internal 
control environment accords with the guidance provided in internal control revised 
guidance for directors on the combined code  
 
other governance matters 
 
whistleblowing policy 
a confidential whistleblowing procedure is in operation allow employees to raise concerns of possible 
improprieties in relation to either operational or financial conduct   
 
employees have been provided with a copy of this policy and are aware of the significance of it new 
employees receive training on all company policies and procedures as part of their induction program 
a copy of the policy is included on the company’s employee intranet    
 
bribery act 2010 
the group has an antibribery and anticorruption policy which applies to all directors and 
employees of all group companies the policy which has been communicated to all employees 
includes clear statements setting out the group’s antibribery measures and anticorruption culture 
practical guidance has been issued in relation to specific circumstances considered to be most 
relevant to group employees these include guidance notes for clinical staff attending pharmaceutical 
and training and development conferences in relation to entertainment and other possible 
inducements as well as guidance notes in relation to the receipt of free products and equipment and 
how such products and incentives may affect clinical judgement specific guidance has also been 
provided in relation to the provision of sales incentives to senior sales and marketing staff within our 
distribution division  
 
new employees receive training on all company policies and procedures as part of their induction 
program a copy of the policy is included on the company’s employee intranet 
 
the corporate governance report set out on pages 56 to 73 has been approved by the board and is 
signed on its behalf by 
 
 
h j mark tompkins 
chairman 74 
 
directors’ remuneration report 2013 
 
 
letter from the remuneration committee chairman 
 
dear shareholder 
 
i am pleased to present to you our directors’ remuneration report for the 2013 financial year 
 
as shareholders may be aware listed companies are now required to provide more detailed 
disclosures in relation to directors’ remuneration and present such information in a different format 
there is a requirement to set out not only the remuneration which directors have received during the 
financial year under review but also the remuneration policy which the remuneration committee 
“the committee” will be applying in relation to future financial years this has resulted in a change in 
format for the directors’ remuneration report this year which i hope shareholders will find provides 
clarity and transparency in the way that our senior team is remunerated 
 
changes in remuneration policy  
 
the new disclosure requirements are very timely in relation to the work undertaken by the committee 
in 2013 in relation to the implementation of the group’s remuneration policies applicable for executive 
directors and senior management of nmc “executives” in the main body of this report the 
committee sets out its remuneration policy for executives including the incentive plans which have 
been implemented to ensure that executives are aligned with the interests of shareholders in seeking 
to improve performance and enhance shareholder value 
 
the principal changes which the committee have discussed and agreed in relation to executive 
remuneration and which are set out in the remuneration policy report are  
 
 the implementation of a short term incentive plan stip for the executive directors and 
other senior management for 2013 
 
 the grant of awards under the long term incentive plan ltip to executive directors and 
other senior management the rules of the ltip were approved as part of the company’s 
ipo in 2012  the committee intends to make awards under this plan for this first time in 
2014  
 
further details of the stip and ltip are provided in the main part of the report   
 
rewarding good performance 
 
the introduction of short and longterm incentives into the executive remuneration structure reflects 
our remuneration philosophy which is to provide competitive remuneration packages which reward 
strong performance in line with the companys strategic objectives   
 
the use of performance based incentives part of which is delivered in shares seeks to align the 
interests of management with those of our shareholders and reflects market practice in the listed 
environment in which we now operate  
 
alignment of base pay 
 
no base pay increases were awarded to any of the executive directors during the 2013 financial year 
the base pay of members of the senior management team was increased in may 2013 following a 
benchmarking exercise undertaken by the committee during the year in conjunction with our 
remuneration consultants deloitte llp whilst the percentage increases awarded were above the 
levels awarded more widely across the nmc group this reflected several years of pay freeze at 
senior management level and a reflection of the increased responsibilities and complexity of roles 
undertaken by the senior management team following the company’s ipo    
 
  75 
 
consultation with shareholders 
 
in addition to consulting our principal shareholders on the implementation of the new executive 
remuneration structure i also met or spoke with several of our external shareholders to discuss the 
committee’s new arrangements with them i thank them for their positive support and contribution  
 
our first directors’ remuneration report last year received a 9999 vote in favour and 001 
voting against for those votes validly cast which were from 9236 of the company’s issued share 
capital votes were withheld on the resolution from shareholders holding 2275476 ordinary shares of 
the company 123  
 
the committee were delighted with both the level of shareholder voting on the report and the 
significant level of support from shareholders for our remuneration arrangements the committee 
sincerely hopes to receive your support for our new incentive arrangements at the agm being held on 
26 june 2014     
  
finally i would like to express my appreciation for the input of my fellow remuneration committee 
members during the year for their support and work to implement our new remuneration structure 
 
 
 
lord clanwilliam 
chairman of the remuneration committee 
  
 
 
 
 
 
 
 
 
 
 
  76 
 
 
introduction  
 
this remuneration report for the year ended 31 december 2013 complies with the requirements of the 
large and mediumsized companies and groups accounts and reports regulations 2008 as 
amended in 2013 the provisions of the uk corporate governance code and the listing rules  
 
this report is drafted in two sections  
 
 the directors remuneration policy section will be put to a binding shareholder vote at the 2014 
agm  this section contains details of the remuneration policy that will apply from the 2014 agm 
subject to obtaining shareholder approval  
 
 the directors’ annual remuneration report this section sets out details of how our remuneration 
policy was implemented for the year ended 31 december 2013 and how we intend for the policy 
to apply for the year ended 31 december 2014  this report will be subject to an advisory 
shareholder vote at the 2014 agm 
  77 
 
directors remuneration policy report  
 
the information contained in the directors’ remuneration policy report is not subject to audit 
 
this section describes the future remuneration policy for our executive and nonexecutive directors  
 
executive director remuneration policy table  
 
the table below summarises the remuneration package provided to our executive directors 
 
remuneration 
element 
purpose and link to 
remuneration strategy 
operation  maximum opportunity  performance measures  
base salary to attract and retain 
management of the calibre 
required to deliver the groups 
strategy without paying more 
than is necessary  
to reward executives for the 
performance of their role  
  
salaries are reviewed annually with 
changes generally taking effect from 1 
june   salaries may be reviewed at 
different intervals if the committee 
considers that this is appropriate 
when setting base salaries consideration 
is given to the following  
 remuneration levels at companies of 
a similar size and complexity in the 
ftse other uae companies of a 
similar size and other international 
healthcare companies                                                                                                                           
 salary increases elsewhere in the 
group  
 business and individual performance 
 the experience of the individual 
 the external economic climate and 
market conditions 
 local market practice  
the committee has also taken into 
account the tax treatment of salaries for 
uae based management in setting base 
salary levels 
while there is no maximum  
salary level ordinarily salary 
increases will be in line with 
increases awarded to other 
employees of the group   
however increases may be 
made above this level at the 
committees discretion to take 
account of individual 
circumstances such as  
 an increase in scope  
responsibilities  
 to reflect the individuals 
development in the role 
eg for a new appointment 
where the salary may be 
increased over time rather 
than set directly at the level 
of the previous incumbent  
market  
 alignment to market level 
none although an individuals 
performance in the role will be 
considered when reviewing base salary 
levels   78 
 
remuneration 
element 
purpose and link to 
remuneration strategy 
operation  maximum opportunity  performance measures  
benefits 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
to provide benefits that are 
competitive relative to the 
employees local market  
benefits are set at a level which the 
committee considers is appropriate taking 
into account  
 local market practice 
 practice at companies of a similar 
size and complexity other uae 
companies and other international 
healthcare companies 
 the role and the individuals 
circumstances 
the group provides a range of benefits 
which reflect typical benefits offered in the 
uae including   
 employee  family accommodation                                                                       
 private medical insurance including 
family cover                                                                                                                  
 life and permanent health insurance 
cover                                                                                                           
 company provided transport facility 
including free air travel up to three 
times a year                                                                        
 annual family return flight to home 
country                                                                      
 30 days holiday 
 end of service benefit   
 reimbursement of reasonable 
personal accommodation and travel 
costs  
in the event that an executive is required to re
locate to undertake their role the committee 
may provide an additional reasonable level of 
benefits to reflect the relevant circumstances 
on a one off or ongoing basis  other benefits 
may be offered if considered appropriate and 
reasonable by the committee                                                                                                   
the cost of benefit provision will 
depend on the cost to the 
company of providing individual 
items and the individual’s 
circumstances and therefore 
there is no maximum value 
 
 
none   79 
 
remuneration 
element 
purpose and link to 
remuneration strategy 
operation  maximum opportunity  performance measures  
retirement 
benefits 
to provide a market competitive 
retirement benefit  
at the committees discretion executives 
may be eligible to participate in a local 
pension arrangement or receive a cash 
allowance or a combination of cash 
allowance and pension contribution   
 
the company currently does not operate 
any pension arrangements but an end of 
service benefit payable to the employee 
when he leaves the group is accrued 
annually in accordance with local uae 
laws  the committee retains discretion to 
operate pension arrangements in the 
future 
whilst the committee has not 
set an absolute maximum 
opportunity the committee will 
determine the level of benefit 
based on what is appropriate 
taking into account 
 local market practice 
 practice at companies of a 
similar size and complexity 
other uae companies and 
other international 
healthcare companies 
 the role and the 
individuals circumstances 
none   
short term 
incentive plan 
bonus plan 
to provide a structure to attract 
retain and motivate senior 
executives of the calibre 
required to manage the 
business 
 
to align the interests of senior 
executives with those of 
shareholders by linking a 
significant proportion of the 
potential remuneration to 
performance and delivery of 
strategic objectives 
 
to provide a bonus 
arrangement which is clearly 
structured and transparent for 
senior executives and 
shareholders  
 
 
bonus measures and performance targets 
are set annually dependent on the 
deemed strategic priorities for that year   
                                                                      
performance is determined by the 
committee after the yearend based on 
performance against targets       
 
the remuneration committee has the 
discretion to amend the bonus payout 
should the formulaic output not produce a 
result which in the view of the committee 
fairly reflects overall performance or 
individual contribution  
                                                                                        
any annual bonus achieved for a financial 
year is normally paid 50 in cash and 
50 is deferred into company shares 
which vest three years from award subject 
to continued employment   there are no 
further performance conditions or other 
conditions which will apply to any deferred 
shares awarded with the exception of 
continued employment  
 
the maximum bonus 
opportunity is 100 of base 
salary 
 
up to 50 of the award pays 
out for target performance  
 
performance is based on a mix of key 
financial operationalstrategic metrics 
and individual kpis measured over one 
financial year 
 
at least 50 of the bonus is based on 
financial metrics payout against the 
operationalstrategic measures and 
individual kpis is subject to a gateway 
hurdle in relation to the level of ebitda 
achieved  
 
the measures that will apply for the 
financial year 2014 are described in the 
directors annual remuneration report  
 
  80 
 
remuneration 
element 
purpose and link to 
remuneration strategy 
operation  maximum opportunity  performance measures  
the committee shall have the discretion 
to determine that a different balance of 
cash and shares applies 
 
deferred awards may receive an amount 
paid in cash or shares although it is 
intended that such amount will be paid in 
shares equal to the dividends paid or 
payable between the date of grant and the 
vesting of the award on the number of 
shares vested this amount may be 
calculated assuming the reinvestment of 
these dividends into shares 
                      
payment of the cash element of any 
bonus is generally made shortly after the 
announcement of audited results for that 
year 
 
malus provisions apply awards may be 
reduced cancelled or have further 
conditions applied in certain 
circumstances these include but are not 
limited to misstatement of financial 
results a material failure of risk 
management or serious reputational 
damage to the company  
 
the committee may adjust or amend the 
terms of the deferred bonus awards in 
accordance with the plan rules  
long term 
incentive plan 
ltip 
to incentivise longterm value 
creation and exceptional 
business performance through 
the achievement of stretching 
group financial targets  
awards vest based on performance 
measured over a three year period the 
committee may determine that a longer 
performance period may apply 
 
executives may receive an amount paid 
in cash or shares equal to the dividends 
paid or payable between the date of grant 
and the vesting of the award on the 
number of shares vested this amount 
maximum award is 150 of 
base salary  in exceptional 
circumstances the committee 
may grant awards of up to 
200 of base salary 
 
it is currently intended that ltip 
awards will be limited to 100 
of base salary but the 
committee retains discretion to 
the committee shall determine 
appropriate performance measures and 
their weightings for ltip awards to be 
granted  such measures would 
normally be financial or linked to share 
price performance and would be aligned 
with the longterm strategy of the 
business 
 
the committee has not yet determined  81 
 
remuneration 
element 
purpose and link to 
remuneration strategy 
operation  maximum opportunity  performance measures  
may be calculated assuming the 
reinvestment of these dividends into 
shares 
 
 
awards may be made in the form of 
conditional share awards forfeitable 
shares nilcost options or a right to a 
cash  payment  
 
awards in the form of options may be 
exercised until the 10
th
 anniversary of the 
date of grant  
 
awards are subject to malus provisions  
awards may be reduced cancelled or 
have further conditions applied in certain 
circumstances these include but are not 
limited to misstatement of results a 
material failure of risk management or 
serious reputational damage to the 
company  
 
the committee may adjust the term of 
awards in accordance with the plan rules  
grant awards up to the plan limit 
if it considers that this is 
appropriate 
 
up to 25 of the award pays 
out for target performance  
 
awards vest on a straightline 
basis between target and 
maximum performance   
 
 
the specific performance measures for 
ltip awards to be granted in 2014 it is 
anticipated however that the principle 
measures used will be earnings per 
share and total shareholder return 
metrics 
 
the performance measures and targets 
that will apply for each financial year 
and will be described in the directors 
annual remuneration report 
 
 
share option 
plan “sop” 
to incentivise executive 
directors to increase the share 
price and deliver value for 
shareholders 
it is intended that awards would only 
be made under this plan in exceptional 
circumstances   
 
awards are granted in the form of market 
value options  awards vest based on 
performance measured over a three year 
period options may be exercised until the 
10
th
 anniversary of the date of grant 
 
executives may receive an amount paid 
in cash or shares equal to the dividends 
paid or payable between the date of grant 
and the vesting of the award on the 
number of shares vested this amount 
may be calculated assuming the 
maximum award is 150 of 
base salary  in exceptional 
circumstances the committee 
may grant awards of up to 
200 of base salary 
in the event that an award was to be 
granted under this plan in exceptional 
circumstances the committee would 
determine appropriate performance 
conditions at that time  82 
 
remuneration 
element 
purpose and link to 
remuneration strategy 
operation  maximum opportunity  performance measures  
reinvestment of these dividends into 
shares 
 
awards are subject to malus provisions  
awards may be reduced cancelled or 
have further conditions applied in certain 
circumstances these include but are not 
limited to misstatement of results  a 
material failure of risk management or 
serious reputational damage to the 
company   
 
the committee may adjust the term of 
awards in accordance with the plan rules 
 
  83 
 
 
the company also operates a shareholding guideline for executive directors and senior 
management – details of this policy can be found on page 93 of the annual remuneration report 
 
committee discretion  
 
the committee reserves the right to make any remuneration payments and payments for loss of 
office notwithstanding that they are not in line with the policy set out above where the terms of the 
payment were agreed i before the policy came into effect or ii at a time when the relevant individual 
was not a director of the company and in the opinion of the committee the payment was not in 
consideration for the individual becoming a director of the company  for these purposes “payments” 
includes but is not limited to the committee satisfying awards of variable remuneration and in 
relation to an award over shares the terms of the payment are “agreed” at the time the award is 
granted 
 
for share awards in the event of a variation of the company’s share capital or a demerger delisting 
special dividend rights issue or other event the number of shares subject to an award andor any 
performance condition attached to awards may be adjusted 
 
the committee may amend any performance conditions applicable to the ltip or sop awards if an 
event occurs which causes the committee to consider an amended performance condition would be 
more appropriate and not materially less difficult to satisfy 
 
the committee retains the discretion to make any payment which is not explicitly provided in this 
policy which is it obliged to make under uae or relevant local laws 
 
the committee may make minor amendments to the policy set out above for regulatory exchange 
control tax or administrative purposes or to take account of a change in legislation without obtaining 
shareholder approval for that amendment     
 
selection of performance measures 
 
the performance measures for the stip have been selected and for the ltip will be selected to 
support the delivery of short and long term performance of the business and shareholder value 
creation  targets are set each year based on stretching internal budgets as well as those financial 
and operational areas which the committee feel are key to business performance achieving or 
exceeding these targets will both return value to shareholders and reward the executive team for 
delivery  
 
the performance measures selected by the committee may change from time to time to reflect any 
shift in group strategy for example from a growth strategy to a consolidation strategy 
 
remuneration arrangements throughout the group 
 
remuneration philosophy is the same throughout nmc – that individuals should be remunerated 
based on their role responsibilities experiences and local market practice  nmc has a variety of 
different roles from senior executives to doctors to administrators and therefore remuneration levels 
and structures vary to reflect the different requirements and expectations of these roles   
 
the committee does consider that it is important however that senior executives are all remunerated 
in a similar way to ensure that they are incentivised to collectively deliver the group’s strategy and 
create value for shareholders  executive directors and senior managers will therefore all participate 
in the annual bonus plan and ltip on principally the same basis for 2014 
 
the committee has retained the existing benefits structure which applied to uae based executive 
directors and senior management before the company’s ipo in april 2012  a similar benefit 
structure is operated throughout the organisation  the benefits included reflect the expatriate nature 
of senior management in the uae and are similar in nature to the types of benefits which are  84 
 
available to other expatriate employees in the group the benefits include private medical insurance 
which is mandatory for employees in abu dhabi where the group is based  
 
remuneration outcomes in different performance scenarios 
 
the committee has set a remuneration structure which ensures that a high proportion of the potential 
total reward available for executive directors and senior management is related to the performance of 
the company 
 
to demonstrate this three scenarios have been illustrated below for each executive director  these 
are based on stip and ltip awards of 75 of base salary 
 
minimum    
 fixed pay 
 no stip pay out 
 no vesting under the ltip 
mid performance  
 fixed pay  
 50 of maximum stip opportunity  
 25 of ltip shares vest at threshold performance  
maximum performance 
 fixed pay  
 75 of stip pays out 
 75 of ltip shares vest 
 
 
fixed 
pay 
salary benefits pension 
annual 
bonus 
long
term 
incentive 
total 
compensation 
maximum 
performance 245000 245000 0 0 183750 183750 612500 
mid performance 245000 245000 0 0 122500 61250 428750 
minimum 245000 245000 0 0 0 0 245000 
        
 
ceo – dr br shetty executive vice chairman – mr khalifa 
bin butti 
   85 
 
fixed pay is comprised of the following 
 
 salary 
salary with effect 
from 1 january 2014 
benefits 
paid in 2013 
 
pension 
 
 
total fixed 
pay 
ceo dr br 
shetty 
408400 149300 0 557700 
executive vice 
chairman mr 
khalifa bin butti 
245000 0 0 245000 
 
the scenarios illustrated above do not take into account share price appreciation or dividends   
 
 
remuneration policy on recruitment 
 
when determining the remuneration package for a newly appointed executive director the 
committee would seek to apply the following principles  
 
 the package should be market competitive to facilitate the recruitment of individuals of sufficient 
calibre to lead the business at the same time the committee would intend to pay no more than it 
believes is necessary to secure the required talent  
 
 the structure of the ongoing remuneration package would normally include the components set 
out in the policy table for executive directors 
 
 in addition the committee has discretion to include any other remuneration component or award 
which it feels is appropriate taking into account the specific commercial circumstances and 
subject to the limit on variable remuneration set out below the key terms and rationale for any 
such component would be appropriately disclosed 
 
 where an individual forfeits outstanding variable pay opportunities or contractual rights at a 
previous employer as a result of appointment the committee may offer compensatory payments 
or awards in such form as the committee considers appropriate taking into account all relevant 
factors including the form of awards expected value and vesting timeframe of forfeited 
opportunities  when determining such ‘buyout’ the guiding principle would be that awards would 
generally be on a ‘like for like’ basis to those forfeited unless this was not considered appropriate 
in the particular circumstances and that the ‘buyout’ package would be an appropriate reflection 
of the value forfeited   
 
 the maximum level of variable remuneration which may be awarded excluding any 
compensatory payments or awards referred to above is 200 of salary  
 
 where an executive director is required to relocate to takeup their role the committee may 
provide reasonable assistance with relocation either via oneoff or ongoing payments or 
benefits 
 
 in the event that an internal candidate was promoted to the board legacy terms and conditions 
would normally be honoured including pension entitlements and any outstanding incentive 
awards   
  86 
 
to facilitate awards outlined above the committee may make awards under company incentive plans 
or other available structures as appropriate including using listing rule 942 for the purpose of making 
“buyout” awards   
 
the remuneration package for a newly appointed nonexecutive director would normally be in line 
with the structure set out in the policy table for nonexecutive directors  remuneration for new hires 
may be paid in the form of cash or shares   
 
executive director service contracts  
 
dr b r shetty is employed by nmc healthcare llc pursuant to a service agreement dated 19 march 
2012 the service agreement provides for an indefinite term of employment unless terminated earlier 
in accordance with the terms of the service agreement the service agreement may be terminated on 
twelve months’ prior written notice given by either dr b r shetty or nmc healthcare llc  
 
mr khalifa bin butti is employed by nmc healthcare llc pursuant to a service agreement dated 19 
march 2012 the service agreement provides for an indefinite term of employment unless terminated 
earlier in accordance with the terms of the service agreement the service agreement may be 
terminated on twelve months’ prior written notice given by either mr khalifa bin butti or nmc 
healthcare llc  
 
copies of the above service agreements are available for inspection during normal business hours at 
the company’s registered office and are available for inspection at the company’s annual general 
meeting 
 
for future executives the committee policy is that notice periods will not exceed 12 months there are 
no matters for which the company requires approval of shareholders for the purposes of chapter 4a 
of part 10 of the companies act 2006 
 
loss of office payments  
 
element of 
remuneration  
policy  illhealth injury disability death 
sale of employing company or business from 
the group any other reason at the 
committees discretion   
policy  other leavers  
base salary and 
benefits  
retirement 
benefits  
on termination without notice executive directors may be entitled to compensation based 
on what would be earned by way of salary and other contractual benefits including 
retirement benefits over the notice period 
stip  there is no automatic entitlement to an annual 
bonus  
executive directors may receive a bonus in 
respect of the financial year of cessation this 
payment will normally be prorated for time and 
subject to performance however the committee 
retains the discretion to review overall business 
and individual performance and determine that a 
different level of bonus payment is appropriate 
in certain circumstances the committee 
may determine that a bonus payment 
may be due to reflect performance and 
contribution to the point of cessation  
deferred bonus 
plan 
plan terms to be 
determined 
awards would normally continue to vest at the 
end of the normal deferral period  the 
committee may determine in appropriate 
circumstances that awards should vest at 
cessation of employment   
awards would normally lapse 
 date of service agreement 
dr b r shetty 19 march 2012 
mr khalifa bin butti 19 march 2012  87 
 
longterm 
incentive plan 
“ltip” 
awards may vest at a level determined by the 
committee taking into account the extent to 
which the performance conditions have been 
met and the time elapsed since grant unless the 
committee determines otherwise 
awards will normally carry on to the normal 
vesting date except in the case of death where 
awards may vest immediately  the committee 
may determine that awards should vest at 
cessation of employment 
awards in the form of nil cost options may be 
exercised for a period of 6 months from vesting 
12 months in the cases of death  participants 
have 6 months from cessation to exercise 
vested awards 12 months in the case of death 
the committee may allow alternative exercise 
windows if it considers it appropriate 
awards will lapse  
 
 
 
 
 
 
share option 
plan “sop” 
options may vest at a level determined by the 
committee taking into account the extent to 
which the performance conditions have been 
met and the time elapsed since grant unless the 
committee determines otherwise 
options vesting will normally carry on to the 
normal vesting date except in the case of death 
where awards may vest immediately  the 
committee may determine that awards should 
vest at cessation of employment 
options may be exercised for a period of 6 
months from vesting 12 months in the case of 
death  participants have 6 months from 
cessation to exercise vested awards 12 months 
in the case of death 
unvested awards will lapse   
 
vested options may be exercised for 6 
months from the date of cessation 
 
 
 
 
change of control  
 
on a change of control awards under the ltip and sop would normally vest to the extent that the 
performance conditions are satisfied at the date of the event any early vesting would generally be on 
a time prorata basis 
 
the committee may vary the level of vesting if it believes that exceptional circumstances warrant 
this taking into account any other factors it believes to be relevant in deciding to what extent an 
award will vest  
 
the executive directors may exchange their awards over company shares for awards in shares of 
the acquiring company if the terms of the offer allow this   
 
deferred bonus shares will normally vest in full upon a change of control 
 
in the event of a windingup of the company demerger delisting special dividend or other event 
which in the opinion of the committee may affect the current or future share price the committee may 
allow ltip sop and deferred bonus awards to vest on the same basis as set out above 
 
  88 
 
nonexecutive director remuneration policy table  
 
chairman 
and non
executive 
director 
fees 
purpose and link 
to remuneration 
strategy 
operation  maximum opportunity  
to provide an 
appropriate reward 
to attract and 
retain highcalibre 
individuals  
the remuneration of nonexecutive 
directors is approved by the 
executive directors following 
recommendations and discussions 
with the chairman of the company 
and the chairman of the 
remuneration committee  
 
fees are structured as follows  
 
 the chairman is paid a single 
consolidated fee 
 the nonexecutive directors 
are paid a basic fee plus 
additional fees for the senior 
independent director 
 
fees are paid in cash with local 
taxes deducted at source  
 
 
nonexecutive directors are also 
reimbursed for travel and 
reasonable personal expenses 
 
nonexecutive directors do not 
currently receive any benefits  
however benefits may be provided 
in the future if this was considered 
appropriate  
the maximum level of non
executive director remuneration is 
set out in the company’s articles of 
association  this may be amended 
from time to time subject to 
shareholder approval 
  
fees are set at a level which reflect 
the commitment and contribution 
that is expected from the chairman 
and nonexecutive directors and 
that are appropriately positioned 
against comparable roles in 
companies of a similar size and 
complexity 
 
fee levels are disclosed in the 
directors remuneration report for 
the relevant financial year  
 
 
additional fees may be payable to 
nonexecutive directors from time 
to time for additional board 
responsibilities eg committee 
chairmanship  additional fees 
may also be paid where the time 
commitment in a particular year 
was significantly more than 
anticipated    
 
terms and conditions for nonexecutive directors  
 
the nonexecutive directors do not have service agreements with the company but instead all have 
letters of appointment the appointment of each of the nonexecutive directors is stated for an initial 
term until the next annual general meeting of the company at which and at subsequent annual 
general meetings they need to submit themselves for reelection if they so wish each of the non
executive directors have a minimum time commitment that they need to give to the company in any 
year 
 
the letters of appointment for each nonexecutive director are summarised below 
 
director position date of 
appointment 
company and 
director  
notice period 
    
mr h j mark 
tompkins 
nonexecutive chairman 7 march 2012  3 months 
he saeed bin butti nonexecutive director 20 july 2011  3 months 
lord clanwilliam nonexecutive director 7 march 2012 3 months 
mrs heather 
lawrence 
nonexecutive director 19 march 2012 3 months 
mr jonathan 
bomford 
senior independent director 27 june 2013 3 months 
 
 
there is no compensation payable upon the early termination of a nonexecutive directors’ 
appointment  89 
 
 
copies of the above executive directors’ service agreements and nonexecutive directors’ letters of 
appointment are available for inspection during normal business hours at the company’s registered 
office and available for inspection at the company’s annual general meeting 
 
shareholder views and consideration of employment conditions elsewhere in the 
group  
 
communication with our shareholders  the committee maintains an open dialogue with our 
shareholders and seeks their views when any significant changes are made to remuneration 
arrangements the committee met or spoke with several of our external shareholders to discuss the 
committee’s new arrangements this year  
 
consideration of pay and conditions of employees  the committee considers pay information in 
relation to doctor and support staff when determining executive pay to ensure that pay structures are 
appropriately aligned the committee did not consult with employees when setting executive director 
pay 
  90 
 
annual remuneration report 
 
some of the  information contained in the annual remuneration report is subject to audit  where the 
information is subject to audit this is identified in the relevant heading 
 
how executive remuneration policy will be applied in 2014 
 
base salaries for 2014  
 
executive directors base salaries are as follows 
 
ceo – dr br shetty 408400 
executive chairman – mr khalifa bin butti 245000 
 
no salary increases have been awarded from 2013 salaries although a review is scheduled for june 
2014 
 
operation of the annual bonus plan for 2014  
 
the operation of the annual bonus for 2014 will be consistent with the policy detailed in the 
remuneration policy section  the maximum award level will be 100 of base salary 
 
the performance targets that will apply for the annual bonus for 2014 have yet to be considered and 
determined by the committee however the committee’s current view is that the performance 
measures will include a gateway hurdle in relation to the level of ebitda achieved 
 
operation of the ltip for 2014  
 
the operation of the ltip for 2014 will be consistent with the policy detailed in the remuneration 
policy section  the maximum award level will be 100 of base salary 
 
the performance targets that will apply to the awards have yet to be finalised and determined by the 
committee however the committee’s current view is that the performance measures will likely be 
based principally on earnings per share and total shareholder return metrics over a three year 
period 
  91 
 
remuneration paid in 2013 single pay figure – subject to audit 
 
the table below sets out the remuneration paid to or received by the executive directors of the company during the financial year ended 31 december 2013 
 
executive 
director 
salary  
000 
benefits  
000 
stip 
000 
ltip awards 
000 
pension 
000 
total  
000 
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 
dr b r 
shetty 
4084 4084 1493 1422 2297 0 0 0 0 0 7874 5506 
mr khalifa 
bin butti 
2450 2450 0 0 1378 0 0 0 0 0 3828 2450 
 
benefits – subject to audit 
 
taxable benefits include the following items 
 
executive 
director 
provision of family 
accommodation 
000 
private medical insurance 
000 
life insurance cover 
000 
annual family return flights to home 
country 
000 
2013 2012 2013 2012 2013 2012 2013 2012 
dr b r shetty 1459 1389 09 09 00 00 25 25 
 
bonus – subject to audit 
 
a bonus of 563 of base salary out of a potential maximum entitlement of 75 of base salary set for the 2013 financial year was paid in respect of that 
year to the ceo and executive vice chairman  the bonus was based on the following performance measures 
 
measure percentage 
weighting  
performance outcome 
ebitda 50 
 
ebitda performance for the year was us929m 
representing a growth of 167 on 2012 this strong 
performance exceeded the relevant ebitda targets 
set by the committee and therefore this portion of the 
bonus paid out in full 
 
50  92 
 
progress on capital development 
projects 
125 the committee considered that sufficient progress on 
capital development projects was not achieved with a 
number of the projects being significantly delayed 
0 
performance against clinical care 
kpis 
250 maximum performance was achieved in relation to the 
45 kpis monitored by each of the group’s specialty 
hospitals under the terms of their jci accreditation 
jci accreditation sets standards that all monitored 
kpis must be achieved to the extent of 90 over the 
course of the review period group performance was 
well in excess of this target   
25 
doctor recruitment targets 125 the targets set for the recruitment of new doctors to 
the group was not met in 2013 as a result of a number 
of expected new facility openings not being achieved 
0 
 
half of the bonus paid to the executive directors is deferred into shares for which additional performance conditions or other conditions with exception of 
continued employment do not apply 
 
there was no bonus plan in operation for 2012 
 
longterm incentive plans – subject to audit 
 
there were no longterm incentive plan awards which were due to vest in respect of performance in 2012 and 2013 
 
pension – subject to audit 
 
there were no pension contributions in 2012 or 2013 
 
 
 
 
  93 
 
directors shareholdings and share interests – subject to audit 
 
the table below shows details of the directors holdings of ordinary shares in the company as at 1 
january 2013 and at 31 december 2013    
 ordinary shares of 10p each 
director 1 january 2013 
or at date of 
appointment if 
later 
31 december 
2013 
   
mr h j mark tompkins 17083 17083 
he saeed bin butti 53466559 53466559 
mr khalifa bin butti 19059842 19059842 
dr b r shetty 37742409 37742409 
lord clanwilliam 8597 0 
mrs heather lawrence 0 4557 
mr jonathan bomford 0 10000 
 
note in addition to the above holdings he saeed bin butti and mr khalifa bin butti also have an 
interest over 14072024 ordinary shares of the company 14072024 ordinary shares as at 1 january 
2013 held by infinite investment llc a company which is owned jointly by he saeed bin butti and mr 
khalifa bin butti 
 
he saeed bin butti resigned as a director of the company on 24 february 2014 
 
none of the directors of the company held any form of option over the shares of the company during the 
year ended 31 december 2013 
 
none of the directors received any loans advances or other form of credit granted by the company nor 
were any guarantees of any kind provided by the company on behalf of any directors during the year 
ended 31 december 2013 
 
there have been no changes in the above shareholdings between 31 december 2013 and the date of this 
directors’ remuneration report  
 
executive directors are required to build a shareholding of 200 of base salary  both the ceo and the 
executive vice chairman are significant shareholders in the company and therefore meet this 
requirement 
 
performance graph and historic ceo remuneration outcomes  
 
the following graph shows the total shareholder return performance of nmc health plc shares against 
the ftse 250  
 
 
  94 
 
 
note the performance graph shows the total shareholder return performance of the company from the 
date of the company’s ipo in april 2012 
 
the committee believes that the ftse 250 index is an appropriate comparator index used to compare 
performance given that the company is a constituent of this index and the lack of direct competitor 
comparators available in the london market 
 
the table below summarises the ceos single figure for total remuneration since listing  this table is also 
required to show the annual bonus and longterm incentive vesting as a percentage of the maximum for 
each year however there was no bonus or ltip vesting in any of the years under consideration  
 
ceo  dr b r shetty 2012 us’000 2013 us’000 
single remuneration figure 5506 7874 
stip payout  of maximum na 75 
lti vesting  of maximum na na 
 
the company did not operate the stip in respect of 2012 no awards have been granted to date under 
the ltip 
 
change in remuneration of ceo compared to group employees 
 
the table below sets out the increase in total remuneration of the ceo and that of all employees 
 
 salary  benefits  annual bonus  
ceo  0 50 comparison not 
applicable as the 
company did not 
operate the stip in 
2012 
allemployees 11 10  
 
relative importance of spend on pay 
 
the graph below shows the total groupwide remuneration expenditure and dividends for the last two 
years  
 
  95 
 
voting 
 
the following summarises voting at the 2013 agm in respect of the 2012 directors’ remuneration report  
this was an advisory shareholder vote 
 
for against number of votes withheld 
9999 001 2275476 123 of share capital 
 
nonexecutive directors remuneration  
 
how remuneration policy will be applied for 2014 
 
for 2014 the fees payable to the nonexecutive directors effective as at 1
 
january 2014 are as follows 
  
 £’000 
chairman 170 
senior independent director 60 
nonexecutive director 50 
 
additional fees may be also payable to nonexecutive directors from time to time for additional board 
responsibilities this may include fees for additional time commitments 
 
no additional fees are payable in relation to the chairmanship or membership of any board committees  
 
details of the remuneration paid to each of the nonexecutive directors who served during the year are 
included in the table on page 95 
 
nonexecutive directors do not participate in any bonus or incentive plan or other form or performance
related remuneration the company does not provide any contribution to their pension arrangements 
 
what remuneration was paid in 2013 single pay figure – subject to audit 
 
the fee paid in cash to each nonexecutive director during the year ended 31 december 2013 is set out 
in the following table 
 
director position fy2013  
£’000 
fy2012  
£’000 
    
mr h j mark tompkins 
see note 1 below 
independent non
executive chairman 
2245 1389 
he saeed bin butti nonexecutive 
director 
500 375 
lord clanwilliam 
see note 1 below 
independent non
executive director 
1045 409 
mrs heather lawrence 
see note 1 below 
 
independent non
executive director 
1045 392 
mr jonathan bomford senior independent 
nonexecutive 
director 
254 00 
mr justin jewitt  
see note 2 below 
previously senior 
independent non
executive director 
300 490 
 
notes 
1 each of the independent nonexecutive directors  is contracted for 16 days per annum with the exception of the chairman 
who is contracted for 24 days per annum each of the nonexecutive directors has spent more time than originally 
anticipated within the letters of appointment by which they were appointed this  is because of time spent supporting the 
business in enhancing the governance processes and improving the group’s internal control environment which the 
board including the nonexecutive directors retain oversight over as recognition for this the executive directors agreed 
additional payments for each of the 2012 and 2013 financial years both of which have been made in the 2013 financial 
year an additional payment of £30000 was made to mr tompkins lord clanwilliam and mrs lawrence in relation to the 
2012 financial year and £24465 in relation to the 2013 financial year whilst these amounts are in relation to additional 
time spent over two financial years they were both paid in the 2013 financial year and are therefore consolidated with the 
normal fees payable for 2013 in the table above  
  96 
 
2 in addition to the fees paid to mr justin jewitt shown in the table above an amount of £66500 was paid to mr justin jewitt 
after he ceased to be a director of the company on 27 june 2013 the letter of appointment for each of the nonexecutive 
directors includes a provision for 3 months’ notice being required on the termination of the appointment the additional 
payment made to mr jewitt was in recognition of time additional to his contractual requirement defined in his letter of 
appointment as 16 days per annum being provided by mr jewitt in the busy first year for the nonexecutive directors after 
the company’s listing on the london stock exchange  
 
the remuneration committee 
 
membership 
 
the remuneration committee consists of four independent nonexecutive directors with an independent 
nonexecutive director holding the chairmanship of the committee during the 2013 financial year the 
following have served as members of the committee 
 
chairman lord clanwilliam  
committee members jonathan bomford from 27 june 2013 
 justin jewitt until 27 june 2013 
 heather lawrence  
 h j mark tompkins  
 
whilst they do not attend remuneration committee meetings the chairman of the committee discussed 
proposed remuneration policies with the chief executive officer and the executive vice chairman during 
their formulation it is worth noting that the shareholdings of the chief executive officer and the executive 
vice chairman are large enough to form a majority veto on any remuneration proposals so their input and 
encouragement has been vital in the remuneration process   
 
the group company secretary acts as secretary to the remuneration committee and provides advice to 
the committee on corporate governance aspects relating to remuneration matters he also provides 
assistance to the chairman of the committee as required in discussions with the remuneration 
committee advisers and on implementation of committee decisions the group company secretary is 
not present when his own remuneration is discussed 
 
role and responsibility 
 
the remuneration committee assists the board in 
 
 making recommendations to the board on the company’s framework of executive remuneration 
including the use of incentive arrangements within that framework  
 
and 
 
 determining on the boards behalf the entire individual remuneration packages for each executive 
director the chairman and the senior management team 
 
all other recommendations must be referred to the board for approval in setting remuneration for senior 
management the committee has considered market practice in the uae and are aware of remuneration 
structures existing for employees who are below senior management level the committee understands 
the need to incentivise executives appropriately whilst ensuring that higher rewards are only achieved for 
exceptional performance 
 
no committee member is permitted to participate in any discussion or decision regarding hisher own 
remuneration neither of the executive directors attend meetings of the committee the remuneration of 
nonexecutive directors is a matter for consideration by the chairman of the company assisted by the 
remuneration committee chairman and the executive directors  
 
the remuneration committee terms of reference clearly set out its authority and duties and were 
approved by the board prior to ipo the terms of reference are available on the investor relations section 
of the group’s website at wwwnmcae or by contacting the group company secretary   
 
support and external advice 
 
the remuneration committee seeks and considers advice from deloitte llp independent remuneration 
advisers deloitte provides no other advisory role to the group deloitte acted as advisors to the company  97 
 
in advance of the company’s ipo in april 2012 but were formally appointed by the committee as 
advisors to the committee later in 2012 specifically to provide the committee with objective and 
independent advice on executive remuneration matters deloitte is a member of the remuneration 
consultants’ group and as such voluntarily operates under the code of conduct in relation to executive 
remuneration consulting in the uk the committee is satisfied that the advice they have received from 
deloitte during the year has been objective and independent  
 
the chairman has direct access to deloitte as and when required the group company secretary liaises 
with deloitte as required to ensure that all committee requests and decisions are dealt with and 
implemented but does so under the guidance of the remuneration committee chairman deloitte attend 
meetings of the committee as required 
 
during the year deloitte provided the following services and advice to the committee 
 
 market practice in relation to remuneration practices prevalent within similar sized listed and 
private groups 
 a review of the previous remuneration policies existing in relation to the executive directors and 
senior management 
 a base salary benchmarking exercise against companies of a similar size and complexity taking 
account of the tax regime prevalent in the uk and uae and 
 provided advice as to the structure of the new short term bonus plan and long term incentive plan 
and the targets relating thereto 
 
deloitte received fees of £38k charged on a time plus expenses basis for advice received during the 
year 
 
meetings 
 
the remuneration committee met formally three times during the period under review in addition to a 
number of discussions held informally during the year whilst the structure and implementation of the new 
incentive arrangements were being discussed  
 
the primary matter for discussion was the implementation of a new stip which would be put in place for 
executive directors and senior management discussion at the initial meetings during the year focused on 
the structure of the new incentive plans with advice from deloitte as to market practice and expectations  
 
the remuneration committee also discussed basic salary levels for senior management following the 
benchmarking exercise undertaken by deloitte the remuneration committee decided not to increase the 
basic salary of either of the executive directors but the salaries for the four members of the senior 
management team in place at that time were increased by an average of 14 to bring them into line with 
median salaries payable for similar roles within a comparator group of companies 
 
assessment of risk and key priorities 
 
the committee is aware of the need to be mindful of potential risks associated with elements of executive 
remuneration the committee is keen to ensure that variable remuneration is not structured in such a way 
as to encourage the taking of undue business risks for the purposes of achieving higher remuneration  
 
all the members of the remuneration committee are also members of or normally attend meetings of 
the audit committee and as a result are aware of the key risks and challenges faced by the group 
 
the new remuneration structure has been implemented to ensure an appropriate reward system is in 
place but considers that the new incentive structure mitigates key business risks as follows 
 
 the deferral of 50 of stip awards into shares for a three year period the introduction of an 
ltip in 2014 will also encourage focus on long term share value enhancement 
 the stip includes two financial measures and three operational measures which the committee 
believe are key to the success of the company in a particular financial year 
 market practice malus and clawback provisions allow the company to forfeit the delivery of share 
related benefits to plan participants 
 
external commitments 
 
the chairman holds a nonexecutive role on the board whilst he has other business interests these are 
not considered material enough to interfere or conflict with his duties to the nmc group   98 
 
 
the board acknowledges that each of the executive directors also have interests as directors andor 
shareholders of other businesses outside of the nmc group the board believes that such interests do 
not interfere or conflict with the role which either executive director has with the nmc group 
 
the other directors are required to spend a specific amount of time performing their duties as non
executive directors and none have significant other external commitments which interfere or conflict with 
their duties to the nmc group  
 
 
it is my pleasure to submit this report to shareholders the directors’ remuneration report has been 
approved by the board and is signed on its behalf by  
 
 
 
 
 
lord clanwilliam  
chairman  99 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
nmc health plc 
 
consolidated financial statements 
 
year ended 31 december 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  100 
 
independent auditors’ report to the members of nmc health plc 
 
we have audited the group financial statements of nmc health plc for the year ended 31 december 2013 
which comprise the consolidated statement of comprehensive income the consolidated statement of 
financial position the consolidated statement of changes in equity the consolidated statement of cash 
flows and the related notes 1 to 34 the financial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting standards ifrss as adopted by the 
european union  
 
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 
of the companies act 2006  our audit work has been undertaken so that we might state to the company’s 
members those matters we are required to state to them in an auditor’s report and for no other purpose  
to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit work for this report or for the opinions we 
have formed   
 
 
respective responsibilities of directors and auditor  
 
as explained more fully in the directors’ responsibilities statement set out on pages 54 to 55 the 
directors are responsible for the preparation of the group financial statements and for being satisfied that 
they give a true and fair view our responsibility is to audit and express an opinion on the group financial 
statements in accordance with applicable law and international standards on auditing uk and ireland 
those standards require us to comply with the auditing practices board’s ethical standards for auditors  
 
scope of the audit of the financial statements  
  
an audit involves obtaining evidence about the amounts and disclosures in the financial statements 
sufficient to give reasonable assurance that the financial statements are free from material misstatement 
whether caused by fraud or error this includes an assessment of whether the accounting policies are 
appropriate to the group’s circumstances and have been consistently applied and adequately disclosed 
the reasonableness of significant accounting estimates made by the directors and the overall 
presentation of the financial statements in addition we read all the financial and nonfinancial information 
in the annual report to identify material inconsistencies with the audited financial statements and to 
identify any information that is apparently materially incorrect based on or materially inconsistent with the 
knowledge acquired by us in the course of performing the audit if we become aware of any apparent 
material misstatements or inconsistencies we consider the implications for our report  
 
opinion on financial statements  
 
in our opinion the group financial statements  
 give a true and fair view of the state of the group’s affairs as at 31 december 2013 and of its profit 
for the year then ended  
 have been properly prepared in accordance with ifrss as adopted by the european union and  
 have been prepared in accordance with the requirements of the companies act 2006 and article 
4 of the ias regulation  
 
our assessment of risks of material misstatement  
 
we identified the following risks that have had the greatest effect on the overall audit strategy the 
allocation of resources in the audit and directing the efforts of the engagement team 
 
 the valuation of trade receivables 
 revenue recognition including the timing of revenue recognition and the determination of 
whether the group is acting in the capacity of an agent rather than principal and 
 the capitalisation of costs into capital work in progress 
 
   
our application of materiality  
 
we apply the concept of materiality both in planning and performing our audit and in evaluating 
the effect of misstatements on our audit and on the financial statements for the purposes of 
determining whether the financial statements are free from material misstatement we define 
materiality as the magnitude of an omission or misstatement that individually or in the  101 
 
aggregate in light of the surrounding circumstances could reasonably be expected to influence 
the economic decisions of the users of the financial statements we also determine a level of 
performance materiality which we use to determine the extent of testing needed to reduce to an 
appropriately low level the probability that the aggregate of uncorrected and undetected 
misstatements exceeds materiality for the financial statements as a whole 
when establishing our overall audit strategy we determined a magnitude of uncorrected 
misstatements that we judged would be material for the financial statements as a whole we 
determined materiality for the group to be 360 million 2012 248 million which is 
approximately 5 2012 4 of adjusted profit before tax we used adjusted profit before tax to 
exclude the nonrecurring writeoff of unamortised finance fees resulting from the refinance of 
loan facilities in the year this provided a basis for determining the nature timing and extent of 
risk assessment procedures identifying and assessing the risk of material misstatement and 
determining the nature timing and extent of further audit procedures 
on the basis of our risk assessments together with our assessment of the group’s overall 
control environment our judgement was that overall performance materiality ie our tolerance 
for misstatement in an individual account or balance for the group should be 50 2012 50 
of materiality namely 180 million 2012 124 million our objective in adopting this approach 
was to ensure that total detected and undetected audit differences in all accounts did not exceed 
our materiality level 
we agreed with the audit committee that we would report to the audit committee all audit 
differences in excess of 016 million 2012 012 million we also agreed to report differences 
below that threshold that in our view warranted reporting on qualitative grounds 
 
an overview of the scope of our audit  
 
following our assessment of the risk of material misstatement to the group financial statements 
we selected eight components which account for 95 of the group’s profit before tax and 97 
of the group’s total assets six of these components were subject to a full audit whilst one 
component was subject to a partial audit where the extent of audit work was based on our 
assessment of the risks of material misstatement and one component was subject to analytical 
review procedures they were also selected to provide an appropriate basis for undertaking 
audit work to address the risks of material misstatement identified above 
the audit work at the eight components and the statutory audits were executed at levels of 
materiality applicable to each individual entity which were much lower than group materiality 
given that the group operates solely in the united arab emirates the senior statutory auditor 
visited the united arab emirates three times during the current year audit process the group 
audit team interacts regularly with the component team in the united arab emirates where 
appropriate during the various stages of the audit reviewed key working papers and were 
responsible for the scope and direction of the audit process 
our response to the risks identified above was as follows 
valuation of trade receivables 
we challenged management on the significant estimation and subjectivity involved in the 
appropriateness of provisions for bad debts which included obtaining evidence to support the 
recoverability of the older unprovided debts we obtained direct external confirmations for a 
sample of customer receivable balances and we vouched post year end cash receipts for a 
sample of yearend trade receivable balances  
revenue recognition including the timing of revenue recognition and the determination 
of whether the group is acting in the capacity of an agent rather than principal   102 
 
we relied upon testing relating to controls over revenue recognition including the timing of 
revenue recognition we performed analytical procedures and cutoff testing procedures to 
check that revenue had been recognised in the appropriate accounting period we tested a 
sample of new revenue agreements entered into during the year we checked the group’s 
adherence to their revenue recognition policies including their determination of whether the 
group is acting as an agent rather than as a principal to agree that these policies are in 
accordance with ifrss as adopted by the european union 
capitalisation of costs into capital work in progress 
we vouched the majority of additions to capital work in progress in the year to supporting 
documentation to check that the costs met the criteria for capitalisation into work in progress 
we also held discussions with the project managers on major capital projects  
opinion on other matter prescribed by the companies act 2006  
 
in our opinion the information given in the strategic report and the directors’ report for the financial year 
for which the group financial statements are prepared is consistent with the group financial statements  
 
matters on which we are required to report by exception  
 
we have nothing to report in respect of the following  
 
under the isas uk and ireland we are required to report to you if in our opinion information in the 
annual report is  
 materially inconsistent with the information in the audited financial statements or  
 apparently materially incorrect based on or materially inconsistent with our knowledge of the 
group acquired in the course of performing our audit or  
 is otherwise misleading  
 
in particular we are required to consider whether we have identified any inconsistencies between our 
knowledge acquired during the audit and the directors’ statement that they consider the annual report is 
fair balanced and understandable and whether the annual report appropriately discloses those matters 
that we communicated to the audit committee which we consider should have been disclosed  
 
under the companies act 2006 we are required to report to you if in our opinion  
 certain disclosures of directors’ remuneration specified by law are not made or  
 we have not received all the information and explanations we require for our audit  
 
under the listing rules we are required to review  
 the directors’ statement set out on page 54 in relation to going concern and  
 the part of the corporate governance statement relating to the company’s compliance with the 
nine provisions of the uk corporate governance code specified for our review  
 
other matter  
 
we have reported separately on the parent company financial statements of nmc health plc for the year 
ended 31 december 2013 and on the information in the directors’ remuneration report that is described 
as having been audited  
 
 
 
cameron cartmell senior statutory auditor 
for and on behalf of ernst  young llp statutory auditor 
london 
24 february 2014 
 
notes 
1 the maintenance and integrity of the nmc health plc website is the responsibility of the directors 
the work carried out by the auditors does not involve consideration of these matters and accordingly the 
auditors accept no responsibility for any changes that may have occurred to the financial statements since 
they were initially presented on the web site 
2 legislation in the united kingdom governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions  103 
 
nmc health plc 
  
consolidated statement of comprehensive income 
for the year ended 31 december 2013  
   
  2013 2012 
 notes us ‘000 us ‘000 
    
    
revenue 5 
550878 
 
      490053  
 
direct costs 
 
6 
 
365336 
 
     329800 
 
      
gross profit 
 
 185542 
 
      160253  
 
    
general and administrative expenses 
 
6 
 
119562 
 
      105055 
 
other income 
 
7 
 
26960 
 
       24421  
 
      
profit from operations before depreciation 
and impairment 
 92940 
 
       79619  
 
  
    
depreciation 
 
16 
 
9663 
 
      7038 
  
impairment of property and equipment 
 
16 
210 
 
 
 
finance costs 
 
8 
 
14344 
 
      13738 
 
finance income 
 
9 
 
3814 
 
         4325  
 
flotation costs 
 
13 
 
 
 
           3402  
 
 
unamortised finance fees written off 
 
25 
3394 
 
 
 
      
profit for the year before tax 
 
10 
 
69143 
 
       59766  
 
    
tax 
 
14 
 
 
 
             
 
      
profit for the year 
 
 
69143 
       59766  
 
    
other comprehensive income 
 
                
 
               
 
      
total comprehensive income for the year 
 
 
69143 
       59766  
 
    
total profit and comprehensive income attributable to 
 
   
  equity holders of the parent 
 
 68165 
 
       58891  
 
  noncontrolling interests 
 
 978 
 
            875  
 
 
 
    
total profit and comprehensive income for the year 
 
 69143 
 
       59766  
 
 
 
  
earnings per share for profit attributable to the 
 
 
  
  equity holders of the parent 
 
 
  
 
 
  
basic and diluted us 
 
15 
 
0367 
0343 
 
    
 
these results relate to continuing operations of the group there are no discontinued operations in the 
current and prior year 
 
 
the attached notes 1 to 34 form part of the consolidated financial statements  104 
 
nmc health plc 
  
consolidated statement of financial position 
as at 31 december 2013 
    
1 january 
  2013 2012 2012 
 notes us ‘000 us ‘000 us ‘000 
assets 
 
  restated restated 
noncurrent assets 
 
    
property and equipment 
 
16 
 
273792 201653  
 
94856 
intangible assets 
 
17 
 
1016 
 
1016  
           
  274808 
 
202669 
 
94856 
            
current assets 
 
    
inventories 
 
18 
 
94123 
 
72458 
       54178  
 
54178 
accounts receivable and prepayments 
 
19 
 
168382 
 
181402  
 
153453 
amounts due from related parties 
 
28 9254 
 
1601 
 
 
bank deposits 
 
20 
 
193366 
 
233703  
 
11072 
bank balances and cash 
 
20 
 
75329 
 
 23747  
 
43001 
                    
  540454 
 
512911  
 
261704 
           
total assets 
 
 815262 
 
715580  
 
356560  
      
equity and liabilities 
 
    
equity 
 
    
share capital 
 
21 
 
29566 
 
29566  
 
27226 
share premium 
 
21 
 
179152 
 
179152  
 
 
group restructuring reserve 
 
22 
 
10001 
 
10001  
 
 
retained earnings 
 
23 
 
187519 
 
130952  
 
72061 
           
equity attributable to equity holders of the parent 
 
 386236 
 
329669  
 
99287  
      
noncontrolling interests 
 
 2915 
 
1934  
 
1059  
            
total equity 
 
 389151 
 
331603  
 
100346  
            
noncurrent liabilities 
 
    
term loans 
 
25 
 
161845 
 
118428  
 
35454 
employees end of service benefits 
 
26 
 
10036 
 
8634 
 
7703 
other payable 
 
 408 
 
1225  
 
 
                     
  172289 
 
128287 
 
43157 
           
current liabilities 
 
    
accounts payable and accruals 
 
27 
 
76087 
 
68613  
 
63942 
amounts due to related parties 
 
28 5079 
 
123  
 
1245 
bank overdrafts and other short term borrowings 
 
20 
 
82238 
 
80668  
 
101275 
term loans 
 
25 
 
88355 
 
104540  
 
45434 
employees end of service benefits 
 
26 
 
2063 
 
1746 
 
1161 
           
  253822 
 
255690 
 
213057 
           
total liabilities 
 
 426111 
 
383977  
 
256214 
                           
total equity and liabilities 
 
 815262 
 
715580  
 
356560 
     
the consolidated financial statements were authorised for issue by the board of directors on 24 february 2014 and were signed  
on its behalf by 
 
 
mr h j mark tompkins          mr prasanth manghat 
chairman          chief financial officer 
the attached notes 1 to 34 form part of the consolidated financial statements  105 
 
nmc health plc 
  
consolidated statement of changes in equity 
for the year ended 31 december 2013 
 
 
 
 
attributable to the equity holders of the parent 
        
 
 
 
share    
capital 
us ‘000 
share  
premium 
us ‘000 
group 
restructuring 
reserve 
us ‘000 
retained 
earnings 
us ‘000 
total  
us ‘000 
non 
controlling 
interests  
us ‘000 
total  
us ‘000 
        
balance as at 1 january 2012 
27226 
 
 
 
 
 
72061 
 
99287 
 
1059 
 
100346 
 
total other comprehensive income for the year 
 
 
 
 
 
 
 
58891 
 
58891 
 
875 
 
59766 
 
group restructuring note 22 
 
27226 
 
 
 
10001 
 
 
 
37227 
 
 
 
37227 
 
issue of share capital note 21 
20696 
 
16531 
 
 
 
 
 
37227 
 
 
37227 
issue of share capital – ipo note 21 
8870 
 
177394 
 
 
 
 
 
186264 
 
 
 
186264 
 
share issue costs note 13 
 
 
14773 
 
 
 
 
14773 
 
 
   14773 
 
               
balance as at 31 december 2012 
 
29566 
 
179152 
 
10001 
 
130952 329669 
1934 
 
331603 
 
        
total other comprehensive income for the year 
 
 
 
 
 
 
 
68165 
 
68165 
 
978 
 
69143 
 
dividend note  24 
 
 
 
 
 
 
 
11598 
 
11598 
 
 
 
11598 
 
contribution by noncontrolling interest 
 
 
 
 
 
 
 
 
 
 
3 
 
3 
 
               
balance as at 31 december 2013 
 
29566 
 
179152 
 
10001 
 
187519 
 
386236 
 
2915 
 
389151 
 
 
       
 
       
 
 
the attached notes 1 to 34 form part of the consolidated financial statements 
 
  106 
 
nmc health plc 
  
consolidated statement of cash flows 
for the year ended 31 december 2013 
  2013 2012 
 notes us ‘000 us ‘000 
   restated 
operating activities 
 
   
profit for the year before  tax 
 
 69143 
 
       59766  
 adjustments for 
 
   
  depreciation 
 
16 
 
9663 
 
       7038  
 
  impairment of property and equipment 
 
16 210 
 
 
 
  employees’ end of service benefits 26 
 
2362 
 
         2142  
 
  finance income 
 
9 
 
3814 
 
        4325 
   finance costs 
 
8 
 
14344 
 
       13738  
   flotation costs 
 
13 
 
 
 
3402  
 
  loss on disposal of property and equipment 
 
 383 
 
             310 
   unamortised finance fees written off 
 
25 3394 
 
 
 
        
  95685 
 
       82071  
 working capital changes 
 
   
  inventories 
 
 21665 
 
        18186 
   accounts receivable and prepayments 
 
 11582 
 
      25221 
 
  amounts due from related parties 
 
 7653 
 
       1601  
   accounts payable and accruals 
 
 2809 
 
      3354 
 
  amounts due to related parties 
 
 4956 
 
        1122 
         
net cash from operations 
 
 85714 
 
       39295  
 
employees’ end of service benefits paid 
 
26 
 
643 
 
           626 
 flotation costs paid 
 
13  3402 
        
net cash from operating activities 
 
 85071 
 
       35267  
                     
investing activities 
 
   
purchase of property and equipment 
 
 78616 
 
      105277 
 
proceeds from disposal of property and equipment 
 
 257 
 
            255  
 acquisition of br medical suites fz llc 
 
  
 
8822 
  
 
bank deposits maturing in over 3 months 
 
 12251 
 
136129  
 restricted cash 
 
 22732 
 
10327  
 finance income received 
 
 5255 
 
            2253 
        
net cash used in investing activities 
 
 108087 
 
       258047  
 
        
financing activities 
 
   
proceeds from share issue  ipo 
 
21 
 
 
 
186264 
 flotation costs paid 
 
13 
 
 
 
14128  
 new term loans and drawdowns 
 
 524465 
 
      314510  
 
repayment of term loans 
 
 500627 
 
     172430 
 receipts of short term borrowings 
 
 275347 
 
      255485  
 
repayment of short term borrowings 
 
 252768 
 
     275508 
 finance costs paid 
 
 14532       13908 
 dividend paid to shareholders 
 
24 11598 
 
 
 
        
net cash from  financing activities 
 
 20287 
 
     280285 
 
        
decrease  increase in cash and cash     
equivalents  2729 
 
       57505  
 
    
cash and cash equivalents at 1 january 
 
 81930 
 
      24425 
 
        
cash and cash equivalents at 31 december 
 
20 
 
79201 
 
       81930  
 
    
    
the attached notes 1 to 34 form part of the consolidated financial statements   
107 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
1 corporate information 
 
nmc health plc the “company” or “parent’’ is a company which was incorporated in england and wales 
on 20 july 2011 the company is a public limited company operating solely in the united arab emirates 
“uae”  the address of the registered office of the company is suite 23 hanover square london w1s 
1jb  the registered number of the company is 7712220 there is no ultimate controlling party 
 
the company completed its premium listing on the london stock exchange on 5 april 2012 
 
the parent and its subsidiaries collectively the “group” are engaged in providing professional medical 
services wholesale of pharmaceutical goods medical equipment cosmetics food and it products and 
services in the united arab emirates 
 
the consolidated financial statements of the group for the year ended 31 december 2013 were 
authorised for issue by the board of directors on 24 february 2014 and the consolidated statement of 
financial position was signed on the board’s behalf by dr b r shetty and mr khalifa bin butti 
 
 
21 basis of preparation 
 
the consolidated financial statements have been prepared in accordance with international financial 
reporting standards as adopted by the european union as they apply to the financial statements of the group 
for the year ended 31 december 2013 and applied in accordance with the companies act 2006  
 
the consolidated financial statements are prepared under the historical cost convention except for 
derivative financial instruments that have been measured at fair value  the principal accounting policies 
adopted in the preparation of these consolidated financial statements are set out below these policies 
have been consistently applied to all periods presented 
 
functional and reporting currency 
the functional currency of the company and its subsidiaries is uae dirham the reporting currency of the 
group is united states of america dollar us as this is a more globally recognised currency the uae 
dirham is pegged against the us dollar at a rate of 3673 per us dollar 
 
all values are rounded to the nearest thousand dollars 000 except when otherwise indicated 
 
going concern 
the group’s business activities together with the factors likely to affect its future development 
performance and position are set out in the strategic review on pages 8 to 43 the financial position of 
the group its cash flows liquidity position and borrowing facilities are described in the financial review 
on pages 27 to 30 
 
the directors have undertaken an assessment of the future prospects of the group and the wider risks 
that the group is exposed to in its assessment of whether the group should adopt the going concern 
basis in preparing its financial statements the directors have considered the adequacy of financial 
resources in order to manage its business risks successfully together with other areas of potential risk 
such as regulatory insurance and legal risks 
 
 
 
 
 
 
 
   
108 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
  
 
21 basis of preparation continued 
 
the group has banking arrangements through a spread of local and international banking groups and 
utilizes short and medium term working capital facilities to optimise business funding debt covenants are 
reviewed by the board each month the board believes that the level of cash in the group the spread of 
bankers and debt facilities mitigates the financing risks that the group faces from both its capital 
expenditure program and in relation to working capital requirements 
 
both the healthcare and distribution divisions have continued their positive growth trends and all major 
financial and nonfinancial kpis showed good improvement during 2013 the directors have reviewed the 
business plan for 2014 and the five year cash flow together with growth forecasts for the healthcare 
sector in uae the directors consider the group’s future forecasts to be reasonable  
  
the directors have not identified any other matters that may impact the viability of the group in the 
medium term and therefore they continue to adopt the going concern basis in preparing the consolidated 
financial statements 
 
comparative information 
 
reclassifications 
 
the group has made following reclassifications in respect of the comparatives to conform to the current 
period presentation these reclassifications are made to correct the presentation of the consolidated 
financial statements 
 
 amounts of us 1746000 as of 31 december 2012 and us 1161000 as of 31 december 
2011 in respect of employees’ end of service benefits have been reclassified from noncurrent 
liabilities to current liabilities note 26   
 an amount of u 3402000 in respect of flotation costs has been reclassified from financing 
activities to operating activities in the consolidated statement of cash flows 
 
these reclassifications have no impact on previously reported equity or profit of the group 
 
22 basis of consolidation 
 
subsidiaries are fully consolidated from the date of acquisition being the date on which the group obtains 
control and continue to be consolidated until the date when such control ceases the financial statements 
of the subsidiaries are prepared for the same reporting period as the parent using consistent accounting 
policies all intragroup balances transactions unrealised gains and losses resulting from intragroup 
transactions and dividends are eliminated in full  
 
total comprehensive income within a subsidiary is attributed to the noncontrolling interest even if that 
results in a deficit balance noncontrolling interests represent the portion of profit or loss and net assets 
not held by the group and are presented separately in the statement of comprehensive income and within 
equity in the consolidated statement of financial position separately from shareholders’ equity 
 
a change in the ownership interest of a subsidiary without a loss of control is accounted for as an equity 
transaction  
 
when the group loses control of a subsidiary a gain or loss is recognized in profit or loss and is 
calculated as the difference between i the aggregate of the fair value of consideration received and the 
fair value of any retained interest and ii the previous carrying amount of the assets including goodwill 
and liabilities of the subsidiary and any noncontrolling interests 
 
 
 
 
   
109 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
22 basis of consolidation continued 
 
the consolidated financial statements include the financial statements of the company and its principal 
subsidiaries listed below 
 
 percentage of  holdings 
 31 december 31 december 
 2013 2012 
direct subsidiaries 
 
  
  nmc holding co llc 
 
100 
 
100 
   nmc health holdco limited 
 
100 
 
100 
    
indirect subsidiaries 
 
  
  nmc healthcare llc 
 
100 
 
100 
   new pharmacy company limited 
 
99 
 
99 
   new medical centre hospital llcdubai 
 
99 
 
99 
   nmc specialty hospital llcabu dhabi 
 
99 
 
99 
   nmc specialty hospital llc dubai 
 
99 99 
  new medical centre trading llc 
 
99 
 
99 
   bait al shifaa pharmacy llcdubai 
 
99 
 
99 
   new medical centre llcsharjah 
 
99 
 
99 
   new medical centre specialty hospital llcal ain 
 
99 
 
99 
   reliance information technology llc 
 
99 
 
99 
   br medical suites fz llc 
 
100 100 
  brightpoint hospital llc 
 
99 99 
  nmc day surgery centre llc 
 
99 99 
  nmc dubai investment park llc 
 
99 99 
 
all the above subsidiaries are incorporated in the uae except for nmc health holdco limited which is 
incorporated in england and wales 
 
 
23 significant accounting judgements and estimates  
 
the key assumptions concerning the future key sources of estimation uncertainty and critical judgements 
at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts 
of assets and liabilities within the next financial year are discussed below 
 
significant estimates 
 
impairment of inventories 
inventories are held at the lower of cost and net realisable value when inventories become old or 
obsolete an estimate is made of their net realisable value for individually significant amounts this 
estimation is performed on an individual basis amounts which are not individually significant but which 
are old or obsolete are assessed collectively and a provision applied according to the inventory type and 
the group’s policy for inventory provisioning the gross carrying amount of inventories at 31 december 
2013 was us 94839000 2012 us 72574000 and the provision for old and obsolete items at 
31 december 2013 was us 716000 2012 us 116000  
 
impairment of accounts receivable  
an estimate of the collectible amount of trade accounts receivable is made when collection of the full 
amount is no longer probable  for individually significant amounts this estimation is performed on an 
individual basis  amounts which are not individually significant but which are past due are assessed 
collectively and a provision applied according to the length of time past due based on historical recovery 
rates 
 
 
   
110 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
23 significant accounting judgements and estimates continued 
 
a majority of the receivables that are past due but not impaired are from insurance companies and 
governmentlinked entities in the united arab emirates which are inherently slow payers due to their long 
invoice verification and approval of payment procedures payments continue to be received from these 
customers and accordingly the risk of nonrecoverability is considered to be low 
 
gross trade accounts receivable at 31 december 2013 were us 154234000 2012 us 164907000 
and the provision for doubtful debts at 31 december 2013 was us 8241000 2012 us 6444000  
any difference between the amounts actually collected in future periods and the amounts expected will be 
recognised in the consolidated statement of comprehensive income 
 
significant judgements 
 
functional currency 
the uae dirham is determined to be the functional currency of the company 
 
judgement has been used to determine the functional currency of the company that most appropriately 
represents the economic effects of the company’s transactions events and conditions  
 
the primary economic environment influencing the company’s income dividends is the uae and the 
effect of the local environment is limited to expenses incurred within the uk the ability of the company to 
meet its obligations and pay dividends to its shareholders is dependent on the economy of and the 
operation of its subsidiaries in the uae  
 
refinancing of jp morgan loan 
judgement has been used to determine that the terms and conditions of the new jp morgan syndicated 
loan are substantially different from the previous loan and accordingly the previous jp morgan syndicated 
loan has been derecognised note 25 management used the following basis for determining that the 
terms and conditions are substantially different 
 
 the principal amount of the loan changed from us 150 million to us 225 million 
 the interest risk profile on the loan changed as the interest rate decreased from 35 plus margin 
to 3 plus margin 
 the securities and guarantees of the loan changed as the personal guarantees of shareholders 
have been removed in the new loan 
 the loan covenants changed and 
 the repayment terms changed as the new loan had an initial repayment grace period of six 
months 
assets held in the name of the previous shareholder 
in accordance with local laws except in some specific locations in the uae the registered title of land and 
buildings must be held in the name of a uae national as a result land and buildings of the group are 
legally registered in the name of shareholders or previous shareholders of the group as at 31 december 
2013 certain land and buildings with a carrying amount of us 9648000 2012 us 9974000 are held 
in the name of a previous shareholder for the beneficial interest of the group as the beneficial interest of 
such land and buildings resides with the group these assets are recorded within land and buildings in the 
group consolidated financial statements the directors take into account this local legal registration 
requirement the groups entitlement to the beneficial interest arising from these assets as well as other 
general business factors when considering whether such assets are impaired  
 
leases for buildings and land  
generally our hospitals day patient medical centres and hospital projects under development are located 
on land and in buildings which are leased as at 31 december 2013 the majority of the lease periods 
range from five to twenty years apart from the leases for new medical centre hospital llcdubai ‘dubai 
general hospital the land on which the khalifa city specialty hospital is being constructed and the 
warehouse facilities which had leases which are renewable on an annual basis with a total value of us    
111 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
23 significant accounting judgements and estimates continued 
 
leases for buildings and land continued 
50244600 included within property plant and equipment as at 31 december 2103 of this us 
49696000 pertains to khalifa city specialty hospital if any such leases are terminated or expire and are 
not renewed the group could lose the investment including the hospital buildings and the warehouses on 
the leased sites which could have a material adverse effect on our business financial condition and 
results of operations the directors have considered the following facts in determining the likelihood that 
these leases will be renewed 
 whilst some leases can be for long term durations it is not unusual and can often be common 
practice throughout all of the emirates in the united arab emirates for landlords to lease land 
and buildings to companies on annually renewable leases of one year terms and for these 
leases to be renewed automatically throughout the group’s 40 year history it has never had 
a lease cancelled or not renewed and the group enjoys a high degree of respect in the 
region and believes that it maintains strong relationships with the landlords  
 both the dubai general hospital and the warehouse facilities have been occupied by the 
group on annually renewable leases for a period of more than 13 years and each year these 
leases have been automatically renewed 
 the warehouse facilities have been built by the company on land leased from government 
bodies in the emirates of dubai and abu dhabi on the back of the policies of these 
governments to attract investment in warehousing in the united arab emirates 
 at 31 december 2013 the land on which the khalifa city specialty hospital is being 
constructed is being leased to nmc from the municipality of abu dhabi and was on a one 
year annually renewable basis subsequent to year end the lease has been renewed and 
extended so that it is now a 27 year lease expiring in the year 2040 the total carrying 
amounts included within property plant and equipment in respect of khalifa city specialty 
hospital as at 31 december 2013 is us 49696000  
24 changes in accounting policies 
 
changes in accounting policies 
the accounting policies adopted are consistent with those of the previous financial year except for 
employees’ end of service benefits as discussed below 
 
employees’ end of service benefits 
the group has reassessed its accounting policy with respect to employees’ end of service benefits in 
previous years the group was treating these as other long term benefits and has now assessed these to 
be treated as postemployment benefits this change in accounting treatment did not materially impact 
the previously reported profit or equity of the group as the actuarial gainloss as a result of the actuarial 
valuation is not material to the group 
 
new and amended standards and interpretations 
the group applies ifrs as adopted in the european union the european union endorsement states 
that ifrs 10 ifrs 11 and ifrs 12 must be applied at the latest with an effective date of 1 january 
2014 although earlier adoption is permitted accordingly the group has early adopted ifrs 10 ifrs 11 
and ifrs 12 with effect from 1 january 2013  
the amendments to ifrs which are effective as of 1 january 2013 and are described in more detail 
below have no impact on the group  
 
 
   
112 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
24 changes in accounting policies continued 
 
the following amendments to ifrs are effective as of 1 january 2013   
 
ifrs 10 consolidated financial statements and ias 27 separate financial statements 
ifrs 10 establishes a single control model that applies to all entities including special purpose entities 
ifrs 10 replaces the parts of previously existing ias 27 consolidated and separate financial statements 
that dealt with consolidated financial statements and sic12 consolidation – special purpose entities 
ifrs 10 changes the definition of control such that an investor controls an investee when it is exposed or 
has rights to variable returns from its involvement with the investee and has the ability to affect those 
returns through its power over the investee ifrs 10 had no impact on the consolidation of investments 
held by the group  
 
ifrs 11 joint arrangements and ias 28 investment in associates and joint ventures 
ifrs 11 replaces ias 31 interests in joint ventures and sic13 jointlycontrolled entities — non
monetary contributions by ventures ifrs 11 removes the option to account for jointly controlled entities 
jces using proportionate consolidation instead jces that meet the definition of a joint venture under 
ifrs 11 must be accounted for using the equity method  
 
ifrs 11 had no impact on the financial position or performance of the group as it does not have any 
jces 
 
ifrs 12 disclosure of interests in other entities 
ifrs 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries joint 
arrangements associates and structured entities the requirements in ifrs 12 are more comprehensive 
than the previously existing disclosure requirements for subsidiaries for example when a subsidiary is 
controlled with less than the majority of voting rights none of these disclosure requirements are 
applicable for consolidated financial statements accordingly the group has not made such disclosures    
 
ifrs 13 fair value measurement 
ifrs 13 establishes a single source of guidance under ifrs for all fair value measurements ifrs 13 
does not change when an entity is required to use fair value but rather provides guidance on how to 
measure fair value under ifrs when fair value is required or permitted the application of ifrs 13 has 
not materially impacted the fair value measurements carried out by the group 
 
ias 1 financial statements presentation  presentation of items of other comprehensive income 
amendments to ias 1 
the amendments to ias 1 introduce a grouping of items presented in other comprehensive income 
items that will be reclassified ‘recycled’ to profit or loss at a future point in time eg net loss or gain on 
available for sale financial assets have to be presented separately from items that will not be reclassified 
eg revaluation of land and buildings the amendments affect presentation only and have no impact on 
the group’s financial position or performance 
 
ias 1 clarification of the requirement for comparative information amendment 
the amendments specify that a third statement of financial position is required when a an entity applies 
an accounting policy retrospectively or makes a retrospective restatement or reclassification of items in 
its financial statements and b the retrospective application restatement or reclassification has a material 
effect on the information in the third statement of financial position the amendments specify that related 
notes are not required to accompany the third statement of financial position the amendments affect 
presentation only and have no impact on the group’s financial position or performance 
 
ias 19 employee benefits revised 2011  
ias 19 revised 2011 changes the accounting for defined benefit plans and termination benefits the 
most significant change relates to the accounting for changes in defined benefits obligation and plan 
assets the amendments require the recognition of changes in defined benefit obligation and in the fair 
value of the plan assets when they occur and hence eliminate the ‘corridor approach’ permitted under the  
previous version of ias 19 and accelerate the recognition of past service costs all actuarial gain and 
losses are recognized immediately through other comprehensive income in order for the net provision 
asset or liability recognized in the consolidated statement of financial position to reflect the full value of the    
113 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
24 changes in accounting policies continued 
 
plan deficit or surplus furthermore the interest cost and the expected return on plan assets used in the 
previous version of ias 19 are replaced with a ‘net interest’ amount under ias19 as revised in 
2011which is calculated by applying the discount rate to the net defined benefit liability or asset these 
changes have no material impact on the amounts recognised in the prior years  
 
25 summary of significant accounting policies  
 
revenue recognition 
revenue is recognised to the extent that it is probable that the economic benefits will flow to the group 
and the revenue can be reliably measured regardless of when the payment is being made revenue is 
measured at the fair value of the consideration received or receivable less discounts and rebates and 
talking into account contractually defined terms of payment and excluding taxes or duties 
 
revenue streams include clinic service revenues sale of goods  pharmacy sale of goods –distribution 
healthcare management fees and revenue from br medical suites  
the group assesses its revenue arrangements against specific criteria in order to determine if it is acting 
as principal or agent the group determines it is acting as principal when it has exposure to the significant 
risks and rewards associated with the transaction and measures revenue as the gross amount received or 
receivable when the group does not retain the significant risks and rewards it deems that it is acting as 
an agent and measures revenue as the amount received or receivable in return for its performance under 
the contract and excludes any amounts collected on behalf of a third party  
clinic service revenues  
clinic service revenues represent the revenue which nmc generates from the provision of either inpatient 
or outpatient medical services the group primarily receives clinic service revenues from patients’ private  
medical insurance schemes clinic revenues are recognised when and to the extent that performance of 
a medical service occurs and is measured at the fair value of the consideration received or receivable  
nmc has determined that it is acting as principal in these arrangements as it has the responsibility for 
providing the medical services to the patient it sets the prices for the clinic services which are provided it 
bears the credit risk and it bears the risk of providing the medical service  
sale of goods  pharmacy 
the sales of goods from pharmacy relates to the sale of pharmaceutical and other products from hospitals 
and pharmacies whilst the group does not establish the prices for the pharmaceutical products sold as 
both the purchase and selling prices for all pharmaceutical products are fixed by the ministry of health 
nmc has determined that it is acting as principal in respect of these sales as it provides the goods for 
sale it bears the inventory risk and it bears the credit risk from customers revenue from the sale of 
goods – pharmacy is therefore recognised when the significant risks and rewards of ownership of the 
goods have passed to the buyer significant risk for retail goods is passed to the buyer at the point of sale 
 
sale of goods  distribution 
where the group bears the inventory risk and the customer credit risk and has the ability to set the prices 
for the products sold then the group has determined that it is acting as principal  revenue from the sale 
of goods is therefore recognised when the significant risks and rewards of ownership of the goods have 
passed to the buyer significant risk for retail goods is passed to the buyer for wholesale goods at the time 
of delivery 
 
for agency relationships the revenue earned is measured as the group’s share of the revenue as 
specified in the contract any amounts collected on behalf of the third party are excluded from revenue 
and are recorded as a payable there are currently no material agency relationships 
 
 
 
 
   
114 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
25 summary of significant accounting policies continued 
 
healthcare management fees 
management fees represent fees earned for managing a hospital management fees are recognised when 
the services under the contract are performed and the service level criteria have been met and are 
measured at the fair value of the consideration received or receivable in line with the terms of the 
management contract 
 
revenue from br medical suites 
br medical suites enters into contracts with doctors whereby these doctors are employed to perform 
certain procedures or run outpatient services using the facilities at br medical suites in return the 
doctors obtain a share of the revenues that are generated from these facilities each contractual 
arrangement with individual doctors is assessed against specific criteria to determine whether the group 
is acting as principal or agent in the arrangement with these doctors 
 
other income 
other income comprises revenue from suppliers for the reimbursement of advertising and promotion costs 
incurred by the group  revenue is recognised following formal acceptance of the groups reimbursement 
claims by suppliers and is measured at the confirmed amount receivable 
 
interest income 
for all financial instruments measured at amortised cost interest income or expense is recorded using the 
effective interest rate eir which is the rate that exactly discounts the estimated future cash payments or 
receipts through the expected life of the financial instrument or a shorter period where appropriate to the 
net carrying amount of the financial asset or liability interest income is included in finance income in the 
consolidated statement of comprehensive income 
 
rebate from suppliers    
the distribution business receives rebates in the ordinary course of business from a number of its 
suppliers of pharmaceutical products in accordance with contractual arrangements in place with specific 
suppliers rebates are accounted for once approval has been received from the supplier following the 
negotiations which have taken place with them  rebates receivable are accounted for as a deduction 
from the cost of purchasing pharmaceutical goods once the rebate has been approved by the supplier on 
the basis under ias 18 that the probability of inflow is not sufficiently certain and the amounts cannot be 
reliably measured until that point when rebates have been agreed in advance for example when it has 
been agreed that a certain rebate will be applied to the purchase of specific goods for a set period of time 
rather than just to a specific one off purchase then the rebate is recognised as a reduction in the 
purchase price as soon as the goods are purchased when rebates are offered based upon the volume 
purchased and it is probable that the rebate will be earned and the amount can be estimated reliably then 
the discount is recognised as a reduction in the purchase price when the goods are purchased and the 
assessment is reviewed on an ongoing basis rebates receivable are accounted for on a net basis being 
set off against the trade payables to which they relate as they are a reduction in the amount we owe to 
our suppliers in respect of pharmaceutical products purchased 
 
business combinations and goodwill 
the group applies the acquisition method to account for business combinations the consideration 
transferred for the acquisition of a subsidiary is the fair values of the assets transferred the liabilities 
incurred to the former owners of the acquiree and the equity interests issued by the group the 
consideration transferred includes the fair value of any asset or liability resulting from a contingent 
consideration arrangement identifiable assets acquired and liabilities and contingent liabilities assumed in 
a business combination are measured initially at their fair values at the acquisition date the group 
recognises any noncontrolling interest in the acquiree on an acquisitionbyacquisition basis either at fair 
value or at the noncontrolling interest’s proportionate share of the recognised amounts of acquiree’s 
identifiable net assets acquisitionrelated costs are expensed as incurred 
 
if the business combination is achieved in stages the acquisition date fair value of the acquirer’s 
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through 
profit or loss 
   
115 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
25 summary of significant accounting policies continued 
 
any contingent consideration to be transferred by the group is recognised at fair value at the acquisition 
date subsequent changes to the fair value of the contingent consideration that is deemed to be an asset 
or liability is recognised in accordance with ias 39 either in profit or loss or as a change to other 
comprehensive income contingent consideration that is classified as equity is not remeasured and its 
subsequent settlement is accounted for within equity 
 
goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred 
and the amount recognised for noncontrolling interest over the net identifiable assets acquired and 
liabilities assumed if the fair value of the net assets acquired is in excess of the aggregate consideration 
transferred the gain is recognised in profit or loss  
 
after initial recognition goodwill is measured at cost less any accumulated impairment losses for the 
purpose of impairment testing goodwill acquired in a business combination is from the acquisition date 
allocated to each of the group’s cashgenerating units that are expected to benefit from the combination 
irrespective of whether other assets or liabilities of the acquire are assigned to those units  
 
where goodwill has been allocated to a cashgenerating unit and part of the operation within that unit is 
disposed of the goodwill associated with the disposed operation is included in the carrying amount of the 
operation when determining the gain or loss on disposal goodwill disposed in these circumstances is 
measured based on the relative values of the disposed operation and the portion of the cashgenerating 
unit retained  
 
business combinations involving entities under common control 
business combinations involving entities under common control do not fall under the scope of ifrs 3 
revised ‘business combinations’ the transfer of companies under common control is therefore 
accounted for using the pooling of interests method under this method there is no requirement to fair 
value the assets and liabilities of the transferred entities and hence no goodwill is created upon transfer of 
ownership as the balances remain at book value the consolidated income statement consolidated 
balance sheet and the consolidated statement of cash flows comparative figures are also presented as if 
the company had been the parent undertaking of the group throughout the current and previous year 
the consolidated financial statements are therefore presented as though the group had always existed in 
its current form 
 
restructuring reserve 
the group restructuring reserve arises on consolidation under the pooling of interests method used for the 
group restructuring which took place on 1 april 2012 this represents the difference between the share 
capital of nmc healthcare llc the previous parent company of the group and the carrying amount of 
the investment in that company at the date of the restructure this reserve is nondistributable 
 
property and equipment 
property and equipment are stated at cost less accumulated depreciation and any impairment in value 
 
depreciation is calculated on all property and equipment other than land and capital work in progress at 
the following rates calculated to write off the cost of each asset on a straight line basis over its expected 
useful life 
 
 hospital building 6 
 buildings 6 
 leasehold improvements 20 
 motor vehicles 20 
 furniture fixtures and fittings 125  20 
 medical equipment 10  25 
 
 
 
 
   
116 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
25 summary of significant accounting policies continued 
 
the carrying amounts of property and equipment are reviewed for impairment when events or changes in 
circumstances indicate the carrying value may not be recoverable if any such indication exists and where 
the carrying values exceed the estimated recoverable amount the assets are written down to their 
recoverable amount being the higher of their fair value less cost to sell and their value in use 
 
capital work in progress is stated at cost and is not depreciated lease costs in respect of capital work in 
progress are capitalised within capital work in progress during the period up until it is commissioned 
when commissioned capital work in progress is transferred to the appropriate property and equipment 
asset category and depreciated in accordance with the group’s policies the carrying amounts of capital  
work in progress are reviewed for impairment when events or changes in circumstances indicate the 
carrying value may not be recoverable if any such indication exists and where the carrying values exceed 
the estimated recoverable amount the assets are written down to their recoverable amount 
 
expenditure incurred to replace a component of an item of property and equipment that is accounted for 
separately is capitalised and the carrying amount of the component that is replaced is written off  other 
subsequent expenditure is capitalised only when it increases future economic benefits of the related item of 
property and equipment all other expenditure is recognised in the consolidated statement of 
comprehensive income as the expense is incurred 
 
borrowing costs 
borrowing costs that are directly attributable to the acquisition or construction of an asset are capitalised 
as part of the cost of the asset until the asset is commissioned for use borrowing costs in respect of 
completed assets or not attributable to assets are expensed in the period in which they are incurred 
 
preoperating expenses 
preoperating expenses are the expenses incurred prior to start of operations of a new business unit 
these are recognised in the consolidated statement of comprehensive income in the year in which they 
occur 
 
inventories 
inventories are valued at the lower of cost and net realisable value after making due allowance for any 
obsolete or slow moving items  costs are those expenses incurred in bringing each product to its present 
location and condition and are determined on a weighted average basis  net realisable value is based on 
estimated selling price less any further costs expected to be incurred to disposal 
 
accounts receivable 
accounts receivable are stated at original invoice amount less a provision for any uncollectible amounts  
an estimate of doubtful debts is made when collection of the full amount is no longer probable  bad debts 
are written off when there is no possibility of recovery 
 
cash and cash equivalents 
for the purpose of the consolidated statement of cash flows cash and cash equivalents consist of cash in 
hand bank balances and short term deposits with an original maturity of three months or less net of 
outstanding bank overdrafts 
 
equity 
the group has issued ordinary shares that are classified as equity the difference between the issue 
price and the par value of ordinary share capital is allocated to share premium the transaction costs 
incurred for the share issue are accounted for as a deduction from share premium net of any related 
income tax benefit to the extent they are incremental costs directly attributable to the share issue that 
would otherwise have been avoided 
 
 
 
 
 
   
117 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
25 summary of significant accounting policies continued 
 
listing transaction costs 
transaction costs of the ipo are accounted for as a deduction from equity net of any related income tax 
benefit transaction costs arising on the issue of equity instruments however do not include indirect 
costs such as the costs of management time and administrative overheads or allocations of internal 
costs that would have been incurred had the shares not been issued marketing costs for the ipo do not 
meet the definition of directly attributable expenses and are therefore expensed through the statement of 
comprehensive income together with the indirect costs related to the ipo  
 
accounts payable and accruals 
liabilities are recognised for amounts to be paid in the future for goods and services received whether 
billed by the supplier or not accounts payable are classified as current liabilities if payment is due within 
one year or less or in the normal operating cycle of the business if longer if not they are presented as 
noncurrent liabilities accounts payable are recognised initially at fair value and subsequently measured 
at amortised cost using the effective interest method 
 
provisions 
provisions are recognised when the group has an obligation legal or constructive arising from a past 
event and the costs to settle the obligation are both probable and able to be reliably measured 
 
provisions are measured at the present value of the expenditures expected to be required to settle the 
obligation using a pretax rate that reflects current market assessments of the time value of money and 
risks specific to the obligation increases in provisions due to the passage of time are recognised in the 
consolidated income statement within ‘finance costs’ 
 
term loans 
term loans are initially recognised at the fair value of the consideration received less directly attributable 
transaction costs after initial recognition term loans are subsequently measured at amortised cost using 
the effective interest method interest on term loans is charged as an expense as it accrues with unpaid 
amounts included in “accounts payable and accruals” 
 
when an existing financial liability is replaced by another from the same lender on substantially different 
terms or the terms of an existing liability are substantially modified such an exchange or modification is 
treated as the derecognition of the original liability and the recognition of a new liability the difference in 
the respective carrying amounts is recognised in the statement of comprehensive income 
 
employees’ end of service benefits  
the group operates an unfunded postemployment benefit plan employees’ end of service benefits for 
its expatriate employees in uae in accordance with the labour laws of the uae the entitlement to these 
benefits is based upon the employees’ final salary and length of service subject to the completion of a 
minimum service period payment for employees’ end of service benefits is made when an employee 
leaves resigns or completes his service  
the cost of providing benefits under the postemployment benefit plan is determined using the projected 
unit credit method remeasurements comprising of actuarial gains and losses are recognized 
immediately in the statement of financial position with a corresponding debit or credit to retained earnings 
through other comprehensive income in the period in which they occur remeasurements are not 
reclassified to profit or loss in subsequent periods 
 
interest is calculated by applying the discount rate to the defined benefit liability the rate used to discount 
the end of service benefit obligation is determined by reference to market yields at the balance sheet date 
on high quality corporate bonds the current and noncurrent portions of the provision relating to 
employees’ end of service benefits are separately disclosed in the consolidated statement of financial 
position  
 
the group recognises the following changes in the employees’ end of service benefits under ‘direct costs’ 
and ‘general and  administrative expenses’ in the consolidated statement of comprehensive income 
● service costs comprising current service costs 
● interest expense    
118 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
25 summary of significant accounting policies continued 
 
employees’ end of service benefits continued 
with respect to its uae national employees the group makes contributions to the relevant uae 
government pension scheme calculated as a percentage of the employees’ salaries the obligations under 
these schemes are limited to these contributions which are expensed when due 
 
with respect to its uae national employees the group makes contributions to the relevant uae 
government pension scheme calculated as a percentage of the employees’ salaries the obligations under 
these schemes are limited to these contributions which are expensed when due 
 
foreign currencies 
transactions in foreign currencies are recorded in uae dirhams at the exchange rate ruling at the date of 
the transaction monetary assets and liabilities denominated in foreign currencies are retranslated at the rate 
of exchange ruling at the balance sheet date  all differences are taken to the consolidated statement of 
comprehensive income 
 
translation of foreign operations 
on consolidation the assets and liabilities of foreign operations are translated into us dollars at the rate of 
exchange prevailing at the reporting date and their income statements are translated at exchange rates 
prevailing at the dates of the transactions since the uae dirham is pegged against the us dollar a single 
rate of 3673 per us dollar is used to translate assets and liabilities and balances in the income statement 
 
derivative financial instruments 
the group uses derivative financial instruments such as interest rate swaps and caps to hedge its interest 
rate risks such derivative financial instruments are initially recognised at fair value on the date on which a 
contract is entered into and are subsequently remeasured at fair value the fair value of interest rate 
swaps are determined by reference to market values for similar instruments derivatives with positive 
market values unrealised gains are included in other assets and derivatives with negative market values 
unrealised losses are included in other liabilities in the consolidated statement of financial position any 
gains or losses arising from changes in fair value on derivatives during the year are taken directly to profit 
or loss whilst the policy of the group is not to apply hedge accounting the derivatives are economic 
hedges of liabilities in issue and it is therefore considered appropriate to show the changes in fair value of 
derivatives in finance costs in the consolidated statement of comprehensive income 
 
financial instruments 
financial instruments comprise cash and bank balances receivables payables bank overdrafts term 
loans and certain other assets and liabilities the fair value of these financial instruments are based on 
estimated fair values calculated using methods such as the quoted market prices and net present value of 
future cash flows the fair value of interest bearing items is estimated based on discounted cash flows 
using interest rates for items with similar terms and characteristics the fair value of investments traded in 
organised markets is determined by reference to quoted market bid prices  
 
impairment of financial assets 
an assessment is made at each consolidated statement of financial position date to determine whether there 
is objective evidence that a specific financial asset may be impaired if such evidence exists any impairment 
loss is recognised in the consolidated statement of comprehensive income impairment is determined as 
the difference between carrying value and the present value of future cash flows discounted at the current 
market rate of return for a similar financial asset 
 
leases 
the determination of whether an arrangement is or contains a lease is based on the substance of the 
arrangement at inception date whether fulfilment of the arrangement is dependent on the use of a specific 
asset or assets or the arrangement conveys a right to use the asset even if that right is not explicitly 
specified in an arrangement operating leases are recognised as an operating expense in the statement 
of comprehensive income on a straight line basis 
   
119 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
3 accounting standards and interpretations issued but not effective 
 
the standards and interpretations that are issued but not yet effective up to the date of issuance of the 
group’s financial statements are disclosed below the group intends to adopt these standards if 
applicable when they become effective 
 
ifrs 9 financial instruments 
ifrs 9 as issued reflects the first phase of the iasb’s work on the replacement of ias 39 and applies to 
classification and measurement of financial assets and financial liabilities as defined in ias 39 the 
standard was initially effective for annual periods beginning on or after 1 january 2013 but amendments 
to ifrs 9 mandatory effective date of ifrs 9 and transition disclosures issued in december 2011 
moved the mandatory effective date to 1 january 2015 in subsequent phases the iasb is addressing 
hedge accounting and impairment of financial assets the adoption of the first phase of ifrs 9 will not 
have a significant impact on the classification and measurement of the group’s financial assets and 
financial liabilities  
 
investment entities amendments to ifrs 10 ifrs 12 and ias 27 
these amendments are effective for annual periods beginning on or after 1 january 2014 provide an 
exception to the consolidation requirement for entities that meet the definition of an investment entity 
under ifrs 10the exception to consolidation requires investment entities to account for subsidiaries at 
fair value through profit or loss it is not expected that this amendment would be relevant to the group 
since none of the entities in the group would qualify to be an investment entity under ifrs 10 
 
ias 32 offsetting financial assets and financial liabilitiesamendments to ias 32 
these amendments clarify the meaning of ‘currently has a legally enforceable right to setoff’ and the 
criteria for nonsimultaneous settlement mechanisms of clearing houses to qualify for offsetting these are 
effective for annual periods beginning on or after 1 january 2014 these amendments are not expected to 
be relevant to the group 
 
ifric interpretation 21 levies ifric 21 
ifric 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment as 
identified by the relevant legislation occurs for a levy that is triggered upon reaching a minimum 
threshold the interpretation clarifies that no liability should be anticipated before the specified minimum 
threshold is reached ifric 21 is effective for annual periods beginning on or after 1 january 2014 the 
group does not expect that ifric 21 will have any material financial impact in future financial statements 
 
ias 39 novation of derivatives and continuation of hedge accountingamendments to ias 39 
these amendments provide relief from discounting hedge accounting when novation of a derivative 
designated as a hedge instrument meets certain criteria these amendments are effective for annual 
periods beginning on or after 1 january 2014 these amendments have no impact on the group 
 
4 business combination under common control 
 
on 28 march 2012 the company became the holding company of nmc healthcare llc through its wholly 
owned subsidiaries nmc holding llc and nmc health holdco limited this transaction falls outside the 
scope of ifrs 3  business combinations so the pooling of interests method is applied and the 
consolidated financial statements of the group are presented as a continuation of the existing group the 
following accounting treatment was applied 
 
a the assets and liabilities of the previous parent company nmc healthcare llc were recognised 
and measured in the consolidated financial statements at the precombination carrying amounts 
without restatement to fair value and 
 
b the retained earnings and other equity balances of nmc healthcare llc immediately before the 
business combination and the results of the period from 1 january 2012 to the date of the 
business combination are those of nmc healthcare llc as the company did not trade prior to  
the transaction 
   
120 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
4 business combination under common control continued 
 
the company had no significant assets or liabilities immediately prior to the time of the acquisition as 
part of the acquisition 130000000 new 10 pence shares were issued to the shareholders of nmc 
healthcare llc a group restructuring reserve of us 10001000 debit arose on consolidation being the 
difference between the share capital of nmc healthcare llc and the carrying amount of the investment 
in the books of the company this has been classified as part of the equity within the consolidated 
statement of financial position note 22 
 
5 segment information 
 
for management purposes the group is organised into business units based on their products and 
services and has two reportable segments as follows 
 
 the healthcare segment is engaged in providing professional medical services comprising 
diagnostic services in and outpatient clinics and retailing of pharmaceutical goods it also 
includes the provision of management services in respect of a hospital  
 
 the distribution  services segment is engaged in wholesale trading of pharmaceutical goods 
medical equipment cosmetics and food 
 
no operating segments have been aggregated to form the above reportable operating segments 
 
management monitors the operating results of its business units separately for the purpose of making 
decisions about resource allocation and performance assessment segment performance is evaluated  
based on profit or loss and is measured consistently with profit or loss excluding finance income and 
finance costs group administrative expenses unallocated depreciation and unallocated other income in 
the consolidated financial statements 
 
group financing and investments including finance costs and finance income are managed on a group 
basis and are not allocated to operating segments this also includes the flotation costs incurred in 2012 
 
transfer prices between operating segments are on an arm’s length basis in a manner similar to 
transactions with third parties 
 
 
the following tables present revenue and profit and certain asset and liability information regarding the 
group‘s business segments for the years ended 31 december 2013 and 2012 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
121 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
5 segment information continued 
 
 
healthcare 
distribution 
and 
services 
total 
segments 
adjustments 
and 
eliminations consolidated 
 
us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 
year ended 31 december 
2013 
     
revenue      
external customers 
 
285043 
 
265835 
 
550878 
 
 
 
550878 
 inter segment 
 
4252 
 
34341 
 
38593 
 
38593 
 
                
            
total 
 
289295 
 
300176 
 
589471 
 
38593 
 
550878 
  
 
     
results 
 
     
depreciation 
 
7120 
 
2092 
 
9212 
 
451 
 
9663 
 finance costs 
 
  
 
  
 
  
 
14344 
 
14344 
       
segment profit 
 
74339 
 
27815 
 
102154 
 
33011 
 
69143 
       
segment assets 
 
338341 190407 
 
528748 
 
286514 815262 
       
segment liabilities 
 
33818 
 
47028 
 
80846 
 
345265 
 
426111 
       
other disclosures 
 
     
capital expenditure 
 
80845 
 
1220 
 
82065 
 
587 
 
82652 
  
 
 
     
 
 
 
year ended 31 december 
2012  
     
revenue      
external customers 
 
      247469  
 
       242584 
 
       490053   
 
       490053 
inter segment 
 
           4179         28490          32669       32669                
            
total 
 
      251648 
 
       271074        522722       32669 
 
       490053 
      
results 
 
     
depreciation 
 
      5871 
 
        829 
 
      6700 
 
           338 
 
     7038 
 finance costs 
 
          
 
  
 
            13738 
 
       13738 
       
segment profit 
 
62318 
 
25379 
 
87697 
 
27931 
 
59766 
       
segment assets        270574  
 
       169112  
 
       439686  
 
       275894  
 
       715580  
       
segment liabilities         40575  
 
         32326  
 
         72901  
 
   311076  
 
     383977  
       
other disclosures 
 
     
capital expenditure      115129  
 
         10014  
 
       125143  
 
           1008  
 
       126151  
       
 
intersegment revenues are eliminated upon consolidation and reflected in the ‘adjustments and 
eliminations’ column all other adjustments and eliminations are part of detailed reconciliations presented 
further below 
   
122 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
5 segment information continued 
 
adjustments and eliminations 
finance income and costs group overheads and fair value gains and losses on derivative financial 
instruments are not allocated to individual segments as the underlying instruments are managed on a 
group basis 
 
term loans bank overdraft and other short term borrowings and certain other assets and liabilities are 
substantially not allocated to segments as they are also managed on a group basis 
 
capital expenditure consists of additions to property and equipment  
 
reconciliation of group profit 
 
  
 2013 2012 
 us ‘000 us ‘000 
   
segment profit 
 
102154 
 
      87697  
   unallocated finance income 
 
3814 
 
              4325 
 
 
  unallocated finance costs 
 
14344 
 
       13738 
   unallocated group administrative expenses 
 
18654 
 
            15036 
   unallocated unamortised finance fees written off  3394 
 
        
   unallocated depreciation 
 
451 
 
                338 
   unallocated other income 
 
18 
 
                 258 
   unallocated flotation costs 
 
 
 
      3402 
      
group profit 
 
 
 
69143 
 
             59766 
   
 
 
  
reconciliation of group assets 
 
  
 2013 2012 
 us ‘000 us ‘000 
    
 segment assets 
 
528748 
 
           439686  
   unallocated property and equipment  
 
12365 
 
             12229 
 
 
  unallocated inventory 
 
36 
 
                   33  
   unallocated accounts receivable and prepayments 
 
5526 
 
              6497 
   unallocated amounts due from related parties 
 
267 
 
58 
  unallocated bank balances and cash 
 
74954 
 
             23374 
  unallocated bank deposits 
 
193366 
 
233703 
     
group assets 
 
815262            715580  
    
reconciliation of group liabilities 
 
  
 2013 2012 
 us ‘000 us ‘000 
    
 segment liabilities 
 
80846 
 
             72901  
   unallocated term loans 
 
250200 
 
            222968 
   unallocated employees’ end of service benefits 
 
219 
 
                 218 
   unallocated accounts payable and accruals 
 
12547 
 
            7276 
   unallocated bank overdraft and other short term borrowings 
 
82238 
 
             80491 
   unallocated amounts due to related parties 
 
61 
 
              123 
      
group liabilities 
 
426111 
 
          383977 
 
 
 
 
 
 
 
  
 
   
123 
 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
5 segment information continued 
 
other information 
the following table provides information relating to group’s major customers who contribute more than 
10 towards the group’s revenues 
 
 
healthcare 
distribution and 
services 
 
total 
 us ‘000 us ‘000 us ‘000 
year ended 31 december 2013 
 
   
  customer 1 
 
75802 
 
 
 
75802 
   customer 2 
 
32715 
 
            
 
32715 
        
 108517 
 
 
 
108517 
    
year ended 31 december 2012 
 
   
  customer 1  
 
               66354 
 
  
 
66354 
   customer 2 
 
27426 
 
             
 
27426 
         
                93780              
 
93780 
     
 
geographical information 
the group has only one geographical segment – united arab emirates all revenues from external 
customers are generated in the united arab emirates and all noncurrent assets are located in the united 
arab emirates 
 
analysis of revenue by category   
 2013 2012 
 us ‘000 us ‘000 
   
revenue from services 
 
  
  healthcare – clinic 
 
207532 
 
           177609 
   healthcare  management fees 
 
5445 
 
         907 
      
 212977 
 
           178516 
sale of goods 
 
    
  distribution 
 
265835 
 
           242584 
  healthcare 
 
72066 
 
             68953 
     
 337901 
 
           311537 
     
total 
 
550878 
 
           490053 
   
   
 
 
 
 
 
 
 
 
 
 
   
124 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
6 expenses by nature 
 
 
2013 2012 
 us ‘000 us ‘000 
   
   
cost of inventories recognised as an expense 
 
265852 
 
      246749  
 salary expenses 
 
126580 
 
       97436 
 rent expenses 
 
21518 
 
       21029  
 sales promotion expenses 
 
29533 
 
       29999  
 repair  maintenance expenses 
 
5796 
 
         6356 
 others 
 
35619 
 
       33286  
      
 484898 
 
     434855  
 allocated  to  
 
  
  direct costs  
 
365336 
 
      329800 
  general and administrative expenses 
 
119562 
 
       105055  
      
 484898 
 
      434855 
    
 
the classification of the remaining expenses by nature recognised in the consolidated statement of 
comprehensive income are 
 2013 2012 
 us ‘000 us ‘000 
     
depreciation  
 
9663 7038 
impairment of property and equipment  
 
210  
finance costs 14344 13738 
flotation costs  3402 
unamortised finance fees written off 3394  
   
 27611 
 
24178 
    
7 other income 
 
other income includes us 26771000 2012 us 23919000 relating to reimbursement of 
advertisement and promotional expenses incurred by the group revenue is recognised following the 
formal acceptance of the group’s reimbursement claims by suppliers and is measured at the confirmed 
amount receivable 
 
8 finance costs  
 2013 2012 
 us ‘000 us ‘000 
   
bank interest 
 
12788 
 
    11968  
 bank charges 
 
2258 
 
     2099  
 change in fair value of derivative financial instrument 
 
702 
 
         329 
      
 14344 
 
    13738  
    
9 finance income 
 2013 2012 
 us ‘000 us ‘000 
   
bank and other interest income 
 
3814 
 
       4325 
      
 3814 
 
    4325 
      
125 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
10 profit for the year before tax 
 
the profit for the year before tax is stated after charging 
 2013 2012 
 us ‘000 us ‘000 
   
cost of inventories recognised as an expense note 6 
 
265852 
 
  246749  
    
cost of inventories written off note 18 
 
1781 
 
     1753  
    
minimum lease payments recognised as operating lease expense 
 
21518 
 
    21029  
    
depreciation note 16 
 
9663 
 
    7038  
    
net impairment of accounts receivable note 19 
 
2462 
 
     1291  
    
employees’ end of service benefits note 26 
 
2362 
 
     2142  
    
net foreign exchange loss  
 
3841 
 
     3034  
    
 
 
11 auditor’s remuneration 
 
the group paid the following amounts to its auditor and its associates in respect of the audit of the 
financial statements and for other services provided to the group 
 
 2013 2012 
 us ‘000 us ‘000 
   
fees payable to the company’s auditor for the audit of the 
company’s annual accounts 
 
615         500 
fees payable to the company’s auditor and its associates for other 
services 
 
  
    the audit of the company’s subsidiaries pursuant to legislation 
 
142 
 
        161 
     audit related assurance services 
 
155 
 
173 
 
 
  
 
    other assurance services 
 
15 
 
2283 
     tax compliances services 25  
    tax advisory services 25  
    corporate finance services 
 
 
 
 2622 
     non audit services 
 
19 
 
         41 
      
 996 
 
        5780 
offset against share premium note 21 
 
 
 
   4285  
      
total included in the consolidated statement of comprehensive  996 
 
      1495 
 income   
 
  
other assurance services in 2012 represented work performed on the group’s historical financial 
information and corporate finance services represent work performed on the group’s long form and 
working capital report both of which were required for the company’s premium listing on the london 
stock exchange  
 
included in the fees payable to the company’s auditor for the audit of the company’s annual accounts in 
the current year is an amount of us 100000 which was underaccrued in respect of the prior year audit 
of the company’s annual accounts 
   
126 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
11 auditor’s remuneration continued 
 
the fees paid to the auditor includes us 85000 2012 us 249500 in respect of out of pocket 
expenses of which us nil 2012 us 205000 relates to out of pocket expenses in respect of the 
corporate finance services work referred to above there were no benefits in kind provided to the auditor 
or its associates in either 2013 or 2012 
 
of the total fees payable to the auditor in 2013 us 437000 2012 us 297500 was payable to the 
auditor ernst  young llp in the united kingdom and the remainder was payable to an associate of the 
auditor based in the uae 
 
12 staff costs and directors’ emoluments 
 
a staff costs 
 
 2013 2012 
 us ‘000 us ‘000 
   
wages and salaries 
 
126580 
 
    97436  
 employees’ end of service benefits note 26 
 
2362 
 
     2142 
 others 
 
7726 
 
    6639 
      
 136668 
 
    106217 
    
 
staff costs include amounts paid to directors disclosed in part b below the average number of monthly 
employees during the year was made up as follows 
 
 2013 2012 
   
healthcare 
 
3169 
 
     2715 
distribution  services 
 
1726 
 
     1538  
 administration 
 
151 
 
        162 
      
 5046 
 
     4415  
    
b directors’ remuneration 
 
 2013 2012 
 us ‘000 us ‘000 
   
directors’ remuneration 
 
1746 
 
      1352 
    
 
there are no other employee benefits such as longterm benefits postemployment benefits or share 
options paid or payable to the directors further information in respect of this compensation paid to 
directors is disclosed in the directors’ remuneration report 
 
13 flotation costs 
 
during the year ended 31 december 2012 costs of us 18175000 were incurred in relation to 
completion of the company’s premium listing on the london stock exchange of these costs 
us 14773000 has been deducted from the share premium account note 21 and us 3402000 has 
been charged to the consolidated statement of comprehensive income in accordance with the 
requirements of ias 32 – financial instruments presentation out of the total costs of us 18175000 an 
amount of us nil remains payable as at 31 december 2013 2012  us 645000 and is included in 
accounts payable and accruals 
 
   
127 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
14 tax 
 
the group operates solely in the united arab emirates and as there is no corporation tax in the united 
arab emirates no taxes are recognised or payable on the operations in the uae it is the opinion of 
management that there are sufficient losses in the company to offset any potential taxable income arising 
in the uk and accordingly any tax liability that could arise would be immaterial  
 
15 earnings per share 
 
basic and diluted earnings per share amounts are calculated by dividing net profit for the year attributable 
to ordinary equity holders of the parent company by the weighted average number of ordinary shares 
outstanding during the year 
 
the following reflects the income and share data used in the basic and diluted earnings per share 
computations 
 
 2013 2012 
   
profit attributable to equity holders of the parent us ‘000 
 
68165     58891 
 weighted average number of ordinary shares in issue ‘000 
 
185714 
 
  171824  
    
basic and diluted earnings per share us 
 
0367 
 
     0343  
    
 
the weighted average number of shares for the year ended 31 december 2012 has been adjusted for the 
effect of the increase in share capital as a result of the company’s premium listing on the london stock 
exchange note 21  
 
 
 
   
128 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
16 property and equipment 
property and equipment consists of the following 
 2013 2012 
 us ‘000 us ‘000 
   
property and equipment 
 
273792   
 
   201653  
      
 273792 
 
    201653  
    
 
freehold 
land 
hospital 
building buildings 
leasehold 
improve
ments 
motor 
vehicles  
furniture 
fixtures 
and 
fittings 
and 
medical 
equipment 
capital 
work in 
progress total 
 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 
31 december 2013 
 
        
cost 
 
        
  at 1 january 2013 
 
     19206  
 
     12343  
 
26269 
 
12722 
 
5544 
 
110594 
 
104067 
 
290745 
 
  additions 
 
  
 
  
 
31  
 
907 
 
83 
 
8791 
 
72840  82652 
 
  disposals 
 
  
 
  
 
  
 
 
 
47 6553 
 
 
 
6600 
 
  transfer from capital  
 
        
  work in progress 
 
             
 
             
 
 
 
3759 
 
307 
 
1242 
 
5308 
 
 
 
  impairment of property         
  and equipment              
 
             
 
 
 
 
 
 
 
 
 
210 210 
 
 

 

 

 
 
 

 

 
 
 

 
at 31 december 2013 
 
     19206  
 
     12343  
 
26300 
 
17388 
 
5887 
 
114074 
 
171389 366587 
 

 

 

 
 
 

  

 

 

 
depreciation         
 at  1 january 2013   
 
7494 
 
3083 
 
8932 
 
4701 
 
64882 
 
  
 
89092 
 
  charge for the year 
 
  
 
310 
 
1418 
 
1347 
 
214 
 
6374 
 
 
 
9663 
 
  relating to disposals 
 
  
 
           
 
           
 
 
 
47 
 
5913 
 
 
 
5960 
 
 

 

 

 
 
 

 

 

 

 
  at  31 december 2013 
 
  
 
7804 
 
4501 
 
10279 
 
4868 
 
65343 
 
            
 
92795 
 
 

 

 

 
 
 

 

 
 
 

 
net carrying amount 
 
        
  at 31 december 2013 
 
     19206  
 
4539 
 
21799 
 
7109 
 
1019 
 
48731 
 
171389 273792 
 

 

 

 

 

 

 

 

 
31 december 2012 
 
        
cost 
 
        
  at 1 january 2012 
 
     19206  
 
     12343  
 
6529 
 
10498 
 
5233 
 
91349 
 
22796 
 
167954 
 
  additions 
 
  
 
  
 
  
 
312 
 
331 
 
11605 
 
106619 
 
118867 
 
  additions from a 
business 
        
   combination  
 
  
 
  
 
  
 
       1336  
 
  
 
       5948  
 
  
 
       7284  
 
  disposals 
 
  
 
  
 
  
 
        203 
 
       20 
 
     3137 
 
  
 
    3360 
 
  transfer from capital  
 
        
  work in progress 
 
             
 
             
 
     19740  
 
          779  
 
           
 
       4829  
 
 25348 
 
              
 
 

 

 

 
 
 

 

 

 

 
  at 31 december 2012 
 
     19206  
 
     12343  
 
26269 
 
12722 
 
5544 
 
110594 
 
104067 
 
290745 
 
 

 

 

 
 
 

 

 
 
 

 
depreciation 
 
        
 at 1 january 2012 
 
  
 
7184 
 
2649 
 
8448 
 
4561 
 
62007 
 
  
 
84849 
 
  charge for the year 
 
  
 
310 
 
434 
 
663 
 
160 
 
5471 
 
  
 
7038 
 
  relating to disposals 
 
  
 
  
 
 
 
179 
 
20 
 
2596 
 
  
 
2795 
 
 

 

 

 
 
 

 

 

 

 
  at 31 december 2012 
 
  
 
7494 
 
3083 
 
8932 
 
4701 
 
64882 
 
  
 
89092 
 
 

 

 

 
 
 

 

 

 

 
net carrying amount 
 
        
  at 31 december 2012      19206  
 
4849 
 
23186 
 
3790 
 
843 
 
45712 
 
104067 
 
201653 
 

 

 

 

 

 

 

 

   
129 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
16 property and equipment continued 
 
as part of the group’s capital expenditure programme borrowing costs of us 4886000 2012 us 
4110000 net of finance income of us 54000 2012 us 1217000 have been capitalised during the 
year the rate used to determine the amount of borrowing costs eligible for capitalisation was 340 
2012 381 which is the effective rate of the borrowings used to finance the capital expenditure as 
companies in uae are not subject to taxation and as such there is no tax relief in respect of capitalised 
interest  
 
generally hospital and distribution operations are carried out on land and buildings which are leased from 
government authorities or certain private parties the majority of the lease periods range from five to 
twenty years apart from new medical centre hospital llcdubai “dubai general hospital” the land on 
which the khalifa city specialty hospital is being constructed and the warehouse facilities which had 
leases renewable on an annual basis note 23 as at 31 december 2013 us 50244600 2012 us 
21796700 of the amounts included in property plant and equipment related to assets with annually 
renewable leases subsequent to year end the lease for the land on which the khalifa city specialty 
hospital is being constructed was renewed for a period of 27 years note 34 khalifa city specialty 
hospital has us 49696000 included in property plant and equipment as at 31 december 2103 
  
in accordance with the local laws except in some specific locations in the uae the registered title of land 
and buildings must be held in the name of a uae national as a result land and buildings of the group are 
legally registered in the name of shareholders or previous shareholders of the group certain land and 
buildings with a carrying amount of us 9648000 31 december 2012 us 9974000 are held in the 
name of a previous shareholder for the beneficial interest of the group as the beneficial interest of such 
land and buildings resides with the group these assets are recorded within land and buildings in the 
group’s consolidated financial statements the directors take into account this local legal registration 
requirement the group’s entitlement to the beneficial interest arising from these assets as well as other 
general business factors when considering whether such assets are impaired 
 
property and equipment with a net carrying amount of us nil at 31 december 2013 2012 us 
4849000 are pledged as security against term loans 
 
17 intangible assets 
 2013 2012 
 us ‘000 us ‘000 
goodwill 
 
  
  balance at 1 january 
 
1016 
 
                 
   addition from business combination           
 
             1016  
      
  balance at 31 december 
 
    1016  
 
              1016 
    
 
on 1 july 2012 the group acquired 100 of the share capital of br medical suites fz llc a company 
registered in dubai uae from its owner dr br shetty a shareholder and director of the company  the 
consideration for the acquisition was us 9000000 br medical suites fz llc is a day patient centre 
with four operating theatres and state of the art medical equipment the group acquired br medical 
suites fz – llc because it increases the range of services in its healthcare segment and will work as a 
synergy to their existing facilities in the areas of patient profiling as well as connectivity with international 
healthcare professionals     
 
goodwill arose on the acquisition of br medical suites fz llc on 1
 
july 2012 the goodwill is attributable 
to the synergies that arose as a result of the acquisition goodwill is allocated to the healthcare segment 
and is monitored at the healthcare segment level which equates to the level for impairment testing 
 
the recoverable amount of the cgu has been determined based on valueinuse calculations these 
calculations use pretax cash flow projection based on financial budgets approved by management 
covering a five year period the pretax discount rate applied to cash flow projections is 93 and a 3 
growth rate is used to arrive at the cash flows between year 6 to 10 and a terminal value beyond year 10  
   
130 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
17 intangible assets continued 
 
is used using a zero growth rate  management has assessed the key assumptions within these 
calculations using their past experience from operating within the healthcare industry the growth rate 
does not exceed either the long term average growth rate for the healthcare business in which the cgu 
operates or the country growth rate 
  
the main assumptions used to compute the value in use were those concerning the discount rate the 
most recent cash flow projections and the expected growth rate at the end of the time horizon of the 
forecast 
 
in addition the group performed a sensitivity analysis for changes in the basic assumptions of the 
impairment test specifically focusing on the variables that have the greatest impact on recoverable value 
discount rate and projections the results of these tests showed no indications of impairment 
 
 
18 inventories 
 
 2013 2012 
 us ‘000 us ‘000 
   
pharmaceuticals and cosmetics  
 
44959 
 
    32906  
 scientific equipment 
 
11899 
 
     9111 
 consumer products 
 
27915 
 
    22701 
 food 
 
6796 
 
     4791 
telecommunication equipment 
 
569 
 
        140  
 consumables 
 
290 
 
     436 
 opticals 
 
358 
 
        357 
 goods in transit 
 
1594 
 
     1589  
 other 
 
459 
 
        543  
       
 94839 
 
    72574  
 less provisions for slow moving and obsolete inventories 
 
716 
 
       116 
      
 94123 
 
    72458  
    
 
the amount of write down of inventories recognised as an expense for the year ended 31 december 2013 
is us 1781000 2012 us 1753000  this is recognised in direct costs 
 
trust receipts issued by banks amounting to us 3100000 2012 us 9493000 are secured against the 
inventories 
 
 
19 accounts receivable and prepayments 
 
 2013 2012 
 us ‘000 us ‘000 
   
accounts receivable 
 
145993 
 
  158463  
 receivable from suppliers for promotional expenses  9696 
 
     11684 
 other receivables 
 
6845 
 
     6219 
 prepayments 
 
5848 
 
     5036  
      
 168382   181402  
  
 
  
   
131 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
19 accounts receivable and prepayments continued 
 
receivables from suppliers relate to advertising and promotional expenses incurred by the group 
accounts receivable are stated net of provision for doubtful debts of us 8241000 2012 us 6444000 
movements in the provision for doubtful debts are as follows 
 
 2013 2012 
 us ‘000 us ‘000 
   
at 1 january 
 
6444 
 
     5153  
 written off 
 
665 
 
          
 written back note 10 
 
472 
 
951 
 charge for the year note 10 
 
2934 
 
     2242  
      
at 31 december 
 
8241 
 
     6444 
    
 
the ageing of unimpaired accounts receivable is as follows 
 
    past due but not impaired 
 
total  
neither past 
due nor 
impaired  90 days 
91180 
days 
181365 
days 365 days 
 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 
       
31 december 2013       
  accounts receivable 
 
145993 
 
104028 
 
31658 
 
6053 
 
2774 
 
1480 
 
       
31 december 2012       
  accounts receivable 
 
  158463  
 
    92086  
 
    41051  
 
    15950  
 
     9007  
 
        369  
 
       
unimpaired receivables are expected on the basis of past experience to be fully recoverable it is not the 
practice of group to obtain collateral over receivables and they are therefore unsecured as at 31 december 
2013 trade receivables of us 8241000 2012 us 6444000 were impaired and fully provided for 
 
credit risk is managed through the group’s established policy procedures and controls relating to credit 
risk management note 29 a majority of the receivables that are past due but not impaired are from 
insurance companies and governmentlinked entities in the united arab emirates which are inherently 
slow payers due to their long invoice verification and approval of payment procedures payments continue 
to be received from these customers and accordingly the risk of nonrecoverability is considered to be 
low 
 
of the net trade receivables balance of us 145993000 an amount of us 61353000 is against five 
customers 2012 us 63966000 is against five customers  
 
the group’s terms require receivables to be repaid within 90120 days depending on the type of 
customer which is in line with local practice in the uae due to the long credit period offered to 
customers a significant amount of trade accounts receivable are neither past due nor impaired  
 
 
 
 
 
   
132 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
20 cash and cash equivalents 
 
cash and cash equivalents included in the consolidated statement of cash flows comprise of the following 
 
 2013 2012 
 us ‘000 us ‘000 
   
bank deposits 
 
193366 
 
    233703 
 bank balances and cash 
 
75329 
 
    23747  
 bank overdrafts and other short term borrowings 
 
82238 
 
80668 
      
 186457 
 
   176782 
 adjustments for 
 
  
short term borrowings 
 
74183 
 
    51604  
 bank deposits maturing in over 3 months 
 
148380 
 
136129 
 restricted cash 
 
33059 
 
          10327 
  
 
     
cash and cash equivalents 
 
79201 
 
    81930 
    
 
 
bank deposits of us 193366000 2012 us 233703000 are with commercial banks in the united 
arab emirates these are mainly denominated in the uae dirhams and earn interest at the respective 
deposit rates these deposits have original maturity between 3 to 12 months 2012 3 to 12 months  
 
short term borrowings include trust receipts and invoice discounting facilities which mature between 90 
and 180 days trust receipts are short term borrowings to finance imports  the bank overdrafts and short 
term borrowings are secured by assets of the group up to the amount of the respective borrowings and 
personal guarantees of the shareholders he saeed mohamed butti mohamed al qebaisi dr br shetty 
and khalifa butti omair yousif ahmad al muhairi and carry interest at eibor plus margin rates ranging 
from 3 to 4 
 
at 31 december 2013 the group had us 18323000 2012 us 11444000 of undrawn bank overdraft 
facilities which are renewable annually 
 
restricted cash mainly represents funds held by a bank in respect of upcoming loan repayment instalments 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
   
133 
 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
21 share capital 
 
as at 31 december 2013 and 31 december  
2012 
 
 
   
 
number of 
shares ordinary shares total 
 thousands us ‘000 us ‘000 
    
issued and fully paid 
 
   
nominal value 10 pence sterling each 
 
185714 
 
29566 
 
29566 
     
issued share capital and share premium movement 
 
 
 
number of 
shares 
ordinary 
shares 
share 
premium total  
 notes thousands us ‘000 us ‘000 us ‘000 
      
at 1 january 2012 
 
         100  
 
    27226  
 
  
 
    27226  
 group restructuring 
 
        100 
 
   27226 
 
  
 
   27226 
 
issue of new shares 
 
   130000  
 
    20696  
 
    16531  
 
    37227  
 issue of new shares – ipo 
 
     55714  
 
     8870  
 
  177394  
 
  186264  
 share issue costs 
 
13                
 
             
 
   14773 
 
   14773 
            
at 31 december 2012 
 
   185714  
 
    29566  
 
  179152  
 
  208718  
       
          
at 31 december 2013 
 
   185714  
 
    29566  
 
  179152  
 
  208718  
       
 
on 5 april 2012 nmc health plc completed its premium listing on the london stock exchange and 
raised us 186264000 from the issue of 55714286 new ordinary shares thereby diluting existing 
shareholders equity interest to 6695 at the time of listing 
 
share issue costs incurred in 2012 include us 4285000 of fees paid to the auditor note 11 
 
 
22 group restructuring reserve 
 
the group restructuring reserve arises on consolidation under the pooling of interests method used for 
group restructuring under this method the group is treated as a continuation of the nmc healthcare llc 
group the difference between the share capital of nmc healthcare llc us 27226000 and the 
carrying amount of the investment in that company us 37227000 which equates to the net assets of 
nmc healthcare llc at the date of reorganisation 28 march 2012 amounting to us 10001000 is 
recorded on consolidation as a group restructuring reserve note 4 this reserve is nondistributable  
 
 
23 retained earnings 
 
as at 31 december 2013 retained earnings of us 14333000 2012 us 12627000 are not 
distributable this relates to a uae companies law requirement to set aside 10 of annual profit of all 
uae subsidiaries until their respective reserves equal 50 of their paid up share capital the subsidiaries 
discontinue such annual transfers once this requirement has been met  
 
 
   
134 
 
 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
24 dividend    
 
in the agm on 27 june 2013 the shareholders approved a dividend of 41 pence per share amounting to 
gbp 7614286 us 11598326 paid to shareholders on the company’s share register on 31 may 2013 
the dividend was paid on 4 july 2013 no interim dividend was declared during the year subject to 
shareholder’s approval a final dividend of 44 pence per share gbp 8212700 us 13633000 will be 
paid to shareholders on the company’s share register on 30 may 2014       
 
 
25 term loans 
 
 2013 2012 
 us ‘000 us ‘000 
   
current portion 
 
88355 
 
    104540  
 noncurrent portion 
 
161845 
 
    118428 
       
 250200 
 
    222968  
    
amounts are repayable as follows 
 
  
   
within 1 year 
 
88355 
 
    104540  
 between 1  2 years 
 
50871 
 
    45195  
 between 2  5 years 
 
110974 
 
    73233 
      
 250200 
 
    222968  
    
   
 
the term loans primarily carry interest at eibor  libor plus margin 
 
31 december 2013  
during the year ended 31 december 2013 the group agreed a new syndicated loan facility led by jp 
morgan chase bank of us 225000000 with an additional available facility of us 75000000 which 
the group has not drawn down to date the loan facility is repayable over 54 monthly instalments with a 
grace period of six months and carries interest at the rate of 1 month us libor  3  mandatory 
costs if any per annum the new syndicated loan facility has been utilised to repay some of the existing 
debts including the debt with jp morgan chase bank against the facility of us 150000000 obtained in 
the previous year and will also be utilised for capital expenditures the group has utilised an amount of 
us 225000000 against the new syndicated loan facility as of 31 december 2013 
 
this new syndicated loan is guaranteed by corporate guarantees provided by nmc health plc and 
operating subsidiaries of the group the new syndicated loan is secured against a collateral package 
which includes an assignment of some insurance company receivables and their proceeds by the group 
and a pledge over certain bank accounts within the group 
in addition to the jp morgan loan facility term loans also include other short term revolving loans which 
get drawn down and repaid over the period and carry interest at varying rates  which include eibor  
margins ranging from 3 to 375 per annum except for one of the loans which carries interest at a fixed 
rate of 75 per annum 
 
the group has charged an amount of us 3394000 2012 us nil to the consolidated statement of 
comprehensive income with respect to unamortised transaction costs of previously existing debts which 
have been settled during the year using the proceeds of the new syndicated loan led by jp morgan chase 
bank   
135 
 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
25 term loans continued 
 
31 december 2012 
 
during the year ended 31 december 2012 the group agreed a new syndicated loan facility led by jp 
morgan chase bank of us 150000000 repayable over 5 years with interest charged at the rate of 1 
month libor plus 35 per annum  the group had drawn down us 150000000 against the loan as at 
31 december 2012 repayments in the year ended 31 december 2012 amounted to us 18889000 
finance fees of us 636000 had been capitalised against the loan as at 31 december 2012 and were 
being amortised over the period of the loan 
 
this syndicated loan was guaranteed by corporate guarantees provided by all operating subsidiaries of 
the group and personal guarantees provided by h e saeed mohamed butti mohamed al qebaisi khalifa 
butti omair yousif ahmad al muhairi and dr br shetty  the syndicated loan was secured against a 
collateral package consisting of i an assignment of daman and abu dhabi national insurance health 
insurance receivables and their proceeds by the borrower ii a pledge over the accounts of the borrower 
iii an account cash sweep borrower accounts only and iv mortgage security over the real estate of 
the dubai specialty hospital as noted above this loan was repaid during the current year using the 
proceeds from the new syndicated loan facility 
 
26 employees’ end of service benefits 
 
movements in the provision recognised in the consolidated statement of financial position are as follows 
 2013 2012 1 january 
 us ‘000 us ‘000 2012 
   us ‘000 
    
balance at 1 january 
 
10380 
 
8864 
 
7532 
charge for the year 
 
2362 
 
2142 
 
1821 
employees’ end of service benefits paid 
 
643 
 
626 
 
531 
net transferred from related party 
 
 
 
 
 
42 
       
balance at 31 december 
 
12099 
 
10380 
 
8864 
s     
 
current 
 
2063 
 
1746 
 
1161 
non –current  
 
10036 
 
8634 
 
7703 
        
balance at 31 december 
 
12099 
 
10380 
 
8864 
s     
 
charge for the year comprise of the following 
 
current service cost 
 
1909 
 
1784 
 
1821 
interest cost 
 
453 
 
358 
 
 
  
 
       
balance at 31 december 
 
2362 
 
2142 
 
1821 
s     
 
in accordance with the provisions of ias 19 – ‘employee benefits’ management has carried out an 
exercise to assess the present value of its obligation at 31 december 2013 and 2012 using the projected 
unit credit method in respect of employees’ end of service benefits payable under the uae labour law 
the impact of the actuarial valuation is not material to the group accordingly no actuarial gain or losses 
are recognised in other comprehensive income management has assumed an average length of service 
of 5 years 2012 5 years and incrementpromotion costs of 30 2012 30 the expected liability at 
the    
136 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
26 employees’ end of service benefits continued 
 
date of employees’ leaving service has been discounted to its net present value using a discount rate of 
45 2012 45 management also performed a sensitivity analysis for changes in discount rate and 
increment costs the results of this analysis showed that none of the factors had any material impact on 
the actuarial valuation 
 
note 
no actuarial valuation was performed as of 31 december 2011 
 
27 accounts payable and accruals 
 
 2013 2012 
 us ‘000 us ‘000 
   
   
trade accounts payable 
 
57565 
 
    53334 
 other payables  
 
13416 
 
    10657 
 accrued interest 
 
705 
 
        893  
 accrued expenses 
 
4401 
 
     3729  
       
 76087 
 
    68613  
    
 
 
trade and other payables are noninterest bearing and are normally settled on 90120 day terms 
 
 
28 related party transactions  
 
these represent transactions with related parties including major shareholders and senior management 
of the group and entities controlled jointly controlled or significantly influenced by such parties or where 
such parties are members of the key management personnel of the entities pricing policies and terms of 
all transactions are approved by the management of the group  
 
the company’s immediate and ultimate controlling party is a group of three individuals he saeed bin 
butti dr br shetty and mr khalifa bin butti who are all shareholders and directors of the company and 
who together have the ability to control the company as the immediate and ultimate controlling party is a 
group of individuals it does not produce consolidated financial statements 
 
transactions with related parties included in the consolidated statement of comprehensive income are as 
follows 
 2013 2012 
 us ‘000 us ‘000 
   
entities significantly influenced by a shareholder who is a key 
management personnel in nmc 
 
 
management personnel in nmc 
  
  
  sales 
 
8828 
 
4135  
   purchases 
 
30040 
 
    13206 
   rent charged 
 
418 
 
425 
  other income 582  
   
shareholder who has significant influence over nmc is a key 
management personnel of the entity 
personnel of the entity 
  
  
  management fees 
 
5445 
 
907 
   sales 
 
2608 
 
 
   
137 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
28 related party transactions continued 
 
transactions with related parties included in the consolidated statement of financial position are as 
follows 
 
 2013 2012 
 us ‘000 us ‘000 
   
shareholder with significant influence over nmc 
 
  
  acquisition of br medical suites fz llc 
 
 
 
9000 
    
 
on 1 july 2012 the group acquired 100 of the share capital of br medical suites fz llc a company 
registered in dubai uae from its owner dr br shetty a shareholder with significant influence over the 
company and director of the company the consideration for the acquisition was us 9000000 note 
17 
 
amounts due from and due to related parties disclosed in the consolidated statement of financial position 
are as follows 
 
 2013 2012 
 us ‘000 us ‘000 
   
entities significantly influenced by a shareholder who is a key 
management personnel in nmc 
  
  
  amounts due from related parties 
 
 
3619 
 
58 
   amounts due to related parties 5018  
    
shareholder who has significant influence over nmc is a key 
management personnel of the entity 
  
  
  amounts due from related parties 
 
5635 
 
1543 
    
shareholder 
 
  
  amounts due to related parties 
 
  61 123 
 
 
 
 
 
 
  
 
outstanding balances with related parties at 31 december 2013 and 31 december 2012 were unsecured 
payable on 60–120 days term and carried interest at 0  31 december 2012 0 per annum 
settlement occurs in cash as at 31 december 2013 us 3249000of the amounts due from related 
parties were past due but not impaired 31 december 2012 us nil 
 
the group has incurred an expenses and recharged back an amount of us 12340000 31 december 
2012 us 636000 made on behalf of a related party where a shareholder who has significant influence 
over the group is a key management personnel of that entity 
 
with the exception of the jp morgan chase syndicated loan facility of us 225000000 all credit facilities 
provided by the bankers to the group are secured by joint and several personalcorporate guarantees of 
the shareholders he saeed mohamed butti al qebaisi dr br shetty and khalifa butti omair yousif 
ahmad al muhairi 
 
pharmacy licenses under which the group sells its products are granted to the shareholders or directors 
of the company who are uae nationals no payments are made in respect of these licenses to 
shareholders or directors  
 
 
 
 
   
138 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
28 related party transactions continued 
 
 
compensation of key management personnel 
 
 2013 2012 
 us ‘000 us ‘000 
   
short term benefits 
 
4065 
 
2174 
 employees’ end of service benefits 
 
19 
 
32 
      
 4084 2206 
    
 
 
the key management personnel include all the nonexecutive directors the two executive directors and 
five senior management personnel 
 
the spouse and the nondependent son of one of the shareholders are employed by the group the total 
compensation for employment received by the spouse and the nondependent son in the year ended 31 
december 2013 amount to us 541000 2012 us 476000 
 
 
29 financial risk management objectives and policies 
 
the group’s principal financial liabilities other than derivatives comprise loans and borrowings and trade 
and other payables the main purpose of these financial liabilities is to finance the group’s operations 
the group has accounts and other receivables and cash and shortterm deposits that arise directly from 
its operations  
 
the group is exposed to interest rate risk credit risk liquidity risk and foreign currency risk  
 
the group’s senior management oversees the management of these risks the board of directors 
reviews and agrees policies for managing each of these risks which are summarised below 
 
interest rate risk 
interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate 
because of changes in market interest rates the group is exposed to interest rate risk on its interest 
bearing assets and liabilities bank deposits bank overdrafts and other short term borrowings and term 
loans  management has sought to limit the exposure of the group to any adverse future movements in 
interest rates by entering into interest rate swap arrangements  management is therefore of the opinion 
that the group’s exposure to interest rate risk is limited 
 
the following table demonstrates the sensitivity of the statement of comprehensive income to reasonably 
possible changes in interest rates with all other variables held constant the sensitivity of the statement 
of comprehensive income is the effect of the assumed changes in interest rates on the group’s profit for 
the year taking into account interest rate swap arrangements based on the floating rate financial assets 
and financial liabilities as of the respective year end 
 
 
increase 
decrease in 
basis points 
effect on profit 
at 31 december 
2013 
effect on profit 
at 31 december 
2012 
 
 us ‘000 us ‘000 
 
   
                   100  
 
1105 
 
             454 
 
                 100 
 
1105 
 
              454 
 
      
139 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
29 financial risk management objectives and policies continued 
 
credit risk 
credit risk is the risk that counterparty will not meet its obligations under a financial instrument or 
customer contract leading to a financial loss the group limits its credit risk with respect to customers 
due to the nature of the customers that it has dealings with within the healthcare business the majority of 
the group’s customers are insurance companies the largest insurance company is fully backed by 
sovereign wealth funding from abu dhabi all other insurance companies are required to be listed on a 
stock exchange and therefore are governed by the regulations of their respective markets within the 
distribution business the group deals primarily with large reputable multinational retail companies the 
group further seeks to limit its credit risk by setting credit limits for individual customers and monitoring 
outstanding receivables 
 
the group limits its credit risk with regard to bank deposits by only dealing with reputable banks the 
external credit ratings for the banks at which the bank deposits and cash at bank are held are as follows 
 
 
 2013 2012 
 us ‘000 us ‘000 
   
   
aa  2169 
aaaa2  40839 
aaa1aa3 498 199 
aa1 701 14521 
aa2 32352 4452 
aa1 1762  
a3a 1188 9532 
aa  35 
baa2 789  
bbb 187822  
bbbbaa1baa1p2 13099 2166 
baa2p2  111070 
without external credit rating 
 
30167 
 
        72237 
     
total bank deposit and cash at bank 
 
268378 
 
        257220  
  
 
   
 
with respect to credit risk arising from cash and cash equivalents the group’s exposure to credit risk 
arises from default of the counterparty with a maximum exposure equal to the carrying amount of these 
instruments 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
140 
 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
29 financial risk management objectives and policies continued 
 
 
liquidity risk 
the group’s objective is to maintain a balance between continuity of funding and flexibility through the 
use of banking facilities the group limits its liquidity risk by raising funds from its operations and ensuring 
bank facilities are available trade payables are normally settled within 90–120 days of the date of 
purchase 
 
the table below summarises the maturities of the group’s undiscounted financial liabilities based on 
contractual payment dates and current market interest rates 
 
 
 
on demand 
less than 3 
months 
3 to 12 
months 1 to 5 years total 
 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 
      
at 31 december 2013 
 
     
trade accounts payable 
 
  
 
57565 
 
  
 
  
 
57565 
amounts due to related parties 
 
  
 
5079 
 
  
 
  
 
5079 
other payables 
 
  
 
13416 
 
  
 
408 13824 
terms loans 
 
 
 
21128 
 
75603 
 
175803 
 
272534 
 bank overdrafts and other short term 
borrowings 
 
8178 42090 34048                84316 
financial guarantees  180 3275 3612 7067 
                 
total 
 
8178 
 
139458 112926 
 
179823 
 
440385 
      
      
at 31 december 2012 
 
     
trade accounts payable 
 
  
 
       53334  
 
  
 
  
 
53334 
 
amounts due to related parties 
 
  
 
         123  
 
  
 
  
 
123 
 
other payables 
 
  
 
10657 
 
 
 
1225 
 
11882 
 
terms loans 
 
  
 
57252 
 
62380 
 
130143 
 
249775 
 
bank overdrafts and other short term 
borrowings 
 
                 
28849  
 
         
52900  
 
      
       
   
             
 
  81749  
financial guarantees  447 1631 5204 7282 
                
total 
 
       28849  
 
     174713  
 
64011 
 
136572 
 
404145 
 
       
 
the group also has future capital commitments for the completion of ongoing capital projects of us 
76402000 2012 us 103106000 note 31 these are to be financed from the fixed deposits held by 
the group  
 
 
 
 
 
 
 
 
 
 
 
   
141 
 
 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
29 financial risk management objectives and policies continued 
 
 
foreign currency risk 
foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will 
fluctuate because of changes in foreign exchange rates foreign currency risk comprises of transaction 
and statement of financial position risk transaction risk relates to the group’s cash flow being adversely 
affected by a change in the exchange rates of foreign currencies against the uae dirham statement of 
financial position risk relates to the risk of the group’s monetary assets and liabilities in foreign currencies 
acquiring a lower or higher value when translated into uae dirhams as a result of currency movements 
 
the group is exposed to currency risk on its trade accounts payable denominated in foreign currencies 
mainly in euros swiss francs and pound sterling 
 
significant foreign currency payable balances included in the consolidated statement of financial position 
are as follows 
 2013 2012 
 us ‘000 us ‘000 
   
eur 
 
1611 
 
          4198  
 chf 
 
612 
 
          730  
    
 
 
 
 
  
 
the table below indicates the group’s foreign currency exposure at 31 december as a result of its 
monetary liabilities as the us dollar is pegged to the uae dirham balances in us dollars are not 
considered to represent significant currency risk the analysis calculates the effect of a reasonable 
possible movement of the us currency rate against the foreign currencies with all other variables held 
constant on the statement of comprehensive income due to the fair value of currency sensitive monetary 
liabilities 
 
 
euros 
swiss 
francs 
british 
pound 
kuwait 
dinar 
australia
n dollar 
effect on 
profit and 
equity 
       
assumed change from year 
end exchange rates  
 
5 5 5 5 5  
       
31 december 2013  
us ‘000 
 
            
 81 
 
       
  31 
 
    
     14 
 
     
      3 
 
 
  
 
     
  129 
 
       
31 december 2012  
us ‘000 
 
            
 210 
 
       
  37 
 
    
     15 
 
     
      1 
 
 
  
 
     
  263 
 
       
assumed change from year 
end exchange rates  
 
5 5 5 5 5  
       
31 december 2013  
us ‘000 
 
81 
 
31 
 
14 
 
3 
 
 
  
 
129 
 
       
31 december 2012  
us ‘000 
 
           
   210  
 
        
    37  
 
         
   15  
 
       
      1  
 
 
  
 
       
  263  
 
       
   
142 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
29 financial risk management objectives and policies continued 
 
capital management 
the primary objective of the groups capital management is to ensure that it maintains healthy capital 
ratios in order to support its business and maximize shareholders’ value 
 
the group manages its capital structure and makes adjustments to it in light of changes in business 
conditions capital comprises share capital share premium group restructuring reserve and retained 
earnings and is measured at us 386236000 as at 31 december 2013 2012 us 329669000 in 
order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to 
shareholders return capital to shareholders issue new shares or sell assets to reduce debt certain 
banking facilities may also impose covenant requirements on the group with respect to capital 
management  
 
the group monitors capital using a gearing ratio which is net debt divided by capital plus net debt the 
group includes within net debt interest bearing loans and borrowings accounts payable and accruals and 
other payables less bank deposits and bank balances and cash   
 
 2013 2012 
 us ‘000 us ‘000 
   
interest bearing loans and borrowings 
 
332438 
 
       303636 
accounts payable and accruals 
 
76495 
 
        69838 
 less bank deposits bank balances and cash 
 
268695 
 
       257450 
      
net debt 
 
140238 
 
       116024  
    
capital 
 
386236 
 
        329669  
      
capital and net debt 
 
526474        445693  
    
gearing ratio 
 
 
27 
 
26 
 
 
 
30 contingent liabilities 
 
the group had contingent liabilities in respect of bank and other guarantees and other matters arising in 
the ordinary course of business from which it is anticipated that no material liabilities will arise at 
31 december 2013 of us 7067000 2012 us 7282000 
 
31 commitments 
 
capital commitments 
the group had future capital commitments of us 76402000 at 31 december 2013 2012 us 
103106000 principally relating to the completion of ongoing capital projects 
 
other commitments 
 2013 2012 
 us ‘000 us ‘000 
future minimum rentals payable under noncancellable 
operating leases 
 
  
  within one year 
 
 
10491 
 
     10233  
   after one year but not more than five years 
 
43984 
 
    43258  
   more than five years 
 
102782 
 
  113999  
      
 157257 
 
  167490  
    
   
143 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
32 derivative financial instruments 
 
the group has entered into the following interest rate swaps to manage its interest rate exposure 
 
negative fair 
value 
notional 
amount maturity profile 
 us ‘000 us ‘000  
    
at 31 december 2013 
 
   
  interest rate swap us 
 
179 
 
24503 
 
feb14 
     
at 31 december 2012 
 
   
  interest rate swap us 
 
    881 
 
    24503  
 
feb14 
     
 
 
the interest rate swaps were contracted to hedge the interest cash flows on term loans as these swaps 
do not qualify for hedge accounting in accordance with ias 39 the movement in fair value gain of 
us 702000 for the year ended 31 december 2013 2012 gain of us 329000 has been charged to the 
consolidated statement of comprehensive income 
 
the notional amounts indicate the volume of transactions outstanding at year end and are neither 
indicative of the market risk nor credit risk 
 
the negative fair value of interest rate swaps is included within accounts payable and accruals as “other 
payables” 
 
  
33 fair values of financial instruments        
 
the fair values of the group’s financial instruments are not materially different from their carrying values 
at the statement of financial position date 
 
the group uses the following hierarchy for determining and disclosing the fair value of financial 
instruments by valuation technique 
 
level 1 quoted unadjusted prices in active markets for identical assets or liabilities 
 
level 2 other techniques for which all inputs which have a significant effect on the recorded fair value are 
observable either directly or indirectly 
 
level 3 techniques which use inputs which have a significant effect on the recorded fair value that are not 
based on observable market data 
 
for financial instruments that are recognized at fair value on a recurring basis the group determines 
whether transfers have occurred between levels in the hierarchy by reassessing categorization bases 
on the lowest level input that is significant to the fair value measurement as a whole at the end of each 
reporting period  
 
 
 
 
 
 
 
 
 
 
   
144 
 
nmc health plc 
  
notes to the consolidated financial statements 
at 31 december 2013 
 
 
33 fair values of financial instruments  continued 
 
 
 
liabilities measured at fair value 
 level 1 level 2 level 3 
total fair 
value 
 us ‘000 us ‘000 us ‘000 us ‘000 
     
31 december 2013     
  interest rate swaps 
 
  
 
179 
 
  
 
179 
      
31 december 2012     
  interest rate swaps  
 
  
 
    881 
 
  
 
    881 
 
 
 
 
 
 
 
     
 
 
    
during the year 31 december 2013 there were no transfers between level 1 and level 2 fair value 
measurements and no transfers into or out of level 3 fair value measurements  
 
the fair value of the interest rate swap is determined by reference to market values for similar 
instruments  it is measured using the forward price method under this method a forward rate or value is 
determined based on the current market price or value of the interest rate and an appropriate rate curve 
and assuming that the forward price rate or value will be realized in future periods 
 
 
34 subsequent event 
 
 
subsequent to year end the lease for the land on which khalifa city specialty hospital is being 
constructed which as at 31 december 2013 was an annually renewable lease has been renewed so that 
it is now a 27 year lease expiring in the year 2040 
 
 
 
 
 
 
             
    
 
 
 
 
 
 
 
 
 
 
 
 
              
 
 
 
 
 
   
145 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
nmc health plc 
 
financial statements 
 
year ended 31 december 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
146 
 
 
 
 
independent auditor’s report to the members of nmc health plc  
 
we have audited the parent company financial statements of nmc health plc for the year ended 31 
december 2013 which comprise the statement of financial position the statement of changes in equity 
and the statement of cash flows and the related notes 1 to 14  the financial reporting framework that 
has been applied in their preparation is applicable law and international financial reporting standards 
ifrss as adopted by the european union and as applied in accordance with the provisions of the 
companies act 2006 
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 
of the companies act 2006  our audit work has been undertaken so that we might state to the company’s 
members those matters we are required to state to them in an auditor’s report and for no other purpose  
to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit work for this report or for the opinions we 
have formed   
 
respective responsibilities of directors and auditor 
as explained more fully in the directors’ responsibilities statement set out on pages 54 to 55 the 
directors are responsible for the preparation of the parent company financial statements and for being 
satisfied that they give a true and fair view our responsibility is to audit and express an opinion on the 
parent company financial statements in accordance with applicable law and international standards on 
auditing uk and ireland those standards require us to comply with the auditing practices board’s 
ethical standards for auditors 
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and disclosures in the financial statements 
sufficient to give reasonable assurance that the financial statements are free from material misstatement 
whether caused by fraud or error this includes an assessment of whether the accounting policies are 
appropriate to the parent company’s circumstances and have been consistently applied and adequately 
disclosed the reasonableness of significant accounting estimates made by the directors and the overall 
presentation of the financial statements  in addition we read all the financial and nonfinancial information 
in the annual report to identify material inconsistencies with the audited financial statements and to 
identify any information that is apparently materially incorrect based on or materially inconsistent with the 
knowledge acquired by us in the course of performing the audit if we become aware of any apparent 
material misstatements or inconsistencies we consider the implications for our report 
opinion on financial statements 
in our opinion the parent company financial statements 
 give a true and fair view of the state of the company’s affairs as at 31 december 2013 
 have been properly prepared in accordance with ifrss as adopted by the european union and 
as applied in accordance with the provisions of the companies act 2006 and 
 have been prepared in accordance with the requirements of the companies act 2006 
opinion on other matters prescribed by the companies act 2006 
in our opinion 
 the part of the directors’ remuneration report to be audited has been properly prepared in 
accordance with the companies act 2006 and 
 the information given in the strategic report and the directors’ report for the financial year for 
which the financial statements are prepared is consistent with the parent company financial 
statements   
147 
 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters where the companies act 2006 requires us 
to report to you if in our opinion 
 adequate accounting records have not been kept by the parent company or returns adequate 
for our audit have not been received from branches not visited by us or 
 the parent company financial statements and the part of the directors’ remuneration report to 
be audited are not in agreement with the accounting records and returns or 
 certain disclosures of directors’ remuneration specified by law are not made or 
 we have not received all the information and explanations we require for our audit 
other matter 
we have reported separately on the group financial statements of nmc health plc for the year ended 31 
december 2013  
 
 
 
cameron cartmell senior statutory auditor 
for and on behalf of ernst  young llp statutory auditor 
london 
24 february 2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
148 
 
 
 
 
nmc health plc 
  
statement of financial position 
as at 31 december 2013 
 
 
  2013 2012 
 notes us ‘000 us ‘000 
assets 
 
   
noncurrent assets 
 
   
investment in subsidiary  4 
 
204127 37227 
 
      
  204127 
 
37227 
       
current assets 
 
   
other receivables and prepayments 
 
5 
 
50 
 
 
 amounts due from a related party 
 
6 2875 
 
166923 
 bank balances and cash 
 
 
 
234 
 
381 
        
  3159 167304 
       
total assets 
 
 207286 204531 
     
equity and liabilities 
 
   
equity 
 
   
share capital 
 
7 
 
29566 
 
       29566  
 share premium 
 
7 
 
179152 
 
179152  
 accumulated losses  9 
 
2904 
 
5938  
       
total equity 
 
 205814 
 
      202780 
       
current liabilities 
 
   
other payables and accruals 
 
8 
 
1472 
 
1751 
        
total liabilities 
 
 1472 
 
1751 
       
total equity and liabilities 
 
 207286 
 
204531 
     
 
 
the financial statements were authorised for issue by the board of directors on 24 february 2014 and 
were signed on its behalf by 
 
 
 
mr h j mark tompkins     mr prasanth manghat  
chairman        chief financial officer  
 
 
the attached notes 1 to 14 form part of the financial statements 
 
 
 
 
 
 
 
 
 
   
149 
 
 
 
 
 
 
nmc health plc 
  
statement of changes in equity  
for the year ended 31 december 2013 
 
 
 
 
 
on demand 
share 
capital 
share 
premium 
accumulated 
losses total 
 us ‘000 us’000 us’000  us’000  us’000 
      
balance at incorporation   
 
 
 
 
 
 
 
 
 
total other comprehensive loss for    
 
    
the period note 9    
 
 
 
 
 
5938 
 
5938 
 issue of share capital note 7 
 
  
 
20696 
 
16531 
 
 
 
37227 
 issue of share capital – ipo note 7 
 
 8870 177394  186264 
share issue costs note 7    14773  14773 
       
  
   
 
       
  
balance as at 31 december 2012 
 
 
 
29566 
 
179152 
 
5938 
 
202780 
  
total other comprehensive  income 
for  
  
 
    
for the year note 9    
 
 
 
 
 
14632 
 
14632 
dividends paid  note 13    
 
 
 
 
 
11598 
 
11598 
       
    
 
   
 
       
  
balance as at 31 december 2013  
 
29566 
 
179152 
 
2904 
 
205814 
 
  
 
   
 
 
 
 
 
the attached notes 1 to 14 form part of the financial statements 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
150 
 
 
 
 
 
 
nmc health plc 
  
statement of cash flows 
for the year ended 31 december 2013 
 
 
  2013 2012 
 notes us ‘000 us ‘000 
   restated 
operating activities 
 
   
profit  loss for the year before  tax  
 
 14632 
 
5938 
 adjustments for 
 
   
  finance costs 
 
 3 
 
10 
   flotation costs 
 
7 
 
 
 
3402  
       
  14635 
 
2526 
 working capital changes 
 
   
  amounts due from a related party 
 
 2852 
 
166923 
  other receivables and prepayments  50 
 
 
  other payables and accruals   279 
 
1106 
       
net cash from  used in operation 
 
 11454 
 
168343 
     
 flotation costs paid    
 
3402 
       
net cash from  used in operations 
 
 11454 171745 
       
financing activities 
 
   
proceeds from share issue – ipo 
 
7 
 
 
 
186264 
 flotation costs paid 
 
7 
 
 
 
14128   
 finance costs paid 
 
 3 
 
10 
 dividend paid to shareholders 
 
13 11598 
 
 
       
net cash used in  from  financing activities 
 
 11601 
 
172126 
       
decrease  increase in cash and cash   147 
 
381 
 equivalents 
 
   
 
cash and cash equivalents at 1 january 
 
 381 
 
 
       
cash and cash equivalents at 31 december 
 
 234 
 
381 
     
 
 
 
the attached notes 1 to 14 form part of the financial statements 
 
 
 
 
 
 
 
   
151 
 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
 
1 corporate information 
 
nmc health plc the “company” or “parent’’ is a company which was incorporated in england and wales 
on 20 july 2011 the company is a public limited company the address of the registered office of the 
company is 23 hanover square london w1s 1jb the registered number of the company is 7712220 
there is no ultimate controlling party 
 
the company completed its premium listing on the london stock exchange on 5 april 2012 
 
the parent and its subsidiaries collectively the “group” are engaged in providing professional medical 
services wholesale of pharmaceutical goods medical equipment cosmetics food and it products and 
services in the united arab emirates 
 
the financial statements of the company for the year ended 31 december 2013 were authorised for issue 
by the board of directors on 24 february 2014 and the statement of financial position was signed on the 
board’s behalf by dr br shetty and mr khalifa bin butti 
 
 
21 basis of preparation 
 
the financial statements have been prepared in accordance with international financial reporting 
standards as adopted by the european union as they apply to the financial statements of the company for the 
year ended 31 december 2013 and applied in accordance with the companies act 2006  
 
the financial statements are prepared under the historical cost convention the principal accounting 
policies adopted in the preparation of these financial statements are set out below  
 
no profit and loss account is presented by the company as permitted by section 408 of the companies 
act 2006  
 
functional currency 
the uae dirham is determined to be the functional currency of the company the reporting currency of 
the company is united states of america dollar us as this is a more globally recognised currency the 
uae dirham is pegged against the us dollar at a rate of 3673 per us dollar 
 
all values are rounded to the nearest thousand dollars 000 except when otherwise indicated 
 
going concern 
these financial statements have been prepared on a going concern basis the company has made a 
profit of us 14632000 2012 loss of us 5938000 and has equity of us 206214000 2012 us 
202780000               
 
the company is the parent of nmc health plc group and is solely a holding company with no business 
activities of its own the company earned a dividend and reported a net profit during the year the 
group’s business activities together with the factors likely to affect its future development performance 
and position are set out in the strategic review on pages 8 to 43 the financial position of the group its 
cash flows liquidity position and borrowing facilities are described in the strategic review on pages 27 to 
30 
 
the group has considerable financial resources including bank facilities as a consequence the directors 
believe that the group is well placed to manage its business risks successfully the directors expect that 
the group has adequate resources to continue in operational existence for the foreseeable future thus 
they continue to adopt the going concern basis in preparing the financial statements 
 
   
152 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
21 basis of preparation continued 
 
comparative information 
 
reclassification 
 
the company has made the following reclassification in respect of the comparatives to conform to the 
current period presentation this reclassification has been made to correct the presentation of the 
financial statements 
 
 an amount of u 3402000 in respect of flotation costs has been reclassified from financing 
activities to operating activities in the statement of cash flows 
 
this reclassification has no impact on previously reported equity or profit of the company 
 
 
22 significant accounting judgements and estimates 
 
the key assumptions concerning the future key sources of estimation uncertainty and critical judgements 
at the statement of financial position date that have a significant risk of causing a material adjustment to 
the carrying amounts of assets and liabilities within the next financial year are discussed below 
 
significant judgements 
 
functional currency 
the uae dirham is determined to be the functional currency of the company  
 
judgement has been used to determine the functional currency of the company that most appropriately 
represents the economic effects of the company’s transactions events and conditions as part of this 
assessment the following information has been taken into account 
 
the primary economic environment influencing the company’s income dividends is the uae and the 
effect of the local environment is limited to expenses incurred within the uk the ability of the company to 
meet its obligations and pay dividends to its shareholders is dependent on the economy of and the 
operation of its subsidiaries in the uae  
 
fair value of intercompany receivable from nmc healthcare llc 
judgement has been used to determine the fair value of the intercompany loan due to the company from 
nmc healthcare llc which has been capitalized by the company as an investment in nmc healthcare 
llc the market value of the intercompany loan was determined to be equal to its face and book value 
the value of the shares in nmc healthcare llc issued to the company was determined to be equal to 
the market value of the loan balance immediately prior to capitalisation   
 
 
23 changes in accounting policies 
 
the accounting policies adopted are consistent with those of the previous financial period 
 
the company applies ifrs as adopted in the european union the european union endorsement 
states that ifrs 10 ifrs 11 and ifrs 12 must be applied at the latest with an effective date of 1 
january 2014 although earlier adoption is permitted accordingly the company has early adopted ifrs 
10 ifrs 11 and ifrs 12 with effect from 1 january 2013  
the amendments to ifrs which are effective as of 1 january 2013 and are described in more detail 
below have no impact on the company  
 
 
 
   
153 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
23 changes in accounting policies continued 
 
new and amended standards and interpretations 
the following amendments to ifrs are effective as of 1 january 2013 
 
 
ifrs 10 consolidated financial statements and ias 27 separate financial statements 
ifrs 10 establishes a single control model that applies to all entities including special purpose entities 
ifrs 10 replaces the parts of previously existing ias 27 consolidated and separate financial statements 
that dealt with consolidated financial statements and sic12 consolidation – special purpose entities 
ifrs 10 changes the definition of control such that an investor controls an investee when it is exposed or 
has rights to variable returns from its involvement with the investee and has the ability to affect those 
returns through its power over the investee ifrs 10 had no impact on the consolidation of investments 
held by the company  
 
ifrs 11 joint arrangements and ias 28 investment in associates and joint ventures 
ifrs 11 replaces ias 31 interests in joint ventures and sic13 jointlycontrolled entities — non
monetary contributions by ventures ifrs 11 removes the option to account for jointly controlled entities 
jces using proportionate consolidation instead jces that meet the definition of a joint venture under 
ifrs 11 must be accounted for using the equity method  
 
ifrs 11 had no impact on the financial position or performance of the company as it does not have any 
jces 
 
ifrs 12 disclosure of interests in other entities 
ifrs 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries joint 
arrangements associates and structured entities the requirements in ifrs 12 are more comprehensive 
than the previously existing disclosure requirements for subsidiaries for example when a subsidiary is 
controlled with less than the majority of voting rights none of these disclosure requirements are 
applicable for financial statements accordingly the company has not made such disclosures 
 
ifrs 13 fair value measurement 
ifrs 13 establishes a single source of guidance under ifrs for all fair value measurements ifrs 13 
does not change when an entity is required to use fair value but rather provides guidance on how to 
measure fair value under ifrs when fair value is required or permitted the application of ifrs 13 has 
not materially impacted the fair value measurements carried out by the company 
 
ias 1 presentation of items of other comprehensive income amendments to ias 1 
the amendments to ias 1 introduce a grouping of items presented in other comprehensive income 
items that will be reclassified ‘recycled’ to profit or loss at a future point in time eg net loss or gain on 
available for sale financial assets have to be presented separately from items that will not be reclassified 
eg revaluation of land and buildings the amendments affect presentation only and have no impact on 
the company’s financial position or performance 
 
ias 1 clarification of the requirement for comparative information amendment 
the amendments specify that a third statement of financial position is required when a an entity applies 
an accounting policy retrospectively or makes a retrospective restatement or reclassification of items in 
its financial statements and b the retrospective application restatement or reclassification has a material 
effect on the information in the third statement of financial position the amendments specify that related 
notes are not required to accompany the third statement of financial position the amendments affect 
presentation only and have no impact on the company’s financial position or performance 
 
 
 
 
 
 
   
154 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
23 changes in accounting policies continued 
 
 
ias 19 employee benefits revised 2011  
ias 19 revised 2011 changes the accounting for defined benefit plans and termination benefits the 
most significant change relates to the accounting for changes in defined benefits obligation and plan 
assets the amendments require the recognition of changes in defined benefit obligation and in the fair 
value of the plan assets when they occur and hence eliminate the ‘corridor approach’ permitted under the 
previous version of ias 19 and accelerate the recognition of past service costs all actuarial gain and 
losses are recognized immediately through other comprehensive income in order for the net provision 
asset or liability recognized in the statement of financial position to reflect the full value of the plan deficit 
or surplus furthermore the interest cost and the expected return on plan assets used in the previous 
version of ias 19 are replaced with a ‘net interest’ amount under ias19 as revised in 2011 which is 
calculated by applying the discount rate to the net defined benefit liability or asset these changes have 
had no impact on the financial position or performance of the company as it does not have any defined 
benefit obligations and plan assets 
 
24 summary of significant accounting policies 
 
investment in subsidiary 
subsidiaries are entities over which the company controls the operating and financial policies generally 
by owning more than 50 of voting rights investments in subsidiaries are recognised at acquisition cost 
less any provision for impairment 
 
when the company incurs increases in or return of share capital tofrom its subsidiaries such 
movements are recognised within the cost of investment in subsidiaries  
 
at each reporting date an assessment is made to determine whether there are any indicators of 
impairment where an indicator of impairment exists a formal estimate of the recoverable amount of the 
investment in subsidiary is made which is considered to be the higher of the fair value less costs to sell 
and the value in use fair value is determined as the amount that would be obtained from the sale of the 
investment in an arm’s length transaction between knowledgeable and willing parties when this 
information is not available the fair value is determined based on the net present value of the future cash 
flows related to its subsidiaries using a discount rate that reflects current market assessments of the time 
value of money and the risks specific to the asset if the carrying amount of an investment exceeds the 
recoverable amount a provision is recorded in the income statement to reflect the investment at the 
recoverable amount  
 
where an impairment charge has previously been recognised an assessment is made at the end of each 
reporting period as to whether there is any indication that the impairment loss may no longer exist or may 
have decreased if any such indication exists an estimate of the recoverable amount is made an 
impairment loss is reversed to the income statement to the extent that the increased carrying value of the 
investment in subsidiary does not exceed the carrying value that would have been determined had no 
impairment loss been recognised for the asset in prior years  
 
acquisition of subsidiary under common control 
when the company acquires a subsidiary under common control the cost of the investment is deemed to 
be the company’s share of the net assets of the subsidiary at the date of acquisition 
 
cash and cash equivalents 
for the purpose of the statement of cash flows cash and cash equivalents consists of cash in hand and 
bank balances 
 
 
 
 
   
155 
 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
24 summary of significant accounting policies continued 
 
equity 
the company has issued ordinary shares that are classified as equity the difference between the issue 
price and the par value of ordinary share capital is allocated to share premium the transaction costs 
incurred for the share issue are accounted for as a deduction from share premium net of any related 
income tax benefit to the extent they are incremental costs directly attributable to the share issue that 
would otherwise have been avoided 
 
listing transaction costs 
transaction costs of the ipo are accounted for as a deduction from equity net of any related income tax 
benefit transaction costs arising on the issue of equity instruments however do not include indirect 
costs such as the costs of management time and administrative overheads or allocations of internal 
costs that would have been incurred had the shares not been issued marketing costs for the ipo do not 
meet the definition of directly attributable expenses and are therefore expensed through the statement of 
comprehensive income together with the indirect costs related to the ipo  
 
accounts payable and accruals 
liabilities are recognised for amounts to be paid in the future for goods and services received whether 
billed by the supplier or not accounts payable are classified as current liabilities if payment is due within 
one year or less or in the normal operating cycle of the business if longer if not they are presented as 
noncurrent liabilities accounts payable are recognised initially at fair value and subsequently measured 
at amortised cost using the effective interest method 
 
provisions 
provisions are recognised when the company has an obligation legal or constructive arising from a past 
event and the costs to settle the obligation are both probable and able to be reliably measured 
 
provisions are measured at the present value of the expenditures expected to be required to settle the 
obligation using a pretax rate that reflects current market assessments of the time value of money and 
risks specific to the obligation increases in provisions due to the passage of time are recognised in the 
consolidated income statement 
 
foreign currencies 
transactions in foreign currencies are recorded in uae dirhams at the exchange rate ruling at the date of 
the transaction monetary assets and liabilities denominated in foreign currencies are retranslated at the 
rate of exchange ruling at the balance sheet date all differences are taken to the statement of 
comprehensive income 
 
financial instruments 
financial instruments comprise amounts due from a related party cash and bank balances and other 
payables the fair value of these financial instruments are based on estimated fair values calculated using 
methods such as the quoted market prices and net present value of future cash flows  the fair value of 
interest bearing items is estimated based on discounted cash flows using interest rates for items with 
similar terms and characteristics the fair value of investments traded in organised markets is determined 
by reference to quoted market bid prices  
 
impairment of financial assets 
an assessment is made at each statement of financial position date to determine whether there is 
objective evidence that a specific financial asset may be impaired if such evidence exists any impairment 
loss is recognised in the statement of comprehensive income  impairment is determined as the difference 
between carrying value and the present value of future cash flows discounted at the current market rate of 
return for a similar financial asset 
 
 
   
156 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
3 accounting standards and interpretations issued but not effective 
 
the standards and interpretations that are issued but not yet effective up to the date of issuance of the 
company’s financial statements are disclosed below the company intends to adopt these standards if 
applicable when they become effective 
 
ifrs 9 financial instruments 
ifrs 9 as issued reflects the first phase of the iasb’s work on the replacement of ias 39 and applies to 
classification and measurement of financial assets and financial liabilities as defined in ias 39 the 
standard was initially effective for annual periods beginning on or after 1 january 2013 but amendments 
to ifrs 9 mandatory effective date of ifrs 9 and transition disclosures issued in december 2011 
moved the mandatory effective date to 1 january 2015 in subsequent phases the iasb is addressing 
hedge accounting and impairment of financial assets the adoption of the first phase of ifrs 9 will not 
have an impact on classification and measurement of the company’s financial assets and financial 
liabilities  
 
investment entities amendments to ifrs 10 ifrs 12 and ias 27 
these amendments are effective for annual periods beginning on or after 1 january 2014 provide an 
exception to the consolidation requirement for entities that meet the definition of an investment entity 
under ifrs 10the exception to consolidation requires investment entities to account for subsidiaries at 
fair value through profit or loss it is not expected that this amendment would be relevant to the company 
since none of the company’s subsidiaries would qualify to be an investment entity under ifrs 10 
 
ias 32 offsetting financial assets and financial liabilitiesamendments to ias 32 
these amendments clarify the meaning of ‘currently has a legally enforceable right to setoff’ and the 
criteria for nonsimultaneous settlement mechanisms of clearing houses to qualify for offsetting these are 
effective for annual periods beginning on or after 1 january 2014 these amendments are not expected to 
be relevant to the company 
 
ifric interpretation 21 levies ifric 21 
ifric 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment as 
identified by the relevant legislation occurs for a levy that is triggered upon reaching a minimum 
threshold the interpretation clarifies that no liability should be anticipated before the specified minimum 
threshold is reached ifric 21 is effective for annual periods beginning on or after 1 january 2014 the 
company does not expect that ifric 21 will have any material financial impact in future financial 
statements 
 
ias 39 novation of derivatives and continuation of hedge accountingamendments to ias 39 
these amendments provide relief from discounting hedge accounting when novation of a derivative 
designated as a hedge instrument meets certain criteria these amendments are effective for annual 
periods beginning on or after 1 january 2014 the amendments have no impact on the company 
 
 
 
 
 
 
 
 
 
 
 
   
157 
 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
 
4 investment in subsidiary 
 
 2013 2012 
 us ‘000 us ‘000 
 
as at 1 january 37227 
 
 
addition  37227 
transfer of amount due from a related party note 6 166900  
     
as at  31 december  204127 37227 
   
   
this represents the cost of investment in nmc healthcare llc previous parent company a wholly 
owned subsidiary held through the holding company subsidiaries nmc health holdco limited and nmc  
holding co llc as part of the restructuring of nmc healthcare llc group on 28 march 2012 nmc 
health plc issued shares to the existing shareholders of nmc healthcare llc in exchange for shares 
already held in nmc healthcare llc the cost of investment represents the company’s share of the net 
assets of nmc healthcare llc at the date of the group restructuring  
 
during the year nmc healthcare llc issued a promissory note to the company in respect of the amount 
that it owed to the company subsequently during the year agreement was reached between the 
company and nmc healthcare llc that the obligations which nmc healthcare llc had under the terms 
of the promissory note would be released and discharged by the company in return for the company 
receiving shares in nmc healthcare llc  accordingly nmc healthcare llc issued 14568 shares to the 
company the market value of the shares issued was equal to the market value of the intercompany 
debt as at the date of the loan capitalisation of us 166900000 
 
the subsidiaries held by nmc heath plc are as follows 
 
 percentage of  holdings 
 31 december 31 december 
 2013 2012 
direct subsidiaries 
 
  
  nmc holding co llc 
 
100 
 
100 
   nmc health holdco limited 
 
100 
 
100 
    
indirect subsidiaries 
 
  
  nmc healthcare llc 
 
100 
 
100 
   new pharmacy company limited 
 
99 
 
99 
   new medical centre hospital llcdubai 
 
99 
 
99 
   nmc specialty hospital llcabu dhabi 
 
99 
 
99 
   nmc specialty hospital llc dubai 
 
99 99 
  new medical centre trading llc 
 
99 
 
99 
   bait al shifaa pharmacy llcdubai 
 
99 
 
99 
   new medical centre llcsharjah 
 
99 
 
99 
   new medical centre specialty hospital llcal ain 
 
99 
 
99 
   reliance information technology llc 
 
99 
 
99 
   br medical suites fz llc 
 
100 100 
  brightpoint hospital llc 
 
99 99 
  nmc day surgery centre llc 
 
99 99 
  nmc dubai investment park llc 
 
99 99 
 
all the above subsidiaries are incorporated in the uae except for nmc health holdco limited which is 
incorporated in england and wales 
 
   
158 
 
 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
5 accounts receivable and prepayments 
 
 2013 2012 
 us ‘000 us ‘000 
   
other receivables 
 
33 
 
 
 prepayments 
 
17 
 
 
      
 50 
 
 
    
   
 
6 related party transactions  
 
these represent transactions with related parties ie major shareholders and senior management of the 
company and entities controlled jointly controlled or significantly influenced by such parties pricing 
policies and terms of all transactions are approved by the management of the company 
 
the company’s immediate and ultimate controlling party is a group of three individuals he saeed bin 
butti dr br shetty and mr khalifa bin butti who are all shareholders and directors of the company and 
who together have the ability to control the company as the immediate and ultimate controlling party is a 
group of individuals it does not produce consolidated financial statements 
 
included in amounts due from a related party as at 31 december 2012 as disclosed in the statement of 
financial position are funds raised from the company’s premium listing on the london stock exchange 
and provided to nmc healthcare llc this amount was interest free and had no fixed repayment terms 
and hence was payable on demand    
 
as referred to in note 4 during the year the intercompany amount owed to the company by nmc 
healthcare llc was capitalised into share capital in nmc healthcare llc 
 
 
  2013 2012 
 us ‘000 us ‘000 
amounts due from subsidiary 
amounts due from a related party 2875 
 
166923 
 
 
  
 
compensation of key management personnel 
 
 2013 2012 
 us ‘000 us ‘000 
 
short term benefits  1586 
 
638 
 
 
  
 
 
key management personnel include all the nonexecutives directors and two senior management 
personnel 
 
 
 
 
 
 
   
159 
 
 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
7 share capital and share premium 
 
as at 31 december 2013 and 31 december 2012 
 
share capital 
 
number of 
shares 
ordinary 
shares total 
 thousands us ‘000 us ‘000 
issued and fully paid 
 
   
nominal value 10 pence sterling each 
 
        185714 
 
    29566  
 
    29566  
     
 
on incorporation the share capital of the company was £100 divided into 100 ordinary shares of £1 each 
on 28 march 2012 as authorised by resolutions of the company 
 
 each of the ordinary shares were subdivided into 10 ordinary shares of 10 pence each and 
the share capital of the company was increased to £13000000 by the issue of 129999000 
ordinary shares of 10 pence each 
 
 
issued share capital and share premium movement 
 
 
on demand 
number of 
shares 
ordinary 
shares 
share 
premium total 
 us ‘000  us  us  us 
      
  
 
     
at the date of incorporation   
 
100 
 
155 
 
  
 
155 
 
share split    
 
900 
 
  
 
 
 
 
 issue of new shares 
 
  
 
129999000
 
 
20696000 
 
16531000 
 
37227000 
 issue of new shares  ipo 
 
  
 
55714286 
 
8870000 
 
177394000 
 
186264000 
 
share issue costs     14773000 14773000 
                   
   
 
   
 
       
  
at 31 december 2012 
 
 
 
185714286
 
 
29566155 
 
179152000 
 
208718155 
 
   
 
  
 
       
   
 
   
 
       
             at 31 december 2013 
 
 
 
185714286
 
 
29566155 
 
179152000 
 
208718155 
 
  
 
  
 
 
 
on 5 april 2012 nmc health plc completed its premium listing on the london stock exchange and 
raised us 186264000 from the issue of 55714286 new ordinary shares thereby diluting existing 
shareholders equity interest to 6695 at the time of listing 
 
during the period ended 31 december 2012 costs of us 18175000 were incurred in relation to 
completion of the company’s premium listing on the london stock exchange of these costs 
us 14773000 has been deducted from the share premium account and us 3402000 has been 
charged to the statement of comprehensive income in accordance with the requirements of ias 32 – 
financial instruments presentation out of the total costs of us 18175000 an amount of us nil 
remains payable as at 31 december 2013 2012 us 645000 and was included in other payables 
 
 
 
 
 
   
160 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
8 other payables and accruals 
 2013 2012 
 us ‘000 us ‘000 
 
other payables 
 
238 
 
737 
 accrued expenses 
 
1234 
 
1014 
      
 1472 
 
1751 
    
 
9 profit attributable to members of the parent company 
 
the profit for the year in the financial statements of the company is us 14632000 2012 loss for 
company for the period from 20 july 2011 to 31 december 2012 was us 5938000  
 
10 auditor’s remuneration 
 
the company paid us 615000 to its auditor in respect of the audit of the company’s annual accounts 
for the year ended 31 december 2013 2012 us 500000 which includes a portion in respect of the 
audit of the financial statements of the company  
 
included in the fees payable to the company’s auditor for the audit of the company’s annual accounts in 
the current year is an amount of us 100000 which was underaccrued in respect of the prior year audit 
of the company’s annual accounts 
 
fees paid to ernst  young llp and its associates for nonaudit services to the company itself are not 
disclosed in the individual accounts of nmc health plc because group financial statements are prepared 
which are required to disclose such fees on a consolidated basis  
 
11 directors’ remuneration 
 
 2013 2012 
 us ‘000 us ‘000 
 
directors’ remuneration  944 
 
557 
   
 
there are no other employee benefits such as longterm benefits postemployment benefits or share 
options paid or payable to the directors further information in respect of this compensation paid to 
directors is disclosed in the directors’ remuneration report 
 
12 financial risk management 
 
the company’s principal financial liabilities are other payables arising in the normal course of business 
the company’s financial assets include an amount due from a related party and bank balances the 
company’s activities expose it to a variety of financial risks interest rate risk credit risk liquidity risk and 
foreign currency risk  
 
interest rate risk 
interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate 
because of changes in market interest rates the company is exposed to interest rate risk on its bank 
balances only as the balance due from a related party is interest free and therefore the company’s 
exposure to interest rate risk is limited   
 
credit risk 
credit risk is the risk that counterparty will not meet its obligations under a financial instrument leading to 
a financial loss the company’s credit risk arises from amounts due from a related party and bank 
balances  
   
161 
 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
12 financial risk management continued 
 
the directors assess the credit quality of the related party by taking into account their financial position 
past experience and other factors management does not expect any losses from nonperformance by this 
counterparty which is a subsidiary of the company  
 
the company limits its credit risk with regard to bank balances by only dealing with reputable banks the 
credit rating of the bank at which the cash at bank is held is aa 
 
liquidity risk 
the company’s objective is to maintain sufficient funding to meet its obligations as they fall due  
 
the table below analyses the company’s undiscounted financial liabilities into relevant maturity groupings 
based on the contractual payment dates  
 
balances due within 12 months equal their carrying balances as the impact of discounting is not 
significant 
 
 
on demand 
less than 3 
months 
3 to 12 
months 1 to 5 years total 
 us ‘000 us ‘000 us ‘000 us ‘000 us ‘000 
      
at 31 december 2013 
 
     
other payables 
 
  
 
238 
 
  
 
 
 
238 
 
                               
total 
 
 
 
238 
 
 
 
 
 
238 
 
      
      
at 31 december 2012 
 
     
other payables 
 
  
 
737 
 
 
 
 
 
737 
 
                            
total 
 
 
 
737 
 
 
 
 
 
737 
 
      
 
foreign currency risk 
foreign currency risk arises when future commercial transactions or recognised assets or liabilities are 
denominated in a currency that is not the entity’s functional currency 
 
the company is exposed to currency risk on its other payables denominated in pound sterling foreign 
currency payable balances included in the statement of financial position denominated in pound sterling 
are us 571000 2012 us 1251000  
 
a  5 movement of the us dollar currency rate against pound sterling with all other variables held 
constant results in an decreaseincrease on the profit for the year of us 29000 2012 loss of us 
63000  
 
fair value estimation 
the fair values of the company’s financial instruments are not materially different from their carrying 
values at the statement of financial position date  
 
financial guarantees 
the company is a guarantor along with other fellow subsidiary undertakings for us 225000000 2012 
nil of syndicated loans from jp morgan raised by its subsidiary nmc healthcare llc 
 
 
 
 
   
162 
 
nmc health plc 
  
notes to the financial statements 
at 31 december 2013 
 
 
13 dividends 
 
in the agm on 27 june 2013 the shareholders approved a dividend of 41 pence per share amounting to 
gbp 7614286 us 11598326 paid to shareholders on the company’s share register on 31 may 2013 
the dividend was paid on 4 july 2013 no interim dividend was declared during the year subject to 
shareholder’s approval a final dividend of 44 pence per share gbp 8212700 us 13633000 will be 
paid to shareholders on the company’s share register on 31 may 2014 
 
 
14 tax 
the group operates solely in the united arab emirates and as there is no corporation tax in the united 
arab emirates no taxes are recognised or payable on the operations in the uae it is the opinion of 
management that there are sufficient losses in the company to offset any potential taxable income arising 
in the uk and accordingly any tax liability that could arise would be immaterial  


Summary:
 4 
 
 
chairman’s letter 
 
dear shareholder 
 
when i wrote to shareholders this time last year with the publication of our 2012 annual report i set out a 
number of achievements which had made 2012 a momentous year of change and achievement for nmc 
health plc  
 
i am pleased to report that again this year many key milestones have been achieved specifically the year 
has seen strong growth with your company following the strategy set out at the time of its ipo in april 2012 
moreover shareholder value has increased significantly during the year group revenue increased from 
us4901m in 2012 to us5509m in 2013 ebitda at group level also improved from us796m to 
us929m in the latest financial year 
 
financial stability 
 
in june 2013 the company announced that it had successfully completed the replacement of its existing 
syndicated bank loan with the help of j p morgan although no additional funds were raised the proceeds 
of the replacement syndicated bank loan have enabled the company to restructure its existing loans 
streamline its financing by reducing the number of loans reduce its cost of funds and create additional 
headroom to ensure that the group is more conservatively financed the reduction in cost of funds is 
estimated to generate average savings of us2m per annum over the next four financial years which will 
have a significant positive effect on the company’s net profit and eps  
 
capital projects 
 
the year has not been without its challenges in relation to the group’s capital projects the group’s 
progress on certain projects within its capital development programme has been slower than expected with 
both the brightpoint women’s hospital and our new dip general hospital having encountered construction 
delays these facilities are expected to open in h1 2014 however our first new facility since ipo the 
nmc day surgery centre in mohammed bin zayed city opened in part in july 2013 and is performing as 
expected our most ambitious capital project the 250 bed hospital being built in the expanding abu dhabi 
suburb of khalifa city is on track to open in h1 2015 finally we also announced in 2013 the launch of a 
medical centre in al ain this project is progressing well  
 
operating divisions 
 
in the healthcare division occupancy rates and outpatient numbers across all of our specialty hospitals 
continue to improve and the group continues to increase the range of specialty procedures that its clinical 
teams undertake during the year our healthcare division also signed a memorandum of understanding 
with oxford fertility unit this joint venture arrangement to provide specialist ivf services at our new 
brightpoint women’s hospital will be a welcome addition to our range of specialist services 
 
the private healthcare market in the uae has been growing steadily in recent years and the board expect 
this to continue the announcement in november 2013 of the introduction of mandatory insurance for 
residents of dubai will help to underpin the growth potential in the uae private healthcare market as our 
healthcare division has existing operations across both abu dhabi and dubai your company is well placed 
to benefit from the rollout of mandatory health insurance in dubai and in the future across the remainder 
of the uae     
 
in the distribution division performance has continued to improve with an increasing number of product 
lines distributed on behalf of our very supportive suppliers general macroeconomic conditions continue to 
indicate good growth levels for the division  
 
corporate governance 
 
during the year your board has continued to assist management in the wider aspects of corporate 
governance where there have been a number of changes in uk regulations and “best practice” standards 
affecting uk listed companies in addition the previous board committee framework has changed with the 
establishment of a clinical governance committee under the guidance of its chair heather lawrence the 
committee will monitor the key areas of clinical risk quality and safety and will work alongside the audit 
committee to ensure key clinical risks facing the group are monitored and where necessary mitigated  5 
 
work has progressed on the establishment of integrated it systems a new hospital information system 
will start to be rolled out in 2014 and the group’s new enterprise resources planning “erp” financial 
system will be operational in h1 2014 and will help simplify administration processes these key 
improvements in the group’s internal controls are important aspects of nmc’s risk mitigation strategy    
 
board changes 
 
during the year there were a number of changes affecting the board jonathan bomford was appointed to 
the board in june 2013 jonathan a chartered accountant is our new independent nonexecutive 
director and chairman of the audit committee and brings sound financial experience to both the audit 
committee and the board as well as experience of working in the gulf region justin jewitt ceased to be a 
director in june 2013 and the board would like to thank him for his contribution during his time as a 
director of the company and chairman of the audit committee 
 
in addition mr keyur nagori was appointed as an alternate director to his excellency saeed bin butti in 
june 2013 
 
on 24 february 2014 he saeed bin butti resigned as a director of the company on the same date he 
saeed nominated mr abdul rahman basaddiq to be appointed as a director of the company and his 
appointment was approved by the board the board would like to thank his excellency for his significant 
contribution to the company and welcome mr basaddiq to the board 
 
dividend 
 
given the good performance of the company and the continued financial stability of the group your board 
plans to submit a resolution to shareholders at the 2014 annual general meeting authorising payment of a 
cash dividend of 44 pence per share this is approximately 20 of profit after tax a level unchanged 
from the amount which shareholders approved in relation to the 2012 financial year
 
 
executive remuneration 
 
the remuneration committee under the chairmanship of lord clanwilliam has been reviewing the 
structure of executive remuneration a new short term incentive plan has been implemented for the 2013 
financial year and a long term incentive plan is proposed for 2014 both of these plans which are 
described more fully in the directors’ remuneration report are designed to focus and incentivise 
management on the long term value of your company and align them with any value change experienced 
by shareholders in the company over the longer term   
 
management and staff 
 
economic conditions in the uae are favourable but dr shetty his management team and staff across the 
group have had to continue to work hard through a continuing period of significant change to achieve 
strong results on your behalf the board greatly appreciates the continued commitment energy and 
goodwill which they have shown in the last 12 months and would like to thank them all for their respective 
contributions  
 
outlook 
 
your board continues to view the outlook for the group with confidence and enthusiasm and looks forward 
to a period of continued well financed growth 
 
 
 
h j mark tompkins 
nonexecutive chairman  6 
 
2013 at a glance      
 
 
 
 
 
 nmc health’s revenue reached 
us5509m in 2013 
 124 revenue growth year on year two 
percentage points higher than last year’s 
growth  
 
 
 
 ebitda increased to us929m in 2013 
167 year on year 
 ebitda margins 169 in 2013 62bps 
year on year  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 net profit increased to us691m in 2013 
157 year on year  
 net profit margins npm were slightly 
higher in 2013 at 126 36bps 
 
  7 
 
 
 
 
 adjusted operating cash flow 
for the group amounted to 
us884m in fy2013 1104 
higher than fy2012 
 key drivers include higher 
ebitda lower change in net 
working capital and lower 
maintenance capex 
 
 
 
 
note adjusted operating cash flow excludes changes 
in amounts due fromto related parties 
 
 
 
 more effective management of 
working capital reduced the 
net working capital to sales 
ratio by 396bps in fy2013 
 
 
 
 
 net debt reached us637m as 
the group continued to 
advance its ongoing 
healthcare projects 
 us722m was spent as 
capital expenditure 
 
 
 
 
 
 shareholders equity increased 
by 172 to us3862m in 
fy2013