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Apollo Hospitals Enterprises Directors Report, Apollo Hospital Reports by Directors
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Apollo Hospitals Enterprises
BSE: 508869|NSE: APOLLOHOSP|ISIN: INE437A01024|SECTOR: Hospitals & Medical Services
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Download Annual Report PDF Format 2014 | 2013 | 2012 | 2011
Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Directors are pleased to present the THIRTY THIRD ANNUAL REPORT
 and the audited statements of accounts for the year ended 31st March
 2014.
 
 Financial Results (Standalone)
 
                                             (Rs. in million)
 
                                  March 31, 2014     March 31, 2013
 For the year ended
 
 Income from operations             38,616             33,178
 
 Profit before Extraordinary 
 Items and Taxation                  4,201              4,034
 
 Provision for Taxation                894                988
 
 Net Profit before Extraordinary 
 Items after Taxation                3,307              3,046
 
 Extraordinary Items                   -                   45
 
 Net Profit after Extraordinary 
 Items                               3,307              3,091
 
 Balance of Profit brought forward   2,307              1,763
 
 Dividend paid on equity shares        -                   22 
 (arising on conversion of FCCB 
 loan & share warrants)
 
 Profit available for appropriations 5,614              4,832
 
 Appropriations
 
 Dividend (inclusive of 
 dividend tax)                         936                895
 
 Transfer to General Reserve         1,500              1,000
 
 Transfer to Debenture Redemption 
 Reserve                                13                630
 
 Balance carried forward to 
 Balance sheet                       3,165              2,307
 
 Results of Operations
 
 During the year under review, the income from operations of the Company
 increased to Rs. 38,616 million compared to Rs. 33,178 million in the
 previous year, registering an impressive growth of 16%. The profit
 after tax for the year increased by 7% to Rs. 3,307 million compared to Rs.
 3,091 million in the previous year.
 
 During the year under review, the consolidated gross revenue of the
 Company increased to Rs. 43,842 million compared to Rs. 37,687 million in
 the previous year, registering an impressive growth of 16%. Net profit
 after minority interest for the group increased to Rs. 3,168 million from
 Rs. 3,044 million representing a growth of 4%.
 
 Consolidated Financial Statements
 
 The Ministry of Corporate Affairs (MCA) vide its circular No.
 5/12/2007-CL-Ill dated 8th February 2011 had 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 fulfllment of certain conditions prescribed. The Board of
 Directors of the Company at its meeting held on 28th May 2014, 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. 5.75 per equity share
 (115% on face value of Rs. 5/ - per share) (as against Rs. 5.50 per equity
 share on face value of Rs. 5/- each, 110% in the previous year) on the
 paid up equity share capital of the company for the financial year
 ended 31st March 2014, which if approved at the forthcoming Annual
 General Meeting on 25th August 2014 will be paid to those shareholders
 whose names appear in the Register of Members as at the closing hours
 of business on 18th August 2014. 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 Tuesday, 19th August 2014 to Monday, 25th August 2014 (both days
 inclusive).
 
 Transfer of Reserves
 
 Your Company proposes to transfer Rs. 1,500 million to the general
 reserves out of the amount available for appropriations. An amount of Rs.
 3,165 million is proposed to be retained in the Profit & Loss Account.
 
 Credit Rating
 
 CRISIL has rated the company''s debt instruments as AA indicating a high
 degree of safety.
 
 CRISIL Equities has upgraded 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 fourteen subsidiary companies (including fellow
 subsidiaries) as on March 31, 2014. 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 Nellore Hospital Limited
 (ANHL) (formerly Pinakini Hospitals Limited), Imperial Hospital and
 Research Centre Limited (IHRCL), Alliance Medicorp (India) Limited
 (Alliance), Sapien Bio Sciences Pvt Limited (SBPL), Apollo Bangalore
 Cradle Limited (ABCL) formerly Apollo Koramangala Cradle Limited,
 Apollo Clinics (Gujarat) Limited (ACGL), Apollo Cosmetic Surgical
 Centre Pvt Limited (ACSPL) and Alliance Dental Care Limited (Alliance
 Dental) 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 services in
 hospitals to critically ill patients. For the year ended 31st March
 2014 UHHCL, recorded a revenue of Rs. 25.56 million and net profit of Rs.
 2.02 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 2014, ABMCL recorded an income
 of Rs. 6.41 million and a net profit of Rs. 4.44 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 2014,
 SHEL recorded revenues of Rs. 279.56 million and a net profit of Rs. 3.36
 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 2014, AHLL recorded a consolidated revenue of Rs.
 1,149.33 million and a net loss of Rs. 326.96 million.
 
 Western Hospitals Corporation Private Limited (WHCPL)
 
 For the year ended 31st March 2014, WHCPL, a wholly owned subsidiary of
 the Company, recorded revenue of Rs. 11.61 million and a net profit of Rs.
 7.92 million.
 
 Apollo Nellore Hospital Limited (ANHL)
 
 ANHL has leased out its land at Nellore to the Company. ANHL recorded
 revenues of Rs. 7.42 million and a net profit of Rs. 4.84 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 2014,
 IHRCL recorded a revenue of Rs. 1,469.35 million and a net profit of Rs.
 51.67 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 2014, Alliance
 recorded consolidated revenue of Rs. 309.72 million and a net loss of Rs.
 27.13 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 2014, SBPL recorded a revenue of Rs. 0.67 million
 and a net loss of Rs. 6.35 million.
 
 Apollo Bangalore Cradle Limited (ABCL) (formerly Apollo Koramangla
 Cradle Limited)
 
 ABCL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in
 the business of healthcare service. For the year ended 31st March 2014,
 ABCL recorded a revenue of Rs. 150.77 million and a net loss of Rs. 33.69
 million.
 
 Apollo Clinics (Gujarat) Limited (ACGL)
 
 ACGL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in
 the business of healthcare services. For the year ended 31st March
 2014, ACGL recorded a revenue of Rs. NIL million and a net loss of Rs. 0.10
 million.
 
 Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL)
 
 ACSPL, a subsidiary of Apollo Health and Lifestyle Limited is engaged
 in the business of running cosmetic surgical centres. For the year
 ended 31st March 2014, ACSPL recorded a revenue of Rs. 50.44 million and
 a net loss of Rs. 0.50 million.
 
 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 2014, Alliance Dental recorded a revenue of Rs. 272.77 million
 and a net loss of Rs. 18.59 million.
 
 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.
 
 Awards
 
 - Apollo Hospitals has been awarded the Gallup Great Places to Work
 Award (GGWA) for the year 2014 in recognition of exceptionally
 leveraging its workforce to drive business results and sustainable
 growth.
 
 - Dr. Prathap C. Reddy, Founder and Chairman of the Apollo Hospitals
 Group was honoured with the Lifetime Achievement Award by NDTV.
 
 - Dr. Prathap C. Reddy, Chairman, Apollo Hospitals Group was conferred
 with the Lifetime Achievement Award at the Asian Business Leadership
 Forum Awards 2013.
 
 - Dr. Prathap C Reddy was also conferred with the Lifetime Achievement
 Award by CNBC TV18 at the 9th edition of India Business Leaders Awards
 2013
 
 - In the Week-Nielsen Hospital Awards 2013, 3 Hospitals from the Apollo
 Network were recognised as being among the Top 15 Multi-specialty
 Hospitals in India. Chennai (#4), Delhi (#9) and Hyderabad (#14) have
 been conferred with this prestigious honour. Chennai and Delhi have
 featured in the list of Top 10 hospitals in India for the 6th year in a
 row. These two facilities have also featured in the list of Best
 Hospitals in India for the specialties of Cardiology and Oncology.
 
 - Apollo Health City, Hyderabad has been bestowed the prestigious
 ''International Medical Tourism Award'' for Excellence in Customer
 Service. This has been awarded by the reputed International Medical
 Travel Journal, UK. Apollo Health City was the only hospital from India
 to be nominated.
 
 Directors'' Responsibility Statement
 
 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
 
 In view of the new Companies Act, 2013 requirements, the Company can
 accept deposits from the public and members only after obtaining
 approval from the members at the ensuing annual general meeting.
 
 The total deposits with the Company as on 31st March 2014 was Rs. 355.38
 million (Rs. 367.61 million as on 31st March 2013) which include deposits
 and interest thereon for an aggregate value of Rs. 4.40 million (Rs. 25.31
 million as on 31st March 2013) not claimed by depositors.
 
 Executive Directors
 
 The Company has gone in for a major re-organisation of its top
 leadership with the twin objective of accelerating growth and
 furthering its strategic goals. This strategic re-alignment will enable
 the company to focus on growth opportunities and hospitals, pharmacies
 and clinics while furthering its clinical leadership and service
 excellence.  The Company aims to deepen the focus in each of these
 verticals as well as drive synergies between them using technology and
 foster an ecosystem focused on wellness, innovation and productivity.
 
 The Board of Directors at its meeting held on 2nd July 2014 approved
 the expanded roles and responsibilities of the following Executive
 Directors along with new designations.
 
 Smt.Preetha Reddy has been re-designated as Executive Vice-Chairperson
 of the Company. She will work closely with the organization''s 8,000
 clinicians, industry bodies, State and Central Governments to advance
 policy matters on important healthcare issues and also in reviewing
 global medical advancements, in introducing contemporary protocols to
 further enhance clinical outcomes. Considering the immense potential in
 international business, Smt. Preetha Reddy will directly lead this
 portfolio and drive Apollo''s aspiration of becoming the global
 healthcare destination. She will also steer the Enterprise Risk
 Management portfolio for the company.
 
 Smt. Suneeta Reddy assumes the role of Managing Director of the
 Company. She will lead the initiatives related to corporate strategy,
 corporate finance, funding and investments and will leverage M&As to
 achieve the accelerated pace of growth and optimize profitability. She
 will directly steer the hospital vertical and will also handle Brand
 and Marketing.
 
 Smt. Shobana Kamineni has been re-designated as Executive
 Vice-Chairperson of the Compnay. She will continue to spearhead Apollo
 Pharmacy related initiatives and will also oversee the planning, design
 and execution of new projects and will lead the Apollo Global Projects
 Consultancy Division.
 
 Smt Sangita Reddy will take charge as Joint Managing Director of the
 Company and will assume greater responsibilities which will include
 creating an IT enabled patient centric operation across the Apollo
 footprint.  She will continue to steer Apollo''s thrust on research,
 innovation and healthcare initiatives. In growing the group''s retail
 healthcare foray, Sangita will also spearhead Retail Health, including
 running Clinics, Cradles and other retail service formats. She will
 also lead the Human Resources and IT functions across all divisions of
 the Group. The other terms and conditions including remuneration of the
 Executive Directors as approved by the Members at the earlier Annual
 General Meetings remain the same.
 
 Directors
 
 Smt. Sangita Reddy, Director retires by rotation at the ensuing Annual
 General Meeting and being eligible offers herself for re-appointment.
 
 Shri. Sanjay Nayar was appointed as an additional director with effect
 from 10th February 2014 and holds office upto the date of the ensuing
 Annual General Meeting.
 
 Shri. Vinayak Chatterjee was appointed as an additional director with
 effect from 2nd July 2014 and holds office upto the date of the ensuing
 Annual General Meeting.
 
 In terms of Sections 149, 152 and other applicable provisions of the
 Companies Act, 2013 read with Rules made thereunder, the Independent
 Directors viz., Shri. N. Vaghul, Shri.Deepak Vaidya, Shri. Rafeeque
 Ahamed, Shri.Rajkumar Menon, Shri. Habibullah Badsha, Shri. G.
 Venkatraman, Shri. Khairil Anuar Abdullah, Shri. Sanjay Nayar and Shri.
 Vinayak Chatterjee are being recommended for appointment for a term of
 upto five consecutive years i.e. upto 31st March 2019, on a
 non-rotational basis.
 
 Shri. T.K. Balaji has resigned from the office of Director of the
 Company w.e.f 15th April 2014 citing his inability to continue given
 his other professional commitments.
 
 The Board wishes to place on record its appreciation for his
 contributions made during his tenure as a Director 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 re-appointed.
 
 The Audit Committee and the Board recommend the re-appointment of
 M/s.S.Viswanathan, Chartered Accountants, as Auditors of the Company,
 to hold office till the conclusion of the next Annual General Meeting.
 
 Cost Auditors
 
 The Company has appointed M/s. Raman and Associates, Cost Accountants,
 as the Cost Auditors for conducting the audit of cost records of the
 Company for the financial year ending 31st March 2015.
 
 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 members 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
 contribution 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  : 2nd July 2014                            Executive Chairman
 
Source : Dion Global Solutions Limited
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