ANNUAL REPORT 2016 - 2017 Climbing the Stairs of Growth, Step by Step & Spreading Smiles. 11 Multi-specialty Units More than a Million Lives Touched Best CSR initiative in Healthcare Award-2017 Recognised as the Best Medical Tourism Centre of Gujarat SHALBY LIMITED 10-Year Revenue CAGR of 33% Shalby Hospitals, Opposite Karnawati Club, Sarkhej Gandhinagar Highway, Near Prahlad Nagar Garden, Ahmedabad – 380 015, Gujarat, India. Over 60 OPD Centres across the globe 19 Chairman's Message 21 CEO's Insights General Information & 22 Governance 25 Financial Highlights 27 Directors' Report Auditors' Report on 63 Standalone Financial Statements 69 Standalone Financial Statements Auditors' Report on 114 Consolidated Financial Statements 119 Consolidated Financial Statements 1 We at Shalby strongly imbibe the belief that Good Health is the moral right of every individual. Our Good Health, mission revolves around this belief and place patients at the core of our activities each day, through the year. Patient centricity is ingrained in every aspect of our expert healthcare, be it quality, compassion or approach towards preserving lives. The Moral Right of every individual for Growing Life 2 3 Growth from within and abound, may be an expression that will describe Shalby’s growth story of over two decades. The journey that began with 4 hospitals in 2012 has transformed us to the Pace of stature of a multi-specialty hospital chain with 11 hospitals (8 fully operational hospitals and 3 recently set-up hospitals), spread across Central and Western India. Growth that Scripts Growth Faster 4 5 Daring to demonstrate the power of artificial Knee Joints at a time when it was one of the most Enabling dreaded surgeries in the world, shows Shalby’s passion for enabling lives with expert healthcare. Each individual who has got a new lease of life through Shalby’s Zero Technique Knee Replacement enabled us to emerge as a world renowned Centre for Joint Replacement. Lives to Today, with a record of over 50,000 successful joint replacement surgeries, Shalby spreads the smiles of Good Health, across the globe. Walk Extra Miles & Grow 6 7 LOCATION OF HOSPITALS & PATIENT OUTREACH CLINICS MOHALI Reaching DEHRADUN HANUMANGARH GHAZIABAD DELHI Out to BIKANER JHUNJHUNU SIKAR Patients BARMER JAIPUR JODHPUR AJMER KISHANGARH at SANCHORE BHUJ JABALPUR Doorsteps INDORE JAMSHEDPUR RANCHI BILASPUR MUMBAI RAIPUR CHENNAI UAE SACE Making healthcare available at the doorsteps of people is the cherished (Shalby Arthroplasty Centre of Excellence) mission of Shalby. Besides establishing most modern multi-specialty healthcare in tier-II and tier-III cities of the country, Shalby has been reaching out to patients at their doorsteps with its novel concept of OPDs and Patient outreach clinics. Today, we operate over 62 OPD Centres Ethopia across India and 6 in rest of the world. Kampala (1) Tanzania Dar-es-Salaam (3) Outpatient Clinic SACE (Shalby Arthroplasty Centre of Excellence) 8 9 Recognitions & Awards: Stepping Stones for Excellence GUJARAT RATNA BEST MULTI-SPECIALTY COMPANY OF THE YEAR AWARD 2014 AWARD 2015-16 HOSPITAL - METRO INDIA IN RECOGNITION OF BY CNBC HEALTHCARE AWARDS 2014 VALUABLE CONTRIBUTION & Growth BY ICICI LOMBARD & CNBC TOWARDS HEALTHCARE BY IMA MED ACHIEVERS BEST MEDIUM ENTERPRISES AWARD TECH-SAVVY SME SECTOR BY YES BANK & BUSINESS TODAY EMERGING INDIA AWARDS 2012 BY ICICI BANK Shalby has been bestowed with numerous awards and accolades by the Indian Healthcare industry, almost every year. We, at Shalby consider each one of them as a stepping stone for achieving further excellence in our customer satisfaction index through quality healthcare deliveries. Out of the many awards Shalby has been conferred with, also includes the coveted recognition of “The Best Medical Tourism Centre – 2016” by Gujarat Tourism. We owe it all to the goodwill of millions who have experienced Shalby’s compassionate care HEALTHCARE SERVICE PROVIDER FICCI HEALTHCARE RAJIV GANDHI NATIONAL which helped us grow consistently from strength to strength. COMPANY OF THE YEAR OPERATIONAL QUALITY AWARDS 2010 AWARDS 2013 EXCELLENCE AWARDS 2011 BY BUREAU OF BY FROST & SULLIVAN BY FICCI INDIAN STANDARDS 10 11 Shalby has been out growing the healthcare pace in terms of compounded annual growth year on Your smiles year. We attribute this success story to the faith and trust millions have been investing in us over the years. We have clocked a 10-Year Revenue CAGR of 33% from the FY 2007 to FY 2017. are the reasons behind our compounded annual growth 12 13 Shalby today is a global family, ever growing on the strong foundation of Trust of multi-specialty A Million care under one roof. We at Shalby measure our growth with the addition of each smiling face to our family, relieved of pain and ill- health. We invest heavily to grow smiles and grow with them. Lives Touched and the Trust Grows 14 15 Shalby’s Corporate Social Responsibility Programmes are aimed at giving back to the society. Shalby bags Award for CSR Initiative Healthcare at doorsteps, our Joint Express and Heart Express initiative has won the "Best CSR Initiative in Healthcare" award, at the 7th Healthcare Leaders Forum, New Delhi. The award has been received by Mr. Ravi Bhandari, CEO of our Company at the hands of Mr. Arun Singhal, Joint Secretary, Health & Family Welfare, Government of India at a function held in New Delhi on June 30, 2017 16 17 CHAIRMAN’S MESSAGE Dubai and Egypt. Your Company, through its tie-ups performance in the second half of Fiscal 2017 has been offering out-patient consultation services though, saw a temporary impact of demonetization, to the population of Kolkata for over half a decade which has impacted all industry sectors to varying and I am pleased to announce that, Shalby has degrees, and ours was no exception. recently taken over the operations and management We continue to focus on initiatives to improve our of the Orthopedics Department at Ohio Hospitals in operational efficiency. Healthcare industry being Kolkata, where it offers its entire range of orthopedic highly capital intensive, we have managed to ensure care services under the “Shalby Ohio Bone and Joint that our capital and operational costs are under Care Centre”. control to drive business performance. As of Out of the total hospitals in India about 70% are December 31, 2016, our capital cost per bed was private setups and less than 10% accounts for ` 4.2 million which is one of the lowest in the private corporate hospitals. This number is expected industry due to optimal use of built-up area. On the to rise with increasing corporatization in the operations front, the centralization of procurement healthcare delivery space. Osteoarthritis has a high of drugs and other medical consumables across the prevalence of 28.7% for the total population, and is group has helped in reduction of the expenses higher for females at 31.6% compared to males with incurred towards them. 28.1%. Mostly affecting the joints and more often Apart from strengthening our expertise in other leading to disability of knees and hips in the elderly specialties and expanding into newer geographies population, Osteoarthritis is expected to become a we shall continue to enhance our capacities through major disorder in India. Having serious impact on the ancillary businesses as well. These include providing elderly population and often resulting in the need of Shalby homecare services, conducting clinical Dear Stakeholders, which focus on offering quality healthcare services joint replacement surgeries; the 30-50 years-group research trails and offering educational programmes "Vision is the art of seeing things invisible to others." across a spectrum of specialties such as neurology, that leads a sedentary lifestyle, lacks exercise, and through Shalby Academy which will contribute - Jonathan Swift nephrology, cardiac care, critical care, and oncology. has nutritional deficiencies is also being affected by significantly to our financial performance in the Your Company is poised for taking a leap forward and Further, given that operating efficiencies and osteoarthritis. India’s population is undergoing a foreseeable future. profitability is critical to our growth, we intend to demographic shift and gradually adding more witnessing next level growth, continuing its We are committed to undertaking corporate social implement initiatives to improve our operational numbers to its elderly segment. The share of phenomenal journey towards excellence in responsibility initiatives, and through the I. C. Shah efficiencies. Finally, apart from offering multi- population in the age group of 54 years and above is healthcare delivery. In this direction your Company Charitable Trust, we provide free or subsidized specialty tertiary and quaternary healthcare expected to rise from 13% in 2016 to 14% in 2020. has recently completed construction of three new healthcare treatment to patients who cannot afford services, it is our strategy to grow our home-based Your Company is rightly placed to serve such a huge facilities, one each at Jaipur, Surat and Naroda desirable treatment. In order to extend our healthcare services under Shalby Homecare. It is in population and capitalize on this potential for (Ahmedabad). Your Company on May 19, 2017, has Company’s outreach to rural areas, we conduct consonance with our above strategies that we have growth. filed its Draft Red Herring Prospectus (DRHP) with various health camps through the ‘Heart Express’ and hence re-crafted our vision and mission statements