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Company Information

Home » Market » Company Information

Apollo Hospitals Enterprise Ltd.

Dec 03
5434.10 -159.90 ( -2.86 %)
 
VOLUME : 24526
Prev. Close 5594.00
Open Price 5585.00
TODAY'S LOW / HIGH
5421.65
 
 
 
5647.95
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
2252.65
 
 
 
5930.70
Dec 03
5432.40 -160.55 ( -2.87 %)
 
VOLUME : 844674
Prev. Close 5592.95
Open Price 5592.95
TODAY'S LOW / HIGH
5420.00
 
 
 
5654.65
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
2251.00
 
 
 
5935.40
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Market Cap. ( ₹ ) 78109.58 Cr. P/BV 16.99 Book Value ( ₹ ) 319.67
52 Week High/Low ( ₹ ) 5935/2251 FV/ML 5/1 P/E(X) 519.35
Bookclosure 31/08/2021 TTM EPS ( ₹ ) 72.01 Div Yield (%) 0.06
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2021-03 

The Directors are pleased to present the FORTIETH ANNUAL REPORT and the audited financial statements for the year ended 31st March 2021

('in million)

Standalone

Consolidated

Particulars

Year ended 31st March 2021

Year ended 31st March 2020

Year ended 31st March 2021

Year ended 31st March 2020

Income from Operations

91,530

97,944

105,600

112,468

Profit before Exceptional Items and Tax after share of profits in Joint Ventures & Associates

1,857

5,179

1,609

4,586

Exceptional Items

(91)

1,644

606

1,983

Profit after Exceptional Items before Tax after share of profits in Joint Ventures & Associates

1,766

6,823

2,215

6,569

Provision for Tax

716

2,121

847

2,252

Profit for the Period

1,050

4,702

1,368

4,317

Earnings Per Share (')

7.50

33.80

10.74

32.70

RESULTS OF OPERATIONS

During the year under review, the income from operations of the Company degrew by 7% to '91,530 million in FY21 compared to '97,944 million in the previous year. The profit after tax for the year declined by 78% to '1,050 million compared to '4,702 million in the previous year.

During the year under review, the consolidated gross revenue of the Company degrew by 6% to '105,600 million compared to '112,468 million. Net profit after minority interest for the group declined by 68% to '1,368 million compared to '4,317 million in the previous year.

IMPACT OF THE COVID-19 PANDEMIC ON THE BUSINESS

Due to the continuing COVID-19 pandemic situation, there were localised lockdowns in various parts of the country apart from continuing restrictions on international and domestic travel . This was coupled with advisories issued by the government on postponing elective surgeries and undergoing preventive health checks .

The Pharmacy Distribution and Stand Alone Pharmacy segmental revenues and business performance were not impacted during the lockdown, and continued to show growth momentum.

However, the continuance of the pandemic situation resulted in a material impact on the healthcare sector in general and the Company's healthcare services business operations, due to the following reasons:

• Severe travel related restrictions impacting both employee movements and patient flows to our hospitals .

• Out Patient footfalls being impacted apart from incidence of postponement of elective procedures. Both factors in turn have led to a substantial reduction in the inpatient case loads .

• Continued investments being required to be made on investments in equipment, consumables and other resources to ensure 100% preparedness for safety in the hospital(s) and eventual treatment of patients in case of a need.

• Current embargo on international travel has also impacted patient flows to hospital units located in metro centres as well.

However, patient case loads and occupancies across the hospitals network witnessed improvements post easing of lockdown related restrictions. We will continue to calibrate our responses to the COVID-19 situation as it evolves.

Apollo Hospitals, being the largest private health care services provider in the country is well positioned to continue to address the demand for tertiary health care services across the country over the long term.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Companies Act, 2013 ("the Act") and Ind AS 110 - Consolidated Financial Statements read with Ind AS 28 -Investment in Associates and Ind AS 31 - Interests in Joint Ventures, the audited consolidated financial statements form part of the Annual Report.

In terms of provision to sub section (3) of Section 129 of the Act, the salient features of the financial statements of the Subsidiaries, Associates and Joint Venture Companies are set out in the prescribed Form AOC-1, which forms a part of the Annual Report.

In accordance with Section 136 of the Act, the audited financial statements, including the consolidated financial statements of the Company and audited accounts of the subsidiaries are available at the Company's website: www.apollohospitals.com. The documents will also be available for inspection during business hours at the registered office of the Company.

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report. There has been no change in the nature of business of the Company.

SCHEME OF ARRANGEMENT

The Board of Directors at their meeting held on November 14, 2018 had approved a Scheme of Arrangement ("the Scheme") between Apollo Hospitals Enterprise Limited ("AHEL") and Apollo Pharmacies Limited ("APL") and their respective shareholders in accordance with the provisions of Sections 230 to 232 of the Companies Act, 2013, for the transfer of the front-end retail pharmacy business ("the divestment business") carried out in the standalone pharmacy segment to APL by way of slump sale for an overall cash consideration of '5,278 million, subject to necessary approvals by stock exchanges, shareholders, the National Company Law Tribunal and all other requisite regulatory authorities.

The Company received no objection letters from National Stock Exchange of India Limited and BSE Limited. Further, the Company obtained approvals from the Competition Commission of India (CCI) and from the equity shareholders in October 2019.

The National Company Law Tribunal (NCLT), Chennai Bench vide its order dated 3rd August 2020 approved the Scheme. The Scheme was effective from 1st September 2020.

Post the disposal of the divestment business, the Company identified Pharmacy Distribution as a new segment with effect from September 1, 2020. The Company thereafter has identified Healthcare and Pharmacy Distribution as its operating and reportable segments. Healthcare segment represents hospitals and hospital based pharmacies. Pharmacy distribution segment represents the business of procurement and distribution of pharmaceutical items, fast moving consumer goods (FMCG) and private label products.

SCHEME OF AMALGAMATION

The Board of Directors at their meeting held on 13th February 2020 had approved the amalgamation of Apollo Home Healthcare (India) Limited and Western Hospitals Corporation Private Limited, wholly owned subsidiaries of the Company (hereinafter referred to as "Transferor Companies") into Apollo Hospitals Enterprise Limited ("Transferee Company") by way of a Scheme of Amalgamation between the Transferor Companies and the Transferee Company and their respective shareholders and creditors, in accordance with the provisions of Sections 230 to 234 of the Companies Act, 2013.

The amalgamation was subject to requisite statutory and regulatory approvals and sanction by the respective shareholders of each of the Companies involved in the scheme.

The Amalgamation of the Transferor Companies with the Transferee Company is aimed at achieving the following primary benefits:

• Facilitate consolidation of the undertakings in order to enable effective management and unified control of operations;

• Create economies in administrative and managerial costs by consolidating operations;

• Reduce duplication of administrative responsibilities and multiplicity of records and legal and regulatory compliances.

The Board of Directors through a circular resolution, approved the revised proposal in compliance with Section 233 of the Companies Act, 2013 to proceed with an application to the Regional Director, Southern Region, Ministry of Corporate Affairs for approving the Scheme of Amalgamation subject to completion of necessary formalities and obtaining requisite approvals instead of filing applications with NCLT seeking dispensation from the requirement of convening shareholders / creditors meetings of the Company:

• Apollo Home Healthcare (India) Limited and

• Western Hospitals Corporation Private Limited

The Company obtained shareholders and creditors approval with the requisite majority for the proposed Scheme of Amalgamation of the wholly owned subsidiary companies with the Company and has also obtained approval from the Regional Director, Southern Region, Ministry of Corporate Affairs vide order dated 28th June 2021 for going ahead with the Scheme of amalgamation. The Scheme would be effective from 1st April, 2020.

There will not be any change in the shareholding pattern of the Transferee Company pursuant to the Scheme of Amalgamation as the Transferor Companies are wholly-owned subsidiaries of the Transferee Company.

PROPOSED TRANSFER OF BUSINESS UNDERTAKING

The Board had met on June 23,2021, to review the Company's long-term strategy including the intent to create a distinctive digital ecosystem for providing a holistic healthcare platform which encompasses a wide range of healthcare services including enabling e-consultations and online ordering for delivery of medicines.

Keeping this in perspective as well as the fact that the business of procurement of pharmaceutical and other wellness products including private label products and wholesaling and supply of such products to pharmacies, including investment in pharmacy retail business, and development, operation and management of the online platform for digital healthcare owned and operated by the Company under the branding of "Apollo 24/7", shall require a specific and focused approach, the Board in its meeting held on 23rd June 2021, approved the proposal for going ahead with the transfer of the business undertaking comprising of the Pharmacy Distribution business and Apollo 24x7 online digital healthcare platform on a slump sale basis to a wholly owned subsidiary company, Apollo HealthCo Limited for a net consideration of '12,100 million (Rupees Twelve Thousand One Hundred Million Only) which is in excess of the networth of the Business Undertaking sought to be transferred to Apollo HealthCo Limited.

This move is expected to result in the following benefits:

1. Facilitate creation of India's largest omni - channel digital healthcare delivery platform and thereby enable huge funneling potential for healthcare consumers into the Apollo ecosystem

2. Enable the process of combining the strength of the Apollo Hospitals Group's offline healthcare leadership with new age digital offerings to address all healthcare consumer needs

3. An asset light approach (through digital offerings) would be followed to fuel growth and achieve the objective of getting 100 million targeted registered users on the Apollo 24x7 digital platform in the next 5 years

4. An appropriate platform would be created for attracting a new pool of investor capital and to enable rapid scale up of the business,

The proposed transfer would include the Company's investment in the pharmacy retail business apart from all related assets and liabilities and is subject to receipt of regulatory approvals including shareholders and lenders approvals.

DIVIDEND

The Board of Directors have recommended a dividend of '3/- per equity share (60% on face value of '5/-per share) on the paid-up equity share capital of the company for the financial year ended 31st March 2021 amounting to '431.35 million which if approved, at the forthcoming Annual General Meeting on 31st August 2021 will be paid to those shareholders whose names appear in the Register of Members as at the closing hours of business on 20th August 2021. In respect of shares held in electronic form, the dividend will be paid on the basis of beneficial ownership furnished by the depositories viz., NSDL and CDSL for this purpose.

The Register of Members and Share Transfer Books will remain closed from Saturday, 21st August 2021 to Tuesday 31st August 2021 (both days inclusive).

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. Your Company shall, accordingly, make the payment of the Dividend after deduction of tax at source.

The Board approved and adopted a dividend distribution policy at its meeting held on 30th May 2017 which is annexed herewith as Annexure - I to this report and also posted on the Company's website: www.apollohospitals.com.

SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINT VENTURES

At the beginning of the year, your Company had eighteen direct subsidiaries, ten step down subsidiaries, four joint ventures and three associate companies. As on 31st March 2021, your Company had eighteen direct subsidiaries, ten step down subsidiaries, three joint ventures and four associate companies.

The statement containing the summarized financial position of the subsidiary companies viz., Apollo Home Healthcare (I) Ltd (AHHCIL), A.B. Medical Centres Limited (ABMCL), Samudra Healthcare Enterprises Limited (SHEL), Apollo Hospital (UK) Limited (AHUKL), Apollo Hospitals Singapore Pte Limited (AHSPL), Apollo Health and Lifestyle Limited (AHLL), Western Hospitals Corporation Pvt Limited (WHCPL), Total Health (TH), Imperial Hospital and Research Centre Limited (IHRCL), Apollo Home Healthcare Limited (AHHL), Apollo Nellore Hospital Limited (ANHL), Sapien BioSciences Pvt Limited (SBPL), Apollo Rajshree Hospitals Pvt Limited (ARHPL), Apollo Lavasa Health Corporation Limited (ALHCL), Assam Hospitals Limited (AHL), Apollo Hospitals International Limited (AHIL), Future Parking Pvt Limited (FPPL), Medics International Lifesciences Limited (MEDICS), Apollo Sugar Clinics Limited (ASCL), Apollo Specialty Hospitals Pvt Limited (ASHPL), Alliance Dental Care Limited (ADCL), Apollo Dialysis Pvt Limited (ADPL), Apollo CVHF Limited (CVHF), Apollo Bangalore Cradle Limited (ABCL), Kshema Healthcare Pvt Limited (KHPL), AHLL Diagnostics Limited (ADL), AHLL Risk Management Pvt Limited (ARMPL) and Surya Fertility Centre Private Limited (SFC) pursuant to Section 129 read with Rules 5 of the Companies (Accounts) Rules, 2014 is contained in Form AOC-1, which forms a part of the Annual Report.

1. APOLLO HOME HEALTHCARE (INDIA) LIMITED (AHHCIL)

AHHCIL, a wholly owned subsidiary of the Company recorded an income of '6.23 million and a net profit of '1.84 million.

2. A.B. Medical Centres Limited (ABMCL)

ABMCL, is a wholly owned subsidiary of the Company and does not have any commercial operations as it has leased out its infrastructure viz., land and building to the company for running a hospital. For the year ended 31st March, 2021, ABMCL recorded an income of '8.04 million and a net profit of '6.38 million.

3. SAMuDRA HEALTHCARE enterprises LIMITED (SHEL)

SHEL, a wholly owned subsidiary of the company, runs a 120 bed multi speciality hospital at Kakinada. For the year ended 31st March, 2021, SHEL recorded an income of '509.45 million and a net profit of '115.14 million.

4. APOLLO HEALTH AND LIFESTYLE LIMITED (AHLL)

AHLL, is a 68.25% subsidiary of the Company engaged in the business of providing primary healthcare facilities through a network of owned/franchised clinics across India offering specialist consultations, diagnostics, preventive health checks, telemedicine facilities and 24-hour pharmacy all under one roof. For the year ended 31st March, 2021, AHLL recorded an consolidated income of '7,062.80 million and a net loss of '663.90 million.

5. WESTERN HOSPITALS CORPORATION PRIVATE LIMITED (WHCPL)

WHCPL, a wholly owned subsidiary of the Company, recorded a net loss of '10 million for the year ended 31st March 2021.

6. TOTAL HEALTH (TH)

TH, is a wholly owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, which is engaged in carrying on CSR activities in the field of community/rural development.

7. apollo hospital (uk) limited (ahukl)

AHUKL, is a wholly owned foreign subsidiary of the Company and has not yet commenced its operations.

8. apollo hospitals singapore pte limited (ahspl)

AHSPL, is a wholly owned subsidiary of the Company which has invested in a venture capital fund which focuses on funding early stage healthcare technology startups in Asia.

9. imperial hospital and research centre limited

(IHRCL)

I HRCL, is a 90% subsidiary of the company which owns a 250 beds multi-specialty hospital at Bengaluru. For the year ended 31st March, 2021, IHRCL recorded an income of '2,319.75 million and a net profit of '83.19 million.

10. apollo home healthcare limited (ahhl)

AHHL, a 89.42% subsidiary of the Company is engaged in the business of providing high quality, personalized and professional healthcare services at the doorsteps of the patients. AHHL recorded an income of '552.80 million and a net profit of '16.93 million.

11. apollo nellore hospital limited (anhl)

ANHL a 80.87% subsidiary of the Company has leased out its land at Nellore to the Company. ANHL recorded an income of '8 .17million and a net profit of '6.44 million.

12. sapIEN BIOsCIENCEs pRivATE LIMITED (sbpL)

SBPL, is a 70% subsidiary of the company which is engaged in the business of bio-banking of tissues. For the year ended 31st March, 2021, SBPL recorded an income of '31.43 million and a net profit of '11.18 million.

13. apollo rajshree hospitals private limited (arhpl)

ARHPL, a 54.63% subsidiary of the company, runs a multi speciality hospital at Indore. For the year ended 31st March, 2021, ARHPL recorded an income of '863.57 million and a net profit of '83.41 million.

25. APOLLO CVHF LIMITED (CVHF)

CVHF, a subsidiary of Apollo Hospitals International Limited is in the business of providing healthcare services. For the year ended 31st March, 2021, CVHF recorded an income of '185.90 million and a net loss of '72.10 million.

26. APOLLO BANGALORE CRADLE LIMITED (ABCL)

ABCL, a subsidiary of Apollo Speciality Hospitals Private Limited, is engaged in the business of running cradle centres. For the year ended 31st March, 2021, ABCL recorded an income of '447.26 million and a net profit of '57.83 million

27. KSHEMA HEALTHCARE PRIVATE LIMITED (KHPL)

KHPL, a subsidiary of Apollo Speciality Hospitals Private Limited is yet to commence its operations

28. surya fertility centre private limited (sfc)

SURYA, a subsidiary of Apollo Speciality Hospitals Private Limited is engaged in the business of running cradle and fertility centres. For the year ended 31st March, 2021, SFC recorded an income of '28.70 million and a net profit of '1.16 million

INVEsTMENTs

Medics International Lifesciences Limited

During the year, the Company completed the acquisition of a 1% additional stake in Medics International Lifesciences Limited ("Medics") which runs 330 bed multispeciality hospital in Lucknow. Consequently, Medics became a subsidiary of the Company with effect from the date of acquisition which was 7th January 2021.

Apollo Multi speciality Hospitals Limited - AMsHL (Formerly known as Apollo glenea-gles Hospital Limited)

The Board of Directors, in their meeting held on November 11, 2020 approved the proposal to acquire the 50% equity stake held by Gleneagles Development Pte Ltd., Singapore in AMSHL Kolkata, in which the Company held a 50% equity stake at a consideration of '4,100 million.

The acquisition of 50% equity stake held in AMSHL, Kolkata by Gleneagles Development Pte Limited was completed on 22nd April 2021, with AMSHL becoming a 100% subsidiary of the Company.

The name of the Company was changed from Apollo Gleneagles Hospital Limited to Apollo Multi Speciality Hospitals Limited, subsequently based on approval obtained from the Ministry of Corporate Affairs with effect from 5th May 2021.

Apollo Medicals private Limited

The Scheme of Arrangement (" the Scheme") relating to the transfer of the front end portion of the retail pharmacy business ("divestment business") to Apollo Pharmacies Limited ("APL" or "Transferee Company") , a wholly owned subsidiary of Apollo Medicals Private Limited ("AMPL") for an overall cash consideration of '5,278 million was approved by the National Company Law Tribunal vide their order dated August 3, 2020.

Pursuant to the Scheme becoming effective from 1st September, 2020, the Company invested a sum of '365 million towards its share of equity contribution and its ownership interest in AMPL reduced to 25.50% .

Apollo Health Co Limited

The Company has acquired the entire equity stake held by the existing shareholders in Apollo Health Co Limited (AHL) on 233rd June 2021. Consequent to that, AHL became a wholly owned subsidiary to the Company.

QUALIFIED INSTITUTIONAL PLACEMENT (QIP)

During the year, your Company successfully completed a Qualified Institutional Placement (QIP) raising '11,699.99 million from Qualified Institutional Buyers by issue of 4,659,498 equity shares of '5/- each at an issue price of '2,511/- per equity share including premium of '2,506/- per share. The monies raised have been utilised in line with the objects to the issue mentioned in the Placement Document.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on corporate governance as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter Listing Regulations), forms an integral part of this report. The requisite certificate from M/s Lakshmmi Subramanian & Associates, Practising Company Secretaries confirming the compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Listing Regulations is presented in a separate section forming part of the Annual Report.

BUSINESS RESPONSIBILITY REPORT

As stipulated under the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as part of the Annual Report.

sexual harassment

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at the work place. During the year, 2 complaints were received under the policy, both of which were disposed off.

vigil mechanism/whistle blower policy

The Company has established a vigil mechanism for Directors and Employees to report their genuine concerns, the details of which are given in the Corporate Governance Report. The policy on Vigil Mechanism and Whistle Blower Policy has been posted on the website of the Company www.apollohospitals.com.

particulars of LOANS, GuARANTEES And INVESTMENTS

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

fixed deposits

During the year, your company did not accept any deposits or renew existing deposits from the public. The total outstanding deposits with the Company as on 31st March 2021 were '1.28 million ('1.90 million as on 31st March 2020) which were not claimed by the depositors.

DIRECTORS AND OTHER KEY MANAGERIAL pERSONNEL (KMpS)

Board Composition and Independent Directors

The Board consists of the Executive Chairman, four Executive Directors and five Independent Directors as on 31st March 2021. Independent directors are appointed for a term of five years and are not liable to retire by rotation.

All Independent Directors have given their declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of the SEBI Listing Regulations.

Retirement by Rotation

Pursuant to Section 152 of the Companies Act 2013, Smt.Preetha Reddy, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

Change in Board Composition

Outgoing Director

Dr. T. Rajgopal had accepted the position of Chief Operating Officer in Breach Candy Hospital, Mumbai. As a good corporate governance practice, he had tendered his resignation from the position of Independent Director of the Company with effect from 1st April 2021 to avoid a potential conflict of interest situation in the Company.

Dr. T. Rajgopal has also confirmed that there are no material reasons for his resignation other than that specified herein above.

The Board places on record its sincere appreciation for the valuable services rendered by Dr. T. Rajgopal during his tenure.

New Director

Based on the recommendation of the Nomination and Remuneration Committee, the Board has recommended to the members that Shri. Som Mittal be appointed as an Independent Director for a term of 5 (five) consecutive years, with effect from 21st July 2021.

The Company has received declarations from Shri Som Mittal confirming that he meets the criteria of independence prescribed under the Act and the Listing Regulations.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are Smt. Suneeta Reddy, Managing Director, Shri. Krishnan Akhileswaran, Chief Financial Officer and Shri.S.M. Krishnan, Vice President-Finance & Company Secretary. There has been no change in the Key Managerial Personnel during the year.

board evaluation

Pursuant to the provisions of the Companies Act, 2013 and in terms of Regulation 17(10) of the SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

remuneration policy

The Board has, on the recommendation of the Nomination & Remuneration Committee, approved a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

meetings of the board

The Board met seven times during the financial year, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

risk management

The Board of Directors had constituted a Risk Management Committee to identify elements of risk in different areas of operations and to develop a policy for actions associated to mitigate the risks. The Committee on a timely basis informed the members of the Board of Directors about risk assessment and minimization procedures and in the opinion of the Committee there was no risk that may threaten the existence of the Company. The details of the Risk Management Committee are included in the Corporate Governance Report.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations

The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The details of the internal control system and its terms of reference are set out in the Management Discussion and Analysis Report forming part of the Board's Report.

The Board of Directors has laid down internal financial controls to be followed by the Company and the policies and procedures to be adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control systems periodically.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013, the Board of Directors to the best of their knowledge hereby state and confirm:

a. that in the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

b. that such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

share capital

The paid up Equity Share Capital as on March 31, 2021 was '718.93 million.

During the year, the Company allotted 4,659,498 equity shares of '5/- each to Qualified Institutional Buyers (QIBs) on 23rd January 2021 under Qualified Institutions Placement Scheme (QIP) at a price of '2,511/- per share including a premium of '2,506/- per share. Consequent to the allotment of above said shares, the equity paid up capital has been increased from '695.63 million divided into 139,125,159 equity shares of '5/- each to '718.93 million divided into 143,784,657 equity shares of '5/- each.

These shares have been listed at BSE Limited (BSE) and National Stock Exchange of India Limited, (NSE), Mumbai.

The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As of March 31, 2021, the details of shareholding in the Company held by the Directors are set out in the Corporate Governance Report forming part of the Board's Report and none of the directors hold convertible instruments of the Company.

TERMINATION OF GLOBAL DEPOSITORY RECEIPTS (“GDRS”) PROGRAM AND DELISTING OF GDRS FROM THE LUXEMBOURG STOCK EXCHANGE (“LSE”)

In view of the minimal number of GDRs outstanding and the low trading volume related to the GDRs, the Board of Directors of the Company at its meeting held on 12th February 2021 had resolved to terminate the GDR program. The notice of termination of the GDR program was sent to all GDR holders on 25th February 2021 by Bank of New York Mellon, Custodian of GDR informing that the GDR facility was terminated with effect from 26th March 2021. The holders can surrender their GDRs to Bank of New York Mellon, for delivery of underlying equity shares upto the period of March 31, 2022, subsequent to which Bank of New York Mellon, Custodian may attempt to sell the underlying shares and distribute the net proceeds to the respective GDR Holders. Subsequent to termination of the GDRs programme, the Luxemburg Stock Exchange will delist the GDRs.

As on March 31, 2021, the total outstanding GDRs was 126,646 representing 0.09% of the paid up share capital of the Company

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions other than the transaction stated in AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, which is annexed herewith as Annexure-II.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website www.apollohospitals.com. Your Directors draw the attention of the members to the Notes to the financial statements which sets out related party disclosures.

None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company.

particulars of employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also provided in the Annual Report, which forms part of this Report.

Having regard to the provisions of Section 136(1) read with the relevant provisions of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished free of cost.

EMpLOYEE sTOCK OpTIONs

No Employee Stock Options have been granted to the employees of the Company and thus no disclosure is required.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Rural Development, Healthcare, Education & Skill Development and Research in Healthcare.

These projects are in accordance with Schedule VII of the Companies Act, 2013. The Report on CSR activities for the financial year 2020-2021 is annexed herewith as "Annexure A".

STATUTORY AUDITORS

The Members at the Annual General Meeting held on 20th September 2017 approved the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants as statutory auditors for a period of five years commencing from the Thirty Sixth Annual General Meeting till the conclusion of the Forty First Annual General Meeting subject to ratification by the Members every year. Pursuant to amendments in Section 139 of the Companies Act, 2013, the requirements to place the matter relating to such appointment for ratification by members at every annual general meeting has been dispensed with effect from 7th May, 2018 and the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants as statutory auditors is valid till the conclusion of the Forty First Annual General Meeting to be held during the year 2022.

There are no qualifications, reservation or adverse remarks made by the statutory auditors in the audit report.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors on the recommendation of the Audit Committee, appointed M/s. A.N. Raman & Associates, Cost Accountants, Chennai (FRN 102111) to audit the cost accounts of the Company for the financial year 2021-2022 on a remuneration of '1.50 million

As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member's ratification for the remuneration payable to M/s. A.N. Raman & Associates, Cost Accountants, Chennai (FRN102111) is included at Item No. 6 of the Notice convening the Annual General Meeting.

The Company has maintained cost records in accordance with the provisions of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 in respect of healthcare services.

SECRETARIAL AUDITORS

The Board had appointed Smt. Lakshmmi Subramanian, Senior Partner, M/s. Lakshmmi Subramanian & Associates, a firm of Company Secretaries in Practice, to conduct Secretarial Audit for the financial year 2020-2021. The Secretarial Audit Report for the financial year ended March 31, 2021 is annexed herewith as "Annexure B". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

STATUTORY AUDITORS AND SECRETARIAL AUDITORS REPORT

The Directors hereby confirm that there is no qualification, reservation or adverse remark made by the statutory auditors of the company or in the secretarial audit report by the practicing company secretary for the year ended 31st March, 2021.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND Foreign ExCHANGE Earnings AND OUTGO.

Information as required to be disclosed on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure C".

EXTRACT OF ANNUAL RETURN

A copy of the Extracts of the Annual Return of the Company as required under section 134(3)(a) of the Companies Act, 2013, in Form MGT-9, as they stood on the close of the financial year i.e. 31st March, 2021 is furnished in ANNEXURE-D and forms part of this Report.

Further, a copy of the Annual Return of the Company containing the particulars prescribed u/s 92 of the Companies Act, 2013, in Form MGT-7, as they stood on the close of the financial year i.e. 31st March, 2020 is uploaded on the website of the Company in the Investor Relations Section and can be accessed from the Company's website www.apollohospitals.com