To the Members of Apollo Hospitals Enterprise Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Apollo Hospitals EnterpriseLimited (the Company) which comprise the Balance Sheet as at March 31 2016 and theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information which wehave signed under reference to this report.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial controls relevant to the Companyspreparation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompanys directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a) in the case of the Balance Sheet of the state of affairs of the Company as at March31 2016; b) in the case of the Statement of Profit and Loss of the profit for the yearended on that date; and c) in the case of the Cash Flow Statement of the cash flows forthe year ended on that date.
Report 0n 0ther Legal and Regulatory Requirements:
1. As required by the Companies (Auditors Report) Order 2016 ("TheOrder") issued by the Central Government of India in terms of Section 143(11) of theAct we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 ofthe Order.
2. As required by section 143(3) of the Companies Act 2013 we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on March 312016 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2016 from being appointed as a director in terms of section 164(2) of theCompanies Act 2013.
f) With respect the adequacy of internal financial controls over financial reporting ofthe Company and the operating effectiveness of such controls refer to our separate reportin Annexure B".
g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer note 28 to the financial statements;
(ii) The Company is fully hedged for all long term derivative contracts and there areno material foreseeable losses on long term contracts for which any provision is required
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company
Annexure A to Independent Auditors Report
The Annexure referred to in paragraph 1 of our Report of even date to the members ofApollo Hospitals Enterprise Limited on the accounts of the Company for the year endedMarch 31 2016.
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The fixed assets have been physically verified by the management at reasonableintervals; according to the information and explanation given to us no materialdiscrepancies were found on such verification.
(c) The title deeds of immovable properties owned by the Company are held in the nameof the Company. The title deeds of immovable property in the form of building constructedon leasehold land are held in the name of the Company. Also refer to note no: 11 in notesto accounts.
ii. Stock of medicines stores spares consumables chemicals lab materials andsurgical instruments have been physically verified at reasonable intervals by themanagement. According to the information and explanation given to us no materialdiscrepancies were noticed.
iii. According to the information and explanation given to us and on the basis of ourexamination of the books of accounts the Company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under section 189 of the Companies Act 2013.
Consequently the provisions of clauses 3(a) and 3(b) are not applicable.
iv. The Company has not provided any loan or investments or Guarantees or Securitieswhich falls under the purview of Sec 185 and Sec 186 of the Companies Act 2013.
v. In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by the Reserve Bank of India andprovisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013and Companies (Acceptance of Deposits) amended Rules 2015 with regard to depositsaccepted from the public including unclaimed deposits matured in earlier years that areoutstanding during the year. To the best of our knowledge and according to the informationand explanations given to us no order has been passed by the Company Law Board NationalCompany Law Tribunal or Reserve Bank of India or any other Court or any other Tribunal onthe Company in respect of the aforesaid deposits.
vi. We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by the Central Government for maintenance of cost records undersub-section 1 of Section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the records.
vii. (a) According to the information and explanations given to us the Company isregular in depositing with appropriate authorities undisputed statutory dues includingProvident Fund Employees State Insurance Income Tax Sales Tax Service taxCustoms Duty Cess and other statutory dues applicable to it. To the best of ourknowledge and according to the information and explanations given to us there are noarrears of outstanding statutory dues as at March 31 2016 for a period of more than sixmonths from the date they became payable. To the best of our knowledge and belief andaccording to the information and explanations given to us excise duty is not applicableto this Company.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues disputed with respect to Cess. The particularsof Sales tax Service Tax Customs duty and Income tax which have not been deposited onaccount of any dispute are as follows:
|Name of the statute ||Nature of the dues ||Amount (Rsin million) 31.03.2016 ||Period to which the amount relates ||Forum where dispute is pending Assistant Collector of Customs |
|Customs Act 1962 ||Customs duty ||99.70 ||1996 1997 ||( Chennai Hyderabad & Customs duty) |
|Service Tax ||Service tax ||29.63 ||2007-12 2012-13 2013-14 ||CESTAT Delhi |
|Value Added Tax Act 2004 || || ||2008-09 ||Deputy Commissioner of |
| ||Value Added Tax ||24.88 ||2009-10 ||Commercial Tax (Enforcement) |
| || || ||2010-11 ||Chennai |
| || || ||Assessment Year || |
| || ||49.12 ||1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 ||Department has filed appeal before Madras High Court |
|Income Tax Act 1961 ||Income Tax || ||2001-2002 || |
| || || ||Assessment Year || |
| || ||142.66 ||2010-2011 2011-2012 2012-2013 ||CIT (Appeals) |
| || ||136.76 ||Assessment Year 2000-2001 ||Honourable Supreme Court |
|Total || ||482.75 || || |
Refer Clause (i) (c) Note 28- Notes forming part of Accounts viii. In our opinion andaccording to the information and explanations given to us the Company has not defaultedin repayment of any dues to financial institutions banks and debenture holders.
ix. In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public offer (including debtinstruments) and hence this clause is not applicable.
x. According to the information and explanations given to us by the Company no fraudon or by the Company has been noticed or reported during the year.
xi. The managerial remuneration paid by the Company is as per Sec 197 of the CompaniesAct 2013 and Schedule V of the Companies Act 2013.
xii. The Company is not a Nidhi Company and hence this clause is not applicable.
xiii. All the transactions mentioned are in compliance with Sec 177 and Sec 188 of theCompanies Act 2013 and are disclosed as required under the applicable AccountingStandards.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and hence thisclause is not applicable.
xv. According to the information and explanation given to us the Company has notentered into non cash transactions with directors or persons connected with them whichwill come under the purview of Sec 192 of the Companies Act 2013.
xvi. As the Company is not in non banking financial services this clause is notapplicable.
Annexure B to the Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ApolloHospitals Enterprise Limited ("the Company") as of 31 March 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompanys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For S Viswanathan LLP |
| ||Chartered Accountants |
| ||FRN: 004770S/S200025 |
| ||V C Krishnan |
|Place: Chennai ||Partner |
|Date : 25th May 2016 ||Membership No: 022167 |