The IHH Healthcare Edge
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IHH Healthcare Berhad STRATEGIC EXECUTION ANNUAL REPORT 2018 Group Overview Governance 2 Strong International Presence 86 Board of Directors 3 Investment Case 98 Group Management 4 IHH at a Glance 1 03 Corporate Governance 6 Financial Highlights Overview Statement 8 Operational and 1 1 4 Nomination Committee Report Sustainability Highlights 1 1 9 Remuneration Committee Report 1 0 Corporate Milestones 1 2 1 Audit Committee Report CONTENTS 1 2 Awards and Accreditations 1 26 Risk Management Committee Report 1 28 Statement on Risk Management Strategic Report and Internal Control 1 6 Chairman’s Statement 1 35 Sustainability Governance 22 CEO’s Message 1 36 Investor Relations Report 26 Case Study – Fortis Healthcare 28 Business Model Other Information 30 Stakeholder Engagement 1 38 Additional Compliance Information 34 Material Matters 1 40 Directors’ Responsibility Statement 36 Market Outlook 38 Business Strategy Financial Statements 40 Risk Management 1 42 Directors’ Report 4 1 Principal Risk 1 49 Statement by Directors 1 49 Statutory Declaration Performance Review 1 50 Independent Auditors’ Report 44 Financial Review 1 55 Statements of Financial Position Operating Review 1 57 Statements of Profit or Loss and Other Comprehensive Income 47 – Malaysia 1 58 Statements of Changes in Equity 48 – Singapore 1 64 Statements of Cash Flows 49 – Turkey 1 67 Notes to the Financial Statements 50 – India 5 1 – Greater China 52 – IMU Health Additional Corporate Information 298 Analysis of Shareholdings 53 – ParkwayLife REIT 302 List of Top 30 Largest Shareholders Sustainability 304 List of Top 10 Properties 30 6 Notice of Ninth Annual General Meeting 56 Scope of Reporting Form of Proxy 58 Our Patients 62 Our People 67 Our Organisation 72 Our Environment 76 Our Community About this report The Annual Report 2018 has been prepared in accordance with the International <IR> Framework by the International Integrated Reporting Council and the Global Reporting Initiative (GRI) – Core Option and GRI Sector Disclosures to enhance reporting connectivity while providing stakeholders with a more holistic view of how the Company creates and sustains value. STRATEGIC EXECUTION This report summarises how we have made progress against the strategy during the financial year and demonstrates our commitment to creating value for material stakeholders. The acquisition of Fortis Healthcare was a notable strategic milestone, as it has significantly boosted our presence and portfolio in India, creating for greater potential for operating synergy. OUR GROUP STRATEGY Our business strategy drives our mission and objectives to deliver the highest quality of healthcare. Pages 38 and 39 CASE STUDY ON FORTIS HEALTHCARE We have scaled up our operations in India through the acquisition of Fortis Healthcare. A significant benefit that lies in the synergy across our hospitals awaits. Pages 26 and 27 PERFORMANCE REVIEW The Group has done well to conclude the financial year with resilient performance despite challenging business conditions in which we operate. Pages 42 to 53 1 Group Overview STRONG INTERNATIONAL INVESTMENT PRESENCE CASE We offer an attractive investment proposition, based on the following qualities that come together to deliver long term shareholder value. Bulgaria Macedonia Turkey India 4 1 16 36* hospitals hospital hospitals hospitals (includes Fortis Healthcare portfolio) 5 10 1 medical medical feeder centres centres centre Greater China 1 hospital Netherlands 9 1 medical centres hospital UAE 1 hospital management Sri Lanka Singapore Brunei Malaysia agreement 1 4 1 15 hospital hospitals hospital hospitals Mauritius (in Fortis Healthcare portfolio) 2 hospitals 50+ (in Fortis Healthcare portfolio) clinics Home Markets Key Growth Markets Other International Markets * Includes the 50/50 Indian JV, Apollo Gleneagles Hospital 2 IHH Healthcare Berhad | Annual Report 2018 OUTSTANDING TRUSTED BY CLINICAL PATIENTS Group Overview OUTCOMES AROUND Our steadfast commitment to international clinical THE REGION governance standards has resulted in excellent outcomes at IHH Healthcare’s business units. Our comprehensive service offerings and talent Resolute in maintaining this, we have in place representing the best in their fields back up our the International Clinical Governance Advisory excellent reputation for high quality service. We Council (ICGAC) to oversee the effectiveness of also recognise that quality output will not our clinical governance. The Council, made up of happen without quality input. This is why we independent thought leaders, former academics, have continually sought innovative ways to practicing professionals and management enhance our suite and standards of services. representatives, serves as the advisory body in This progressive approach has made us a the areas of patient safety, clinical quality training trusted healthcare provider for local patients initiatives, education and related activities. All and medical travellers. these serve to strengthen IHH Healthcare’s reputation as a world-class healthcare institution. 4 20+ Key Advisory Members Patient Assistance Centres with exceptional achievements in the medical field worldwide to refer foreign patients and provide a one-stop seamless patient care experience to our hospitals STRONG STRATEGIC LEADERSHIP EXECUTION Successful organisations are steered by As a forward-thinking Group, we recognise visionaries who have the best interests of their the need to continually strive for greater stakeholders at heart. IHH Healthcare is led by success. While our existing hospitals will be a dynamic and accomplished team who believe placed under expansion plans as and when in no less. At the helm, is a team of medical, legal they are needed, we are already venturing into and financial professionals with an excellent track new markets by establishing new hospitals. record of hospital management and administration IHH Healthcare has identified India and Greater in both public and private healthcare. Under their China as two key growth markets with immense expertise and strict governance standards, they potential. The team has planned strategies and have grown IHH Healthcare’s footprint to projected pipelines to become a major 83 hospitals in 12 countries worldwide. international healthcare player. 10 2 Highly Valued Professionals in Greenfield Hospital Projects in Group Management Greater China comprising of specialists in their individual expertise total of 800-bed capacity in the project pipeline 3 Group Overview IHH AT A GLANCE As at 29 March 2019 OUR DIVISIONS IHH Healthcare Berhad 100% 90% 100% With a network of 61 hospitals Acibadem Holdings is Turkey’s leading The International Medical University throughout the region, including private healthcare provider, offering is IHH’s medical education arm. IMU Malaysia, Singapore, India, China, integrated healthcare services across oversees the established higher Brunei and UAE, Parkway Pantai 22 hospitals in Turkey, Macedonia, learning institutions of International Limited is one of Asia’s largest Bulgaria and the Netherlands. The Medical College and IMU in Malaysia. integrated private healthcare groups. “Acibadem” brand is renowned for its clinical excellence in the Central and Eastern Europe, Middle East and North Africa regions. 100% Parkway Shenton 100% 35.7% 31.1% 4 IHH Healthcare Berhad | Annual Report 2018 Gleneagles Group Overview OUR TRUSTED BRANDS IHH offers an integrated network of hospital and ancillary services through a wide array of brands. Our brands are among the most Gleneagles is the Group’s prestigious in Asia and are widely recognised for their clinical excellence international brand, with footprint in Central & Eastern Europe. in Malaysia, Singapore, India, China, Hong Kong and Brunei. Across Asia, the brand is synonymous with personalised care and superior clinical outcomes. Mount Elizabeth Pantai Acibadem With two established hospitals in Pantai has a strong reputation Acibadem is renowned for its Singapore specialising in tertiary in Malaysia for delivering quality clinical excellence as a leading and quaternary care, Mount healthcare through a wide private healthcare provider in Elizabeth is among the world’s top spectrum of services ranging Turkey. It offers the full suite of destinations for medical treatment. from hospitals to laboratory and integrated healthcare services rehabilitation services. and has a presence in Bulgaria, Macedonia and the Netherlands. Parkway Fortis Shenton ParkwayHealth Healthcare Parkway Shenton is a well-known ParkwayHealth is the brand for Fortis Healthcare is a leading integrated primary healthcare brand in Parkway Pantai’s ancillary services healthcare delivery service provider in Singapore with an extensive in Singapore, including radiology India. The healthcare verticals of the network of over 1,000 general and laboratory services. It is also company primarily comprise hospitals, practitioner clinics, 24-hour clinics the preferred primary healthcare diagnostics and day care specialty and executive health screening network for expatriates in China. facilities. Currently, the company operates centres across the island state. its healthcare delivery services in India, Mauritius and Sri Lanka. 5 Group Overview FINANCIAL HIGHLIGHTS Revenue by strategic EBITDA by strategic Profit tax and minority business units business units interest (PATMI) (RM Million) (RM Million) excluding exceptional items (RM Million) Parkway Pantai Parkway Pantai 7,450.4 1,518.2 1,027.6 FY18 7,450.4 FY18 1,518.2 FY18 1,027.6 FY17