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Apollo Hospitals Enterprises
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Download Annual Report PDF Format 2013 | 2012 | 2011
Directors Report Year End : Mar '13    « Mar 12
The Directors are pleased to present the THIRTY SECOND ANNUAL REPORT
 and the audited statements of accounts for the year ended 31st March
 2013.
 
 FINANCIAL RESULTS (STANDALONE)
 
                                                       (Rs. in million)
 
 For the year ended                     March 31, 2013  March 31, 2012
 
 Income from operations                       33,178          28,001
 
 Profit before Extraordinary Items 
 and Taxation                                  4,034           3,375
 
 Provision for Taxation                          988           1,066
 
 Net Profit before Extraordinary 
 Items after Taxation                          3,046           2,309
 
 Extraordinary Item                               45               -
 
 Net Profit after Extraordinary Item           3,091           2,309
 
 Balance of Profit brought forward             1,763           1,649
 
 Dividend paid on equity shares                   22               -
 (arising on conversion of FCCB 
 loan & share warrants)
 
 Profit Available for appropriations           4,832           3,958 
 
 Appropriations
 
 Dividend (inclusive of dividend tax)            895             625
 
 Transfer to General Reserve                   1,000           1,500
 
 Transfer to Debenture Redemption Reserve        630              70
 
 Balance carried forward to Balance sheet      2,307           1,763
 
 RESULTS OF OPERATIONS
 
 During the year under review, the income from operations of the Company
 increased to Rs. 33,178 million compared to Rs. 28,001 million in the
 previous year, registering an impressive growth of 18%. The profit
 after tax for the year increased by 34% to Rs. 3,091 million compared
 to Rs. 2,309 million in the previous year.
 
 During the year under review, the consolidated gross revenue of the
 Company increased toRs. 37,687 million compared to Rs. 31,475 million
 in the previous year, registering an impressive growth of 20%. Net
 profit after minority interest for the group increased to Rs. 3,045
 million from Rs. 2,194 million representing a growth of 39%.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The Ministry of Corporate Affairs (MCA) vide its circular No.
 5/12/2007-CL-lll dated 8th February 2011 has granted general exemption
 under Section 212(8) of the Companies Act, 1956 to companies from
 attaching the accounts of their subsidiaries in their annual reports
 subject to fulfillment of certain conditions prescribed. The Board of
 Directors of the Company at its meeting held on 20th May 2013, noted
 the provisions of the MCA circular cited and passed the necessary
 resolution granting requisite approvals for not attaching the Balance
 Sheet, Profit & Loss Account, Report of the Board of Directors and
 Report of the Auditors of each of the subsidiary companies to the
 accounts of the Company. A statement of summarized financials of all
 subsidiaries of your Company, pursuant to Section 212(8) of the
 Companies Act, 1956 forms part of this report. Any further information
 in respect of the annual report and the financial statements of the
 subsidiary companies of your Company will be made available to the
 members on request and will also be available for inspection for any
 member at its Registered Office. In accordance with the Accounting
 Standard, AS-21 issued by the Institute of Chartered Accountants of
 India, the Consolidated Financial Statement presented by your Company
 includes the financial information of all its subsidiaries.
 
 DIVIDEND
 
 The Board of Directors recommend a dividend of Rs. 5.50 per Equity
 Share (110% on face value of Rs. 5/ - per share) (as againstRs. 4/- per
 Equity share on face value ofRs. 5/- each, 80% in the previous year) on
 the paid up equity share capital of the company for the financial year
 ended 31st March 2013, which if approved at the forthcoming Annual
 General Meeting on 7th August 2013 will be paid to those shareholders
 whose names appear in the Register of Members as at the closing hours
 of business on 26th July 2013. In respect of shares held in electronic
 form, the dividend will be paid on the basis of beneficial ownership
 furnished by the depositories viz., NSDL and CDSL for this purpose.
 
 The Register of Members and Share Transfer Books will remain closed
 from Saturday, 27th July 2013 to Wednesday, 7th August 2013 (both days
 inclusive).
 
 TRANSFER OF RESERVES
 
 Your Company proposes to transfer Rs. 1,000 million to the general
 reserve out of the amount available for appropriations. An amount of
 Rs. 2,307 million is proposed to be retained in the Profit & Loss
 Account.
 
 CREDIT RATING
 
 The Company continues to have the credit rating of AA from CRISIL for
 its debt instruments which indicates a high degree of safety.
 
 CRISIL Equities has upgraded the Company''s CRISIL IER fundamental grade
 to 5/5 from 4/5. The grade indicates that the company''s fundamentals
 are ''excellent'' relative to other listed equity securities in India.
 
 SUBSIDIARIES
 
 Your Company has sixteen subsidiary companies (including fellow
 subsidiaries) as on March 31, 2013. The statement in respect of the
 details of the subsidiary companies viz., Unique Home Health Care
 Limited (UHHCL), AB Medical Centres Limited (ABMCL), Samudra Healthcare
 Enterprises Limited (SHEL), Apollo Hospital (UK) Limited (AHUKL),
 Apollo Health and Lifestyle Limited (AHLL), Western Hospitals
 Corporation Pvt Limited (WHCPL), Apollo Cosmetic Surgical Centre Pvt
 Limited (ACSPL), Apollo Nellore Hospital Limited (ANHL) (formerly known
 as Pinakini Hospitals Limited), Imperial Hospital and Research Centre
 Limited (IHRCL), Alliance Medicorp (India) Limited (Alliance), Alliance
 Dental Care Limited (Alliance Dental), Sapien Bio Sciences Pvt Limited
 (SBPL), ISIS Healthcare India Private Limited (ISIS), Mera Healthcare
 India Private Limited (MERA), Apollo Koramangala Cradle Limited (AKCL)
 and Apollo Clinics (Gujarat) Limited (ACGL) pursuant to section 212 of
 the Companies Act, 1956, is attached to this report.
 
 Unique Home Health Care Limited (UHHCL)
 
 UHHCL, a wholly owned subsidiary of the Company provides medical and
 paramedical services including doctor''s consultation, physiotherapy
 direct to patient homes and also offers paramedical service in
 hospitals to critically ill patients. For the year ended 31st March
 2013 UHHCL, recorded a revenue of Rs. 40.05 million and net profit of
 Rs. 17.88 million.
 
 AB Medical Centres Limited (ABMCL)
 
 ABMCL, a wholly owned subsidiary of the Company does not have any
 commercial operations as it has leased out its infrastructure viz.,
 land, building and medical equipment to the Company for running the
 hospital. For the year ended 31st March 2013, ABMCL recorded an income
 of Rs. 6.40 million and a net profit of Rs. 4.11 million.
 
 Samudra Healthcare Enterprises Limited (SHEL)
 
 SHEL, a wholly owned subsidiary of the company, runs a 120 bed multi
 speciality hospital at Kakinada. For the year ended 31st March 2013,
 SHEL recorded revenue of Rs. 282.89 million and a net profit of Rs.
 5.88 million.
 
 Apollo Hospital (UK) Limited (AHUKL)
 
 AHUKL is a wholly owned foreign subsidiary of the Company and has not
 yet commenced its operations.
 
 Apollo Health and Lifestyle Limited (AHLL)
 
 AHLL, a wholly owned subsidiary of the Company is engaged in the
 business of providing primary healthcare facilities through a network
 of owned/franchised clinics across India offering specialist
 consultation, diagnostics, preventive health checks, telemedicine
 facilities and a 24-hour pharmacy all under one roof. For the year
 ended 31st March 2013, AHLL recorded a consolidated revenue of Rs.
 566.94 million and a net loss of Rs. 167.03 million.
 
 Western Hospitals Corporation Private Limited (WHCPL)
 
 For the year ended 31st March 2013, WHCPL, a wholly owned subsidiary of
 the company, recorded revenue of Rs. 10.80 million and a net profit of
 Rs. 7.81 million.
 
 Apollo Nellore Hospital Limited (ANHL)
 
 As a part of its strategy to reach out to the tier II towns and cities,
 the Company intends to build a hospital in Nellore through a subsidiary
 company, Apollo Nellore Hospital Limited (formerly known as Pinakini
 Hospitals Limited).  ANHL recorded revenue of Rs. 7.42 million and a
 net profit of Rs. 5.60 million.
 
 Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL)
 
 ACSPL, a 69.40% subsidiary of the company is engaged in the business of
 running cosmetic surgical centres. For the year ended 31st March 2013,
 ACSPL recorded a revenue of Rs. 28.09 million and a net profit of Rs.
 0.93 million.
 
 Imperial Hospital and Research Centre Limited (IHRCL)
 
 IHRCL, a 85.76% subsidiary of the company owns a 240 bed multi
 speciality hospital at Bengaluru. For the year ended 31st March 2013,
 IHRCL recorded a revenue of Rs. 1,241.72 million and a net profit of
 Rs. 2.30 million.
 
 Alliance Medicorp India Limited (Alliance)
 
 Alliance, a 51 % subsidiary of the Company is engaged in the business
 of running dialysis clinics. For the year ended 31st March 2013,
 Alliance recorded consolidated revenue of Rs. 184.87 million and a net
 loss of Rs. 31.84 million.
 
 Sapien Biosciences Pvt Ltd (SBPL)
 
 SBPL, a 70% subsidiary of the company which is engaged in the business
 of bio-banking of tissues is currently in the startup stage . For the
 year ended 31st March 2013, SBPL recorded pre-operative expenses of Rs.
 0.91 million.
 
 ISIS Health Care India Private Limited (ISIS)
 
 ISIS, a subsidiary of Apollo Health and Lifestyle Limited is engaged in
 the business of providing healthcare services.  For the year ended 31st
 March 2013, ISIS recorded a revenue of Rs. 18 million and a net profit
 of Rs. 0.21 million.
 
 Mera Health Care India Private Limited (MERA)
 
 MERA, a subsidiary of Apollo Health and Lifestyle Limited is engaged in
 the business of healthcare services. For the year ended 31st March
 2013, MERA recorded a revenue of Rs. 11 million.
 
 Apollo Koramangala Cradle Limited (AKCL)
 
 AKCL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in
 the business of healthcare services. For the year ended 31st March
 2013, AKCL recorded a revenue of Rs. 25 million and a net loss of Rs.
 34 million.
 
 Apollo Clinics (Gujarat) Limited (ACGL)
 
 ACGL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in
 the business of healthcare services.  Alliance Dental Care Limited
 (Alliance Dental)
 
 Alliance Dental, a subsidiary of Alliance Medicorp (India) Limited is
 engaged in the business of running dental clinics. For the year ended
 31st March 2013, Alliance Dental recorded a revenue of Rs. 156.59
 million and a net loss of Rs. 24.33 million.
 
 INCREASE IN THE PAID-UP SHARE CAPITAL
 
 The paid-upshare capitalof the Company increased fromRs. 672.33 million
 (consisting of 134,466,618equitysharesof Rs. 5/- each) to Rs. 695.63
 million (consisting of 139,125,159 equity shares ofRs. 5/- each)
 consequent to the allotment of:-
 
 (i) 1,381,619 equity shares to International Finance Corporation,
 Washington upon conversion of 750 Foreign Currency Convertible Bonds of
 USD 10,000/- each aggregating to USD 7.5 million at a price of Rs.
 302.50 per share of Rs. 5/- each, including a premium of Rs. 297.50 per
 share on 7th June 2012.
 
 (ii) 3,276,922 equity shares to Dr. Prathap C Reddy, one of the
 promoters of the Company on 25th July 2012 upon conversion of warrants
 issued to him on 5th February 2011 at a price of Rs. 472.46 per share
 including a premium of Rs. 467.46 per share.
 
 These shares have been listed at Bombay Stock Exchange Limited (BSE)
 and National Stock Exchange India Limited, (NSE), Mumbai.
 
 ISSUE OF NON CONVERTIBLE DEBENTURES
 
 During the year under review, your Company privately placed 2,250
 Secured Redeemable Non Convertible Debentures of Rs. 1 million each
 aggregating to Rs. 2,250 million to Banks and Financial Institutions.
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 (VII) of the Listing Agreement with the Stock
 Exchanges, a separate report on Corporate Governance forms part of the
 Directors'' Report in the Annual Report. Your Company has been complying
 with the requirements of the Listing Agreement and necessary
 disclosures have been made in this regard in the Corporate Governance
 Report.
 
 A certificate from the Auditors of the Company regarding compliance
 with the conditions of Corporate Governance as stipulated under Clause
 49 of the Listing Agreement is attached to this report.
 
 HUMAN RESOURCES DEVELOPMENT
 
 Millions of patients from all across the world come to Apollo Hospitals
 with great hope in their hearts, looking for a cure and it is the
 dedication and commitment of every member of the Apollo family that
 makes this possible.
 
 For us at Apollo Hospitals, patient-centricity is not a mere goal, but
 the very core of our existence. Several employees work closely with the
 patient and many more work indirectly to support the delivery of
 superior healthcare. Therefore, all employees, both individually and
 collectively are key to Apollo Hospitals being renowned as a trusted
 healthcare provider. The mantra of ''Tender Loving Care'' has a profound
 impact on everything we do and is the bedrock of the Apollo culture.
 With immense compassion and commitment, the doctors, nurses and every
 employee of the organization come together and transform Apollo into a
 warm, helpful and friendly environment for patients and their families.
 
 Apollo Hospitals recognises that its greatest differentiator is its
 human resources capital. Therefore, the human resources systems,
 procedures and the organizational environment are all designed to
 nurture creativity, innovation and greater efficiencies in its human
 capital. Training is an integral element of the HR system and empowers
 employees to work towards shared goals and the common purpose of
 providing superior patient care.
 
 Apollo Hospitals firmly believes in maintaining and encouraging an
 organizational climate conducive to developing satisfied and productive
 employees. In keeping with this, the Organizational Climate Survey
 (OCS) is conducted on a regular basis to assess and ascertain employee
 feedback. The Organizational Climate Survey 2012 elicited responses
 from employees on diverse themes such as sense of belonging, role of
 HOD and superior communication, decision making processes, training,
 team building, compensation & patient satisfaction. Based on the
 feedback received from the OCS, robust action plans were mapped out for
 continuous improvements.
 
 Apollo values every individual''s performance and thus the Apollo
 Performance Management System encompassing the management cadre
 employees across the Group was instituted focusing on alignment,
 measurement, reward and recognition including Personal Development Plan
 (PDP). As a part of Rewards and Recognition scheme, the following
 awards were introduced to promote greater employee performance and
 engagement:
 
 1.  Award for Best Ideas & Suggestion
 
 2.  Award for Best Talent
 
 3.  Award for Service Excellence & Wellness.
 
 Leadership development through programs such as FLDP & CCP was also
 initiated this year. Future Leaders Development program (FLDP) at
 Apollo Hospital was organized primarily with the aim to prepare 2nd and
 3rd level Executives for Senior Leadership roles. Competency Coaching
 Program (CCP) for nursing leaders is a structured approach to enhance
 skill and competencies required in different application areas in
 business to achieve desired outcomes.
 
 The total number of employees increased from 32,991 as on March 31,
 2012 to 35,348 as on March 31, 2013.
 
 HR INITIATIVES AT APOLLO
 
 Apollo Acculturation Program for imbibing excellence is a detailed
 3-day Induction program which is followed by an on-line test.
 
 Wellness at Apollo is an imperative and to encourage focus on
 preventive healthcare, the Annual Master Health Check-up for
 consultants and their spouses was initiated and made mandatory. An
 Incentive for employees on referring their friends and family for
 Health check-ups was also introduced this year.
 
 In our continuous quest towards improving healthcare and in achieving
 superior standards of excellence, we launched the Employee Suggestion
 Program Apollo Big Minds''. A new Intranet initiative christened Apollo
 Space'' was launched. The online environment encourages open
 communication and Apolloites can now Connect, Communicate & Collaborate
 with greater ease and make collective discoveries.
 
 An exciting corporate tie-up was introduced as a welfare measure for
 all employees and their family members enabling them to avail discounts
 and other benefits in amusement parks, apparel stores, restaurants,
 beauty salons, optical stores and travel agencies.
 
 Apollo Hospitals was a recipient of several awards at prestigious
 forums this year. Significant awards and accolades received during the
 year are detailed below:
 
 - Asian Learning & Development Leadership Awards for Best Induction
 Program.
 
 - 21st Global HR Excellence Awards 2013 for Institution Building.
 
 - 7th Employer Branding Awards 2013 for Talent Management and Best
 HR Strategy in line with Business.
 
 - AIMA Award for Best Innovation in Service Delivery.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the
 Directors of the Company hereby state and confirm that:
 
 - In the preparation of the annual accounts for the year, the
 applicable accounting standards had been followed along with proper
 explanations and there were no material departures;
 
 - The Directors had selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit of
 the Company for that period;
 
 - The Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 - The Directors had prepared the annual accounts on a going concern
 basis.
 
 FIXED DEPOSITS
 
 The total deposits with the Company as on 31st March 2013 was Rs.
 364.94 million (Rs. 490.47 million as on 31st March 2012) which include
 deposits for an aggregate of value of Rs. 23.09 million (Rs. 16.67
 million as on 31st March 2012) not claimed by the depositors. Out of
 these deposits, an aggregate value of Rs. 15.78 million have since been
 repaid / renewed.
 
 DIRECTORS
 
 As per the provisions of the Articles of Association of the Company,
 four directors of the company viz., Shri. Habibullah Badsha, Shri.
 Khairil Anuar Abdullah, Smt. Suneeta Reddy and Smt. Shobana Kamineni
 retire by rotation at the ensuing Annual General Meeting and are
 eligible for re-appointment.
 
 Shri. Sandeep Naik and Shri. Michael Fernandes both resigned from the
 position of Director of the Company w.e.f 9th November 2012 due to
 their inability to continue in view of increased professional
 commitments.
 
 Pursuant to the Shareholders Agreement (Agreement) entered into between
 the Company and the Apax Group, HSTN Acquisition (FI I) Limited (HSTN),
 an Apax group Company, had nominated Shri.Shashank Singh and he was
 appointed by the Company as an additional director on 9th November
 2012. As per the terms of the agreement, upon the Apax Group''s equity
 holding falling below a minimum threshold limit of 5.65% of the total
 capital of the company, their entitlement to nominate a director on the
 board of the Company ceases. Since the Apax Group''s equity holding is
 currently below 5.65%, Shri. Shashank Singh will only hold the office
 till the date of the Annual General Meeting.
 
 The Board wishes to place on record its appreciation of the
 contributions made by Shri.Sandeep Naik, Shri. Michael Fernandes and
 Shri. Shashank Singh during their tenure as Directors of the Company.
 
 AUDITORS
 
 The Auditors, M/s. S. Viswanathan, Chartered Accountants, retire at the
 ensuing Annual General Meeting and have confirmed their eligibility and
 willingness to accept office, if reappointed.
 
 PARTICULARS OF EMPLOYEES AS PER SECTION 217(2A) OF THE COMPANIES ACT,
 1956.
 
 In terms of provisions of Section 217(2A) of the Companies Act, 1956,
 read with the Companies (Particulars of Employees) Rules, 1975, the
 names and other particulars of employees are set out in the Annexure to
 the Directors'' Report. However, having regard to the provisions of
 Section 219(1 )(b)(iv) of the Companies Act, 1956, the Annual Report
 excluding the aforesaid information is being sent to all the members of
 the Company and others entitled thereto. Any member interested in
 obtaining such particulars may write to the Company Secretary at the
 Registered Office of the Company.
 
 PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
 FOREIGN EXCHANGE EARNINGS AND OUTGO.
 
 Particulars as required to be disclosed as per the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 are set out in the statement attached herewith as Annexure - A.
 
 ACKNOWLEDGEMENT
 
 Your Directors wish to place on record their appreciation of the
 contributions made by the employees at all levels, to the continued
 growth and prosperity of your Company.
 
 Your Directors also wish to place on record their appreciation of
 business constituents, banks and other financial institutions and
 shareholders, of the Company for their continued support.
 
                         For and on behalf of the Board of Directors
 
 Place : Chennai                                 Dr. Prathap C Reddy
 
 Date : 20th May 2013                             Executive Chairman
Source : Dion Global Solutions Limited
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