EXCELLENCE IN HEALTHCARE...FOR EVERYONE. HEALTHCARE...FOR DURDANS HOSPITAL | ANNUAL REPORT 2018/19 ANNUAL REPORT EXCELLENCE IN HEALTHCARE... Durdans Hospital No. 03, Alfred Place Colombo 03 Sri Lanka Tel : +94 (0) 11 214 0000 Fax : +94 (0) 11 257 5302 +94 (0) 11 237 2632 Email : [email protected] ANNUAL REPORT 2018/19 Corporate Information NAME OF COMPANY LAWYERS Ceylon Hospitals PLC Mr. D. F. R. Jayamaha Hector Jayamaha Law Office BRAND NAME No. 228, Thimbirigasyaya Road DURDANS Colombo 05 LEGAL FORM SECRETARIES Contents A quoted public company with limited Nexia Corporate Consultants (Pvt) Ltd liability incorporated in Sri Lanka under the No. 181, Nawala Road Companies Ordinance No. 51 of 1938 and Narahenpita registered under the Companies Act No. 07 of 2007 REGISTRARS Our Business Financial Reports SSP Corporate Services (Pvt) Ltd Vision, Mission and Values 3 Annual Report of the Board of Directors on the COMPANY REGISTRATION NUMBER No. 546, Galle Road Affairs of the Company 92 Financial Highlights 4 PQ 113 Colombo 03 Statement of Directors’ Responsibility 97 Historical Time Line 6 Report of the Related Party Transactions STOCK EXCHANGE LISTING Our Leadership 8 Review Committee (RPTRC) 98 The Ordinary Shares of the Company are Report of the Remuneration Committee 99 listed on the Colombo Stock Exchange of Our Leadership Report of the Nominations Committee 100 Sri Lanka Chairman’s Message 10 Audit Committee Report 101 Message from the Director Medical Services 14 Independent Auditor’s Report 103 REGISTERED OFFICE Board of Directors 16 Consolidated Statement of Profit or Loss and No. 03, Alfred Place, Colombo 03 Senior Management Team 20 Other Comprehensive Income 106 Consolidated Statement of Financial Position 107 BANKERS Performance and Capital Management Statement of Changes in Equity 108 Commercial Bank of Ceylon PLC Bank of Ceylon Value Creation Model 24 Statement of Cash Flows 110 DFCC Bank PLC Stakeholder Engagement 26 Notes to the Financial Statements 111 Union Bank PLC Financial Capital 28 National Development Bank PLC Social and Relationship Capital Value Added Statement 31 160 Nations Trust Bank PLC Human Capital 54 Ten Year Summary 161 Seylan Bank PLC Manufactured Capital 62 Share Information 162 Sampath Bank PLC Intellectual Capital 67 Notice of Meeting 166 Hatton National Bank PLC Natural Capital 74 Form of Attendance 167 People’s Bank Form of Proxy 169 Governance AUDITORS B. R. De Silva & Co. Chartered Accountants Corporate Governance 78 Corporate Information IBC No. 22/4, Vijaya Kumaranatunga Mawatha Enterprise Risk Management 86 Colombo 05 This report can be accessed online at https://www.durdans.com ...for everyone. At Durdans Hospital, we take pride in delivering excellence in healthcare for everyone. With a name founded on dedication and trust, our team remains committed to serving people with warmth and compassion. The year under review has seen us rise to greater heights. Durdans Hospital continued to set exemplary standards in the provision of clinical expertise, state-of-the-art technology and outcome oriented healthcare. This report speaks of our year of expansion, strategic investments made and standards set. As we continue to redesign the future of Sri Lankan healthcare and create enhanced value for our diverse stakeholder community who have partnered us in our journey, we are indeed humbled to be a hospital which continues to deliver excellence in healthcare to everyone. Vision At the forefront of medical excellence, defining the future of Sri Lankan healthcare. Mission To enhance the lives of our community at large, by unfolding a paradigm shift in all service tiers and excelling in preventative and compassionate patient care. 2 Durdans Hospital | Annual Report 2018/19 Values Empowering Pride Attract, inspire and motivate passionate individuals Dedicated Compassion Creating heartfelt, customer-centered experiences Advancing Medical Excellence Driving the medical industry towards greater heights Prestige Beyond Our Borders Enhancing our reputation beyond Sri Lanka Our Business Our Leadership Performance and Capital Management Governance Financial Reports Financial Highlights Group 2015 2016 2017 2018 2019 Financial Results Turnover (Rs. Mn) 4,083 4,728 5,289 5,733 5,806 Operating Profit (Rs. Mn) 390 643 621 723 682 Profit Before Tax (Rs. Mn) 266 557 525 603 549 Profit After Interest and Tax (Rs. Mn) 224 500 389 488 376 Net Profit Per Share (Rs.) 6.61 14.76 11.48 14.40 11.10 Statement of Financial Position Fixed Assets - Net Book Value (Rs. Mn) 4,107 4,286 6,445 6,539 6,959 Total Assets (Rs. Mn) 4,932 5,366 7,939 8,093 8,797 Capital Employed (Rs. Mn) 3,857 4,225 6,530 6,738 7,265 Net Assets (Rs. Mn) 2,778 3,087 5,198 5,009 5,143 Ratios Earnings Per Share (Rs.) 5.91 12.67 9.67 11.87 9.50 Annual Income Growth (%) 3.00 16.00 11.87 8.39 1.27 Interest Cover (times) 3.10 7.44 6.34 6.02 5.15 Net Assets Per Share (Rs.) 82.01 91.14 153.46 147.88 151.83 Return on Assets (%) 4.50 9.30 4.90 6.00 4.50 Return on Capital Employed (%) 10.00 15.00 10.00 11.00 9.40 Return on Equity (%) 8.10 16.20 7.50 9.70 7.40 REVENUE PROFIT AFTER TAX NET ASSETS PER SHARE Rs. 5.8 Bn Rs. 376 Mn Rs. 151.83 4 Durdans Hospital | Annual Report 2018/19 TURNOVER - (Rs. Mn) PROFIT BEFORE TAX - (Rs. Mn) PROFIT AFTER INTEREST AND TAX - (Rs. Mn) 6,000 700 600 5,000 600 500 500 4,000 400 400 3,000 300 300 2,000 200 200 1,000 100 100 4,083 4,728 5,289 5,733 5,806 266 557 525 603 549 224 500 389 488 376 0 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 NET PROFIT PER SHARE - (Rs.) FIXED ASSETS - NBV - (Rs. Mn) TOTAL ASSETS - (Rs. Mn) 15 8,000 10,000 12 8,000 6,000 9 6,000 4,000 6 4,000 2,000 3 2,000 6.61 14.76 11.48 14.40 11.10 4,107 4,286 6,445 6,539 6,959 4,932 5,366 7,939 8,093 8,797 0 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 EARNINGS PER SHARE - (Rs.) RETURN ON CAPITAL EMPLOYED - (%) INTEREST COVER - (Times) 15 15 8 12 12 6 9 9 4 6 6 2 3 3 5.91 12.67 9.67 11.87 9.50 10.00 15.00 10.00 11.00 9.40 3.10 7.44 6.34 6.02 5.15 0 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Excellence in Healthcare...for everyone. 5 Our Business Our Leadership Performance and Capital Management Governance Financial Reports Historical Time Line 1939 1968 1993 A military hospital opens to treat A special focus was given to maternity care The Intensive Care Unit (ICU) was formally from 1968 when Durdans opened its first established. British personnel in Ceylon and maternity ward as well as an outpatient is known as the forerunner of the facility. 1995 Durdans Enterprises. The Endoscopy Unit was set up. 1982 1945 The Paediatric Ward, Surgical Ward and 1996 In 1945, a group of doctors recognised Operating Theatre complex was set up. The Pathological Laboratory and Blood an opportunity to develop the fledgling Bank commenced operations. healthcare sector as a private enterprise, 1984 and took over the former military hospital to Radiology services were introduced to the establish Ceylon Hospitals Limited. public. 1997 2001 2005 Durdans established strategic alliances with A formal Emergency Treatment Unit was set Commencement of Ocular surgery and the ‘Escorts Heart Institute and Research up. Cochlear Implant surgery for the first time in Centre’ in New Delhi which is a renowned Sri Lanka. institute in the field of Cardiology. 2002 The five-year modernisation program of 2010 1999 the hospital and the modernisation of the Durdans Medical and Surgical Hospital (Pvt) The Heart Command Centre and Heart surgical theatre complex was completed. Ltd was unveiled to the public and became Station became operational. fully operational. 2003 2000 Ceylon Hospitals Limited was listed on the 2012 Cardiovascular surgeries, invasive and Colombo Stock Exchange. Operations relating to the Diabetes and interventional cardiac procedures Endocrinology Centre and Durdans Oral commenced. 2004 Health Centre commenced. The Neonatal and Dialysis Units were established. 6 Durdans Hospital | Annual Report 2018/19 New technology for the Cardiac Fractional 2015 The Dietetic and Nutritional Care Centre as Flow Reserve (CFFR) Measurement System well as ‘Enhance’ Cosmetic Care Centre and The Phillips Alluraclarity Cardiac, was launched in order to evaluate the inner the Physiotherapy and Sports Medicine Units Angiography System and the advanced diameter of a blood vessel. were established. Ultrasound Phillips EPIQ 7 was installed. Sleep Lab Test services and the Autologus 2013 Platelet Rich Plasma Liquid Procedure 2017 The Neuro Centre was established. (APRP) were introduced. A state-of-the-art Bone Densitometer (Dexa Scanner), Dental X-ray System, Digital 2014 2016 Imaging Plate System and a Mobile X-ray System was introduced to the Radiology Durdans became the first hospital in Minimally invasive instruments for Coronary Department. Laboratory operations were re- Sri Lanka to be accredited with the Gold Artery Bypass Grafting (CABG) and valve accredited with ISO 15189:2012, including Seal of approval by the Joint Commission surgeries were introduced. International (JCI). the Histopathology Unit the latter being a first for a hospital. 2018 Relaunch of the Durdans brand under the 2019 slogan ‘Dedicated to You’, enhancing the Durdans Hospital continued to introduce next-generation diagnostics customer experience with the introduction and patient care solutions to our portfolio, with the notable launch of the of sophisticated technology, processes and Philips Azurion Image Guided Therapy System - the most advanced biplane operations.