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Apollo Hospitals Enterprise Ltd.

BSE: 508869 Sector: Health care
NSE: APOLLOHOSP ISIN Code: INE437A01024
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VOLUME 61987
52-Week high 1574.95
52-Week low 1083.00
P/E 60.36
Mkt Cap.(Rs cr) 19,432
Buy Price 1388.00
Buy Qty 12.00
Sell Price 1409.00
Sell Qty 50.00
OPEN 1443.95
CLOSE 1417.95
VOLUME 61987
52-Week high 1574.95
52-Week low 1083.00
P/E 60.36
Mkt Cap.(Rs cr) 19,432
Buy Price 1388.00
Buy Qty 12.00
Sell Price 1409.00
Sell Qty 50.00

Apollo Hospitals Enterprise Ltd. (APOLLOHOSP) - Director Report

Company director report

Your Directors are pleased to present the THIRTY EIGHTH ANNUAL REPORT and theaudited financial statements for the year ended 31st March 2019.

Financial results (standalone)
(रin million)
Particulars Year ended March 31 2019 Year ended March 31 2018
Income from Operations 83489 71956
Profit before Exceptional Items and Taxation 4625 3301
Profit after Exceptional Items before Tax 4625 3301
Provision for Tax 1597 969
Profit for the Period 3028 2332
Earnings Per Share (र) 21.76 16.76

Results of operations

During the year under review the income from operations of the Company increased toर83489 million compared to र71956 million in the previous year registeringa growth of 16%. The profit after tax for the year increased by 30% to र3028million compared to र2332 million in the previous year.

During the year under review the consolidated gross revenue of the Company increasedto र96488 million compared to र82756 million registering an impressivegrowth of 17%. Net profit after minority interest for the group increased by 236% toर2001 million compared to र 595 million in the previous year.

Consolidated financial statements

In accordance with Companies Act 2013 ("the Act") and Ind AS 110 -Consolidated Financial Statements read with Ind AS 28 - Investment in Associates and IndAS 31 - Interests in Joint Ventures the audited consolidated financial statements formpart 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 the Company's website: www.apollohospitals.com. Thedocuments will also be available for inspection during business hours at the registeredoffice of the Company.

Material Changes affecting the Company

There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of this Report. There hasbeen no change in the nature of business of the Company.

Scheme of arrangement

The Board of Directors at their meeting held on November 14 2018 have approved aScheme of Arrangement ("the Scheme") between Apollo Hospitals EnterpriseLimited ("AHEL") and Apollo Pharmacies Limited ("APL") and theirrespective shareholders in accordance with the provisions of Sections 230 to 232 of theCompanies Act 2013 for the transfer of the front-end retail pharmacy business ("thedisposal group") carried out in the standalone pharmacy segment to APL by way ofslump sale subject to necessary approvals by stock exchanges shareholders NationalCompany Law Tribunal and all other requisite regulatory authorities.

The Company received Observation Letters from National Stock Exchange of India Limitedand BSE Limited conveying their no objection / no adverse observations so as to enablethe Company to file the Scheme with the Honourable National Company Law Tribunal (NCLT).

The Company has consequently filed the requisite applications with NCLT seekingdirection to convene a shareholders meeting through e-voting process for obtaining theirapproval.

Dividend

The Board of Directors have recommended a dividend of र6/- per equity share (120%on face value of र5/-per share) on the paid-up equity share capital of the companyfor the financial year ended 31st March 2019 amounting to र1004.69 millioninclusive of tax of र169.94 million which if approved at the forthcoming AnnualGeneral Meeting on 27th September 2019 will be paid to those shareholders whose namesappear in the Register of Members as at the closing hours of business on 13th September2019. In respect of shares held in electronic form the dividend will be paid on the basisof beneficial ownership furnished by the depositories viz. NSDL and CDSL for thispurpose.

The Register of Members and Share Transfer Books will remain closed from SaturdaySeptember 14 2019 to Friday September 27 2019 (both days inclusive).

The Board approved and adopted a dividend distribution policy at its meeting held on30th May 2017 which is annexed herewith as Annexure – I to this report and alsoposted on the Company's website: www.apollohospitals. Com.

Subsidiaries associate Companies and Joint ventures.

At the beginning of the year your Company had eighteen direct subsidiaries and sevenstep down subsidiaries three joint ventures and four associate companies. As on 31stMarch 2019 your Company had nineteen direct subsidiaries ten step down subsidiariesfour joint ventures and four associate companies.

The statement containing the summarized financial position of the subsidiary companiesviz. Apollo Home Healthcare (I) Ltd (AHHCIL) A.B. 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 Pvt Limited (WHCPL) Total Health (TH) ImperialHospital and Research Centre Limited (IHRCL) Apollo Medicals Pvt Limited (AMPL) ApolloHome Healthcare Limited (AHHL) Apollo Nellore Hospital Limited (ANHL) Sapien biosciencesPvt Limited (SBPL) Apollo Rajshree Hospitals Pvt Limited (ARHPL) Apollo Lavasa HealthCorporation Limited (ALHCL) Assam Hospitals Limited (AHL) Apollo

Hospitals International Limited (AHIL) Future Parking Pvt Limited (FPPL) ApolloHealthcare Technology Solutions Limited (AHTSL) Apollo Sugar Clinics Limited (ASCL)Apollo Specialty Hospitals Pvt Limited (ASHPL) Alliance Dental Care Limited (ADCL)Apollo Dialysis Pvt Limited (ADPL) Apollo CVHF Limited (CVHF) Apollo Bangalore CradleLimited (ABCL) Kshema Healthcare Pvt Limited (KHPL) AHLL Diagnostics Limited (ADL) AHLLRisk Management Pvt Limited (ARMPL) and Apollo Pharmacies Limited (APL) pursuant toSection 129 read with Rules 5 of the Companies (Accounts) Rules 2014 is contained in FormAOC-1 which forms part of the Annual Report.

1. Apollo Home Healthcare (India) limited (ahhcil)

AHHCIL a wholly owned subsidiary of the Company recorded a revenue of र4.31million and net profit of र 1.45 million.

2. A.B. medical Centres limited (abmcl)

ABMCL is a wholly owned subsidiary of the Company does not have any commercialoperations as it has leased out its infrastructure viz. land and building to the companyfor running a hospital. For the year ended 31st March 2019 ABMCL recorded an income ofर7.78 million and a net profit of र6.09 million.

3. Samudra Healthcare enterprises limited (shel)

SHEL a wholly owned subsidiary of the company runs a 120 beds multi specialityhospital at Kakinada. For the year ended 31st March 2019 SHEL recorded an income ofर381.26 million and a net profit of र14.45 million.

4. Apollo Health and lifestyle limited (ahll)

AHLL is a 70.25% subsidiary of the Company 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 24-hour pharmacy all under one roof. For the year ended 31st March 2019AHLL recorded an income of र5970.46 million and a net loss of र1329.43million.

5. Western Hospitals Corporation private limited (whcpl)

WHCPL is a wholly owned subsidiary of the Company recorded an income of र10.39million and a net profit of र3.68 million for the year ended 31st March 2019.

6. Total Health (th)

TH is a wholly owned subsidiary of the Company registered under Section 8 of theCompanies Act 2013 which is engaged in carrying on CSR activities in the field ofcommunity/rural development.

7. Apollo Hospital (uk) limited (ahukl)

AHUKL is a wholly owned foreign subsidiary of the Company and has not yet commencedits operations.

8. Apollo Hospitals singapore pte limited (ahspl)

AHSPL is a wholly owned subsidiary of the Company and during the year invested in aventure capital fund which focuses on funding early stage healthcare technology start upsin Asia.

9. Apollo medicals private limited (ampl)

AMPL is a wholly owned subsidiary of the Company and yet to commence its operations.

10. Imperial Hospital and research Centre limited (ihrcl)

IHRCL is a 90% subsidiary of the company owns a 290 beds multi-specialty hospital atBengaluru. For the year ended 31st March 2019 IHRCL recorded an income ofर2495.89 million and a net profit of र332.30 million.

11. Apollo Home Healthcare limited (ahhl)

AHHL a 58.12% subsidiary of the Company is engaged in the business of providing highquality personalized and professional healthcare services at the doorsteps of thepatients. AHHL recorded an income of र359.73 million and a net loss of र 65.48million.

12. Apollo nellore Hospital limited (anhl)

ANHL a 79.44% subsidiary of the Company has leased out its land at Nellore to theCompany. ANHL recorded an income of र8.17 million and a net profit of र6.27million.

13. Sapien Biosciences private limited (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 2019 SBPL recorded an income ofर24.08 million and a net profit of र0.89 million.

14. Apollo rajshree Hospitals private limited (arhpl)

ARHPL a 54.63% subsidiary of the company runs a multi speciality hospital at Indore.For the year ended 31st March 2019 ARHPL recorded an income of र670.79 million anda net loss of र0.64 million.

15. Apollo lavasa Health Corporation limited (alhcl)

ALHCL a 51% subsidiary of the company runs a hospital at Lavasa. For the year ended31st March 2019 ALHCL recorded an income of र6.05 million and a net loss ofर38.17 million.

16. Assam Hospitals limited (ahl)

AHL a 62.32% subsidiary of the company runs a multi speciality hospital at Guwahati.For the year ended 31st March 2019 AHL recorded an income of र 1453.42 millionand a net profit of र145.32 million.

17. Apollo Hospitals International limited (ahil)

AHIL a 50% subsidiary of the company runs a multi speciality hospital at Ahmedabad.For the year ended 31st March 2019 AHIL recorded an income of र1926.99 millionand a net profit of र44.12 million.

18. Future parking private limited (fppl)

FPPL a subsidiary of the company has been promoted for the development of a Multilevel Car parking facility at Wallace Garden Nungambakkam Chennai. FPPL recorded anincome of र43.46 million and a net loss of र 24.50 million.

19. Apollo Healthcare technology solutions limited (ahtsl)

AHTSL a subsidiary of the Company is yet to commence its operations.

20. Apollo speciality Hospitals private limited (ashpl)

ASHPL a subsidiary of Apollo Health and Lifestyle Limited is engaged in the businessof running day surgery centres. For the year ended 31st March 2019 ASHPL recorded anincome of र 3119.41 million and a net loss of र656.39 million.

21. Apollo sugar Clinics limited (ascl)

ASCL a subsidiary of Apollo Health and Lifestyle Limited is engaged in the businessof running diabetes management centres. For the year ended 31st March 2019 ASCL recordedan income of र270.97 million and a net loss of र19.94 million.

22. Alliance dental Care limited (adcl)

ADCL a subsidiary of Apollo Health and Lifestyle Limited recorded an income of र317.45 million and a net loss of र98.68 million for the year ended 31st March 2019.

23. Apollo dialysis private limited (adpl)

ADPL a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business ofrunning dialysis centers. For the year ended 31st March 2019 ADPL recorded a revenue ofर 136.64 million and a net loss of र 24.59 million.

24. Ahll diagnostics limited (adl)

ADL a subsidiary of Apollo Health and Lifestyle Limited is yet to commence itsoperations.

25. Ahll risk management private limited (arml)

ARML a subsidiary of Apollo Health and Lifestyle Limited is yet to commence itsoperations.

26. Apollo cvhf limited (cvhf)

CVHF a subsidiary of Apollo Hospitals International Limited is in the business ofproviding healthcare services and is yet to commence its operations.

27. Apollo Bangalore Cradle limited (abcl)

ABCL a subsidiary of Apollo Speciality Hospitals Private Limited is engaged in thebusiness of running Cradle centres. For the year ended 31st March 2019 ABCL recorded anincome of र 322.40 million and a net loss of र 0.06 million.

28. Kshema Healthcare private limited (khpl)

KHPL a subsidiary of Apollo Speciality Hospitals Private Limited is yet to commenceits operations.

29. Apollo pharmacies limited (apl)

APL a subsidiary of Apollo Medicals Private Limited is yet to commence its operations.

Corporate governance

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 and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter ListingRegulations) forms an integral part of this report. The requisite certificate from theAuditors of the Company confirming the compliance with the conditions of corporategovernance is attached to the report on Corporate Governance.

Management discussion and analysis report

Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the Listing Regulations is presented in a separate section formingpart of the Annual Report.

Business responsibility report

As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernance perspective is attached as part of the Annual Report.

Sexual Harassment

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 has an Internal Complaints Committee for providing a redressalmechanism pertaining to sexual harassment of women employees at the work place. During theyear 6 complaints were received under the policy all of which were disposed off.

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.

Fixed deposits

During the year your company did not accept any deposits or renew existing depositsfrom the public. The total outstanding deposits with the Company as on 31st March 2019were र13.42 million (र94.77 million as on 31st March 2018) which were notclaimed by the depositors.

Directors and other Key managerial personnel (Kmps) Board Composition and Independentdirectors

The Board consists of the Executive Chairman four Executive Directors and fiveIndependent Directors.

Independent directors are appointed for a term of five years and are not liable toretire by rotation.

All Independent Directors have given their 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.

Outgoing directors

Shri. BVR Mohan Reddy and Shri. Sanjay Nayar citing existing professional commitmentshave resigned from the Board with effect from 20th August 2018 and 9th February 2019respectively.

As per the recent amendments to the SEBI LODR Regulations one eligibility criteriathat needs to be ensured for a director to continue being treated as an IndependentDirector is to avoid a "board inter-lock situation" which could arise in a casewhere there are common non-independent directors on the boards of two listed entities(i.e. A director of a listed company is also on the board of another listed entity inwhich another non-independent director of the first listed entity is an independentdirector).

Shri Deepak Vaidya while being an Independent Director on the Board was also anon-executive director on the Board of Strides Pharma Sciences Ltd. Smt. Sangita ReddyJoint Managing Director also serves as an Independent Director on the board of StridesPharma Sciences Ltd.

Keeping in view the above regulation Shri. Deepak Vaidya would not have been deemed tobe an Independent Director with effect from 1st October 2018 and accordingly tendered hisresignation from the Board as an Independent Director with effect from 5th September 2018.

Pursuant to the provisions of the Companies Act 2013 ("Act") theshareholders at the 33rd AGM of the Company held on 25th August 2014 appointed Shri. N.Vaghul and Shri. G. Venkatraman as Independent Non-Executive Directors to hold office forfive consecutive years for a term up to 31st March 2019. Though the Companies Act permitsfor their appointment for a second term of five years Shri. N. Vaghul and Shri. G.Venkatraman conveyed their intention not to seek re-appointment as Independent Directorsof the Company. Accordingly Shri.N. Vaghul and Shri. G. Venkatraman ceased to beDirectors of the Company with effect from 1st April 2019.

The Board places on record its sincere appreciation for the valuable services renderedby the individual Directors during their tenure.

New directors

Based on the recommendation of the Nomination and Remuneration Committee the Board hasrecommended to the members that Dr. Murali Doraiswamy Smt.V. Kavitha Dutt and Shri. MBNRao be appointed as Independent Directors for a term of 5 (five) consecutive years witheffect from their respective dates of appointment viz. 27th September 2018 9th February2019 and 9th February 2019 respectively.

The Company has received declarations from Dr. Murali Doraiswamy Smt. V. Kavitha Duttand Shri MBN Rao confirming that they meet the criteria of independence prescribed underthe Act and the Listing Regulations.

Re-appointment of Independent director

Pursuant to the provisions of the Companies Act 2013 ("Act") theshareholders at the 33rd AGM of the Company held on 25th August 2014 appointed Shri.Vinayak Chatterjee as an Independent Non-Executive Director to hold office for fiveconsecutive years for a term up to 31st March 2019. Shri. Vinayak Chatterjee is eligiblefor reappointment as an Independent Non Executive Director for a second term of fiveconsecutive years. Pursuant to the provisions of the Act and based on the recommendationof the Nomination and Remuneration Committee the

Board recommends for the approval of the Members through a Special Resolution at the38th AGM of the Company the re-appointment of Shri. Vinayak Chatterjee as an IndependentNon-Executive Director for a second term of five consecutive years for a term up to 31stMarch 2024.

Key managerial personnel

Pursuant to the provisions of Section 203 of the Companies Act 2013 the KeyManagerial Personnel of the Company are Smt. Suneeta Reddy Managing Director Shri.Krishnan Akhileswaran Chief Financial Officer and Shri.S.M. Krishnan VicePresident-Finance & Company Secretary. There has been no change in the Key ManagerialPersonnel during the year.

Board evaluation

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 Committees. The manner in which the evaluation has been carried out hasbeen explained in the Corporate Governance Report.

Remuneration policy

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 seven times during the financial year the details of which are given inthe Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.

Risk management

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) function is defined in the InternalAudit Charter. To maintain its objectivity and independence the Internal Audit functionreports to the Chairman of the Audit Committee of the Board. The details of the internalcontrol system and its terms of reference are set out in the Management Discussion andAnalysis Report forming part of the Board's Report.

The Board of Directors has laid down internal financial controls to be followed by theCompany and the policies and procedures to be adopted by the Company for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information. The Audit Committee evaluates the internalfinancial control 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 2019 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 2019 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.

Share Capital

The paid up Equity Share Capital as on March 31 2019 was र695.63 million. Duringthe year under review the Company has not issued shares with differential voting rightsnor granted stock options nor sweat equity. As of March 31 2019 the details ofshareholding in the Company held by the Directors are set out in the Corporate GovernanceReport forming part of the Board's Report and none of the directors hold convertibleinstruments of the Company.

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 arm's lengthbasis. 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 Company's 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 Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules are provided in the AnnualReport which forms part of this Report.

Disclosures relating to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are also provided in the Annual Report which forms partof this 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. 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 granted 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 Healthcare Education & SkillDevelopment and Research in Healthcare.

These projects are in accordance with Schedule VII of the Companies Act 2013. TheReport on CSR activities for the financial year 2018-2019 is annexed herewith as"Annexure A".

Statutory auditors

The Members at the Annual General Meeting held on 20th September 2017 approved theappointment of Deloitte Haskins & Sells LLP Chartered Accountants as statutoryauditors for a period of five years commencing from the Thirty Sixth Annual GeneralMeeting till the conclusion of the Forty First Annual General Meeting subject toratification by the Members every year. Pursuant to amendments in Section 139 of theCompanies Act 2013 the requirements to place the matter relating to such appointment forratification by members at every annual general meeting has been dispensed with effectfrom 7th May 2018 and the appointment of Deloitte Haskins & Sells LLP CharteredAccountants as statutory auditors is valid till the conclusion of the Forty First AnnualGeneral Meeting to be held during the year 2022.

There are no qualifications reservation or adverse remarks made by the statutoryauditors in the audit report.

Cost auditors

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the Directors on the recommendation of the AuditCommittee appointed M/s. A.N. Raman & Associates Cost Accountants Chennai (FRN102111) to audit the cost accounts of the Company for the financial year 2019-2020 on aremuneration of र1.50 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 Member's ratification for the remuneration payable toM/s. A.N. Raman & Associates Cost Accountants Chennai (FRN102111) is included atItem No. 14 of the Notice convening the Annual General Meeting.

The Company has maintained cost records in accordance with the provisions of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014in respect of healthcare services.

Secretarial auditors

The Board had appointed Smt. Lakshmmi Subramanian Senior Partner M/s. LakshmmiSubramanian & Associates a firm of Company Secretaries in Practice to conductSecretarial Audit for the financial year 2018-2019. The Secretarial Audit Report for thefinancial year ended March 31 2019 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 2019.

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".

Acknowledgement

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 : May 30 2019 Executive Chairman