The Lanka Hospitals Corporation PLC Annual Report 2016

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The Lanka Hospitals Corporation PLC Annual Report 2016 IN SERVICE TOThe Lanka Hospitals Corporation PLCYOU Annual Report 2016 The Lanka Hospitals Corporation PLC PLC Corporation The Lanka Hospitals Ӏ Annual Report 2016 Annual Report No: 578, Elvitigala Mawatha, Narahenpita, Colombo 5, Sri Lanka. Emergency: 1566 Tel : +94 11 543 0000 Fax : +94 11 451 1199 Email : [email protected] www.lankahospitals.com CORPORATE INFORMATION NAME OF THE COMpaNY SECREtarIES & REGIStrarS TO SHARES The Lanka Hospitals Corporation PLC M/s. Business Intelligence (Pvt) Ltd No 8, Tickel Road, ABOUT US COMpaNY REGIStratION NO. Colombo 08 PQ 180 Tel : +94 11 5579959-60 (Appointed on 28th February 2017) THE LANKA HOSPItalS REGISTERED OFFICE CORPOratION PLC COMMENCED MORE THAN 6,300 MORE THAN 289,000 IN MORE THAN 2.8MN MORE THAN 73,000 No. 578, Elvitigala Mawatha, Secretaries & Registrars to Shares CARDIOTHORACIC SURGERIES PATIENT ADMISSIONS CONSULTATIONS PHYSIOTHERAPY PROCEDURES Narahenpita, Colombo 05, Sri Lanka M/s. Accounting Systems Secretarial (Private) Limited SINCE INCEPTION SINCE INCEPTION SINCE 2007 SINCE 2014 OPEratIONS IN SRI LANKA Tele : +94 11 5430000 Level 3, # 11 , Castle Lane, Colombo 04 ON 7TH JUNE 2002, UNDER Fax : +94 11 4511199 (Resigned on 28th February 2017) E-mail : [email protected] THE BraND NAME OF APOLLO AUDITORS BOARD OF DIREctORS M/s. KPMG HOSPItalS, A part OF THE Dr. Sarath Paranavitane (Chartered Accountants) CHAIN OF APOLLO HOSPItalS Ven. Thiniyawala Palitha Thero No. 32A, Prof. Menaka Dilani Samarawickrema Lokuhetty Sir Mohamed Macan Markar Mawatha, FOUNDED BY THE RENOWN MORE THAN 7,000 MORE THAN 93,000 MORE THAN 9 MN BLOOD MORE THAN 30,000 FOREIGN IN Dr. Rohan Lalith Wijesundera Colombo 03 CATARACT SURGERIES DIALYSIS SESSIONS RELATED INVESTIGATIONS PATIENTS ADMISSIONS DR. Pratap C. REDDY IN INDIA. SINCE 2009 SINCE 2007 SINCE ITS INCEPTION SINCE INCEPTION Mr. Daljit Sing Tel: +94 11 5426426 Mr. Kalyana Sundaram Srivastava AS THE ONLY PURPOSE BUIlt Mr. Keith Damien Bernad BANKERS PRIVatE HOSPItal OF ITS Dr. Anil Abeywickrama Bank of Ceylon Mrs. Umashanthiee Rajamantri Hatton National Bank PLC KIND IN SRI LANKA, APOLLO Mr. Asendra Chaminda Siriwardena Mr. Thanuja Weeratne COLOMBO REVOLUTIONISED SRI Mr. Ravi Sachdev (Alternative Director to Mr. Daljith Singh) LANKA’S HEalthcarE SERVICE MORE THAN 80,000 MORE THAN 1800 MORE THAN 8,000 MORE THAN 2,650 Mr. Meghraj Aravindrao Gore (Alternative Director to HEALTH CHECKS PICKUPS/ DROPS FOR NUCLEAR PROCEDURES DELIVERIES IN 2016 Mr. Kalyana Sundaram Srivastava) OFFER, AND TODAY UNDER THE SINCE 2010 THE YEAR 2016 SINCE 2014 (HIGHEST NUMBER OF DELIVERIES IN THE HISTORY) BraND LANKA HOSPItalS, WE CONTINUE TO DOMINatE AND LEAD THE HEalthcarE SEctOR. OURS IS STILL CONSIDERED TO BE THE BEST HEalth carE MORE THAN 70,000 1000TH IVF BABY IS EXPECTED IN SERVED OVER 1.5 MN OVER 350,000 SURGERIES MARCH 2017 (HIGHEST RESULTS PRESCRIPTIONS DURING THE RADIOLOGICAL FacILITY IN THE COUNTRY. SINCE 2009 IN THE INDUSTRY AND IN LAST 3 YEARS THROUGH PROCEDURES DURING THE ANY IVF LAB IN SRI LANKA) ITS PHARMACY CHAIN LAST 3 YEARS Design & Concept by: Optima Designs (Pvt) Ltd. Printed by: Aitken Spence Printing & Packaging (Pvt) Ltd. IN SERVICE TO YOU NO ONE REALLY WANTS TO BE ILL, BUT WHAT IF THERE WAS A PLACE THAT CREATED A HEALING AND WHOLESOME ATMOSPHERE IN WHICH PATIENTS FEEL SAFE AND SECURE IN KNOWING THAT THEY ARE LOOKED AFTER BY THE BEST? WELCOME TO LANKA HOSPITALS, THE BEST HEALTHCARE PROVIDER IN SRI LANKA THAT IS WHOLLY DETERMINED TO ENSURE THAT YOUR EXPERIENCE HERE IS NOTHING LESS THAN CONVENIENT, WELCOMING AND CENTERED ON YOU. FROM THE BEST IN SERVICE FROM OUR PROFESSIONAL STAFF TO THE MOST COMPREHENSIVE RANGE OF MEDICAL OPTIONS THROUGH OUR DIVERSE CENTRES, WE MAKE SURE THAT EVERY PATIENT, AND EVERY INDIVIDUAL WHO WALKS THROUGH OUR DOORS ARE GIVEN THE BEST TREATMENT. WHAT ELSE WOULD YOU EXPECT FROM A HOSPITAL IN SERVICE TO YOU? CONTENTS COMPANY OVERVIEW Financial Highlights 6 Overview of Our Business 8 MANAGEMENT REVIEW Chairman’s Review 15 Group Chief Executive Officer’s Review 19 Our Integrated Value Creation Model 22 Operating Context and Strategy 24 Our Performance 33 Capital Management Review 44 Independent Assurance Report to the Lanka Hospitals Corporation PLC 64 GRI Content Index Tool 67 Board of Directors 74 EXCO Members 80 Corporate Governance 81 Risk Management 96 Annual Report of the Board of Directors on the Affairs of the Company 100 Statement of Directors’ Responsibility 106 The Board Remuneration Committee Report 107 The Board Related Party Transactions Review Committee Report 108 The Board Audit Committee Report 109 FINANCIAL REPORTS Independent Auditors’ Report 112 Income Statement 113 Statement of Profit or Loss and Other Comprehensive Income 114 Statement of Financial Position 115 Consolidated Statement of Changes in Equity 116 Statement of Changes in Equity 117 Statement of Cash Flows 118 Notes to the Financial Statements 119 Shareholder and Investor Information 164 Ten Year Financial Summary 167 Notice of Annual General Meeting 168 Form of Proxy 171 Corporate Information Inner Back Cover THE LANKA Hospitals corporation plc | ANNUAL report 2016 3 VISION To be the foremost and preferred Private Healthcare Facility in the Country, which will serve the Nation and her People to build a healthier community. MISSION To maintain exceptional and compassionate quality while offering cost effective healthcare solutions of international standards. PROMISE We believe that every person has the right to be treated with utmost respect and consideration. Therefore at Lanka Hospitals, we care about our patients We care about their families who are anxious and concerned. We care about our colleagues and how we as a team, provide the best care to our patients. Because we care, we will be sincere, compassionate and sensitive to make a difference in the lives we touch. THE LANKA HOSPITALS CORPORATION PLC | ANNUAL REPORT 2016 4 ABOUT THIS REPORT THIS YEAR, WE EMBRACE THE PRINCIPLES OF INTEGRATED REPORTING, DEMONSTRATING THE SOUND APPRECIATION OF THE RESOURCES AND RELATIONSHIPS WE DEPEND ON TO CREATE SUSTAINABLE VALUE. THROUGH OUR FIRST INTEGRATED REPORT WE AIM TO CLEARLY AND CONCISELY ARTICULATE OUR APPROACH TO VALUE CREATION AS WELL AS OUR STRATEGY, PERFORMANCE AND OUTLOOK IN RELATION TO OUR FINANCIAL, SOCIAL AND ENVIRONMENTAL GOALS. THE REPORT HAS BEEN PREPARED IN ACCORDANCE WITH THE <IR> FRAMEWORK PRESCRIBED BY THE INTERNATIONAL INTEGRATED REPORTING COUNCIL AND HAS BEEN CAREFULLY STRUCTURED TO PRESENT MATERIAL INFORMATION WHERE IT IS MOST RELEVANT. Scope and Boundary [G4-17, G4-28, G4-29, G4-32(a)] The report covers the operations of The Lanka Hospitals Corporation PLC and its subsidiary, Lanka Hospitals Diagnostics (Pvt) Ltd. for the period from 1st of January to 31st December 2016. For completeness, material events up to the sign off date by the Board of Directors on 28th February 2017 have been included in this Report. The financial and non-financial information presented in the narrative report represents both entities unless otherwise stated. This year, we have also adopted the Global Reporting Initiative (GRI) - G4 guidelines for sustainability reporting. This is our first GRI report and is in line with the ‘In Accordance-Core’ criteria prescribed by GRI. Our Approach to Materiality The material content included in this Report has been selected through a structured and comprehensive process as detailed on page 30 of this report. This exercise enables us to clearly identify both internal and external issues which are of greatest significance to current and potential stakeholders and rather than simply providing a list of ‘material issues’ we have sought to ensure that the information presented herein relate to matters affecting our value creation. Understanding our organisation (pages 22 to 23), needs of our stakeholders (pages 27 to 29) our business model (page 32) and our value chain impacts form the basis for identifying these issues. THE LANKA Hospitals corporation plc | ANNUAL report 2016 5 REPORTING STANDARDS AND EXTERNAL ASSURANCE [G4-15, G4-33] INTEGRATED REPORT ANNUAL FINANCIAL CORPORATE SUSTAINABILITY STATEMENTS GOVERNANCE RISK PERFORMANCE MANAGEMENT REPORT » Integrated Reporting » Sri Lanka Financial » Code of Best Practice » GRI- G4 Framework of Reporting Standards. on Corporate guidelines(Core). the International » Companies Act No. 7 Governance issued by Integrated Reporting of 2007. the ICASL and SEC. Council (IIRC). » Listing Requirements of the Colombo Stock rinciples tandards and S P Exchange. Messrs. KPMG, Chartered Messrs. KPMG, Chartered Accountants. Accountants. ssurance A In preparing this Report, we have given due consideration to the following guiding principles, as prescribed by the <IR> Framework. Reliability Consistency Strategic Stakeholder Connectivity Materiality Conciseness and and Focus Relationships Completeness Comparability FEEDBACK [G4-31] We understand that Integrated Reporting is a journey of continuous improvement and will seek consistently enhance the meaningfulness and readability of our report. We welcome your feedback, comments and queries which can be addressed to, Finance Manager, The Lanka Hospitals Corporation PLC, Contact Number: 011 543 9037. THE LANKA HOSPITALS CORPORATION PLC | ANNUAL REPORT 2016 6 FINANCIAL HIGHLIGHTS FIVE YEAR SUMMARY 2016 2015 2014 2013 2012 Group Company Group Company Group Company Company Company Revenue Rs. 5,886,441,551 4,902,083,201 5,514,070,918 4,810,837,891 4,753,588,586 4,491,554,590 4,071,914,867 3,405,864,503 Profit before interest & tax Rs. 898,621,919 669,429,124 810,602,330 703,814,296 451,915,678 504,936,835 607,686,338 337,091,890 Profit after tax Rs. 972,025,044 733,383,619 859,638,171 748,240,653 514,211,829 569,316,098 688,913,083 386,056,467 Total assets Rs. 7,352,315,218 7,149,683,371 6,343,640,759 6,421,228,552 5,672,964,842 5,766,532,850 5,099,710,859 4,367,568,505 Net assets Rs. 5,844,274,820 5,528,100,599 4,990,131,075 4,945,689,276 4,483,278,556 4,550,524,787 4,058,971,539 3,629,179,249 Annual revenue growth 7% 2% 16% 7% N/A 10% 20% 17% Net cash flow from operating activities Rs.
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