Your Directors are pleased to present the THIRTY FIFTH ANNUAL REPORT and the auditedfinancial statements for the year ended 31st March 2016.
Financial Results (Standalone)
| || ||( Rs in million) |
|For the year ended ||March 31 2016 ||March 31 2015 |
|Income from operations ||54091 ||45928 |
|Profit before Extraordinary Items and Taxation ||4778 ||4820 |
|Provision for Taxation ||827 ||1207 |
|Net Profit before Extraordinary Item after Taxation ||3951 ||3613 |
|Exceptional Items ||(257) ||(147) |
|Net Profit after Exceptional Items ||3694 ||3466 |
|Balance of Profit brought forward ||3144 ||3165 |
|Profit Available for appropriations ||6838 ||6631 |
|Appropriations || || |
|Dividend (inclusive of dividend tax) ||1004 ||964 |
|Transfer to General Reserve ||2000 ||1500 |
|Transfer to Debenture Redemption Reserve ||- ||485 |
|Amount charged off in accordance with the transitional provisions of the Companies Act 2013 ||- ||539 |
|Balance carried forward to the Balance Sheet ||3834 ||3143 |
Results of Operations
During the year under review the income from operations of the Company increased toRs54091 million compared to Rs45928 million in the previous year registering animpressive growth of 18%. The profit after tax for the year increased by 7% to Rs3694million compared to Rs3466 million in the previous year.
During the year under review the consolidated gross revenue of the Company increasedto Rs60856 million compared to Rs51785 million in the previous year registering animpressive growth of 18%. Net profit after minority interest for the group stood atRs3310 million.
Consolidated Financial Statements
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS)-21 on Consolidated Financial Statements read with AS-23 on Accounting forInvestments in Associates and AS-27 on Financial Reporting of Interests in Joint Venturesthe audited consolidated financial statements form part of the Annual Report.
In terms of provision to sub section (3) of Section 129 of the Act the salientfeatures of the financial statements of the Subsidiaries Associates and Joint VentureCompanies are set out in the prescribed Form AOC-1 which forms a part of the AnnualReport.
In accordance with Section 136 of the Act the audited financial statements includingthe consolidated financial statements of the Company and audited accounts of thesubsidiaries are available at companys website www.apollohospitals.com. Thedocuments will also be available for inspection during business hours at the registeredoffice of the Company.
During the year your Company declared an interim dividend of Rs6.00 per equity share.Your Directors have considered it financially prudent in the long-term interests of theCompany to reinvest the profits into the business of the Company to build a strong reservebase and grow the business of the Company. No final dividend has therefore beenrecommended for the year ended March 31 2016.
Transfer of Reserves
Your Company proposes to transfer Rs2000 million to the general reserves out of theamount available for appropriations. An amount of Rs3834 million is proposed to beretained in the profit and loss account.
CRISIL has rated the companys debt instruments as AA indicating a high degree ofsafety.
India Ratings and Research (Ind-RA) (a Fitch Group Company) has assigned theCompanys long term debt and Non-Convertible Debentures (NCDs) an IND AA+ Ratingwith a stable outlook.
Subsidiaries Associate Companies and Joint Ventures.
At the beginning of the year your Company had twelve direct subsidiaries and five stepdown subsidiaries seven joint ventures and three associate companies. As on 31st March2016 your Company has sixteen direct subsidiaries and five step down subsidiaries sixjoint ventures and three associate companies.
The statement containing the summarized financial position of the subsidiary companiesviz. Apollo Home Healthcare (I) Ltd (formerly known as Unique Home Healthcare Limited)(AHHCL) AB Medical Centres Limited (ABMCL) Samudra Healthcare Enterprises Limited(SHEL) Apollo Hospital (UK) Limited (AHUKL) Apollo Hospitals Singapore Pte Limited(AHSPL) Apollo Health and Lifestyle Limited (AHLL) Western Hospitals Corporation PvtLimited (WHCPL) Total Health (TH) Apollo Healthcare Technology Solutions Limited(AHTSL) Imperial Hospital and Research Centre Limited (IHRCL) Apollo Home HealthcareLimited (AHHL) Apollo Nellore Hospital Limited (ANHL) Sapien Bio Sciences Pvt Limited(SBPL)
Apollo Rajshree Hospitals Pvt Limited (ARHL) Apollo Lavasa Health Corporation Limited(ALHCL) Assam Hospitals Limited (AHL) Apollo Cosmetic Surgical Centre Pvt Limited(ACSPL) Apollo Sugar Clinics Limited (ASCL) Akeso Healthcare Private Limited (AKESO)Alliance Dental Care Limited (ADCL) and Apollo Dialysis Private Limited (ADPL) pursuant toSection 129 and Rules 5 of the Companies (Accounts) Rules 2014 is contained in FormAOC-1 which forms part of the Annual Report.
Apollo Home Healthcare (India) Limited (AHHCL)
(Formerly known as Unique Home Healthcare Limited)
AHHCL a wholly owned subsidiary of the Company provides medical and paramedicalservices including doctors consultation physiotherapy direct to patient homes andalso offers paramedical services in hospitals to critically ill patients. During the yearAHHCL recorded a revenue of Rs12.53 million and net profit of Rs0.11 million.
AB Medical Centres Limited (ABMCL)
ABMCL a wholly owned subsidiary of the Company does not have any commercial operationsas it has leased out its infrastructure viz. land and building to the company for runninga hospital. For the year ended 31st March 2016 ABMCL recorded an income of Rs6.79million and a net profit of Rs4.66 million.
Samudra Healthcare Enterprises Limited (SHEL)
SHEL a wholly owned subsidiary of the company runs a 120 bed multi specialityhospital at Kakinada. For the year ended 31st March 2016 SHEL recorded an income ofRs266.40 million and a net profit of Rs4.49 million.
Apollo Health and Lifestyle Limited (AHLL)
AHLL is a 99.29% subsidiary of the Company is engaged in the business of providingprimary healthcare facilities through a network of owned/franchised clinics across Indiaoffering specialist consultations diagnostics preventive health checks telemedicinefacilities and a 24-hour pharmacy all under one roof. For the year ended 31st March 2016AHLL recorded an income of Rs2000.13 million and a net loss of Rs56.86 million.
Western Hospitals Corporation Private Limited (WHCPL)
WHCPL a wholly owned subsidiary of the Company for the year ended 31st March 2016recorded an income of Rs 14.44 million and a net profit of Rs9.60 million.
Total Health (TH)
TH a wholly owned subsidiary of the Company registered under Section 8 of theCompanies Act 2013 is engaged in carrying on CSR activities in the field ofcommunity/rural development.
Apollo Healthcare Technology Solutions Limited (AHTSL)
AHTSL a wholly owned subsidiary of the Company is in the process of setting up theProton Therapy Centre in Chennai which will be the first of its kind in the SouthernHemisphere and offering advanced oncology care. AHTSL is yet to commence operations.
Apollo Hospital (UK) Limited (AHUKL)
AHUKL is a wholly owned foreign subsidiary of the Company and has not yet commenced itsoperations.
Apollo Hospitals Singapore Pte Limited (AHSPL)
AHSPL is a wholly owned subsidiary of the Company and has not yet commenced itsoperations.
Imperial Hospital and Research Centre Limited (IHRCL)
IHRCL a 90% subsidiary of the company owns a 240 bed multi-specialty hospital atBengaluru. For the year ended 31st March 2016 IHRCL recorded an income of Rs1839.90million and a net profit of Rs61.70 million.
Apollo Home Healthcare Limited (AHHL)
AHHL a 80.87% subsidiary of the Company is engaged in the business of providing highquality personalized and professional healthcare services at the doorsteps of thepatients. AHHL recorded revenues of Rs59.88 million and a net loss of Rs113.64 million.
Apollo Nellore Hospital Limited (ANHL)
ANHL has leased out its land at Nellore to the Company. ANHL recorded revenues ofRs8.01 million and a net profit of Rs6.18 million.
Sapien Biosciences Pvt Ltd (SBPL)
SBPL is a 70% subsidiary of the company which is engaged in the business ofbio-banking of tissues. For the year ended 31st March 2016 SBPL recorded revenues ofRs5.95 million and a net loss of Rs10.37 million.
Apollo Rajshree Hospitals Pvt Ltd (ARHL)
ARHL a 57.27% subsidiary of the company runs a multi speciality hospital at Indore.For the year ended 31st March 2016 ARHL recorded an income of Rs 201.70 million and anet loss of Rs83.87 million.
Apollo Lavasa Health Corporation Limited (ALHCL)
ALHCL a 51% subsidiary of the company runs a hospital at Lavasa. For the year ended31st March 2016 ALHCL recorded an income of Rs7.20 million and a net loss of Rs39.45million.
Assam Hospitals Limited (AHL)
AHL a 51% subsidiary of the company runs a multi speciality hospital at Guwahati. Forthe year ended 31st March 2016 AHL recorded an income of Rs869.55 million and a netprofit of Rs18.00 million.
Apollo Sugar Clinics Limited (ASCL)
ASCL a subsidiary company of Apollo Health and Lifestyle Limited is engaged in thebusiness of running diabetes management centres. For the year ended 31st March 2016 ASCLrecorded an income of Rs190.46 million and a net loss of Rs171.01 million.
Apollo Cosmetic Surgical Centre Pvt Ltd (ACSPL)
ACSPL a subsidiary company of Apollo Health and Lifestyle Limited is engaged in thebusiness of running cosmetic surgical centres. For the year ended 31st March 2016 ACSPLrecorded an income of Rs12.24 million and a net loss of Rs10.11 million.
Akeso Healthcare Private Limited (AKESO)
AKESO a wholly owned subsidiary company of Apollo Health and Lifestyle Limited isengaged in the business of healthcare services. For the year ended 31st March 2016 itrecorded an income of Rs45.86 million and a net loss of Rs 0.62 million.
Alliance Dental Care Limited (ADCL)
ADCL a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business ofrunning dental clinics. For the year ended 31st March 2016 ADCL recorded a revenue of Rs382.34 million and a net loss of Rs62.68 million.
Apollo Dialysis Pvt Ltd (ADPL)
ADPL a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business ofrunning dialysis centres. For the year ended 31st March 2016 ADPL recorded a revenue ofRs49.13 million and a net loss of Rs6.30 million.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The report on corporategovernance as required under the Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter Listing Regulations) forms anintegral part of this report. The requisite certificate from the Auditors of the Companyconfirming compliance with the conditions of corporate governance is attached to thereport on Corporate Governance.
Managements Discussion and Analysis Report
Managements Discussion and Analysis Report for the year under review asstipulated under Regulation 34 of the Listing Regulations is presented in a separatesection forming part of the Annual Report.
Business Responsibility Report
The SEBIs Listing Regulations mandates inclusion of the Business ResponsibilityReport (BRR) as part of the Annual Report for top 500 listed entities based on marketcapitalisation. In compliance with the regulation BRR is presented in a separate sectionforming part of the Annual Report.
The Company has adopted a policy on prevention prohibition and redressal of sexualharassment at the workplace in line with the provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder. The Company received 3 complaints under the policy all of which were disposedoff.
Vigil Mechanism/Whistle Blower Policy
The Company has established a vigil mechanism for Directors and Employees to reporttheir genuine concerns the details of which are given in the Corporate Governance Report.The policy on Vigil Mechanism and Whistle Blower Policy has been posted on the website ofthe Company www.apollohospitals.com.
Particulars of Loans Guarantees and Investments
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
During the financial year your company had not accepted deposits from the public.
The total outstanding deposits with the Company as on 31st March 2016 were Rs273.41million (Rs339.27 million as on 31st March 2015) which include deposits for an aggregatevalue of Rs18.87 million (Rs1.49 million as on 31st March 2015) not claimed by thedepositors.
Directors and other Key Managerial Personnel (KMPs)
Board Composition and Independent Directors
The Board consists of the Executive Chairman four Executive directors and eightIndependent directors.
Independent directors are appointed for a term of five years and are not liable toretire by rotation.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of the SEBI Listing Regulations.
Retirement by Rotation
Pursuant to Section 152 of the Companies Act 2013 Smt.Shobana Kamineni Directorretires by rotation at the ensuing Annual General Meeting and being eligible offersherself for re-appointment.
Key Managerial Personnel
Pursuant to the provisions of Section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company are Smt. Suneeta Reddy Managing Director Shri. KrishnanAkhileswaran Chief Financial Officer and Shri. S.M. Krishnan Company Secretary. Therehas been no change in the Key Managerial Personnel during the year.
Pursuant to the provisions of the Companies Act 2013 and in terms of Regulation 17(10)of the SEBI Listing Regulations the Board has carried out an annual performanceevaluation of its own performance the directors individually as well as the evaluation ofthe working of the Audit and the Nomination & Remuneration Committees. The manner inwhich the evaluation has been carried out has been explained in the Corporate GovernanceReport.
The Board has on the recommendation of the Nomination & Remuneration Committeeapproved a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
Meetings of the Board
The Board met five times during the financial year the details of which are given inthe Corporate Governance Report.
The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
The Board of Directors had constituted a Risk Management Committee to identify elementsof risk in different areas of operations and to develop a policy for actions associated tomitigate the risks. The Committee on a timely basis informed the members of the Board ofDirectors about risk assessment and minimization procedures and in the opinion of theCommittee there was no risk that may threaten the existence of the Company. The details ofthe Risk Management Committee are included in the Corporate Governance Report.
Internal Financial Controls and their Adequacy
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board.The details of the internal control system and its terms of reference are set out in theManagement Discussion and Analysis Report forming part of the Boards Report.
The Directors had laid down internal financial controls to be followed by the Companyand the policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to the Companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol systems periodically.
Significant and Material Orders passed by the Regulators or Courts.
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
Directors Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge hereby state and confirm:
a. that in the preparation of the annual financial statements for the year ended March31 2016 the applicable accounting standards have been followed along with properexplanations relating to material departures if any;
b. that such accounting policies have been selected and applied consistently andjudgement and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2016 and of theprofit of the Company for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
The paid up Equity Share Capital as on March 31 2016 was Rs695.63 Million. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As on March 31 2016 the details of theshareholding by the Directors of the Company are set out in the Corporate GovernanceReport forming part of the Boards Report and none of the directors hold convertibleinstruments of the Company.
The Board at its meeting held on 28th May 2015 approved the proposal to undertake anissue of equity shares to the existing shareholders on a Rights basis of a sum of uptoRs7500 million.
The purpose of the Rights Issue was to raise long term equity capital for the Company.The Company is awaiting necessary approvals for going ahead with the Rights Issue.
Contracts and Arrangements with Related Parties
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an armslength basis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Companys websitewww.apollohospitals.com. Your Directors draw the attention of the members to the Notes tothe financial statements which sets out related party disclosures.
None of the Directors have any pecuniary relationships or transactions vis--vis theCompany.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said Rules isprovided in the Annual Report.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annual Report.
Having regard to the provisions of Section 136(1) read with the relevant provisions ofthe Companies Act 2013 the Annual Report excluding the aforesaid information is beingsent to the members of the Company. The said information is available for inspection atthe Registered Office of the Company during working hours and any member interested inobtaining such information may write to the Company Secretary and the same will befurnished free of cost.
Employee Stock Options
No Employee Stock Options have been given to the employees of the Company and thus nodisclosure is required.
Corporate Social Responsibility Initiatives
As part of its initiatives under Corporate Social Responsibility (CSR) the Company hasundertaken projects in the areas of Rural Development Education and Health. Theseprojects are in accordance with Schedule VII of the Companies Act 2013. The Report on CSRactivities for the financial year 2015-16 is annexed herewith as "Annexure A".
The Auditors S. Viswanathan LLP Chartered Accountants retire at the ensuing AnnualGeneral Meeting and have confirmed their eligibility and willingness to accept office ifreappointed.
The Audit Committee and the Board recommend the re-appointment of S. Viswanathan LLPChartered Accountants as Auditors of the Company to hold office till the conclusion ofthe next Annual General Meeting.
It may please be noted that this would be the last year of appointment of the existingStatutory Auditor under the transitional provisions contained in the Companies Act 2013.
The Company engages the services of the Big Four consulting firms on complianceregulatory and tax matters including enterprise risk management review of internalfinancial controls which also covers Information Technology related controls etc andprovides periodic updates to the Board on an ongoing basis .
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 your Directors had on the recommendation of theAudit Committee appointed M/s. Raman & Associates Cost Accountants Chennai (ICWARegistration No.000050) to audit the cost accounts of the Company for the financial year2016-17 on a remuneration of Rs1.50 million.
As required under the Companies Act 2013 the remuneration payable to the cost auditoris required to be placed before the Members in a general meeting for their ratification.Accordingly a resolution seeking Members ratification for the remuneration payableto M/s. Raman & Associates Cost Accountants Chennai (ICWA Registration No.000050) isincluded at Item No. 8 of the Notice convening the Annual General Meeting.
The Board has appointed Smt. Lakshmmi Subramanian Senior Partner M/s. LakshmmiSubramanian & Associates a firm of Company Secretaries in Practice to conductSecretarial Audit for the financial year 2015-2016. The Secretarial Audit Report for thefinancial year ended March 31 2016 is annexed herewith as "Annexure B". TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
Statutory Auditors and Secretarial Auditors Report
The Directors hereby confirm that there is no qualification reservation or adverseremark made by the statutory auditors of the company or in the secretarial audit report bythe practicing company secretary for the year ended 31st March 2016.
Particulars regarding Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo.
Information as required to be disclosed on conservation of energy technologyabsorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 isannexed herewith as "Annexure C".
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as "Annexure D".
Your Directors wish to place on record their appreciation of the contribution made bythe employees at all levels towards the continued growth and prosperity of your Company.
Your Directors also wish to place on record their appreciation of businessconstituents banks and other financial institutions and shareholders of the Company fortheir continued support.
| ||For and on behalf of the Board of Directors |
|Place : Chennai ||Dr. Prathap C Reddy |
|Date : 25th May 2016 ||Executive Chairman |
Annexure - A to the Directors Report
Report on Corporate Social Responsibility (CSR) activities for the financial year 2015- 2016.
|1 A brief outline of the Companys CSR policy including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programmes. ||Your Company has undertaken CSR activities during the year to create a meaningful and lasting impact on the communities in remote areas by helping them transcend barriers of socio-economic development. Your company wishes to extend comprehensive integrated healthcare services to the community. Your company is also committed to developing the skills of the youth through high quality education and research in healthcare services. |
| ||Your company continues to focus on the CSR activities under the following broad segments : |
| ||1. Rural Development |
| ||2. Healthcare |
| ||3. Education and Skills Development |
| ||4. Research in Healthcare |
| ||5. Disaster Management |
| ||The CSR Policy can be assessed on the companys website. |
| ||Weblink: https://www.apollohospitals.com/apollo_pdf/csr-policy.pdf |
|2 Composition of the CSR Committee: || Dr. Prathap C Reddy Chairman |
| || Smt. Preetha Reddy |
| || Shri. N. Vaghul and |
| || Shri.G.Venkatraman |
|3 Average net profit of the Company for the last three financial years: ||Rs4321.98 million |
|4 Prescribed CSR Expenditure (two percent of the amount as in item 3 above): ||Rs86.44 million |
|5 Details of CSR spent for the financial year Total Amount to be spent for the financial year ||2015 -2016 Rs86.44 million |
|Amount unspent if any ||Nil |
6 Manner in which the amount was spent during the financial year is detailed below :
The Company undertook CSR activities in line with the CSR policy approved by the Boardof Directors focussing on the following themes.
1. Rural Development.
2. Healthcare encompassing free health screening camps.
3. Education and Skill Development.
Manner in which the amount was spent during the financial year is detailed below:
|CSR Project or activity identified ||Sector in which the project is covered ||Projects or Programs (1) Local area or other (2) Specify the State and district where Projects or Programs were undertaken ||Amount of Outlay (Budget) project or program wise Rs in million ||Amount spent on the project or programs Rs in million ||Cumulative Expenditure upto the reporting period Rs in million ||Amount spent directly or through implementing agency* |
|1 Providing safe drinking water ||Rural Development ||Andhra Pradesh Chittoor District Aragonda ||80.00 ||8.34 ||27.89 ||Implementing Agency: Total Health |
|Extension of Sanitation facilities || || || || || || |
|Setting up of Nutrition Centres || || || || || || |
|Vocational Training Centres facilitating skill development training || || || || || || |
|Mobile Medical Units primary and preventive health care including diagnostics || || || || || || |
|Promotion and revival of rural sports || || || || || || |
|2 Education and other related Initiatives ||Promoting education ||Andhra Pradesh Chittoor District Aragonda ||30.00 ||5.50 ||16.02 ||Implementing Agency : Aragonda Apollo Medical and Educational Research Foundation |
|3 Health Check-ups - Free Medicines and Medical Check- ups for poor people Health Care activities Health awareness camps for primary and preventive healthcare including diagnostics. ||Promoting healthcare including preventive care ||Free medical Clinics at: ||73.35 ||34.60 ||73.35 ||Direct |
| || ||1. Tirumala Tirupathi Devasthanam (TTD) Tirupathi Andhra Pradesh. || || || || |
| || ||2. Koyambedu Bus Stand Chennai. || || || || |
| || ||3. Research Centre at Tambaram Chennai. || || || || |
| || ||4. Rural Community Centre Ayanambakkam Chennai. || || || || |
| || ||5. Medical Camp at Sabarimala Pamba Pathanamthitta District Kerala. || || || || |
|4 Free Medical Treatment for children ailing from heart diseases. ||Promoting healthcare including preventive care ||Tamil Nadu Chennai ||7.83 ||2.50 ||7.83 ||Implementing Agency: Save a Childs Heart Initiative registered under the Trust Act. |
|5 Free Medical Treatment for children with hearing impairment ||Promoting healthcare including preventive care ||Andhra Pradesh Hyderabad ||2.50 ||2.50 ||2.50 ||Implementing Agency: Society to Aid the Hearing Impaired registered under the Trust Act. |
|6 Free Medicines to Geriatric Centers ||Promoting healthcare including preventive care ||Tamil Nadu Chennai ||2.70 ||2.70 ||2.70 ||Implementing Agency: Direct |
|7 Donation to Tamil Nadu Chief Minister Fund for Flood Relief ||Disaster Management ||Tamil Nadu ||30.00 ||30.00 ||30.00 ||Implementing Agency: Government of Tamil Nadu |
|8 Swach Bharat Initiatives ||Community Development ||- ||3.56 ||- ||3.56 ||Implementing Agency : Society to Heal Aid Restore Educate |
|9 Eradication of Child Poverty ||Community development ||Andhra Pradesh ||0.30 ||0.30 ||0.30 ||Implementing Agency: Magic Bus Foundation |
|Total || || ||230.24 ||86.44 ||164.15 || |
Responsibility Statement by the Corporate Social Responsibility Committee:
The implementation and monitoring of the CSR Policy is in compliance with the CSRobjectives and policy of the Company.
|Sd/- ||sd/- |
|Dr. Prathap C Reddy ||Suneeta Reddy |
|Chairman CSR Committee ||Managing Director |
|Place : Chennai || |
|Date : 25th May 2016 || |
Annexure - B to the Directors Report Secretarial Audit Report
Secretarial Audit Report
For the financial year ended 31st March 2016
[Pursuant to section 204(1) of the Companies Act 2013 and Rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014] To the Members Apollo HospitalsEnterprise Limited No. 19 Bishop Gardens Raja Annamalaipuram Chennai - 600 028
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Apollo Hospitals EnterpriseLimited (hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.
Based on our verification of the Companys books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit We hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance mechanisms in place to the extent in the manner andsubject to the reporting made hereinafter:
We have examined the books papers minute books forms and returns filed and otherrecords maintained by Apollo Hospitals Enterprise Limited ("the Company") forthe financial year ended on 31st March 2016 according to the provisions as applicable tothe Company during the period of audit:
(i) The Companies Act 2013 ("the Act") and the rules made thereunder and theCompanies Act 1956 to the extent applicable;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 and Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 (applicable with effect from 15th May 2015);
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 and amendments from time to time;
(d) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
(e) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with clients tothe extent of securities issued;
(f) The Listing Agreements entered into by the Company with the Stock Exchanges wherethe securities of the Company are listed and the uniform listing agreement with the saidstock exchanges pursuant to the provisions of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (applicable with effect from 1 December 2015).
(g) Secretarial Standards with respect to Meetings of the Board of Directors (SS-1) andGeneral Meetings (SS-2) issued by the Institute of Company Secretaries of India applicablewith effect from 1 July 2015.
It is reported that during the period under review the Company has been regular incomplying with the provisions of the Act Rules Regulations Guidelines and Standardsetc. as mentioned above.
We further report that there were no actions/events in the pursuance of
(a) The Securities and Exchange Board of India (Share Based employee Benefits)Regulations 2014 and the Employees Stock Option Scheme 2007 approved under theprovisions of the Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;
(b) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (c) The Securities and Exchange Board of India (Buyback of Securities)Regulations 1998 requiring compliance thereof by the Company during the financial yearunder review.
We further report that on examination of the relevant documents and recordstheCompany has been regular in complying with the provisions of the Act Rules Regulationsetc. as mentioned below and has adequate systems to monitor and ensure the compliance(including the process of renewal/fresh/pending applications with Government Authorities)of the following laws specifically applicable to the Company
1 Atomic Energy Act 1962
2 Birth and Death and Marriage Registrations Act 1886
3 Blood Bank Regulations under Drugs and Cosmetics Act 1940
4 Clinical Thermometers (Quality Control) Order 2001
5 Dentists Act 1948
6 Drugs and Cosmetics Act 1940
7 Drugs and Cosmetics Rules 1945
8 Drugs and Magic Remedies (Objectionable Advertisements) Act 1954
9 Drugs and Magical Remedies Rules 1955
10 Epidemic Diseases Act 1897
11 Ethical guidelines for Biomedical Research on Human Subjects
12 Excise Permit (For Storage of Spirit) under Central Excise Act 1956
13 Infant Milk Substitute Feeding Bottles and Infant Foods (Regulation of ProductionSupply and Distribution) Act 1992
14 Infant Milk Substitute Feeding Bottles and Infant Foods (Regulation of ProductionSupply and Distribution) Rules 1993
15 Legal Metrology Act 2009
16 Legal Metrology Rules 2011
17 Medical Termination of Pregnancy Act 1971
18 Medical Termination of Pregnancy Regulations 1976
19 Medical Termination of Pregnancy Rules 1975
20 NACO Guidelines.
21 Mental Health Act 1987
22 Narcotic Drugs and Psychotropic Substances Rules 1985
23 Narcotic Drugs and Psychotropic Substances Act 1985
24 Pharmacy Act 1948
25 Poisons Act 1919
26 Poisons Rules (state specific)
27 Pre Conception and Prenatal Diagnostic Techniques Act 1994
28 Pre Conception and Prenatal Diagnostic Techniques Rules 1996
29 Prevention of Illicit Traffic in Narcotics Drugs Act 1988
30 Prohibition of Smoking Act 2008
31 Static and Mobile Pressure vessels (unfired) Rules 1981
32 The Bio Medical Waste (Management and Handling) Rules 1998
33 Transplantation of Human Organs Act and Rules 1994
34 Clinical Establishments and Registration Act 2010/ State Private ClinicalEstablishment Registration Act
We further report that based on the information provided by the Company its officersand authorized representatives during the conduct of the audit and also on the review ofquarterly compliance reports by respective department heads / company secretary taken onrecord by the Board of Directors of the Company in our opinion adequate systems andprocesses and control mechanism exist in the Company to monitor and ensure compliance withapplicable other general laws including Industrial Laws Environmental Laws HumanResources and labour laws.
We further report that the compliance by the Company of applicable financial lawslike direct and indirect tax laws has not been reviewed in this Audit since the same havebeen subject to review by the statutory financial auditor and other designatedprofessionals.
We further report that
The Board of Directors of the Company is well constituted with a proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changesin the composition of the Board of Directors that took place during the period underreview were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were delivered and a system exists for seeking and obtainingfurther information and clarifications on the agenda items before the meeting and formeaningful participation at the meeting.
All decisions at Board Meetings and Committee Meetings are carried out unanimously asrecorded in the minutes of the meetings of the Board of Directors or Committees of theBoard as the case may be.
We further report that during the audit period no events other than the followinghave occurred during the year which have a major bearing on the Companys affairs
The company during the financial year under review has passed a Boardresolution for Rights Issue and the same is under process.
The NCDs which was privately placed earlier amounting to Rs1250 million wasrepaid in full and satisfaction of charge was filed with ROC on 30th December 2015.
Two multi-speciality hospitals at Malleswaram Bangalore and Vishakapatnam wereinaugurated during the year under review.
The following companies have become subsidiaries to AHEL during the year2015-2016
1. Apollo Lavasa Health Corporation Ltd
2. Apollo Healthcare Technology Solutions Ltd
3. Assam Hospitals Ltd
4. Apollo Home Healthcare Ltd
5. Apollo Hospitals Singapore Pte Ltd
Names of the Subsidiaries which have been liquidated/ sold or ceased to becomesubsidiaries during the year
1. As per the Scheme of Arrangement approved by Honble High Court of Madras theDialysis Division of Alliance Medicorp (I) Ltd was demerged into Apollo Dialysis PrivateLimited and the remaining undertaking was amalgamated with Alliance Dental Care Limited.Alliance Medicorp (I) Limited shall stand dissolved without being wound up.
2. The Company has transferred its entire equity stake in Alliance Dental Care Limitedand Apollo Dialysis Private Limited to its subsidiary Apollo Health and Lifestyle Limited.
| ||For LAKSHMMI SUBRAMANIAN & ASSOCIATES |
| ||Sd/- |
| ||Lakshmmi Subramanian |
| ||Senior Partner |
|Place : Chennai ||FCS No. 3534 |
|Date : 25th May 2016 ||C.P.No. 1087 |
**Note: This report should be read with the letter of even date by the SecretarialAuditors attached herewith.
Apollo Hospitals Enterprise Limited
No. 19 Bishop Gardens Raja Annamalaipuram Chennai - 600 028
1. Maintenance of secretarial records is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on a random test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andbooks of accounts of the Company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and occurrence of events .
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of the management. Our examination waslimited to the verification of procedures on a random test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.
| ||For LAKSHMMI SUBRAMANIAN & ASSOCIATES |
| ||Sd/- |
| ||Lakshmmi Subramanian |
| ||Senior Partner |
|Place : Chennai ||FCS No. 3534 |
|Date : 25th May 2016 ||C.P.No. 1087 |
Annexure - C to the Directors Report
Energy Conservation Technology Absorption and Foreign Exchange Earnings and OutgoConservation of Energy
The operations of the Company are not energy-intensive. However significant measuresare being taken to reduce the energy consumption by using energy-efficient equipment.
Your Company constantly evaluates and invests in new technology to make itsinfrastructure more energy efficient. The following energy saving measures were adoptedduring the year 2015-2016.
Phasing out of CFL lamps to LED lights.
Procurement of electricity from alternative source - WEG.
Optimization of fuel consumption in boiler operations.
Introduction of timer based operation of Air handling Units to reduce powerconsumption.
Introducing of micro processing energy saver for AHU Motors.
Energy optimization practices implemented in Transformer operation.
VFD installation for AHU motor in a phased manner.
All Lifts and OT AHUs are operated with VFD panels.
Introduced timer control for AHU motors to reduce running hours.
As energy costs comprise a very small portion of your Companys total expensesthe financial implications of these measures are not material.
Over the years your Company has brought into the country the best that the world hasto offer in terms of technology. In its continuous endeavour to serve the patients betterand to bring healthcare of international standards within the reach of every individualyour Company has introduced the latest technology in its hospitals.
1 Indigenous technology absorption- In an effort to promote indigenous technologyabsorption the following equipments have been installed at various Apollo Hospitallocations.
a) Blood bank equipment including Deep freezer Blood bank refrigerator Plateletagitator/incubator Blood collection monitor and Tube sealer.
b) Digital radiography system.
c) Neonatal infant care equipment including Infant care warmer/ incubator TransportIncubator CPAP unit and LED Phototherapy unit.
d) Fluoroscopy unit.
e) Reverse osmosis plant for haemodialysis.
2. The benefit accrued due to this is primarily cost reduction from import substitutionconsidering the impact of exchange rate fluctuation and revision of customs duty tariffs.The performance and quality of these equipments have been found to be quite satisfactory.
a) MRI system Philips model Ingenia 3Tesla The Philips system utilizes dStreamarchitecture for high signal to noise ratio for better image quality. Other featuresinclude better magnet homogeneity and linearity power saving technology and multitransmit technology for reduction of dielectric shading and local specific absorptionrate. Personalised and automated exams and better workflow add to patient comfort. In-boreexperience comfort tone and auto voice enable patients to overcome claustrophobia duringscanning.
b) Cathlab Philips model Allura Clarity FD20 - This latest model cathlab is suitablefor both cardiac and neuro vascular applications . With powerful image processingtechnology it offers enhanced image quality at a fraction of the dose in earlier models.With the ceiling suspended gantry this model provides free floor space for betterworkflow. 3D Rotational Angiography and Roadmap offer useful interventional tools. Instantstent boost subtract and large screen display enable better visualization of stentplacements.
c) CT scanner Philips model Ingenuity 128 slice This model utilizes the latestgeneration nano panel detector for low noise low dose and low energy imaging ensuringhigh image quality . Other unique features include ECG dose modulation for dose reductionadaptive pitch selection for optimal temporal resolution and breath hold step and shootfor low dose and high quality cardiac imaging and beat to beat variable delay algorithmfor consistent tracking of the physiologic cardiac phase.
d) CT scanner Siemens model Somatom Definition AS+ 128 slice This model has alarge (78cm) gantry bore for ensuring maximum comfort to patients during scanning. Thehigh power Straton tube and generator and UFC detector enable very good image quality.With SAFIRE dose algorithm substantial dose reduction is possible in addition to lowpediatric dose levels. In addition to multispecialty software the system offers dualenergy applications as well.
e) Neurosurgical operating microscope Leica model OH6 - This has unique fusion opticstechnology for ideal combination of high resolution and depth of focus. This model has ahigh working distance dual xenon lamps and power supplies for fail safe operation. Thefluorescence module can be inbuilt and with special filters the system can be used forvisualization of tumor and vasculature.
f) Digital mammography system Siemens model Mammomat Inspiration has a flexiblemodular platform for screening 3D stereo biopsy diagnosis and is upgradable to 3Dtomosynthesis. The unique OPCOMP feature ensures optimal compression without causingdiscomfort to patients and OPDOSE feature ensures optimal dose with best image quality.
g) Mobile digital radiography system Philips model Diagnost Opta - This Philips modeloffers quality digital images that can be acquired quickly and transferred to PACS. It iseasy to manoeuvre and has a wide range of anatomical programs. Reduced patient wait timesbetter results and bedside point of care are enabled. h) Getinge CSSD equipment- Thelatest generation sterilizers from Getinge Sweden are being launched for the first timein India at Apollo. The sterilizers are built on modular technology with touch panels onboth loading and unloading side for ease of operation. They are incorporated with Corianpanel which is non-porous anti-microbial and hygienic. The sterilizers operatewith reduced power and water and faster cycle times. They have an auto-start up systemwhich ensures that the sterilizers are ready for operation before the CSSD staff arrive inthe Department. Similarly the Turbo range of washer disinfectors feature a multi-taskingsystem to save process time energy water space and operating costs.
i) Extracorporeal photo chemotherapy - This technology has been introduced at ApolloHospitals from the leaders in the field- Macopharma France. This cellular therapy processis useful for treatment of various disorders such as cutaneous T-cell lymphoma Graftversus host disease ( acute and chronic ) after allogenic bone marrow transplantationorgan transplant rejection and autoimmune disorders. The principle of ECP is based onexposure of peripheral blood to a photosensitizing agent and Ultra violet illumination.Mononuclear cells are harvested by cytapheresis and reinfused to the patient after UVAillumination. This off-line technique is cost effective and improves the treatmentefficacy for pediatric and low weight patients.
j) Tomotherapy system - In order to augment the multiple radiotherapy technologiesavailable in the Apollo Hospitals Group Tomotherapy system has been ordered and is underinstallation at Apollo Hyderabad. Tomotherapy uses daily CT imaging to guide treatmentsbased on patient anatomy customizes radiation delivery for each patient with highlyprecise radiation from all angles minimizes radiation exposure to healthy tissue andvaries the treatment plan if necessary at any time. The unique feature of Tomotherapy isthat it offers seamless integration of image-guided and intensity modulated radiationtherapy and side effects are often minimized since lesser radiation reaches healthytissues and organs.
Foreign Exchange Earnings & Outgo
Foreign Exchange Earnings : Rs973.90 million (This is exclusive of rupee payments madeby Non-Resident Indian and Foreign Nationals)
Foreign Exchange Outgo : Rs1155.23 million towards purchase of medical equipments andcapital expenditure.