Your Directors are pleased to present their report and financial statements for thefinancial year ended 31st_March 2017.
|FINANCIAL SUMMARY || || |
| || ||(Rs. In Lakhs) |
|Particulars ||FY 2016-17 ||FY 2015-16 |
|I. Revenue from Operations ||76571.61 ||75544.88 |
|II. Other Income ||159.26 ||211.77 |
|III. Total Income (I+II) ||76730.87 ||75756.65 |
|IV. EXPENSES || || |
|Stores & Spares consumed ||15021.28 ||14955.68 |
|Employee benefits expense ||19025.70 ||18155.79 |
|Finance costs ||790.54 ||742.49 |
|Depreciation and amortization expense ||3053.21 ||3532.51 |
|Other expenses ||34758.38 ||34495.58 |
|Total expenses (IV) ||72649.11 ||71882.05 |
|V. Profit before exceptional items and tax (III-IV) ||4081.76 ||3874.60 |
|VI. Exceptional Items ||- ||- |
|VII. Profit/(loss) before tax (V-VI) ||4081.76 ||3874.60 |
|VIII. Tax expense: || || |
|(1) Current tax ||1854.11 ||1499.79 |
|(2) Deferred tax ||(396.88) ||(68.45) |
|IX. Profit/(loss) for the year (VII-VIII) ||2624.53 ||2443.26 |
|X. Other Comprehensive Income || || |
|(i) Items that will not be reclassified subsequently to profit or loss || || |
|Re-measurement gains (losses) on defined benefit plans ||106.15 ||(43.78) |
|Income Tax effect (Deferred Tax) ||(36.74) ||15.15 |
| ||69.41 ||(28.63) |
|XI. Total Comprehensive Income for the year (Comprising Profit (Loss) and ||2693.94 ||2414.63 |
|Other_Comprehensive Income for the year) || || |
INDIAN ACCOUNTING STANDARDS (IND AS)
In accordance with the notification issued by the Ministry of Corporate Affairs (MCA)your Company is required to prepare financial statements under Indian Accounting Standards(Ind AS) prescribed under section 133 of the Companies Act 2013 read with rule 3 of theCompanies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Amendment Rules 2016 with effect from 1st April 2016. Ind AS hasreplaced the existing Indian GAAP prescribed under section 133 of the Companies Act 2013read with rule 7 of Companies (Accounts) Rules 2014. Accordingly the Company has adoptedIndian Accounting Standard
("Ind_AS") with effect from 1st April 2016 with the transitiondate of 1st April 2015 and the financial Statements for the year ended 31stMarch 2017 has been prepared in accordance with Ind AS. The financial statements for theyear ended 31st March 2016 have been restated to comply with Ind AS to makethem comparable.
TRANSFER TO RESERVES
The Company does not propose to transfer any amount to the General Reserve out of theamount available for appropriation in the current year. Rs. 100 lakhs was transferred tothe General Reserve out of the amount available for appropriation during the previousyear.
The Directors are pleased to recommend payment of dividend on equity shares @ Rs. 1.80per share (18 percent) for the financial year ended 31st March 2017 the sameas paid in the previous year.
RESULTS OF OPERATIONS AND THE STATE OF COMPANY AFFAIRS
During the financial year under review the Company has registered growth in itsworking and achieved higher income. The total income increased from Rs. 75756.65 lakhs toRs. 76730.87 lakhs.
The Company's EBIDTA decreased marginally by 0.9% from Rs 8105.82 lakhs to Rs. 8031.66lakhs. However the Profit Before Tax (PBT) increased by 9.3% from Rs 3830.82 lakhs toRs. 4187.91 lakhs and the Profit After Tax (PAT) increased by 11.6% from Rs. 2414.63lakhs to Rs. 2693.94 Lakhs. In the Main Hospital total outpatient volumes decreasedmarginally by 0.51% from 410723 to 408625 and total admissions by 0.08% from 47229 to47191. The overall bed occupancy of the hospital was 76% for the year and the AverageLength of Stay was 4.4 days. The current total bed capacity is 718.
In spite of the tough macroeconomic environment a steady growth of 15% 11% and 11%was seen in robotic surgeries cosmetic surgeries and general surgeries respectively.However a decline of 5% 4% and 13% respectively was seen in cardiac surgeriesneurosurgeries and orthopedic surgeries. In oncology admissions increased by 9% whereassurgeries and the number of radiotherapy sittings declined by 6% and 3% respectively. Thetotal number of Apollo Health Checks increased by 5%.
There has been an outbreak of vector borne illness like Dengue and Chikungunya in thecountry. To support community health and to prevent the spread of mosquito borne diseasessuch as Dengue and Chikungunya a fogging drive was carried out in the neighbouring areasof Jasola Sarita Vihar and Sukhdev Vihar New Delhi.
Apollo Hospitals Noida continued to perform well across all operational parameters andremained one of the leading destinations for Mother and Child Care Dialysis and ApolloHealth Checks. Total admissions increased by 17.3% and admissions through Emergency by26.8%. It continued to be one of the leading renal transplant centers in Noida. Renaltransplant surgeries increased by 57%. Growth continued in Non-Invasive Cardiology HealthChecks and Dialysis. In a Public Interest Litigation (PIL) the Hon'ble High Court ofDelhi had held that free treatment provided by the Hospital as per the terms of the leasedeed shall be inclusive of medicines and consumables. The Company had filed a SpecialLeave Petition (SLP) before the Hon'ble Supreme Court of India against the impugnedjudgment and order of the Hon'ble High Court of Delhi. The Hon'ble Supreme Court of Indiahad admitted the SLP and passed an interim order on 30.11.2009. In pursuance of theinterim order the Hospital is providing free treatment to the patients referred by theGovt. of NCT of Delhi exclusive of medicines and medical consumables. The SLP is pendingbefore the Supreme Court of India.
A Nodal Medical Officer deputed by the Directorate of Health Services is present in thehospital to support guide and monitor the treatment of patients referred by theGovernment. During the year a total of 25750 patients (22457 Out Patients and 3293 InPatients) were treated under the free category.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION (A) Conservation of Energy
The Hospital has been continuously engaged in activities related to conservation ofelectrical energy and reduction in the use of fresh water.
In order to achieve energy conservation the Hospital adopted an approach of shifting100 TR of HVAC load from standalone air cooled split units to a centralized water cooledsystem. In continuation from the previous years all the renovated areas have been upgradedwith LED lights.
Water recycling after tertiary treatment has been started for cooling towers; this hasfurther reduced our fresh water requirement from the previous year.
The accumulated savings in electricity is over 174180 KWH and reduction in fresh waterrequirement is close to 2.9 KL as compared to the previous year.
The Company has also started to purchase power through open access system following arigorous process of applications and installation & testing. This has been done incoordination with all agencies concerned and is expected to generate healthy savings inenergy costs.
(B) Technology Absorption
The Hospital continued its efforts to maintain standards at par with best hospitalsglobally. Investment was made in the latest technology in medical care including new-agetechnology upgrades.
Stand Alone Bispectral Index (BIS)
Bispectral index (BIS) is one of several technologies used to monitor depth ofanaesthesia. BIS monitors are intended to replace or supplement Guedel's classificationsystem for determining the depth of anaesthesia. Titrating anaesthetic agents to aspecific bispectral index during general anaesthesia in adults (and children over 1 yearof age) allows the anaesthetist to adjust the amount of anaesthetic agent to the needs ofthe patient which may result in a more rapid emergence from anaesthesia. Use of the BISmonitor could reduce the incidence of intraoperative awareness during anaesthesia.
FOREIGN EXCHANGE EARNINGS & OUTGO (a) Activities relating to exports; initiativestaken to increase exports; development of new export markets for products and services;and export plans
The Company is engaged in the healthcare business and is not carrying on any exportactivities. The Hospital has been empanelled with eminent international insurancecompanies and has appointed healthcare facilitators in various countries to cater tointernational patients.
(b) Total Foreign Exchange Earnings and Outgo
During the year under review foreign exchange earnings and outgo were asunder:-Earnings : Rs. 12575.54 lakhs Outgo : Rs. 1965.40 lakhs
Five (5) Board meetings were held during the financial year ended 31stMarch 2017. The dates of the meetings are as follows: 20th May 2016 1stJuly 2016 30th August 2016 22nd November 2016 and 30thJanuary 2017.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Jaideep Gupta has been re-appointed by the Board as Managing Director of theCompany for a period of one year effective from 30th April 2017 to 29thApril 2018. In accordance with the provisions of the Companies Act 2013 and the Articlesof Association of the Company Ms. Vineeta Rai and Ms. Renu S. Karnad Directors of theCompany shall retire by rotation at the ensuing Annual General Meeting. Ms. Vineeta Raiand Ms. Renu S. Karnad being eligible have offered themselves for reelection.
Mr. P. Shivakumar - Chief Financial and Operating Officer of the Company has joined asthe Chief Executive Officer M/s. Apollo Hospitals Enterprise Limited Chennai and hasrelinquished office w.e.f. 31st May 2017. Mr. Chander Prakash Tyagi - VicePresident (Finance) has been appointed Chief Financial Officer of the Company in theplace of Mr. P. Shivakumar.
In pursuance to the requirement of Section 203 of the Companies Act 2013 Mr. JaideepGupta - Managing Director Mr. Ajay Kumar Singhal - Vice president cum Company Secretaryand Mr. Chander Prakash Tyagi - Chief Financial Officer are the Key Managerial Personnelof the Company.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as laid down in Section 149(6) ofthe Companies Act 2013.
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee is given in the Corporate Governance Report.
All recommendations of the Audit Committee have been accepted by the Board of Directorsof the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism for Directors and Employees to reporttheir concerns about unethical behavior actual or suspected fraud or violation of thecompany's code of conduct or ethics policy or any other grievance the details of whichare given in the Corporate Governance Report. The Whistle Blower Policy may be accessed onthe Company's website on the link http://www.apollohospdelhi.com/downloads/Whistle%20Blower%20Policy.pdf. During the year under review no matter has been receivedunder Whistle Blower Policy of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
in the preparation of the annual accounts the applicable accounting standardshave been followed and no material departures have been made from the same; theappropriate accounting policies have been selected and applied consistently and have madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2017 and of the profitof the Company for the year ended 31st March 2017.
the 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; the annual accounts have been prepared on an ongoing concern basis.
the internal financial controls to be followed by the Company had been laid downand such internal financial controls are adequate and were operating effectively; and the proper systems had been devised to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has no subsidiaries or associate companies. The Company also does not haveany joint venture.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure - 1 to thisReport.
AUDITORS AND AUDITORS' REPORT
As per Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the term of M/s. S. C. Vasudeva & Co. ((ICAI Registration No.000235N) Chartered Accountants New Delhi as the Statutory Auditors of the Companyexpires at the conclusion of the ensuing Annual General Meeting of the Company.
The Board of Directors of the Company at their meeting held on 26th May2017 on the recommendation of the Audit Committee have made its recommendation forappointment of M/s. S. N. Dhawan & Co. LLP Chartered Accountants (ICAI RegistrationNo. 000045N) as the Statutory Auditors of the Company by the Members at the twenty-ninthAnnual General Meeting of the Company for a term of five years from the conclusion oftwenty-ninth Annual General Meeting till the conclusion of the thirty-fourth AnnualGeneral Meeting subject to rati_cation of their appointment by the Members at everyAnnual General Meeting held after twenty-ninth Annual General Meeting of the Company.Accordingly a resolution proposing appointment of M/s. S. N. Dhawan & Co. LLPChartered Accountants as the Statutory Auditors of the Company pursuant to Section 139of the Companies Act 2013 forms part of the Notice of the twenty-ninth Annual GeneralMeeting of the Company. The Company has received their written consent and a certificatethat they satisfy the criteria provided under Section 141 of the Act and that theappointment if made shall be in accordance with the applicable provisions of the Act andrules framed thereunder.
The Report given by M/s. S. C. Vasudeva & Co. Statutory Auditors on the financialstatement of the Company for the year 2016-17 is part of the Annual Report. The Notes onfinancial statement referred to in the Auditors' Report are self-explanatory and do notcall for any further comment. The Auditors' Report does not contain any qualificationreservation or adverse remark.
No fraud has been reported by the Auditors to the Audit Committee or the Board.
M/s. S. C. Vasudeva & Co. over many years have successfully met the challenge thatthe size and scale of the Company's operations pose for auditors and have maintained thehighest level of governance ethical standards rigour and quality in their audit. TheBoard places on record its appreciation for the services rendered by M/s. S. C. Vasudeva& Co. as the Statutory Auditors of the Company.
The Board has appointed M/s RSM & CO. practicing Company Secretaries to conductSecretarial Audit for the financial year 2016-17. The Secretarial Audit Report for thefinancial year ended 31st March 2017 is annexed herewith marked as Annexure-2 to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
The Board has appointed M/s Devarajan Swaminathan and Co. Cost Accountants as theCost Auditors to conduct the audit of the cost records of the Company for the financialyear ended 31st March 2017. The Cost Auditor has given the Cost Audit Reportfor the financial year ended 31st March 2017 and the Cost Audit Report doesnot contain any qualification reservation or adverse remark.
During the year under review the Company has not accepted any deposit under Chapter Vof the Companies Act 2013.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in the future.
INTERNAL FINANCIAL CONTROL SYSTEMS
To ensure that the Company's financial statements are accurate sufficient andcredible the Company has established a system of Internal Financial Controls to ensurethat all assets are safeguarded and protected against losses that may arise fromunauthorized use or disposition incorrect use any incident of fraud and inappropriatestorage.
The system is designed to adequately ensure that financial and other records maintainedare accurate and reliable for preparing financial information and other data.
Such internal control procedures are augmented by an extensive programme of internaland external audits and periodic reviews by the management. Reasonable assurance isobtained based on evidence regarding processes followed and their appropriate testing thatsuch systems are adequate and comprehensive and are working effectively.
The Audit Committee evaluates the internal financial control system periodically.
PARTICULARS OF LOANS GIVEN
INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED
During the year under review the Company has not given any loan nor made investmentnor given guarantees under Section 186 of the Companies Act 2013.
The Company has established an Enterprise wide Risk Management (ERM) Framework and hasconstituted a Risk Management Committee comprising senior executives headed by theManaging Director.
The Company also has a Risk Management Policy for identification evaluation andmitigation of business risks and opportunities. This framework helps establish ownershipthroughout the organization and embed risk management as an integral part of the businessand its goals and objectives. It helps the decision makers of the organization effectivelyrecognize and to take account of uncertainty the nature of that uncertainty and to worktowards a solution to address the same.
CORPORATE SOCIAL RESPONSIBILITY
The Company is committed to conducting its business in a socially responsible ethicaland environmental friendly manner and to continuously work towards improving the qualityof life of the communities where it operates. The Company has a duly constituted CSRCommittee which is responsible for fulfilling the CSR objectives of the Company. As on 31March 2017 the Committee comprised three Directors viz. Ms. Vineeta Rai Mr. S.Regunathan and Ms. Suneeta Reddy. Ms. Vineeta Rai is the Chairperson of the CSR Committee.
The Company has in place a CSR policy which lays down its philosophy and approachtowards CSR commitment. The CSR Policy may be accessed on the Company's website on thelink http://www.apollohospdelhi.com/ downloads/corporate-social-responsibility-policy.pdfUnder the CSR Policy the Company focuses primarily on the following programmes: A.Community Development B. Healthcare C. Education and Skills Development D. PromoteResearch in Healthcare The annual report on CSR containing particulars specified inCompanies (CSR Policy) Rules 2014 including an update on the CSR initiatives taken by theCompany during the year is given in Annexure - 3 and forms an integral part of thisReport.
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 any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. Accordingly thedisclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC 2 is not applicable to your Company. The policy onmateriality of related party transactions as approved by the Board may be accessed on theCompany's website at http://www.apollohospdelhi.com/downloads/materiality-of-related-party-transactions.pdf
FORMAL ANNUAL EVALUATION
The Nomination and Remuneration Committee of the Company approved Evaluation Criteriafor Appointment/ Re-appointment of Independent Directors along with Evaluation Criteriafor Performance Evaluation of Independent Directors/Directors/Chairperson and PerformanceEvaluation of the Board as a whole by each Director which was adopted by the Board ofDirectors. The Evaluation Criteria for Appointment/Re-appointment of Independent Directorsalong with Evaluation Criteria for Performance Evaluation of Independent Directors/Directors/Chairperson and Performance Evaluation of the Board of Directors by eachdirector as laid down by the Nomination and Remuneration Committee is annexed herewithmarked as Annexure -4 to this Report.
During the year the Evaluation cycle was completed by the Company internally whichincluded the Evaluation of the Independent Directors by the Board of Directors andEvaluation of Non-Independent Directors and the Board as a whole by Independent Directorsof the Company.
The Board has on the recommendation of the Nomination and Remuneration Committeeapproved a policy for selection and appointment of Directors Senior Management and fordetermining their remuneration. The Remuneration Policy is annexed herewith marked asAnnexure - 5 to this Report.
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 are setout in the annexure to this report. Disclosures pertaining to remuneration and otherdetails as required under Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areset out in the annexure to this report.
Having regard to the provisions of Section 136(1) read with its relevant proviso of theCompanies Act 2013 the Board's Report is being sent to the members without abovementioned annexures. The said annexures are available for inspection at the RegisteredOffice of the Company during working hours and any member interested in obtaining suchannexures may write to the Vice President cum Company Secretary and the same will befurnished free of cost.
Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (Listing Regulations) a Management Discussion and Analysis Report and aReport on Corporate Governance is attached with this Report.
A Certificate from Practising Company Secretary regarding the Compliance by the Companyof the conditions stipulated in Regulations Part C of Schedule V of the ListingRegulations is also attached with this report. A declaration by the Managing Directorpursuant to Regulations Part C of Schedule V of the Listing Regulations stating that allthe Board Members and Senior Management Personnel of the Company have affirmed compliancewith the Code of Conduct during the financial year ended 31st March 2017 isalso attached with this report.
The Company has zero tolerance towards sexual harassment at the workplace and hasframed rules on prevention prohibition and redressal of sexual harassment in line withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the rules framed thereunder. During the calendar year 2016 theCompany had received one complaint which was duly investigated and redressed.
The Industrial Relations scenario continued to be cordial during the year under review.
MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY
No material change and commitment affecting the financial position of the Company haveoccurred between the financial year ended on 31st March 2017 and the date ofthe report.
The Directors wish to thank and deeply acknowledge the cooperation assistance andsupport extended by the financial institutions banks the Government of Delhi and theUnion Government.
The Directors also wish to place on record their appreciation for the overall supportand cooperation received from the consultant doctors and employees at all levels.