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Apollo Hospitals Enterprise Ltd.

BSE: 508869 Sector: Health care
NSE: APOLLOHOSP ISIN Code: INE437A01024
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VOLUME 22712
52-Week high 5930.70
52-Week low 3122.90
P/E 82.48
Mkt Cap.(Rs cr) 52,440
Buy Price 3640.00
Buy Qty 5.00
Sell Price 3675.00
Sell Qty 3.00

Apollo Hospitals Enterprise Ltd. (APOLLOHOSP) - Director Report

Company director report

Your Directors are pleased to present the FORTIETH ANNUAL REPORT andthe audited financial statements for the year ended 31st March 2021

FINANCIAL RESULTS

(Rs.in million)

Standalone

Consolidated

Particulars Year ended 31st March 2021 Year ended 31st March 2020 Year ended 31st March 2021 Year ended 31st March 2020
Income from Operations 91530 97944 105600 112468
Profit before Exceptional Items and Tax after share of profits in Joint Ventures & Associates 1857 5179 1609 4586
Exceptional Items (91) 1644 606 1983
Profit after Exceptional Items before Tax after share of profits in Joint Ventures & Associates 1766 6823 2215 6569
Provision for Tax 716 2121 847 2252
Profit for the Period 1050 4702 1368 4317
Earnings Per Share (Rs.) 7.50 33.80 10.74 32.70

RESULTS OF OPERATIONS

During the year under review the income from operations of the Companydegrew by 7% to Rs.91530 million in FY21 compared to Rs.97944 million in the previousyear. The profit after tax for the year declined by 78% to Rs.1050 million compared toRs.4702 million in the previous year.

During the year under review the consolidated gross revenue of theCompany degrew by 6% to Rs.105600 million compared to Rs.112468 million. Net profitafter minority interest for the group declined by 68% to Rs.1368 million compared toRs.4317 million in the previous year.

IMPACT OF THE COVID19 PANDEMIC ON THE BUSINESS

Due to the continuing COVID-19 pandemic situation there were localisedlockdowns in various parts of the country apart from continuing restrictions oninternational and domestic travel . This was coupled with advisories issued by thegovernment on postponing elective surgeries and undergoing preventive health checks .

The Pharmacy Distribution and Stand Alone Pharmacy segmental revenuesand business performance were not impacted during the lockdown and continued to showgrowth momentum.

However the continuance of the pandemic situation resulted in amaterial impact on the healthcare sector in general and the Company's healthcareservices business operations due to the following reasons:

• Severe travel related restrictions impacting both employeemovements and patient flows to our hospitals .

• Out Patient footfalls being impacted apart from incidence ofpostponement of elective procedures. Both factors in turn have led to a substantialreduction in the inpatient case loads .

• Continued investments being required to be made on investmentsin equipment consumables and other resources to ensure 100% preparedness for safety inthe hospital(s) and eventual treatment of patients in case of a need.

• Current embargo on international travel has also impactedpatient flows to hospital units located in metro centres as well.

However patient case loads and occupancies across the hospitalsnetwork witnessed improvements post easing of lockdown related restrictions. We willcontinue to calibrate our responses to the COVID-19 situation as it evolves.

Apollo Hospitals being the largest private health care servicesprovider in the country is well positioned to continue to address the demand for tertiaryhealth care services across the country over the long term.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Companies Act 2013 ("the Act") and Ind AS110 - Consolidated Financial Statements read with Ind AS 28 - Investment in Associates andInd AS 31 - Interests in Joint Ventures the audited consolidated financial statementsform part of the Annual Report.

In terms of provision to sub section (3) of Section 129 of the Act thesalient features of the financial statements of the Subsidiaries Associates and JointVenture Companies are set out in the prescribed Form AOC-1 which forms a part of theAnnual Report.

In accordance with Section 136 of the Act the audited financialstatements including the consolidated financial statements of the Company and auditedaccounts of the subsidiaries are available at the Company's website:www.apollohospitals.com. The documents will also be available for inspection duringbusiness hours at the registered office of the Company.

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting thefinancial position of the Company between the end of the financial year and the date ofthis Report. There has been 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 hadapproved a Scheme of Arrangement ("the Scheme") between Apollo HospitalsEnterprise Limited ("AHEL") and Apollo Pharmacies Limited ("APL") andtheir respective shareholders in accordance with the provisions of Sections 230 to 232 ofthe Companies Act 2013 for the transfer of the front-end retail pharmacy business("the divestment business") carried out in the standalone pharmacy segment toAPL by way of slump sale for an overall cash consideration of Rs.5278 million subject tonecessary approvals by stock exchanges shareholders the National Company Law Tribunaland all other requisite regulatory authorities.

The Company received no objection letters from National Stock Exchangeof India Limited and BSE Limited. Further the Company obtained approvals from theCompetition Commission of India (CCI) and from the equity shareholders in October 2019.

The National Company Law Tribunal (NCLT) Chennai Bench vide its orderdated 3rd August 2020 approved the Scheme. The Scheme was effective from 1st September2020.

Post the disposal of the divestment business the Company identifiedPharmacy Distribution as a new segment with effect from September 1 2020. The Companythereafter has identified Healthcare and Pharmacy Distribution as its operating andreportable segments. Healthcare segment represents hospitals and hospital basedpharmacies. Pharmacy distribution segment represents the business of procurement anddistribution of pharmaceutical items fast moving consumer goods (FMCG) and private labelproducts.

SCHEME OF AMALGAMATION

The Board of Directors at their meeting held on 13th February 2020 hadapproved the amalgamation of Apollo Home Healthcare (India) Limited and Western HospitalsCorporation Private Limited wholly owned subsidiaries of the Company (hereinafterreferred to as "Transferor Companies") into Apollo Hospitals Enterprise Limited("Transferee Company") by way of a Scheme of Amalgamation between the TransferorCompanies and the Transferee Company and their respective shareholders and creditors inaccordance with the provisions of Sections 230 to 234 of the Companies Act 2013.

The amalgamation was subject to requisite statutory and regulatoryapprovals and sanction by the respective shareholders of each of the Companies involved inthe scheme.

The Amalgamation of the Transferor Companies with the TransfereeCompany is aimed at achieving the following primary benefits:

• Facilitate consolidation of the undertakings in order to enableeffective management and unified control of operations;

• Create economies in administrative and managerial costs byconsolidating operations;

• Reduce duplication of administrative responsibilities andmultiplicity of records and legal and regulatory compliances.

The Board of Directors through a circular resolution approved therevised proposal in compliance with Section 233 of the Companies Act 2013 to proceed withan application to the Regional Director Southern Region Ministry of Corporate Affairsfor approving the Scheme of Amalgamation subject to completion of necessary formalitiesand obtaining requisite approvals instead of filing applications with NCLT seekingdispensation from the requirement of convening shareholders / creditors meetings of theCompany:

• Apollo Home Healthcare (India) Limited and

• Western Hospitals Corporation Private Limited

The Company obtained shareholders and creditors approval with therequisite majority for the proposed Scheme of Amalgamation of the wholly owned subsidiarycompanies with the Company and has also obtained approval from the Regional DirectorSouthern Region Ministry of Corporate Affairs vide order dated 28th June 2021 for goingahead with the Scheme of amalgamation. The Scheme would be effective from 1st April 2020.

There will not be any change in the shareholding pattern of theTransferee Company pursuant to the Scheme of Amalgamation as the Transferor Companies arewholly-owned subsidiaries of the Transferee Company.

PROPOSEDTRANSFER OF BUSINESS UNDERTAKING

The Board had met on June 232021 to review the Company'slong-term strategy including the intent to create a distinctive digital ecosystem forproviding a holistic healthcare platform which encompasses a wide range of healthcareservices including enabling e-consultations and online ordering for delivery of medicines.

Keeping this in perspective as well as the fact that the business ofprocurement of pharmaceutical and other wellness products including private label productsand wholesaling and supply of such products to pharmacies including investment inpharmacy retail business and development operation and management of the online platformfor digital healthcare owned and operated by the Company under the branding of"Apollo 24/7" shall require a specific and focused approach the Board in itsmeeting held on 23rd June 2021 approved the proposal for going ahead with the transfer ofthe business undertaking comprising of the Pharmacy Distribution business and Apollo 24x7online digital healthcare platform on a slump sale basis to a wholly owned subsidiarycompany Apollo Health Co Limited for a net consideration of Rs.12100 million (RupeesTwelve Thousand One Hundred Million Only) which is in excess of the networth of theBusiness Undertaking sought to be transferred to Apollo HealthCo Limited.

This move is expected to result in the following benefits:

1. Facilitate creation of India's largest omni - channel digitalhealthcare delivery platform and thereby enable huge funneling potential for healthcareconsumers into the Apollo ecosystem

2. Enable the process of combining the strength of the Apollo HospitalsGroup's offline healthcare leadership with new age digital offerings to address allhealthcare consumer needs

3. An asset light approach (through digital offerings) would befollowed to fuel growth and achieve the objective of getting 100 million targetedregistered users on the Apollo 24x7 digital platform in the next 5 years

4. An appropriate platform would be created for attracting a new poolof investor capital and to enable rapid fiscal up of the business

The proposed transfer would include the Company's investment inthe pharmacy retail business apart from all related assets and liabilities and is subjectto receipt of regulatory approvals including shareholders and lenders approvals.

DIVIDEND

The Board of Directors have recommended a dividend of Rs.3/- per equityshare (60% on face value of Rs.5/-per share) on the paid-up equity share capital of thecompany for the financial year ended 31st March 2021 amounting to Rs.431.35 million whichif approved at the forthcoming Annual General Meeting on 31st August 2021 will be paid tothose shareholders whose names appear in the Register of Members as at the closing hoursof business on 20th August 2021. In respect of shares held in electronic form thedividend will be paid on the basis of beneficial ownership furnished by the depositoriesviz. NSDL and CDSL for this purpose.

The Register of Members and Share Transfer Books will remain closedfrom Saturday 21st August 2021 to Tuesday 31st August 2021 (both days inclusive).

In view of the changes made under the Income-tax Act 1961 by theFinance Act 2020 dividends paid or distributed by the Company shall be taxable in thehands of the Shareholders. Your Company shall accordingly make the payment of theDividend after deduction of tax at source.

The Board approved and adopted a dividend distribution policy at itsmeeting held on 30th May 2017 which is annexed herewith as Annexure – I to thisreport and also posted on the Company's website: www.apollohospitals.com.

SUBSIDIARIES ASSOCIATE COMPANIES AND JOINT VENTURES

At the beginning of the year your Company had eighteen directsubsidiaries ten step down subsidiaries four joint ventures and three associatecompanies. As on 31st March 2021 your Company had eighteen direct subsidiaries ten stepdown subsidiaries three joint ventures and four associate companies.

The statement containing the summarized financial position of thesubsidiary companies viz. Apollo Home Healthcare (I) Ltd (AHHCIL) A.B. Medical CentresLimited (ABMCL) Samudra Healthcare Enterprises Limited (SHEL) Apollo Hospital (UK)Limited (AHUKL) Apollo Hospitals Singapore Pte Limited (AHSPL) Apollo Health andLifestyle Limited (AHLL) Western Hospitals Corporation Pvt Limited (WHCPL) Total Health(TH) Imperial Hospital and Research Centre Limited (IHRCL) Apollo Home HealthcareLimited (AHHL) Apollo Nellore Hospital Limited (ANHL) Sapien BioSciences Pvt Limited(SBPL) Apollo Rajshree Hospitals Pvt Limited (ARHPL) Apollo Lavasa Health CorporationLimited (ALHCL) Assam Hospitals Limited (AHL) Apollo Hospitals International Limited(AHIL) Future Parking Pvt Limited (FPPL) Medics International Lifesciences Limited(MEDICS) Apollo Sugar Clinics Limited (ASCL) Apollo Specialty Hospitals Pvt Limited(ASHPL) Alliance Dental Care Limited (ADCL) Apollo Dialysis Pvt Limited (ADPL) ApolloCVHF Limited (CVHF) Apollo Bangalore Cradle Limited (ABCL) Kshema Healthcare Pvt Limited(KHPL) AHLL Diagnostics Limited (ADL) AHLL Risk Management Pvt Limited (ARMPL) and SuryaFertility Centre Private Limited (SFC) pursuant to Section 129 read with Rules 5 of theCompanies (Accounts) Rules 2014 is contained in Form AOC-1 which forms a part of theAnnual Report.

1. APOLLO HOME HEALTHCARE INDIA LIMITED AHHCIL

AHHCIL a wholly owned subsidiary of the Company recorded an income ofRs.6.23 million and a net profit of Rs.1.84 million.

2. A.B. MEDICAL CENTRES LIMITED ABMCL

ABMCL is a wholly owned subsidiary of the Company and does not haveany commercial operations as it has leased out its infrastructure viz. land and buildingto the company for running a hospital. For the year ended 31st March 2021 ABMCL recordedan income of Rs.8.04 million and a net profit of Rs.6.38 million.

3. SAMUDRA HEALTHCARE ENTERPRISES LIMITED SHEL

SHEL a wholly owned subsidiary of the company runs a 120 bed multispeciality hospital at Kakinada. For the year ended 31st March 2021 SHEL recorded anincome of Rs.509.45 million and a net profit of Rs. 115.14 million.

4. APOLLO HEALTH AND LIFESTYLE LIMITED AHLL

AHLL is a 68.25% subsidiary of the Company engaged in the business ofproviding primary healthcare facilities through a network of owned/franchised clinicsacross India offering specialist consultations diagnostics preventive health checkstelemedicine facilities and 24-hour pharmacy all under one roof. For the year ended 31stMarch 2021 AHLL recorded an consolidated income of Rs.7062.80 million and a net loss ofRs.663.90 million.

5. WESTERN HOSPITALS CORPORATION PRIVATE LIMITED WHCPL

WHCPL a wholly owned subsidiary of the Company recorded a net loss ofRs.10 million for the year ended 31st March 2021.

6. TOTAL HEALTH TH

TH is a wholly owned subsidiary of the Company registered underSection 8 of the Companies Act 2013 which is engaged in carrying on CSR activities inthe field of community/rural development.

7. APOLLO HOSPITAL UK LIMITED AHUKL

AHUKL is a wholly owned foreign subsidiary of the Company and has notyet commenced its operations.

8. APOLLO HOSPITALS SINGAPORE PTE LIMITED AHSPL

AHSPL is a wholly owned subsidiary of the Company which has investedin a venture capital fund which focuses on funding early stage healthcare technologystartups in Asia.

9. IMPERIAL HOSPITAL AND RESEARCH CENTRE LIMITED

IHRCL

IHRCL is a 90% subsidiary of the company which owns a 250 bedsmulti-specialty hospital at Bengaluru. For the year ended 31st March 2021 IHRCL recordedan income of Rs.2319.75 million and a net profit of Rs.83.19 million.

10. APOLLO HOME HEALTHCARE LIMITED AHHL

AHHL a 89.42% subsidiary of the Company is engaged in the business ofproviding high quality personalized and professional healthcare services at the doorstepsof the patients. AHHL recorded an income of Rs.552.80 million and a net profit of Rs.16.93million.

11. APOLLO NELLORE HOSPITAL LIMITED ANHL

ANHL a 80.87% subsidiary of the Company has leased out its land atNellore to the Company. ANHL recorded an income of Rs. 8 .17million and a net profit ofRs.6.44 million.

12. SAPIEN BIOSCIENCES PRIVATE LIMITED SBPL

SBPL is a 70% subsidiary of the company which is engaged in thebusiness of bio-banking of tissues. For the year ended 31st March 2021 SBPL recorded anincome of Rs.31.43 million and a net profit of Rs.11.18 million.

13. APOLLO RAJSHREE HOSPITALS PRIVATE LIMITED ARHPL

ARHPL a 54.63% subsidiary of the company runs a multi specialityhospital at Indore. For the year ended 31st March 2021 ARHPL recorded an income ofRs.863.57 million and a net profit of Rs.83.41 million.

14. APOLLO LAVASA HEALTH CORPORATION LIMITED ALHCL

ALHCL a 51% subsidiary of the company runs a hospital at Lavasa. Forthe year ended 31st March 2021 ALHCL recorded a net loss of Rs.19.59 million.

15. ASSAM HOSPITALS LIMITED AHL

AHL a 65.85% subsidiary of the company runs a multi specialityhospital at Guwahati. For the year ended 31st March 2021 AHL recorded an income ofRs.1352.15 million and a net profit of Rs.80.77 million.

16. APOLLO HOSPITALS INTERNATIONAL LIMITED AHIL

AHIL a 50% subsidiary of the company runs a multi speciality hospitalat Ahmedabad. For the year ended 31st March 2021 AHIL recorded an consolidated income ofRs.1719.13 million and a net profit of Rs.29.06 million

17. FUTURE PARKING PRIVATE LIMITED FPPL

FPPL a subsidiary of the company has been promoted for thedevelopment of a Multi level Car parking facility at Wallace Garden NungambakkamChennai. FPPL recorded an income of Rs. 45.60 million and a net loss of Rs.20.04 million

18. MEDICS INTERNATIONAL LIFESCIENCES LIMITED MEDICS

MEDICS is a 51% subsidiary of the company which owns a 330 bedsmulti-specialty hospital at Lucknow. For the year ended 31st March 2021 Medics recordedan income of Rs. 1928.15 million and a net profit of Rs. 97.41 million

19. APOLLO SPECIALITY HOSPITALS PRIVATE LIMITED ASHPL

ASHPL a subsidiary of Apollo Health and Lifestyle Limited is engagedin the business of running day surgery centres. For the year ended 31st March 2021 ASHPLrecorded an income of Rs.3301.30 million and a net loss of Rs.441.70 million.

20. APOLLO SUGAR CLINICS LIMITED ASCL

ASCL a subsidiary of Apollo Health and Lifestyle Limited is engagedin the business of running diabetes management centres. For the year ended 31st March2021 ASCL recorded an income of Rs.187.82 million and a net profit of Rs.2.82 million.

21. ALLIANCE DENTAL CARE LIMITED ADCL

ADCL a subsidiary of Apollo Health and Lifestyle Limited is engaged inthe business of running dental care centres and recorded an income of Rs.173.56 millionand a net loss of Rs.48.56 million for the year ended 31st March 2021.

22. APOLLO DIALYSIS PRIVATE LIMITED ADPL

ADPL a subsidiary of Apollo Health and Lifestyle Limited is engaged inthe business of running dialysis centers. For the year ended 31st March 2021 ADPLrecorded a revenue of Rs.414.82 million and a net loss of Rs. 4.35 million.

23. AHLLD IAGNOSTICS LIMITED ADL

ADL a subsidiary of Apollo Health and Lifestyle Limited is yet tocommence its operations.

24. AHLLR ISK MANAGEMENT PRIVATE LIMITED ARML

ARML a subsidiary of Apollo Health and Lifestyle Limited had recordedan income of Rs.0.53 million and a net loss of Rs. 5.17 million.

25. APOLLO CVHFL IMITED CVHF

CVHF a subsidiary of Apollo Hospitals International Limited is in thebusiness of providing healthcare services. For the year ended 31st March 2021 CVHFrecorded an income of Rs.185.90 million and a net loss of Rs. 72.10 million.

26. APOLLO BANGALORE CRADLE LIMITED ABCL

ABCL a subsidiary of Apollo Speciality Hospitals Private Limited isengaged in the business of running cradle centres. For the year ended 31st March 2021ABCL recorded an income of Rs.447.26 million and a net profit of Rs.57.83 million

27. KSHEMA HEALTHCARE PRIVATE LIMITED KHPL

KHPL a subsidiary of Apollo Speciality Hospitals Private Limited isyet to commence its operations

28. SURYA FERTILITY CENTRE PRIVATE LIMITED SFC

SURYA a subsidiary of Apollo Speciality Hospitals Private Limited isengaged in the business of running cradle and fertility centres. For the year ended 31stMarch 2021 SFC recorded an income of Rs.28.70 million and a net profit of Rs.1.16million

INVESTMENTS

Medics International Lifesciences Limited

During the year the Company completed the acquisition of a 1%additional stake in Medics International Lifesciences Limited ("Medics") whichruns 330 bed multispeciality hospital in Lucknow. Consequently Medics became a subsidiaryof the Company with effect from the date of acquisition which was 7th January 2021.

Apollo Multi Speciality Hospitals Limited - AMSHL (Formerly known asApollo Glenea-gles Hospital Limited)

The Board of Directors in their meeting held on November 11 2020approved the proposal to acquire the 50% equity stake held by Gleneagles Development PteLtd. Singapore in AMSHL Kolkata in which the Company held a 50% equity stake at aconsideration of Rs. 4100 million.

The acquisition of 50% equity stake held in AMSHL Kolkata byGleneagles Development Pte Limited was completed on 22nd April 2021 with AMSHL becoming a100% subsidiary of the Company.

The name of the Company was changed from Apollo Gleneagles HospitalLimited to Apollo Multi Speciality Hospitals Limited subsequently based on approvalobtained from the Ministry of Corporate Affairs with effect from 5th May 2021.

Apollo Medicals Private Limited

The Scheme of Arrangement (" the Scheme") relating to thetransfer of the front end portion of the retail pharmacy business ("divestmentbusiness") to Apollo Pharmacies Limited ("APL" or "TransfereeCompany") a wholly owned subsidiary of Apollo Medicals Private Limited("AMPL") for an overall cash consideration of Rs.5278 million was approved bythe National Company Law Tribunal vide their order dated August 3 2020.

Pursuant to the Scheme becoming effective from 1st September 2020 theCompany invested a sum of Rs.365 million towards its share of equity contribution and itsownership interest in AMPL reduced to 25.50% .

Apollo Health Co Limited

The Company has acquired the entire equity stake held by the existingshareholders in Apollo Health Co Limited (AHL) on 233rd June 2021. Consequent to that AHLbecame a wholly owned subsidiary to the Company.

QUALIFIED INSTITUTIONAL PLACEMENT QIP

During the year your Company successfully completed a QualifiedInstitutional Placement (QIP) raising Rs.11699.99 million from Qualified

Institutional Buyers by issue of 4659498 equity shares of Rs.5/- eachat an issue price of Rs.2511/- per equity share including premium of Rs.2506/- pershare. The monies raised have been utilised in line with the objects to the issuementioned in the Placement Document.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporategovernance and adhere to the corporate governance requirements set out by SEBI. The reporton corporate governance as required under the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter ListingRegulations) forms an integral part of this report. The requisite certificate from M/sLakshmmi Subramanian & Associates Practising Company Secretaries confirming thecompliance with the conditions of corporate governance is attached to the report onCorporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management 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

As stipulated under the Listing Regulations the BusinessResponsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective is attached as part of the Annual Report.

SEXUAL HARASSMENT

The Company has adopted a policy on prevention prohibition andredressal of sexual harassment at the workplace in line with the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and therules framed thereunder. The Company has an Internal Complaints Committee for providing aredressal mechanism pertaining to sexual harassment of women employees at the work place.During the year 2 complaints were received under the policy both of which were disposedoff.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for Directors andEmployees to report their genuine concerns the details of which are given in theCorporate Governance Report. The policy on Vigil Mechanism and Whistle Blower Policy hasbeen posted on the website of the Company www.apollohospitals.com.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.

FIXED DEPOSITS

During the year your company did not accept any deposits or renewexisting deposits from the public. The total outstanding deposits with the Company as on31st March 2021 were Rs.1.28 million (Rs.1.90 million as on 31st March 2020) which werenot claimed by the depositors.

DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL KMPS

Board Composition and Independent Directors

The Board consists of the Executive Chairman four Executive Directorsand five Independent Directors as on 31st March 2021. Independent directors are appointedfor a term of five years and are not liable to retire by rotation.

All Independent Directors have given their declarations that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and Regulation 16 (b) of the SEBI Listing Regulations.

Retirement by Rotation

Pursuant to Section 152 of the Companies Act 2013 Smt. Preetha ReddyDirector retires by rotation at the ensuing Annual General Meeting and being eligibleoffers herself for re-appointment.

Change in Board Composition Outgoing Director

Dr. T. Rajgopal had accepted the position of Chief Operating Officer inBreach Candy Hospital Mumbai. As a good corporate governance practice he had tenderedhis resignation from the position of Independent Director of the Company with effect from1st April 2021 to avoid a potential conflict of interest situation in the Company.

Dr. T. Rajgopal has also confirmed that there are no material reasonsfor his resignation other than that specified herein above.

The Board places on record its sincere appreciation for the valuableservices rendered by Dr. T. Rajgopal during his tenure.

New Director

Based on the recommendation of the Nomination and RemunerationCommittee the Board has recommended to the members that Shri. Som Mittal be appointed asan Independent Director for a term of 5 (five) consecutive years with effect from 21stJuly 2021.

The Company has received declarations from Shri Som Mittal confirmingthat he meets the criteria of independence prescribed under the Act and the ListingRegulations.

Key Managerial Personnel

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

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and in terms ofRegulation 17(10) of the SEBI Listing Regulations the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of the Committees. The manner in which the evaluation has beencarried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination &Remuneration Committee approved a policy for selection and appointment of DirectorsSenior Management and their remuneration. The Remuneration Policy is stated in theCorporate Governance Report.

MEETINGS OF THE BOARD

The Board met seven times during the financial year the details ofwhich are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.

RISK MANAGEMENT

The Board of Directors had constituted a Risk Management Committee toidentify elements of risk in different areas of operations and to develop a policy foractions associated to mitigate the risks. The Committee on a timely basis informed themembers of the Board of Directors about risk assessment and minimization procedures and inthe opinion of the Committee there was no risk that may threaten the existence of theCompany. The details of the Risk Management Committee are included in the CorporateGovernance Report.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the sizefiscal and complexity of its operations

The scope and authority of the Internal Audit (IA) function is definedin the Internal Audit Charter. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board. The details ofthe internal control system and its terms of reference are set out in the ManagementDiscussion and Analysis Report forming part of the Board's Report.

The Board of Directors has laid down internal financial controls to befollowed by the Company and the policies and procedures to be adopted by the Company forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors 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 would impact the going concern status of the Company and its futureoperations.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge hereby state and confirm:

a. that in the preparation of the annual financial statements for theyear ended March 31 2021 the applicable accounting standards have been followed alongwith proper explanations relating to material departures if any;

b. that such accounting policies have been selected and appliedconsistently and judgement and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at March 312021 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d. that the annual financial statements have been prepared on a goingconcern basis;

e. that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31 2021 was Rs.718.93million.

During the year the Company allotted 4659498 equity shares of Rs.5/-each to Qualified Institutional Buyers (QIBs) on 23rd January 2021 under QualifiedInstitutions Placement Scheme (QIP) at a price of Rs. 2511/- per share including apremium of Rs.2506/- per share.

Consequent to the allotment of above said shares the equity paid upcapital has been increased from Rs.695.63 million divided into 139125159 equity sharesof Rs. 5/- each to Rs. 718.93 million divided into 143784657 equity shares of Rs.5/-each.

These shares have been listed at BSE Limited (BSE) and National StockExchange of India Limited (NSE) Mumbai.

The Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As of March 31 2021 the details of shareholdingin the Company held by the Directors are set out in the Corporate Governance Reportforming part of the Board's Report and none of the directors hold convertibleinstruments of the Company.

TERMINATION OF GLOBAL DEPOSITORY RECEIPTS "GDRS" PROGRAMAND DELISTING OF GDRS FROM THE LUXEMBOURG STOCK EXCHANGE "LSE"

In view of the minimal number of GDRs outstanding and the low tradingvolume related to the GDRs the Board of Directors of the Company at its meeting held on12th February 2021 had resolved to terminate the GDR program. The notice of termination ofthe GDR program was sent to all GDR holders on 25th February 2021 by Bank of New YorkMellon Custodian of GDR informing that the GDR facility was terminated with effect from26th March 2021. The holders can surrender their GDRs to Bank of New York Mellon fordelivery of underlying equity shares upto the period of March 31 2022 subsequent towhich Bank of New York Mellon Custodian may attempt to sell the underlying shares anddistribute the net proceeds to the respective GDR Holders. Subsequent to termination ofthe GDRs programme the Luxemburg Stock Exchange will delist the GDRs.

As on March 31 2021 the total outstanding GDRs was 126646representing 0.09% of the paid up share capital of the Company.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company duringthe financial year with related parties were in the ordinary course of business and on anarm's length 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 transactionsother than the transaction stated in AOC-2 in terms of Section 134(3)(h) read with Section188 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 which is annexedherewith as Annexure-II.

The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on theCompany's website www.apollohospitals.com. Your Directors draw the attention of themembers to the Notes to the financial statements which sets out related party disclosures.

None of the Directors have any pecuniary relationships or transactionsvis--vis the Company.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said rules areprovided in the Annual Report which forms part of this Report.

Disclosures relating to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are also provided in the Annual Reportwhich forms part of this Report.

Having regard to the provisions of Section 136(1) read with therelevant provisions of the Companies Act 2013 the Annual Report excluding the aforesaidinformation is being sent to the members of the Company. The said information is availablefor inspection at the Registered Office of the Company during working hours. Any memberinterested in obtaining such information may write to the Company Secretary and the samewill be furnished free of cost.

EMPLOYEE STOCK OPTIONS

No Employee Stock Options have been granted to the employees of theCompany and thus no disclosure is required.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As part of its initiatives under Corporate Social Responsibility (CSR)the Company has undertaken projects in the areas of Rural Development HealthcareEducation & Skill Development and Research in Healthcare.

These projects are in accordance with Schedule VII of the CompaniesAct 2013. The Report on CSR activities for the financial year 2020-2021 is annexedherewith as "Annexure A".

STATUTORY AUDITORS

The Members at the Annual General Meeting held on 20th September 2017approved the appointment of Deloitte Haskins & Sells LLP Chartered Accountants asstatutory auditors for a period of five years commencing from the Thirty Sixth AnnualGeneral Meeting 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 thestatutory auditors in the audit report.

COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 the Directors on therecommendation of the Audit Committee appointed M/s. A.N. Raman & Associates CostAccountants Chennai (FRN 102111) to audit the cost accounts of the Company for thefinancial year 2021-2022 on a remuneration of Rs.1.50 million

As required under the Companies Act 2013 the remuneration payable tothe cost auditor is required to be placed before the Members in a general meeting fortheir ratification. Accordingly a resolution seeking Member's ratification for theremuneration payable to M/s. A.N. Raman & Associates Cost Accountants Chennai(FRN102111) is included at Item No. 6 of the Notice convening the Annual General Meeting.

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

SECRETARIAL AUDITORS

The Board had appointed Smt. Lakshmmi Subramanian Senior Partner M/s.Lakshmmi Subramanian & Associates a firm of Company Secretaries in Practice toconduct Secretarial Audit for the financial year 2020-2021. The Secretarial Audit Reportfor the financial year ended March 31 2021 is annexed herewith as "Annexure B".The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

STATUTORY AUDITORS AND SECRETARIAL AUDITORS REPORT

The Directors hereby confirm that there is no qualificationreservation or adverse remark made by the statutory auditors of the company or in thesecretarial audit report by the practicing company secretary for the year ended 31stMarch 2021.

PARTICULARS REGARDING CONSERVATION OF ENERGY TECH NOLOGY ABSORPTIONAND FOREIGN EXCHANGE EARNINGS AND OUTGO.

Information as required to be disclosed on conservation of energytechnology absorption and foreign exchange earnings and outgo stipulated under Section134(3)(m) of the Companies Act 2013 read with Rule 8 of The Companies (Accounts) Rules2014 is annexed herewith as "Annexure C".

EXTRACT OF ANNUAL RETURN

A copy of the Extracts of the Annual Return of the Company as requiredunder section 134(3)(a) of the Companies Act 2013 in Form MGT-9 as they stood on theclose of the financial year i.e. 31st March 2021 is furnished in ANNEXURE-D and formspart of this Report.

Further a copy of the Annual Return of the Company containing theparticulars prescribed u/s 92 of the Companies Act 2013 in Form MGT-7 as they stood onthe close of the financial year i.e. 31st March 2020 is uploaded on the website of theCompany in the Investor Relations Section and can be accessed from the Company'swebsite www.apollohospitals.com

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation of thecontribution made by the employees at all levels towards the continued growth andprosperity of your Company.

Your Directors also wish to place on record their appreciation ofbusiness constituents banks and other financial institutions and shareholders of theCompany for their continued support.

For and on behalf of the Board of Directors
Place : Chennai Dr. Prathap C Reddy
Date : July 21 2021 Executive Chairman

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