CELEBRATING YEARS OF GROWTH BEIJING Annual Report 2015 TIANJIN DALIAN JAPAN CHINA OSAKA NANJING SHANGHAI SHENZHEN HONG KONG HANOI VIETNAM CAMBODIA PHNOM PENH HO CHI MINH CITY VUNG TAU SINGAPORE INDONESIA JAKARTA COMPASSION TEAM-BASED CARE We put you and your well-being at the We dedicate and combine centre of all that we do; treating all with our skills, knowledge and respect, compassion and dignity. experience for your benefi t. Core COMMITMENT VALUE We will uphold your trust by We seek always to create maintaining the highest professional and deliver value for you. Values integrity and standards. EXCELLENCE We will continually seek advancement and innovation to achieve better healthcare. YOUR TRUSTED Vision PARTNER FOR HEALTH CONTENTS Financial Highlights 02 Clinical Leaders 18 Financial Report 45 Chairman’s Message 06 Operations Review 22 Shareholdings Statistics 114 Board of Directors 10 Corporate Social Responsibility 28 Notice of Annual General Meeting 116 Further Information on Professional Governance 30 Proxy Form Board of Directors 13 Corporate Information 32 Senior Management 16 Corporate Governance Statement 33 CELEBRATING 40 YEARS OF GROWTH annual report 2015 1 CELEBRATING Years OF GROWTH FROM OUR HUMBLEE BEGINNINGSBEGINNINGS ASAS A TWO-CLINIC GENERALAL PRACTICE,PRACTICE, RAFFLESRAFFLES MEDICAL GROUP HASS BEEN GUIDEDGUIDED BY OUROUR FIRM COMMITMENT TOO DELIVER QUALITYQUALITY CARECARE TO OUR PATIENTS ANDD PARTNERS.PARTNERS. WE HAVE COME A LONGNG WAY SINCE,SINCE, WITH AN ESTABLISHED ISLANDWIDEWIDE PRESENCEPRESENCE AND AN EXPANDING REGIONALL FOOTPRINT.FOOTPRINT. WE LOOKLOOK TO THE FUTURE WITH THE AIM OFOF PROVIDINGPROVIDING COMPREHENSIVE ANDD INTEGRATEDINTEGRATED SERVICESSERVICES ACROSS THE HEALTHCARECARE SPECTRUM.SPECTRUM. RAFFLES MEDICAL GROUP annual report 2015 2 Financial Highlights REVENUE CONTRIBUTION BY SEGMENT HOSPITAL SERVICES % INVESTMENT 61 HEALTHCARE SERVICES HEALTHCARE SERVICES % 36 HOSPITAL SERVICES INVESTMENT 3% 2015 PERFORMANCE AT A GLANCE HEALTHCARE SERVICES HOSPITAL SERVICES GROUP DIVISION DIVISION REVENUE % % % 14.6 7.0 9.6 Revenue from Healthcare Revenue from Hospital Group achieved 9.6% Services Division grew Services Division grew growth in revenue 14.6% to $160.5 million 7.0% to $268.4 million to $410.5 million EBITDA PATMI 3.8% 2.4% Earnings before interest, Profi t after tax and taxes, depreciation and minority interests (PATMI) amortisation (EBITDA) grew by 2.4% grew by 3.8% to to $69.3 million $93.4 million CELEBRATING 40 YEARS OF GROWTH annual report 2015 3 GROUP REVENUE ($’M) GROUP PROFIT AFTER TAX ($’M) 410.5 69.0 68.0 374.6 341.0 64.9* 311.6 57.2 272.8 50.6 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 EARNINGS PER SHARE (CENTS) RETURN ON EQUITY (%) 12.03 15.1 11.96 14.6 11.58* 13.7* 10.42 12.6 11.5 9.36 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 FINANCIAL SUMMARY 2011 2012 2013 2014 2015 $’000 $’000 $’000 $’000 $’000 Revenue 272,783 311,633 340,989 374,641 410,535 Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) 66,750 74,258 82,207* 89,973 93,411 Operating Profi t 59,510 66,355 73,939* 80,327 80,604 Profi t Before Tax 59,440 66,585 74,850* 81,281 81,607 Profi t After Tax 50,621 57,209 64,907* 67,962 69,031 Diluted Earnings per Share (cents) 9.36 10.42 11.58* 11.96 12.03 Net Asset Value per Share (cents) 62.51 71.29 85.31 95.50 104.88 Return on Equity (%) 15.1 14.6 13.7* 12.6 11.5 *Excluding the gain on disposal of a subsidiary in 2013. Senior Physician & Deputy Director Dr Choo Shiao Hoe high-fives a young patient at the hospital. 1976 1990 Young doctors acquire Teng’s Raffl es Medical Group fl ies high, clinic, start Raffl es Medical Group provides medical services Dr Loo Choon Yong and Dr Alfred Loh at airports bought over Teng’s Clinic at Cecil Street Raffl es Medical Group ventured and Maxwell House in 1976. Around into aviation and emergency 1980, the partners changed the name of medicine and was appointed the practice to Raffl es Medical Group, exclusive medical provider for adopting the name of their alma mater – Singapore’s Changi International Raffl es Institution. Airport in 1990, and for Hong Kong’s Chek Lap Kok International Airport in 1998. Years OF BUILDING TRUST Over the years, we have built meaningful relationships with our patients and partners to meet their healthcare needs. We will continue to fulfil our promise to be your trusted partner for health. RAFFLES MEDICAL GROUP annual report 2015 6 Chairman’s Message CELEBRATING 40 YEARS OF GROWTH annual report 2015 7 Chairman’s Message Dear Shareholders Caring Corporate Citizen The Group continued on its growth path in As we celebrate our The Group and our staff continue to 2015 to achieve a record revenue of $410.5 contribute towards various causes million registering a growth of 9.6% over the th deserving of our support as part of its previous year. Our profi t after tax attributable 40 anniversary Corporate Social Responsibility efforts. to shareholders stands at $69.3 million with In particular, the Group supports the work of all divisions of the Group contributing to in 2016, we are the Asian Medical Foundation, a healthcare the performance. charity founded by the staff of the Group. The Group will continue to evaluate how we 40 Years of Caring pleased to see could give back to society to care for the less As we celebrate our 40th anniversary in 2016, privileged in the community. we are pleased to see how the Group has how the Group been growing continuously through the Caring Together years. The Group became the fi rst Asian has been growing We thank our team of 360 multispecialty member of the Mayo Clinic Care Network. physicians, 850 nurses and allied healthcare This partnership allows our physicians to continuously professionals, 90 healthcare managers as collaborate with Mayo Clinic’s physicians, well as 950 ancillary and support staff for enabling patients to get answers to their caring and serving our patients professionally medical questions while staying close through the years. and compassionately, as our loved ones. For to home. this, we are proud and grateful. Caring for Singapore The Raffl es Hospital extension project is We appreciate the support and guidance The Group continued to grow, caring for progressing well. As we continue to grow of our Board of Directors. Their frequent more lives through its 100 multi-disciplinary our breadth and depth of our services in the interactions with the senior management clinics in Singapore and across Asia. existing hospital facility, we look forward to provided valuable guidance on strategic as Renovations for some specialist clinics at the new building which would provide us well as business matters, keeping us focused Raffl es Hospital, including expansion of the with a runway to grow for the next 10 years and disciplined. We welcomed Mr Eric Ang 24 Hour Emergency, made room for us to to RMG50. and Mr Lim Beng Chee into the Board in the take in subsidised care patients from SCDF year. Their guidance and contributions would ambulances, a fi rst in the history of private Caring for Asia continue to steer the Group into greater hospitals in Singapore. heights as we look on to celebrating RMG50. Marching to our own drumbeat, we have been growing steadily and making inroads Raffl es’ fi rst multi-disciplinary medical centre into the region. We now have medical offi cially commenced operations at Shaw presence in 12 cities outside of Singapore. Centre on 23 July 2015, offering both local Our joint venture with International SOS to and overseas patients a new location for manage and operate 10 clinics in China, premier healthcare services in Singapore. Vietnam and Cambodia will enable us to serve more of our patients wherever they go. Contributing to Singapore Health Care The Group’s project in Holland Village is The Group continues to progress in its set to complete in the fi rst quarter of 2016 projects in China with a foundation as planned. Raffl es Holland V with its own stone laying ceremony for the 400-bed car parks will host a Raffl es Medical Centre, Raffl es Hospital Shanghai last year. We DBS Bank branch, renowned retail shops, will thoughtfully evaluate various other restaurants, cafes and wine bars. The mall opportunities in the region whereby the is expected to be a landmark in that part Raffl es’ brand of reliable and quality Dr Loo Choon Yong of Singapore. healthcare is in demand. Executive Chairman (From left to right) Our multi-disciplinary healthcare team comprising Medical Director Dr Chng Shih Kiat, Urologist Dr Siow Woei Yun, Acting Nurse Clinician Michelle Segal and Urologist Dr Lim Kok Bin, having a patient case conference. 1993 1995 First standalone surgery centre Raffl es Medical expands its opens in Asia operations regionally Raffl es Surgicentre began operations In 1995, Raffl es Medical Group on 18 September at No. 182 opened its fi rst overseas clinic at Clemenceau Avenue as the fi rst Central in Hong Kong. The other standalone day surgery centre in clinics are located in Chek Lap Kok Southeast Asia, incorporating four International Airport and Taikoo Place. operating theatres, 28 recovery beds In 2010, RMG opened a medical centre and two intensive care beds. in Shanghai. Years OF CARING TOGETHER Recognising the growing complexity of our society’s medical needs, we have diversified our offerings from medical, dental and hospital services to include consumer health, preventive care and specialist healthcare insurance. Together, we work in tandem to provide exceptional patient care for everyone.