Building the Future of Healthcare Narayana Hrudayalaya Limited Annual Report 2018-19 Contents 1 Affordable Healthcare 4 Operational and Clinical Highlights Company 5 Chairman’s Message Overview 7 CEO’s Message 9 Clinical Review of Services 23 Board of Directors 29 Management Discussion and Analysis 38 Board’s Report Statutory 56 CSR Report Reports 64 Corporate Governance Report 80 Business Responsibility Report Financial 111 Standalone Financial Statements Statements 180 Consolidated Financial Statements Our Vision Our Mission To provide high quality healthcare with The Company’s mission is to deliver care and compassion at an affordable high-quality, affordable services to the cost on a large scale. broader population in India. PAGE 3 Annual Report 2018 - 19 Company Overview |Statutory Reports|Financial Statements Affordable Healthcare A 225-bed hospital in the year 2000, is today a 7,155 capacity-bed multi-specialty healthcare services chain that provides superior tertiary healthcare at affordable costs. Headquartered in Bengaluru, we have a network of 23 hospitals (multispeciality and super-speciality healthcare facilities) with 7 heart centres (super- speciality units) across 18 locations in India and 1 multispeciality hospital in Cayman Islands. In 19 years, we have demonstrated that vision and operational excellence can indeed create a healthcare service that is within the reach of all. We have done so by consistently growing our network of facilities, both through organic and inorganic routes. We have brought together quality and affordability. We have ensured that technology and accessibility coexist. And in the process, we have gained trust and credibility. Today, we are firmly focused on strengthening this circle of care and compassion that has enabled us to serve patients, with means and without. And, in all that we do, the objective of building an affordable and sustainable healthcare ecosystem remains at the core. PAGE 1 Narayana Hrudayalaya Limited 23 HOSPITALS HEART 7 CENTRES PRIMARY 19 FACILITIES HOSPITAL 1 IN CAYMAN ISLANDS 7,155 Capacity Beds 30+ Specialities 16,690 Full-time employees and associates including 3,644 Doctors as of March 2019 PAGE 2 Annual Report 2018 - 19 Company Overview |Statutory Reports|Financial Statements PAGE 3 Narayana Hrudayalaya Limited Operational & Clinical Highlights • Mazumdar Shaw Medical Center (MSMC), Bengaluru, achieved the feat of completing 1,000 bone marrow transplants since its inception, thus becoming the first ever facility in Karnataka to have attained such distinction • NH establishes strategic foray into Bangladesh by entering into partnership for operating cardiac sciences department in a state-of-the-art 350 bedded hospital • NH SRCC Children’s Hospital, Mumbai, recently commissioned state-of- the-art Bone Marrow Transplant (BMT) department and have successfully performed over 10 BMTs since of its commissioning • NH SRCC Children’s Hospital, Mumbai, successfully performed Endoscopic detethering of spinal cord. There have been only 7 such reported surgeries in the world and this was the first one performed in India • Narayana Institute of Cardiac Sciences, Bengaluru, performed a double lung transplant. With novel techniques like these, the facility has emerged as the prime centre for organ transplants • Narayana Institute of Cardiac Sciences, Bengaluru, performed India’s first Interventional Fontan Completion, a hybrid treatment modality that reduces the number of surgeries required from 3 to 1 to treat congenital heart diseases • Rabindranath Tagore International Institute of Cardiac Sciences (RTIICS), Kolkata, achieved the rare distinction of performing dual kidney transplant on a patient. It was the first ever such transplant in Eastern India • Brahmananda Narayana Multispeciality Hospital, Jamshedpur, successfully removed a cancerous tumour weighing 3 kg. It was the second largest parotid gland tumour removal in India • Narayana Health City, Bengaluru, successfully performed a heart-lung transplant on a patient suffering from interstitial lung disease (ILD) and severe coronary artery disease. This procedure was the first of its kind in the state • NH completed its first year of liver transplant program and performed around 18 such transplants across RTIICS at Kolkata, MSMC, M S Ramaiah NH at Bengaluru and Narayana Superspeciality Hospital at Gurugram • SRCC Mumbai now runs the 2nd largest paediatric cardiac surgery program in Maharashtra state • Mazumdar Shaw Medical Centre, Bengaluru, operated a case of Naso Orbital Solitary Fibrous tumor using trans-nasal endo-orbital approach. Only 30 such cases have been reported in the world with this being the 2nd case operated by endoscopic approach PAGE 4 Annual Report 2018 - 19 Company Overview |Statutory Reports|Financial Statements Chairman’s Message We have been globally “recognised as a disruptive innovator in the field of healthcare for proving a model that combines world-class healthcare delivery with a cost-conscious mindset. We recognise the power of digitisation and its disruptive” impact on companies that refused to evolve, and we believe that it will transform every aspect of our business. A few years ago, we took a decision to develop the capability to build software in-house and so we created the NH Software Development Centre. This team is building the next generation of hospital information systems, electronic records, and clinical decision support systems that will help us achieve high quality of clinical outcomes without putting a financial burden on our patients. I would like to highlight some of our ongoing projects: Online Diabetes Clinic Digital health may have started in developed economies, but Dear Stakeholders, it is desperately required in India which is struggling with the We started NH as a group of doctors with the idea of making shortage of medical specialists. India is the diabetic capital high quality healthcare accessible to the masses. In the 19 of the world, with 7.2 million diabetes patients (International years since we began this journey, our company has grown Diabetes Federation, 2017), yet it has only around 600 into a chain of super-speciality hospitals treating patients diabetologists to treat them. We believe that online diabetic from across the world. We have been globally recognised as care is the only way forward because a diabetologist sitting at a disruptive innovator in the field of healthcare for proving a home in front of a computer can treat 10 times more patients model that combines world-class healthcare delivery with a than seeing patients physically in clinic. NH has developed cost-conscious mindset. We don’t have the luxury to sit still CURA diabetes outpatient application which treated over because the world is changing, and we must change to remain 34,000 patients in the last two years. Eight months ago, relevant in the 21st century. Just like AirBnB built the world’s we launched an online diabetes management system that largest hotel chain without building any rooms, and Uber built treats more than 2,400 patients online. Our patients were the world’s largest transport company without buying any cars, initially reluctant to consult the doctor online, but after they I believe that the world’s largest healthcare company of the experienced the convenience, very few of them want to visit the future will not build any beds. hospital for a follow up. PAGE 5 Narayana Hrudayalaya Limited NH-Atma, NH-Medha, and Kaizala to keep adding beds. With better systems to enable optimal The entire NH network will transition to a home-grown Hospital usage of manpower and equipment, we can serve more Information System built by our team over the next couple patients with the same infrastructure. NH Average Length of of years. This software, which we have affectionately named Stay has decreased from 4.3 days in FY 2015-16 to 3.9 in FY NH-Atma, will be the foundation upon which our digital 2018-19, while the number of discharges increased from 1.9 infrastructure will be developed. NH-Atma is cloud-based, fully lakh to 2.6 lakh. This proves that our focus on clinical quality scalable, and can integrate with all the existing infrastructure allows us to do more with less. in the hospital. It has taken us 2 years to develop the software, Outreach Programs but it is the first and most important step in our digital NH has always been at the forefront of responsible ESG transformation. stewardship in the healthcare space and we strive to align As a low-cost healthcare operator, NH relies on accurate and our healthcare initiatives with socio-economic imperatives. timely data to help us make important decisions. We have a Our CSR programmes allow us to reach out to the masses to large team that can analyse this data and help us to identify realise the goal of an educated and healthy society. inefficiencies in the hospital. With developments in AI and Suposhan Program predictive analytics, we will soon be able to identify problem India has been fighting an invisible war against adolescent areas before they become serious events. Our data analytics anaemia for decades. Anaemia, caused by the lack of iron product, called NH-Medha, has been a valuable tool in helping in the diet, is associated with learning disabilities, lowered hospital administrators cut down costs, and doctors to make immunity, and maternal mortality. NH and Britannia Nutrition better clinical decisions. Foundation have launched a nutritional intervention programme Kaizala is an application developed by Microsoft that NH in Jaipur in which 52 government schools have been selected has adopted as an in-house messaging platform. We have for this research and action programme. We will distribute iron developed multiple cards that run on top of Kaizala to help fortified biscuits amongst adolescents and conduct dietary our teams communicate better. Our e-ICU cards have made surveys. The emphasis is on addressing awareness towards a huge impact on care management for patients in the ICU. anaemia and the need for nutritional diversity. Our doctors can manage an ICU patient’s condition from any Project H.O.P.E part of the world using only their mobile phones.