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Directors Report of Apollo Hospitals Enterprise Ltd.

Mar 31, 2016

The Directors are pleased to present the THIRTY FIFTH ANNUAL REPORT and the audited financial statements for the year ended 31st March 2016.

Financial Results (Standalone)

(Rs. in million)

For the year ended

March 31, 2016

March 31, 2015

Income from operations

54,091

45,928

Profit before Extraordinary Items and Taxation

4,778

4,820

Provision for Taxation

827

1,207

Net Profit before Extraordinary Item after Taxation

3,951

3,613

Exceptional Items

(257)

(147)

Net Profit after Exceptional Items

3,694

3,466

Balance of Profit brought forward

3,144

3,165

Profit Available for appropriations

6,838

6,631

Appropriations

Dividend (inclusive of dividend tax)

1,004

964

Transfer to General Reserve

2,000

1,500

Transfer to Debenture Redemption Reserve

-

485

Amount charged off in accordance with the transitional provisions of the Companies Act, 2013

-

539

Balance carried forward to the Balance Sheet

3,834

3,143

Results of Operations

During the year under review, the income from operations of the Company increased to Rs.54,091 million compared to Rs.45,928 million in the previous year, registering an impressive growth of 18%. The profit after tax for the year increased by 7% to Rs.3,694 million compared to Rs.3,466 million in the previous year.

During the year under review, the consolidated gross revenue of the Company increased to Rs.60,856 million compared to Rs.51,785 million in the previous year, registering an impressive growth of 18%. Net profit after minority interest for the group stood at Rs.3,310 million.

Consolidated Financial Statements

In accordance with the Companies Act, 2013 (“the Act”) and Accounting Standard (AS)-21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of 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 company’s website www.apollohospitals.com. The documents will also be available for inspection during business hours at the registered office of the Company.

Dividend

During the year, your Company declared an interim dividend of Rs.6.00 per eguity share. Your Directors have considered it financially prudent in the long-term interests of the Company to reinvest the profits into the business of the Company to build a strong reserve base and grow the business of the Company. No final dividend has therefore been recommended for the year ended March 31, 2016.

Transfer of Reserves

Your Company proposes to transfer Rs.2,000 million to the general reserves out of the amount available for appropriations. An amount of Rs.3,834 million is proposed to be retained in the profit and loss account.

Credit Rating

CRISIL has rated the company’s debt instruments as AA indicating a high degree of safety.

India Ratings and Research (Ind-RA) (a Fitch Group Company) has assigned the Company’s long term debt and Non-Convertible Debentures (NCDs), an IND AA Rating with a stable outlook.

Subsidiaries, Associate Companies and Joint Ventures.

At the beginning of the year, your Company had twelve direct subsidiaries and five step down subsidiaries, seven joint ventures and three associate companies. As on 31st March 2016, your Company has sixteen direct subsidiaries and five step down subsidiaries, six joint ventures and three associate companies.

The statement containing the summarized financial position of the subsidiary companies viz., Apollo Home Healthcare (I) Ltd (formerly known as Unigue Home Healthcare Limited) (AHHCL), AB 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), Apollo Healthcare Technology Solutions Limited (AHTSL), Imperial Hospital and Research Centre Limited (IHRCL), Apollo Home Healthcare Limited (AHHL), Apollo Nellore Hospital Limited (ANHL), Sapien Bio Sciences Pvt Limited (SBPL), Apollo Rajshree Hospitals Pvt Limited (ARHL), Apollo Lavasa Health Corporation Limited (ALHCL), Assam Hospitals Limited (AHL), Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL), Apollo Sugar Clinics Limited (ASCL), Akeso Healthcare Private Limited (AKESO), Alliance Dental Care Limited (ADCL) and Apollo Dialysis Private Limited (ADPL) pursuant to Section 129 and Rules 5 of the Companies (Accounts) Rules, 2014 is contained in Form AOC-1, which forms part of the Annual Report.

Apollo Home Healthcare (India) Limited (AHHCL)

(Formerly known as Unigue Home Healthcare Limited)

AHHCL, a wholly owned subsidiary of the Company provides medical and paramedical services including doctor’s consultation, physiotherapy direct to patient homes and also offers paramedical services in hospitals to critically ill patients. During the year AHHCL, recorded a revenue of Rs.12.53 million, and net profit of Rs.0.11 million.

AB Medical Centres Limited (ABMCL)

ABMCL, a wholly owned subsidiary of the Company 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, 2016, ABMCL recorded an income of Rs.6.79 million and a net profit of Rs.4.66 million.

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, 2016, SHEL recorded an income of Rs.266.40 million and a net profit of Rs.4.49 million.

Apollo Health and Lifestyle Limited (AHLL)

AHLL, is a 99.29% subsidiary of the Company is 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 a 24-hour pharmacy all under one roof. For the year ended 31st March, 2016, AHLL recorded an income of Rs.2,000.13 million and a net loss of Rs.56.86 million.

Western Hospitals Corporation Private Limited (WHCPL)

WHCPL, a wholly owned subsidiary of the Company, for the year ended 31st March 2016, recorded an income of Rs.14.44 million and a net profit of Rs.9.60 million.

Total Health (TH)

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

Apollo Healthcare Technology Solutions Limited (AHTSL)

AHTSL, a wholly owned subsidiary of the Company is in the process of setting up the Proton Therapy Centre in Chennai which will be the first of its kind in the Southern Hemisphere and offering advanced oncology care. AHTSL is yet to commence operations.

Apollo Hospital (UK) Limited (AHUKL)

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

Apollo Hospitals Singapore Pte Limited (AHSPL)

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

Imperial Hospital and Research Centre Limited (IHRCL)

IHRCL, a 90% subsidiary of the company owns a 240 bed multi-specialty hospital at Bengaluru. For the year ended 31st March, 2016, IHRCL recorded an income of Rs.1,839.90 million and a net profit of Rs.61.70 million.

Apollo Home Healthcare Limited (AHHL)

AHHL, a 80.87% subsidiary of the Company is engaged in the business of providing high guality, personalized and professional healthcare services at the doorsteps of the patients. AHHL recorded revenues of Rs.59.88 million and a net loss omi3.64 million.

Apollo Nell ore Hospital Limited (ANHL)

ANHL has leased out its land at Nellore to the Company. ANHL recorded revenues of Rs.8.01 million and a net profit of Rs.6.18 million.

Sapien Biosciences Pvt Ltd (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, 2016, SBPL recorded revenues of Rs.5.95 million and a net loss of Rs.10.37 million.

Apollo Rajshree Hospitals Pvt Ltd (ARHL)

ARHL, a 57.27% subsidiary of the company, runs a multi speciality hospital at Indore. For the year ended 31st March, 2016, ARHL recorded an income of Rs.201.70 million and a net loss of Rs.83.87 million.

Apollo Lavasa Health Corporation Limited (ALHCL)

ALHCL, a 51% subsidiary of the company, runs a hospital at Lavasa. For the year ended 31st March, 2016, ALHCL recorded an income of Rs.7.20 million and a net loss of Rs.39.45 million.

Assam Hospitals Limited (AHL)

AHL, a 51% subsidiary of the company, runs a multi speciality hospital at Guwahati. For the year ended 31st March, 2016, AHL recorded an income of Rs.869.55 million and a net profit of Rs.18.00 million.

Apollo Sugar Clinics Limited (ASCL)

ASCL, a subsidiary company of Apollo Health and Lifestyle Limited, is engaged in the business of running diabetes management centres. For the year ended 31st March, 2016, ASCL recorded an income of Rs.190.46 million and a net loss of Rs.171.01 million.

Apollo Cosmetic Surgical Centre Pvt Ltd (ACSPL)

ACSPL, a subsidiary company of Apollo Health and Lifestyle Limited, is engaged in the business of running cosmetic surgical centres. For the year ended 31st March, 2016, ACSPL recorded an income of Rs.12.24 million and a net loss omo.ll million.

Akeso Healthcare Private Limited (AKESO)

AKESO, a wholly owned subsidiary company of Apollo Health and Lifestyle Limited, is engaged in the business of healthcare services. For the year ended 31st March, 2016, it recorded an income of Rs.45.86 million and a net loss of Rs.0.62 million.

All lance Dental Care Limited ^ AD CL^

ADCL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of running dental clinics. For the year ended 31st March 2016, ADCL recorded a revenue of Rs.382.34 million and a net loss of Rs.62.68 million.

Apollo Dialysis Pvt Ltd (ADPL)

ADPL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of running dialysis centres. For the year ended 31st March 2016, ADPL recorded a revenue of Rs.49.13 million and a net loss of Rs.6.30 million.

Corporate Governance

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance reguirements set out by SEBI. The report on corporate governance as reguired under the Securities Exchange Board of India (Listing Obligations and Disclosure Reguirements) Regulations, 2015 (hereinafter Listing Regulations), forms an integral part of this report. The reguisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

Management’s Discussion and Analysis Report

Management’s 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

The SEBI’s Listing Regulations mandates inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 500 listed entities based on market capitalisation. In compliance with the regulation, BRR is presented in a separate section forming 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 received 3 complaints under the policy, all 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 financial year, your company had not accepted deposits from the public.

The total outstanding deposits with the Company as on 31st March 2016 were Rs.273.41 million (Rs.339.27 million as on 31st March 2015) which include deposits for an aggregate value of Rs.18.87 million (Rs.1.49 million as on 31st March 2015) 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 eight Independent directors.

Independent directors are appointed for a term of five years and are not liable to retire by rotation.

All Independent Directors have given 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.Shobana Kamineni, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

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, 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 Audit and the Nomination & Remuneration 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 five 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 Directors had laid down internal financial controls to be followed by the Company and the policies and procedures 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, 2016, 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, 2016 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 adeguate 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 adeguate and were operating effectively.

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

Share Capital

The paid up Eguity Share Capital as on March 31, 2016 was Rs.695.63 Million. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat eguity. As on March 31, 2016, the details of the shareholding by the Directors of the Company 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.

Rights Issue

The Board at its meeting held on 28th May 2015 approved the proposal to undertake an issue of eguity shares to the existing shareholders on a Rights basis of a sum of upto Rs.7,500 million.

The purpose of the Rights Issue was to raise long term equity capital for the Company. The Company is awaiting necessary approvals for going ahead with the Rights Issue.

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.

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 Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules is provided in the Annual Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(l) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual 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 and 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 given 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, Education and Health. These projects are in accordance with Schedule VII of the Companies Act, 2013. The Report on CSR activities for the financial year 2015-16 is annexed herewith as”Annexure A”.

Statutory Auditors

The Auditors S. Viswanathan LLP, Chartered Accountants retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed.

The Audit Committee and the Board recommend the re-appointment of S. Viswanathan LLP, Chartered Accountants, as Auditors of the Company, to hold office till the conclusion of the next Annual General Meeting.

It may please be noted that this would be the last year of appointment of the existing Statutory Auditor under the transitional provisions contained in the Companies Act, 2013.

The Company engages the services of the Big Four consulting firms on compliance, regulatory and tax matters including enterprise risk management, review of internal financial controls which also covers Information Technology related controls etc and provides periodic updates to the Board on an ongoing basis .

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, your Directors had, on the recommendation of the Audit Committee, appointed M/s. Raman & Associates, Cost Accountants, Chennai (ICWA Registration No.000050) to audit the cost accounts of the Company for the financial year 2016-17 on a remuneration of Rs.1.50 million.

As reguired under the Companies Act, 2013, the remuneration payable to the cost auditor is reguired 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. Raman & Associates, Cost Accountants, Chennai (ICWA Registration No.000050) is included at Item No. 8 of the Notice convening the Annual General Meeting.

Secretarial Auditors

The Board has 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 2015-2016. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith as “Annexure B”. The Secretarial Audit Report does not contain any gualification, reservation or adverse remark.

Statutory Auditors and Secretarial Auditors Report

The Directors hereby confirm that there is no gualification, 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, 2016.

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

Information as reguired 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

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as “Annexure D”.

Acknowledgement

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, towards the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders of the Company for their continued support.

For and on behalf of the Board of Directors

Place : Chennai Dr. Prathap C Reddy

Date : 25th May, 2016 Executive Chairman


Mar 31, 2013

The Directors are pleased to present the THIRTY SECOND ANNUAL REPORT and the audited statements of accounts for the year ended 31st March 2013.

FINANCIAL RESULTS (STANDALONE)

(Rs. in million)

For the year ended March 31, 2013 March 31, 2012

Income from operations 33,178 28,001

Profit before Extraordinary Items and Taxation 4,034 3,375

Provision for Taxation 988 1,066

Net Profit before Extraordinary Items after Taxation 3,046 2,309

Extraordinary Item 45 -

Net Profit after Extraordinary Item 3,091 2,309

Balance of Profit brought forward 1,763 1,649

Dividend paid on equity shares 22 - (arising on conversion of FCCB loan & share warrants)

Profit Available for appropriations 4,832 3,958

Appropriations

Dividend (inclusive of dividend tax) 895 625

Transfer to General Reserve 1,000 1,500

Transfer to Debenture Redemption Reserve 630 70

Balance carried forward to Balance sheet 2,307 1,763

RESULTS OF OPERATIONS

During the year under review, the income from operations of the Company increased to Rs. 33,178 million compared to Rs. 28,001 million in the previous year, registering an impressive growth of 18%. The profit after tax for the year increased by 34% to Rs. 3,091 million compared to Rs. 2,309 million in the previous year.

During the year under review, the consolidated gross revenue of the Company increased toRs. 37,687 million compared to Rs. 31,475 million in the previous year, registering an impressive growth of 20%. Net profit after minority interest for the group increased to Rs. 3,045 million from Rs. 2,194 million representing a growth of 39%.

CONSOLIDATED FINANCIAL STATEMENTS

The Ministry of Corporate Affairs (MCA) vide its circular No. 5/12/2007-CL-lll dated 8th February 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956 to companies from attaching the accounts of their subsidiaries in their annual reports subject to fulfillment of certain conditions prescribed. The Board of Directors of the Company at its meeting held on 20th May 2013, noted the provisions of the MCA circular cited and passed the necessary resolution granting requisite approvals for not attaching the Balance Sheet, Profit & Loss Account, Report of the Board of Directors and Report of the Auditors of each of the subsidiary companies to the accounts of the Company. A statement of summarized financials of all subsidiaries of your Company, pursuant to Section 212(8) of the Companies Act, 1956 forms part of this report. Any further information in respect of the annual report and the financial statements of the subsidiary companies of your Company will be made available to the members on request and will also be available for inspection for any member at its Registered Office. In accordance with the Accounting Standard, AS-21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statement presented by your Company includes the financial information of all its subsidiaries.

DIVIDEND

The Board of Directors recommend a dividend of Rs. 5.50 per Equity Share (110% on face value of Rs. 5/ - per share) (as againstRs. 4/- per Equity share on face value ofRs. 5/- each, 80% in the previous year) on the paid up equity share capital of the company for the financial year ended 31st March 2013, which if approved at the forthcoming Annual General Meeting on 7th August 2013 will be paid to those shareholders whose names appear in the Register of Members as at the closing hours of business on 26th July 2013. 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, 27th July 2013 to Wednesday, 7th August 2013 (both days inclusive).

TRANSFER OF RESERVES

Your Company proposes to transfer Rs. 1,000 million to the general reserve out of the amount available for appropriations. An amount of Rs. 2,307 million is proposed to be retained in the Profit & Loss Account.

CREDIT RATING

The Company continues to have the credit rating of AA from CRISIL for its debt instruments which indicates a high degree of safety.

CRISIL Equities has upgraded the Company''s CRISIL IER fundamental grade to 5/5 from 4/5. The grade indicates that the company''s fundamentals are ''excellent'' relative to other listed equity securities in India.

SUBSIDIARIES

Your Company has sixteen subsidiary companies (including fellow subsidiaries) as on March 31, 2013. The statement in respect of the details of the subsidiary companies viz., Unique Home Health Care Limited (UHHCL), AB Medical Centres Limited (ABMCL), Samudra Healthcare Enterprises Limited (SHEL), Apollo Hospital (UK) Limited (AHUKL), Apollo Health and Lifestyle Limited (AHLL), Western Hospitals Corporation Pvt Limited (WHCPL), Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL), Apollo Nellore Hospital Limited (ANHL) (formerly known as Pinakini Hospitals Limited), Imperial Hospital and Research Centre Limited (IHRCL), Alliance Medicorp (India) Limited (Alliance), Alliance Dental Care Limited (Alliance Dental), Sapien Bio Sciences Pvt Limited (SBPL), ISIS Healthcare India Private Limited (ISIS), Mera Healthcare India Private Limited (MERA), Apollo Koramangala Cradle Limited (AKCL) and Apollo Clinics (Gujarat) Limited (ACGL) pursuant to section 212 of the Companies Act, 1956, is attached to this report.

Unique Home Health Care Limited (UHHCL)

UHHCL, a wholly owned subsidiary of the Company provides medical and paramedical services including doctor''s consultation, physiotherapy direct to patient homes and also offers paramedical service in hospitals to critically ill patients. For the year ended 31st March 2013 UHHCL, recorded a revenue of Rs. 40.05 million and net profit of Rs. 17.88 million.

AB Medical Centres Limited (ABMCL)

ABMCL, a wholly owned subsidiary of the Company does not have any commercial operations as it has leased out its infrastructure viz., land, building and medical equipment to the Company for running the hospital. For the year ended 31st March 2013, ABMCL recorded an income of Rs. 6.40 million and a net profit of Rs. 4.11 million.

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 2013, SHEL recorded revenue of Rs. 282.89 million and a net profit of Rs. 5.88 million.

Apollo Hospital (UK) Limited (AHUKL)

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

Apollo Health and Lifestyle Limited (AHLL)

AHLL, a wholly owned subsidiary of the Company is engaged in the business of providing primary healthcare facilities through a network of owned/franchised clinics across India offering specialist consultation, diagnostics, preventive health checks, telemedicine facilities and a 24-hour pharmacy all under one roof. For the year ended 31st March 2013, AHLL recorded a consolidated revenue of Rs. 566.94 million and a net loss of Rs. 167.03 million.

Western Hospitals Corporation Private Limited (WHCPL)

For the year ended 31st March 2013, WHCPL, a wholly owned subsidiary of the company, recorded revenue of Rs. 10.80 million and a net profit of Rs. 7.81 million.

Apollo Nellore Hospital Limited (ANHL)

As a part of its strategy to reach out to the tier II towns and cities, the Company intends to build a hospital in Nellore through a subsidiary company, Apollo Nellore Hospital Limited (formerly known as Pinakini Hospitals Limited). ANHL recorded revenue of Rs. 7.42 million and a net profit of Rs. 5.60 million.

Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL)

ACSPL, a 69.40% subsidiary of the company is engaged in the business of running cosmetic surgical centres. For the year ended 31st March 2013, ACSPL recorded a revenue of Rs. 28.09 million and a net profit of Rs. 0.93 million.

Imperial Hospital and Research Centre Limited (IHRCL)

IHRCL, a 85.76% subsidiary of the company owns a 240 bed multi speciality hospital at Bengaluru. For the year ended 31st March 2013, IHRCL recorded a revenue of Rs. 1,241.72 million and a net profit of Rs. 2.30 million.

Alliance Medicorp India Limited (Alliance)

Alliance, a 51 % subsidiary of the Company is engaged in the business of running dialysis clinics. For the year ended 31st March 2013, Alliance recorded consolidated revenue of Rs. 184.87 million and a net loss of Rs. 31.84 million.

Sapien Biosciences Pvt Ltd (SBPL)

SBPL, a 70% subsidiary of the company which is engaged in the business of bio-banking of tissues is currently in the startup stage . For the year ended 31st March 2013, SBPL recorded pre-operative expenses of Rs. 0.91 million.

ISIS Health Care India Private Limited (ISIS)

ISIS, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of providing healthcare services. For the year ended 31st March 2013, ISIS recorded a revenue of Rs. 18 million and a net profit of Rs. 0.21 million.

Mera Health Care India Private Limited (MERA)

MERA, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of healthcare services. For the year ended 31st March 2013, MERA recorded a revenue of Rs. 11 million.

Apollo Koramangala Cradle Limited (AKCL)

AKCL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of healthcare services. For the year ended 31st March 2013, AKCL recorded a revenue of Rs. 25 million and a net loss of Rs. 34 million.

Apollo Clinics (Gujarat) Limited (ACGL)

ACGL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of healthcare services. Alliance Dental Care Limited (Alliance Dental)

Alliance Dental, a subsidiary of Alliance Medicorp (India) Limited is engaged in the business of running dental clinics. For the year ended 31st March 2013, Alliance Dental recorded a revenue of Rs. 156.59 million and a net loss of Rs. 24.33 million.

INCREASE IN THE PAID-UP SHARE CAPITAL

The paid-upshare capitalof the Company increased fromRs. 672.33 million (consisting of 134,466,618equitysharesof Rs. 5/- each) to Rs. 695.63 million (consisting of 139,125,159 equity shares ofRs. 5/- each) consequent to the allotment of:-

(i) 1,381,619 equity shares to International Finance Corporation, Washington upon conversion of 750 Foreign Currency Convertible Bonds of USD 10,000/- each aggregating to USD 7.5 million at a price of Rs. 302.50 per share of Rs. 5/- each, including a premium of Rs. 297.50 per share on 7th June 2012.

(ii) 3,276,922 equity shares to Dr. Prathap C Reddy, one of the promoters of the Company on 25th July 2012 upon conversion of warrants issued to him on 5th February 2011 at a price of Rs. 472.46 per share including a premium of Rs. 467.46 per share.

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

ISSUE OF NON CONVERTIBLE DEBENTURES

During the year under review, your Company privately placed 2,250 Secured Redeemable Non Convertible Debentures of Rs. 1 million each aggregating to Rs. 2,250 million to Banks and Financial Institutions.

CORPORATE GOVERNANCE

Pursuant to Clause 49 (VII) of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance forms part of the Directors'' Report in the Annual Report. Your Company has been complying with the requirements of the Listing Agreement and necessary disclosures have been made in this regard in the Corporate Governance Report.

A certificate from the Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

HUMAN RESOURCES DEVELOPMENT

Millions of patients from all across the world come to Apollo Hospitals with great hope in their hearts, looking for a cure and it is the dedication and commitment of every member of the Apollo family that makes this possible.

For us at Apollo Hospitals, patient-centricity is not a mere goal, but the very core of our existence. Several employees work closely with the patient and many more work indirectly to support the delivery of superior healthcare. Therefore, all employees, both individually and collectively are key to Apollo Hospitals being renowned as a trusted healthcare provider. The mantra of ''Tender Loving Care'' has a profound impact on everything we do and is the bedrock of the Apollo culture. With immense compassion and commitment, the doctors, nurses and every employee of the organization come together and transform Apollo into a warm, helpful and friendly environment for patients and their families.

Apollo Hospitals recognises that its greatest differentiator is its human resources capital. Therefore, the human resources systems, procedures and the organizational environment are all designed to nurture creativity, innovation and greater efficiencies in its human capital. Training is an integral element of the HR system and empowers employees to work towards shared goals and the common purpose of providing superior patient care.

Apollo Hospitals firmly believes in maintaining and encouraging an organizational climate conducive to developing satisfied and productive employees. In keeping with this, the Organizational Climate Survey (OCS) is conducted on a regular basis to assess and ascertain employee feedback. The Organizational Climate Survey 2012 elicited responses from employees on diverse themes such as sense of belonging, role of HOD and superior communication, decision making processes, training, team building, compensation & patient satisfaction. Based on the feedback received from the OCS, robust action plans were mapped out for continuous improvements.

Apollo values every individual''s performance and thus the Apollo Performance Management System encompassing the management cadre employees across the Group was instituted focusing on alignment, measurement, reward and recognition including Personal Development Plan (PDP). As a part of Rewards and Recognition scheme, the following awards were introduced to promote greater employee performance and engagement:

1. Award for Best Ideas & Suggestion

2. Award for Best Talent

3. Award for Service Excellence & Wellness.

Leadership development through programs such as FLDP & CCP was also initiated this year. Future Leaders Development program (FLDP) at Apollo Hospital was organized primarily with the aim to prepare 2nd and 3rd level Executives for Senior Leadership roles. Competency Coaching Program (CCP) for nursing leaders is a structured approach to enhance skill and competencies required in different application areas in business to achieve desired outcomes.

The total number of employees increased from 32,991 as on March 31, 2012 to 35,348 as on March 31, 2013.

HR INITIATIVES AT APOLLO

Apollo Acculturation Program for imbibing excellence is a detailed 3-day Induction program which is followed by an on-line test.

Wellness at Apollo is an imperative and to encourage focus on preventive healthcare, the Annual Master Health Check-up for consultants and their spouses was initiated and made mandatory. An Incentive for employees on referring their friends and family for Health check-ups was also introduced this year.

In our continuous quest towards improving healthcare and in achieving superior standards of excellence, we launched the Employee Suggestion Program Apollo Big Minds''. A new Intranet initiative christened Apollo Space'' was launched. The online environment encourages open communication and Apolloites can now Connect, Communicate & Collaborate with greater ease and make collective discoveries.

An exciting corporate tie-up was introduced as a welfare measure for all employees and their family members enabling them to avail discounts and other benefits in amusement parks, apparel stores, restaurants, beauty salons, optical stores and travel agencies.

Apollo Hospitals was a recipient of several awards at prestigious forums this year. Significant awards and accolades received during the year are detailed below:

- Asian Learning & Development Leadership Awards for "Best Induction Program".

- 21st Global HR Excellence Awards 2013 for" Institution Building".

- 7th Employer Branding Awards 2013 for "Talent Management" and "Best HR Strategy in line with Business".

- AIMA Award for "Best Innovation in Service Delivery".

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the Directors of the Company hereby state and confirm that:

- In the preparation of the annual accounts for the year, the applicable accounting standards had been followed along with proper explanations and there were no material departures;

- The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

- The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Directors had prepared the annual accounts on a going concern basis.

FIXED DEPOSITS

The total deposits with the Company as on 31st March 2013 was Rs. 364.94 million (Rs. 490.47 million as on 31st March 2012) which include deposits for an aggregate of value of Rs. 23.09 million (Rs. 16.67 million as on 31st March 2012) not claimed by the depositors. Out of these deposits, an aggregate value of Rs. 15.78 million have since been repaid / renewed.

DIRECTORS

As per the provisions of the Articles of Association of the Company, four directors of the company viz., Shri. Habibullah Badsha, Shri. Khairil Anuar Abdullah, Smt. Suneeta Reddy and Smt. Shobana Kamineni retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Shri. Sandeep Naik and Shri. Michael Fernandes both resigned from the position of Director of the Company w.e.f 9th November 2012 due to their inability to continue in view of increased professional commitments.

Pursuant to the Shareholders Agreement (Agreement) entered into between the Company and the Apax Group, HSTN Acquisition (FI I) Limited (HSTN), an Apax group Company, had nominated Shri.Shashank Singh and he was appointed by the Company as an additional director on 9th November 2012. As per the terms of the agreement, upon the Apax Group''s equity holding falling below a minimum threshold limit of 5.65% of the total capital of the company, their entitlement to nominate a director on the board of the Company ceases. Since the Apax Group''s equity holding is currently below 5.65%, Shri. Shashank Singh will only hold the office till the date of the Annual General Meeting.

The Board wishes to place on record its appreciation of the contributions made by Shri.Sandeep Naik, Shri. Michael Fernandes and Shri. Shashank Singh during their tenure as Directors of the Company.

AUDITORS

The Auditors, M/s. S. Viswanathan, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed.

PARTICULARS OF EMPLOYEES AS PER SECTION 217(2A) OF THE COMPANIES ACT, 1956.

In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

Particulars as required to be disclosed as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the statement attached herewith as Annexure - A.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation of the contributions made by the employees at all levels, to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders, of the Company for their continued support.

For and on behalf of the Board of Directors

Place : Chennai Dr. Prathap C Reddy

Date : 20th May 2013 Executive Chairman


Mar 31, 2012

The Directors are pleased to present the THIRTY FIRST ANNUAL REPORT and the audited statements of accounts for the year ended March 31, 2012.

FINANCIAL RESULTS (STANDALONE)

(Rs in million) For the year ended March 31, 2012 March 31, 2011

Income from operations 28,001 23,319

Profit before Taxation 3,375 2,693

provision for taxation 1,066 876

Net profit after taxation 2,310 1,817

Balance of profit brought forward 1,648 1,474

Profit Available for appropriations 3,958 3,291

Appropriations

Dividend (inclusive of dividend tax) 625 544

transfer to General Reserve 1,500 1,000

transfer to Debenture Redemption Reserve 70 100

Balance carried forward to Balance sheet 1,763 1,647

RESULTS OF OPERATIONS

During the year under review, the income from operations of the Company increased to Rs 28,001 million compared to Rs 23,319 million in the previous year, registering an impressive growth of 20%. The profit after tax for the year increased by 27% to Rs 2,310 million compared to Rs 1,817 million in the previous year.

During the year under review, the consolidated gross revenue of the Company increased to Rs 31,475 million compared to Rs 26,054 million in the previous year, registering an impressive growth of 21%. Net profit after minority interest for the group increased to Rs 2,194 million from Rs 1,839 million representing a growth of 19%.

CONSOLIDATED FINANCIAL STATEMENTS

The Ministry of Corporate Affairs (MCA) vide its circular No. 5/12/2007-CL-Ill dated February 8, 2011 had granted general exemption under Section 212(8) of the Companies Act, 1956 to companies from attaching the accounts of their subsidiaries in their annual reports subject to fulfillment of certain conditions prescribed. The Board of Directors of the Company at its meeting held on May 29, 2012 noted the provisions of the circular of the MCA and passed the necessary resolution granting the requisite approvals for not attaching the Balance Sheet, Profit & Loss Account, Report of the Board of Directors and Report of the Auditors of each of the Subsidiary Companies to the accounts of the Company. A statement of summarized financials of all subsidiaries of your Company, pursuant to Section 212(8) of the Companies Act, 1956 forms part of this report. Any further information in respect of the annual report and the financial statements of the subsidiary companies of your Company will be made available to the members on request and will also be available for inspection for any member at its Registered Office. In accordance with the Accounting Standard, AS-21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements presented by your Company includes the financial information of all its subsidiaries.

DIVIDEND

The Board of Directors recommend a dividend of Rs 4 per equity share (80% on face value of Rs 5/ - per share) (as against Rs 3.75 per equity share on face value of Rs 5/- each, 75% in the previous year) on the paid up equity share capital of the company for the financial year ended March 31, 2012, which if approved at the forthcoming Annual General Meeting on August 9, 2012 will be paid to those shareholders whose names appear in the Register of Members as at the closing hours of business on July 27, 2012. 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 July 28, 2012 to August 9, 2012 (both days inclusive).

TRANSFER OF RESERVES

Your Company proposes to transfer Rs 1,500 million to the general reserve out of the amount available for appropriations. An amount of Rs 1,763 million is proposed to be retained in the Profit & Loss Account.

CREDIT RATING

CRISIL has rated the company's debt instruments as AA indicating high degree of safety.

CRISIL Equities has upgraded Company's CRISIL IER fundamental grade to 5/5 from 4/5. The grade indicates that the Company's fundamentals are 'excellent' relative to other listed equity securities in India.

SUBSIDIARIES

Your Company has fourteen subsidiary companies (including fellow subsidiaries) as on March 31, 2012. The statement in respect of the details of the subsidiary companies viz., Unique Home Health Care Limited (UHHCL), AB Medical Centres Limited (ABMCL), Samudra Healthcare Enterprises Limited (SHEL), Apollo Hospital (UK) Limited (AHUKL), Apollo Health and Lifestyle Limited (AHLL), Western Hospitals Corporation Pvt Limited (WHCPL), Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL), Pinakini Hospitals Limited (PHL), Imperial Hospital and Research Centre Limited (IHRCL), Alliance Medicorp (India) Limited (Alliance), ISIS Healthcare India Private Limited (ISIS), Mera Healthcare India Private Limited (MERA), Apollo Koramangala Cradle Limited (AKCL) and Alliance Dental Care Private Limited (Alliance Dental) pursuant to Section 212 of the Companies Act, 1956, is attached to this report.

Unique Home Health Care Limited (UHHCL)

UHHCL, a Wholly-owned subsidiary of the Company provides medical and paramedical services including doctor's consultation, physiotherapy direct to patient homes and also offers paramedical service in hospitals to critically ill patients. For the year ended March 31, 2012 UHHCL, recorded a revenue of Rs 18.23 million and net profit of Rs 1.01 million.

AB Medical Centres Limited (ABMCL)

ABMCL, a Wholly-owned subsidiary of the Company does not have any commercial operations as it has leased out its infrastructure viz., land, building and medical equipment to the Company for running the hospital. For the year ended March 31, 2012, ABMCL recorded an income of Rs 6.52 million and a net profit of Rs 4.44 million.

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 March 31, 2012, SHEL recorded revenues of Rs 263.14 million and a net profit of Rs 13.08 million.

Apollo Hospital (UK) Limited (AHUKL)

AHUKL is a Wholly-owned foreign subsidiary of the Company and is yet to commence its operations.

Apollo Health and Lifestyle Limited (AHLL)

AHLL, a Wholly-owned subsidiary of the Company is engaged in the business of providing primary healthcare facilities through a network of franchised clinics across India offering specialist consultation, diagnostics, preventive health checks, telemedicine facilities and a 24-hour pharmacy all under one roof. For the year ended March 31, 2012, AHLL recorded a consolidated revenue of Rs 363.02 million and a net loss of Rs 11.16 million.

Western Hospitals Corporation Private Limited (WHCPL)

During the year under review, your Company acquired a 60% equity stake held by Eleanor Holdings in Western Hospitals Corporation Private Limited (WHCPL), consequently, WHCPL has become a 100% subsidiary of the Company.

Pinakini Hospitals Limited (PHL)

As a part of its strategy to reach out to the Tier II towns and cities, the Company intends to build a hospital in Nellore through a subsidiary company, Pinakini Hospitals Limited.

Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL)

ACSPL, a 69.40% subsidiary of the Company is engaged in the business of running cosmetic surgical centres. For the year ended March 31, 2012, ACSPL recorded a revenue of Rs 40.45 million and a net loss of Rs 3.24 million.

Imperial Hospital and Research Centre Limited (IHRCL)

IHRCL, a 85.76% subsidiary of the Company owns a 240 bed multi speciality hospital at Bengaluru. For the year ended March 31, 2012, IHRCL recorded a revenue of Rs 1016.45 million and a net loss of Rs 30.80 million.

Alliance Medicorp India Limited (Alliance)

Alliance, a 51% subsidiary of the Company is engaged in the business of running dialysis clinics. For the year ended March 31, 2012, Alliance recorded consolidated revenue of Rs 122.47 million and a net loss of Rs 14.14 million.

ISIS Health Care India Private Limited (ISIS)

ISIS, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of providing healthcare services. For the year ended March 31, 2012,, ISIS recorded a revenue of Rs 13.08 million and a net profit of Rs 0.39 million.

Mera Health Care India Private Limited (MERA)

MERA, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of healthcare services. For the year ended March 31, 2012,, MERA recorded a revenue of Rs 10.52 million and a net profit of Rs 0.06 million.

Apollo Koramangala Cradle Limited (AKCL)

AKCL, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of healthcare services and is yet to commence its operations.

Alliance Dental Care Private Limited (Alliance Dental)

Alliance Dental, a subsidiary of Alliance Medicorp (India) Limited is engaged in the business of running dental clinics. For the year ended March 31, 2012, Alliance Dental recorded a revenue of Rs 98.24 million and a net loss of Rs 13.51 million.

QUALIFIED INSTITUTIONAL PLACEMENT (QIP) SCHEME

During the year under review, your Company successfully completed the issue of 6,666,666 equity shares of Rs 5/- each, at a price of Rs 495 per equity share, including a premium of Rs 490 per equity share, aggregating to Rs 3,300 million to Qualified Institutional Buyers (QIBs) under Qualified Institutional Placement Scheme in terms of Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations), as amended. The QIP issue was opened for subscription to QIBs on Thursday, July 14, 2011 and closed on Monday, July 18, 2011. There was a strong response for the said QIP issue from institutional investors and the issue was successfully subscribed. The equity shares were allotted on July 20, 2011.

The proceeds of the QIP issue would be utilized substantially for expansion activities of the Company.

INCREASE IN THE PAID-UP SHARE CAPITAL

During the year, the paid-up share capital of the Company increased from Rs 623.55 million (consisting of 124,710,710 equity shares of Rs 5/- each) to Rs 672.33 million (consisting of 134,466,618 equity shares of Rs 5/- each) consequent to the allotment of :-

i) 6,666,666 equity shares to Qualified Institutiona1 Buyers (QIBs) on July 20, 2011 under Qualified Institutional Placement (QIP) Scheme at a price of Rs 495 per share of Rs 5/- each including a premium of Rs 490 per share.

ii) 3,089,242 equity shares to Dr. Prathap C Reddy, one of the promoters of the Company on December 10, 2011 upon conversion of warrants issued to him on June 12, 2010 at a price of Rs 385.88 per share including a premium of Rs 380.88 per share.

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

ISSUE OF WARRANTS CONVERTIBLE INTO EQUITY SHARES TO DR. PRATHAP C REDDY

Your Company allotted 3,276,922 convertible share warrants to Dr.Prathap C Reddy, one of the promoters of the Company on a preferential basis on February 5, 2011 under the applicable SEBI guidelines.

These warrants have been issued with a conversion option to be exercised within a period of 18 months from the date of allotment. Each warrant issued is convertible into one equity share of the company of nominal value of Rs 5/- each at a price of Rs 472.46 which includes a premium of Rs 467.46 per share calculated in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

The objective of this preferential issue was to part fund the expansion activities, finance additional working capital requirements and for general corporate purposes.

ISSUE OF NON CONVERTIBLE DEBENTURES

During the year under review, your Company privately placed 1,000 Secured Redeemable Non-Convertible Debentures of Rs 1 million each aggregating to Rs 1,000 million to Banks and Financial Institutions.

PROCEEDS OF THE SECURITIES ISSUED

The details of utilization of proceeds of the securities issued up to March 31, 2012, are set out in the statement attached herewith as Annexure - A.

CORPORATE GOVERNANCE

Pursuant to Clause 49 (VII) of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance forms part of the Directors' Report in the Annual Report. Your Company has been complying with the requirements of the Listing Agreement and necessary disclosures have been made in this regard in the Corporate Governance Report.

A certificate from the Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

HUMAN RESOURCES DEVELOPMENT

Apollo warmly acknowledges the contribution by all its employees for ensuring its success as a leading tertiary healthcare provider in India. The talent and passion of our people is critical to our success and we foster it by providing an exhilarating working environment that inspires lateral thinking, fosters team spirit and encourages open communication.

Apollo's HR vision is to be an employer of choice where every employee is a brand ambassador of our superior medical service delivery, and an organization, where every individual shares the pride and commitment in taking Apollo to its next phase of development "to touch a Billion lives".

The Apollo's People Survey (Organisation Climate Survey) is one of the principal tools used to measure employee engagement; the degree of affiliation and commitment to the organization. It provides valuable insights into employees' views, and it has had a consistently high response rate.

We have a long-standing commitment to create a culture that embraces diversity and fosters inclusion. By embedding these principles in our operations, we understand better the needs of our varied customers, partners and stakeholders.

As a continuous learning and development process each member of the Apollo family is facilitated and encouraged to unleash their potential in a focused manner to deliver world class service to achieve organisational objectives. Apollo practices an ongoing learning process such as CME (Continuous Medical Education) and CNE (Continuous Nurses Education). Apollo also sponsors education programmes and has tie ups with leading institutions like XLRI, IIMs and CII for conducting various Management Development programmes.

As a part of the Reward & Recognition scheme, awards for 'Employee(s) of the year' , 'Outstanding Leader of the year' and 'Young Leader of the year' were institutionalized to recognise our employees who demonstrated exemplary leadership qualities by leading a high performing team with a focus on growth and development of team members.

Leadership development is a continuous process; it evolves as an individual gains experiences, assumes greater levels of responsibility, and faces increasing levels of complex organizational demands and problems. Hence, a 360 degree feedback process focusing on leadership competencies was implemented across the Group.

We value patients' satisfaction enormously and realize that the skill and service of trained manpower are key for maintenance of the trust reposed in us as a quality healthcare provider by our patients. Thus attrition of trained human capital can pose a challenge to effective service delivery to our patients and hence needs to be tackled systematically. We have devised an effective recruitment and human resources management process to prevent existing attrition of clinical/non-clinical manpower from impacting Apollo's superior healthcare delivery model. This robust process ensures a continuous supply of clinical manpower to support the organization's patient care delivery process. Total number of employees increased from 30,975 as on March 31, 2011 to 32,991 as on March 31, 2012.

Cognizant of the enormity and the complexity of identifying skilled resources, the Apollo Hospitals group is furthering its initiatives in the domain of Health Education - skilling & up-skilling in the healthcare space. The Group has been involved in reversing the brain drain of talented Indian doctors and has built quality education infrastructure which includes Nursing colleges, Courses for Allied Health professionals, Hospital Management programs and ongoing CME's for doctors and nurses. To meet the challenge of aligning Medical education to the healthcare needs of tomorrow, a vertical focused exclusively on Healthcare Education is being created.

A fair, structured and standardized Compensation and Benefits programme is followed across all levels. Salary revisions are sanctioned based on the individual performance ratings on Key Result Areas and Competencies. Periodical wages surveys are conducted to ensure that we remain competitive in the healthcare sector.

Apollo Hospitals won several awards at prestigious forums this year. Some of the major awards won by us this year are:

- ASIA's BEST EMPLOYER BRAND AWARDS for Innovation in Career Development.

- ASIAN LEADERSHIP AWARD for Best In Diversity And Impact Management.

- World HR Congress Awards in 3 categories :

- Leading HR Practices in Learning & Human Capital Development

- Talent Leadership & HR: HR Excellence award for Innovation in HR

- Global HR Excellence Awards: Organization with Innovative HR Practices

CORPORATE SOCIAL RESPONSIBILITY

Touching lives is the goal at Apollo Hospitals, India. We are committed to the well-being of not just our patients, but society as a whole. Towards this end, several initiatives have been started by the Apollo Hospitals Group. Initiatives like SACHi, SAHI, CURE and DISHA aim to reach out and provide healthcare measures to the economically backward.

Saving a Child's Heart Initiative

Saving A Child's Heart initiative (SACHi) is one of Asia's largest voluntary organizations, dedicated to paediatric cardiac care for the underprivileged. In order to combat the escalating problem of congenital cardiac issues in children, Dr. Prathap C. Reddy, Chairman, Apollo Group of Hospitals established the Children's Cardiac Wing in the hospitals. SACHi exists today due to his vision towards removing barriers that deny any child the right to breathe freely, play, study and most importantly, live a full life. Ours is a story of positive change that has only just begun its journey.

SACHi Camps

Our team of doctors and paramedical staff offer free cardiac screening at medical camps in cities, towns and villages across India, for all children under 12 years of age. SACHi has conducted camps and screens children on a regular basis in Kolkata, Warangal, Vijayawada, Guntur, Karimnagar, West Godavari, Kurnool, and Medak in Andhra Pradesh; Ahmedabad, Nadiad, Vadodara and Surat in Gujarat; Bhubaneswar, Cuttack and Rourkela in Orissa; Pune, Nagpur, Chandrapur and Pusad in Maharashtra.

SAHI- Society to Aid the Hearing Impaired

SAHI strives to help poor children with hearing impairment. Every year in Andhra Pradesh approximately 2,500 children are born totally deaf. If not treated in the first 3-5 years of life they will remain hearing and speech challenged all their lives.

SAHI seeks to identify and treat children mainly in rural areas with little or no access to modern medical treatment. Since it was established, SAHI has been trying to address this problem by conducting camps in remote areas of the state. It is a well known that as children grow and develop, they learn about sound with little effort. But it can be a daunting task for a child with hearing impairment to understand sounds and develop language & communication skills, which in turn affects personal development and the process of reasoning and education.

Gift a Ear Project

The Cochlear implant surgery can help these children grow up as normal adults and lead a successful life. Unfortunately very few can afford this surgical treatment, as the cost of the Cochlear implant system, is very expensive. SAHI looks for sponsors who would fund the surgery of the children and give them a gift of senses.

Many generous donors have come forward to help the children and ensured a bright future for the children.

On August, 2011 SAHI and Apollo Cochlear Implant Clinic had their 500th Cochlear Implant surgery which made us one of the leading Cochlear Implant Clinics in the country having, in addition to India, patients from Sri Lanka, Oman, Kuwait, Dubai, Saudi Arabia, Tanzania, Nigeria, USA and Canada.

SAHI holds the world record for the largest number of Cochlear Implant surgeries done in a single day i.e. 24th Oct 2008. This is mentioned in the Limca Book of world records - 2010.

SAHI has conducted free camps in various districts of Andhra Pradesh like Kurnool, Guntur, Nalgonda, Kadapah, Anatapur, Mahbubnagar etc.

Cure Foundation

CURE Foundation is a spirited initiative to create consciousness on cancer prevention, early detection, cure & rehabilitation. In addition to spreading awareness for the benefit of the society, the Foundation has so far made available, quality cancer treatment, both free and subsidized, to more than 500 needy patients, and engaged in numerous rehabilitation, research and education programs. CURE is a non-profit organization.

CURE aims to spread awareness about cancer, its causes, symptoms and treatment options. This will benefit not only the population at large but also those at a high risk, such as chronic tobacco users, people with a family history of cancer etc. It will also guide general practitioners and health professionals in early detection of the disease.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the Directors of the Company hereby state and confirm that:

- I n the preparation of the annual accounts for the year, the applicable accounting standards had been followed along with proper explanations and there were no material departures;

- The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

- The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Directors had prepared the annual accounts on a going concern basis.

fixed deposits

The total deposits with the Company as on March 31, 2012 was Rs 490.47 million (Rs 579.16 million as on March 31, 2011) which include deposits for an aggregate of value of Rs 16.67 million (Rs 9.17 million as on March 31, 2011) not claimed by the depositors. Out of these deposits, an aggregate value of Rs 11.78 million have since been repaid / renewed.

DIRECTORS

As per the provisions of the Articles of Association of the Company, four directors of the company viz., Shri. N. Vaghul, Shri. T.K. Balaji, Shri. Rajkumar Menon and Shri. G. Venkatraman retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

AUDITORS

The Auditors, M/s. S. Viswanathan, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed.

PARTICULARS OF EMPLOYEES AS PER SECTION 217(2A) OF THE COMPANIES ACT, 1956

In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN ExCHANGE EARNINGS AND OUTGO

Particulars as required to be disclosed as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the statement attached as Annexure - B.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders, of the Company for their continued support.

For and on behalf of the Board of Directors

Place : Chennai Dr. Prathap C Reddy

Date : 29th May 2012 Executive Chairman


Mar 31, 2011

The Directors are pleased to present the THIRTIETH ANNUAL REPORT and the audited statements of accounts for the year ended 31st March 2011.

Financial Results (Standalone) (Rs.in million)

For the year ended 31st March 2011 31st March 2010

Total Income 23533 18587

Profit before Extraordinary Items and Taxation 2693 2222

Provision for Taxation 876 702

Net Profit before Extraordinary Item after Taxation 1817 1520

Net Profit after Extraordinary Item and Taxation 1817 1520

Balance of Profit brought forward 1474 1209

Profit Available for appropriations 3291 2729

Appropriations

Dividend (inclusive of dividend tax) 544 504

Transfer to General Reserve 1000 750

Transfer to Debenture Redemption Reserve 100 -

Balance carried forward to Balance sheet 1647 1475

Results of Operations

During the year under review, the gross revenue of the Company increased to Rs.23533 million compared to Rs. 18587 million in the previous year, registering an impressive growth of 27%. The profit after tax for the year increased by 20% to Rs.1817 million compared to Rs. 1520 million in the previous year.

During the year under review, the consolidated gross revenue of the Company increased to Rs.26240 million compared to Rs. 20587 million in the previous year, registering an impressive growth of 27%. Net profit after minority interest for the group increased to Rs. 1839 million from Rs. 1376 million representing a growth of 34%.

Consolidated Financial Statements

In accordance with the general circular No. 5/12/2007-CL-lll dated 8th February 2011 issued by the Ministry of Corporate Affairs, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Annual Report of the Company. A statement of summarized financials of all subsidiaries of your Company, pursuant to Section 212(8) of the Companies Act, 1956 forms part of this report. Any further information in respect of the annual report and the financial statements of the subsidiary companies of your Company will be made available to the members on request. In accordance with the Accounting Standard, AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by your Company include the financial information of all its subsidiaries.

Dividend

The Board of Directors recommend a dividend of Rs.3.75 per Equity Share (75% on face value of Rs. 5/- per share) (as against Rs.7/- per Equity share on face value of Rs.10/- each, 70% in the previous year) on the paid up equity share capital of the company for the financial year ended 31st March 2011, which if approved at the forthcoming Annual General Meeting on 22nd July 2011 will be paid to those shareholders whose names appear in the Register of Members as at the closing hours of business on 8th July 2011. 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 9th July 2011 to 22nd July 2011 (both days inclusive).

Transfer of Reserves

Your Company proposes to transfer Rs.1000 million to the general reserve out of the amount available for appropriations. An amount of Rs. 1647 million is proposed to be retained in the Profit & Loss Account.

Credit Rating

CRISIL has upgraded the rating on the companys debt instruments from AA- to AA.

CRISIL Equities upgraded Companys CRISIL IER fundamental grade to 5/5 from 4/5. It is only the second Company in India to receive this rating. The grade indicates that the companys fundamentals are excellent relative to other listed equity securities in India.

Subsidiaries

Your Company has twelve subsidiary companies as on March 31, 2011. The statement in respect of the details of the subsidiary companies viz., Unique Home Health Care Limited (UHHCL), AB Medical Centres Limited (ABMCL), Samudra Healthcare Enterprises Limited (SHEL), Apollo Hospital (UK) Limited (AHUKL), Apollo Health and Lifestyle Limited (AHLL), Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL), Pinakini Hospitals Limited (PHL), Imperial Hospital and Research Centre Limited (IHRCL), Alliance Medicorp (India) Limited (Alliance), ISIS Healthcare India Private Limited (ISIS), Mera Healthcare India Private Limited (MERA) and Alliance Dental Care Private Limited (Alliance Dental) pursuant to section 212 of the Companies Act, 1956, is attached to this report.

Unique Home Health Care Limited (UHHCL)

UHHCL, a wholly owned subsidiary of the Company provides medical and paramedical services including doctors consultation, physiotherapy direct to patient homes and also offers paramedical service in hospitals to critically ill patients. For the year ended 31st March 2011 UHHCL, recorded a revenue of Rs. 19.53 million and net profit of Rs. 2.18 million.

AB Medical Centres Limited (ABMCL)

ABMCL, a wholly owned subsidiary of the Company does not have any commercial operations as it has leased out its infrastructure viz., land, building and medical equipment to the Company for running the hospital. For the year ended 31st March 2011, ABMCL recorded an income of Rs.6.55 million and a net profit of Rs.4.28 million.

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 2011, SHEL recorded revenues of Rs. 263.31 million and a net profit of Rs. 17.16 million.

Apollo Hospital (UK) Limited (AHUKL)

AHUKL is a wholly owned foreign subsidiary of the Company and is yet to commence its operations.

Apollo Health and Lifestyle Limited (AHLL)

AHLL, a subsidiary of the Company is engaged in the business of providing primary healthcare facilities through a network of franchised clinics across India offering specialist consultation, diagnostics, preventive health checks, telemedicine facilities and a 24-hour pharmacy all under one roof. For the year ended 31st March 2011, AHLL recorded a consolidated revenue of Rs. 154.43 million and a net profit of Rs. 3.71 million.

Pinakini Hospitals Limited (PHL)

As a part of its strategy to reach out to the tier II towns and cities, the Company intends to build a hospital in Nellore through a subsidiary company, Pinakini Hospitals Limited.

Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL)

ACSPL, a 61% subsidiary of the company is engaged in the business of running cosmetic surgical centres. For the year ended 31st March 2011, ACSPL recorded a revenue of Rs. 14.65 million and a net loss of Rs. 4.03 million.

Imperial Hospital and Research Centre Limited (IHRCL)

IHRCL, a 51% subsidiary of the company owns a 240 bed multi speciality hospital at Bengaluru. For the year ended 31st March 2011, IHRCL recorded a revenue of Rs.875.25 million and a net loss of Rs. 29.30 million.

Alliance Medicorp India Limited (Alliance)

Alliance, a 51% subsidiary of the Company is engaged in the business of running dialysis clinics. For the year ended 31st March 2011, Alliance recorded consolidated revenue of Rs.102.32 million and a net profit of Rs. 1.43 million.

ISIS Health Care India Private Limited (ISIS)

ISIS, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of providing healthcare services. For the year ended 31st March 2011, ISIS recorded a revenue of Rs. 18.67 million and a net loss of Rs.1.23 million.

Mera Health Care India Private Limited (MERA)

MERA, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of healthcare Services. For the year ended 31st March 2011, MERA recorded a revenue of Rs. 12.20 million and a net profit of Rs. 1.24 million.

Alliance Dental Care Private Limited (Alliance Dental)

Alliance Dental, a 100% subsidiary of Alliance Medicorp (India) Limited is engaged in the business of running dental clinics. For the year ended 31st March 2011, Anjana recorded a revenue of Rs. 84.80 million and a net profit of Rs. 2.78 million.

Subdivision of Equity Shares

As a step towards better liquidity and increased investor participation, the Company had undertaken subdivision of one (1) equity share of face value of Rs.10/-each into two (2) equity shares of face value of Rs.5/- each with effect from the Record date i.e. 3rd September 2010. Consequently, new equity shares of face value of Rs.5/- each were credited to the respective depository accounts of shareholders holding shares in demat mode and the new share certificates were issued to shareholders having physical shares. Pursuant to the sub-division of equity shares of the Company, a New ISIN INE437A01024 has been allotted by the Depositories.

Increase in the Authorised Share Capital

During the year, the authorized share capital of the Company has been increased from Rs.850 million divided into 150 million equity shares of Rs. 5/- each and 1 million preference shares of Rs.100/- each to Rs.1100 million divided into 200 million equity shares of Rs.5/- each and 1 million preference shares of Rs.100/- each.

Increase in the Paid-up Share Capital

During the year, the paid-up share capital of the Company increased from Rs.617.85 million (consisting of 123.56 million equity shares of Rs.5/- each) to Rs.623.55 million (consisting of 124.71 million equity shares of Rs.5/- each) consequent to the allotment of 1.14 million equity shares to International Finance Corporation, Washington upon conversion of 750 Foreign Currency Convertible Bonds of USD 10,000 each aggregating to USD 7.5 million at a price of Rs. 302.50 per share of Rs 5/- each including premium of Rs. 297.50 at a premium of 14% over the floor price determined as per the FCCB Scheme, 1993 and in accordance with the terms of the FCCB Loan Agreement dated 18th June 2009.

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

Issue of warrants convertible into equity shares to Dr.Prathap C Reddy

(i) During the year, your Company allotted 1.54 million Equity Warrants with each warrant convertible into one equity share of the Company of nominal value of Rs.10/- each at a price of Rs.771.76 which includes a premium of Rs.761.76 per share to Dr. Prathap C Reddy, one of the Promoters of the Company. These warrants were issued with a convertible option to be exercised within a period of 18 months from the date of allotment i.e., on or before 11th December 2011.

The Company has undertaken subdivision of each existing equity share of face value of Rs.10/- each into 2 equity shares of face value of Rs.5/- each with effect from the record date i.e., 3rd September 2010. Accordingly, the 1.54 million warrants allotted to Dr.Prathap C Reddy shall stand adjusted to 3.08 million warrants of face value of Rs.5/- each at a price of Rs.385.88 per share.

(ii) On 5th February 2011, your Company allotted 3.27 million convertible share warrants to Dr. Prathap C Reddy, one of the promoters of the company on a preferential basis under the applicable SEBI guidelines.

These warrants have been issued with a conversion option to be exercised within a period of 18 months from the date of allotment. Each warrant issued is convertible into one equity share of the company of nominal value of Rs.5/- each at a price of Rs.472.46 which includes a premium of Rs.467.46 per share calculated in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

The objective of this preferential issue was to part fund the expansion activities, finance additional working capital requirements and for general corporate purposes.

Corporate Governance

Pursuant to Clause 49 (VII) of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance forms part of the Directors Report in the Annual Report. Your Company has been complying with the requirements of the Listing Agreement and necessary disclosures have been made in this regard in the Corporate Governance Report.

A certificate from the Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Human Resources Development

At Apollo, the delivery of superior medical care to millions of patients looking for a cure is made possible only because of the dedication and diligent services of our employees, some of whom have a touch point with patients directly and others who work indirectly to support the delivery of superior health care. Thus all our employees are both individually and collectively key for the success of Apollo as a trusted medical care provider for all our patients. The philosophy of Tender Loving Care" is not just a motto but a way of life embraced by every employee of the Apollo family, and is a testimony of the commitment from our employees towards Apollos vision to touch a billion lives. Thus Apollo warmly acknowledges the contribution by all its employees towards its success as a healthcare giant in India and supports every effort to nourish this invaluable human capital.

At Apollo we are aware that commitment and competence of employees are key drivers of overall organizational performance and thus we endeavour to strengthen the organizational culture both to attract and retain the best talent. The human resource systems, procedures and the organization environment have been created to ensure creativity, innovation and efficiency amongst the employees. Training is an integral part of the HR system and enables employees to align with the organizations cultural values and develop professional etiquette, skill and knowledge.

We value patient satisfaction enormously and realize that the skill and service of trained manpower are key for maintenance of the trust reposed in us as a quality healthcare provider by our patients. Attrition of trained human capital can pose a challenge in ensuring successful delivery to our patients and hence needs to be tackled systemically. We have devised an effective recruitment and human resources management process to prevent existing attrition of clinical/non-clinical manpower from impacting Apollos superior healthcare delivery model. The robust process ensures a continuous supply of clinical manpower to support the organizations patient care delivery process. Total number of employees for the group increased from 26,659 as on 31st March 2010 to 30,640 as on 31st March 2011.

At Apollo, we believe in maintaining the right organizational climate conducive to developing satisfied and productive employees. Hence we carry out organizational climate surveys on a regular basis to understand the overall organizational climate as perceived by our employees. The Organization Climate Survey 2010 elicited responses from employees on diverse organizational themes such as Sense of belonging, Role of HOD / Superior, Communication, Decision Making process, Training, Team Building, Compensation a Customer satisfaction and based on the feedback received, development action plans are evolved for improvement.

Apollo values every individuals performance and thus Apollo Performance Management System across the Group covering all Management cadre employees was instituted focusing on alignment, measurement and reward and recognition including a Personal Development Plan. As a part of Reward a Recognition scheme, an award for "Employee(s) of the year" a "Outstanding Leader of the year" was instituted to recognize Senior Management employees who demonstrated exemplary leadership qualities by leading a high performing team with focus on growth and development of team members. Leadership development is a continuous process; it evolves as an individual gains experiences, assumes greater levels of responsibility, and faces increasing level of complex organizational demands and problems. Hence, a 360 degree feedback process focusing on leadership competencies was implemented across the Group.

Apollos HR vision is to be an employer of choice where every employee is a brand ambassador of our superior medical service delivery, and an organization, where every individual shares the pride and commitment in taking Apollo to its next phase of development "to touch a Billion lives".

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the Directors of the Company hereby state and confirm that:

-In the preparation of the annual accounts for the year, the applicable accounting standards had been followed along with proper explanations and there were no material departures;

-The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

-The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

-The Directors had prepared the annual accounts on a going concern basis.

Fixed Deposits

The total deposits with the Company as on 31st March 2011 was Rs. 579.16 million (Rs.510.67 million as on 31st March 2010) which include deposits for an aggregate of value of Rs. 9.17 million (Rs. 7.53 million as on 31st March 2010) not claimed by the depositors. Out of these deposits, an aggregate value of Rs.1.62 million have since been repaid / renewed.

Directors

As per the provisions of the Articles of Association of the Company, four directors of the company viz., Smt. Suneeta Reddy, Smt. Sangita Reddy, Shri. Deepak Vaidya and Shri. Rafeeque Ahamed retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Shri. Steven Thompson had resigned from the position of Director of the Company with effect from 11th February 2011 due to his inability to continue in view of increased professional commitments.

The Board wishes to place on record its appreciation of the contributions made by Shri. Steven Thompson during his tenure as a Director of the Company.

Auditors

The Auditors, M/s. S. Viswanathan, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed.

Particulars of Employees as per Section 217(2A) of the Companies Act, 1956.

In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any members interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

Particulars as required to be disclosed as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the statement attached herewith as Annexure - A.

Acknowledgement

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders, of the Company for their continued support.

For and on behalf of the Board of Directors

Dr. Prathap C Reddy Executive Chairman

Place : Chennai Date : 24th May 2011


Mar 31, 2010

The Directors are pleased to present the TWENTY NINETH ANNUAL REPORT and the audited statements of accounts for the year ended 31st March 2010.

Financial Results (Rs.in million)

For the year ended 31st March 2010 31st March 2009

Total Income 18587 - 14803

Profit before Extraordinary Items and Taxation 2222 1763

Provision for Taxation 702 542

Net Profit before Extraordinary Item after Taxation 1520 1221 Extraordinary Item - 40 Net Profit after Extraordinary Item and Taxation 1520 1181

Balance of Profit brought forward 1209 1248

Profit Available for appropriations 2729 2429 Appropriations

Dividend (inclusive of dividend tax) 504 470

Transfer to General Reserve 750 750 Balance carried forward to Balance sheet 1475 1209

Results of Operations

During the year under review, the gross revenue of the Company increased to Rs. 18587 million compared to Rs. 14803 million in the previous year, registering an impressive growth of 26%. The profit after tax for the year increased by 29% to Rs.1520 million compared to Rs. 1181 million in the previous year.

During the year under review, the consolidated gross revenue of the Company increased to Rs.20587 million compared to Rs. 16350 million in the previous year, registering an impressive growth of 26%. Net profit after minority interest for the group increased to Rs.1376 million from Rs.1025 million representing a growth of 34%

Consolidated Financial Statements

Your Company has been granted exemption from attaching the financial statements of its subsidiary companies in India and abroad, to the balance sheet of your Company for the financial year 2009-2010, under Section 212(8) of the Companies Act, 1956 by

the Ministry of Corporate Affairs (MCA). A statement of summarized financials of all subsidiaries of your Company, pursuant to the approval under Section 212(8) of the Companies Act, 1956 forms part of this report. Any further information in respect of the annual report and the financial statements of the subsidiary companies of your Company will be made available to the members on request. In accordance with the Accounting Standard, AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by your Company include the financial information of all its subsidiaries.

Dividend

The Board of Directors recommend a dividend of Rs.7/- per Equity Share (70% on par value of Rs.10/-) (as against Rs.6.50 per Equity share, 65% in the previous year) on the paid up equity share capital of the Company for the financial year ended 31st March 2010, which if approved at the forthcoming Annual General Meeting on 26th July 2010 will be paid to those shareholders whose names appear in

the Register of Members as at the closing hours of business on 16th July 2010. In respect of shares held in electronic form, the dividend will be paid on the basis of beneficial ownership information furnished by the depositories viz., NSDL and CDSL for this purpose.

The Register of Members and Share Transfer Books will remain closed from 17th July 2010 to 26th July 2010 (both days inclusive).

Transfer of Reserves

Your Company proposes to transfer Rs.750 million to the general reserve out of the amount available for appropriations. An amount of Rs.1475 million is proposed to be retained in the profit 6t loss account.

Credit Rating

CRISIL has assigned to the company a grade of 4/5, indicating a superior rating with strong fundamentals.

Subsidiaries

Your Company has ten subsidiary companies as on March 31, 2010. The statement in respect of the details of the subsidiary companies viz., Unique Home Health Care Limited (UHHCL), AB Medical Centres Limited (ABMCL), Samudra Healthcare Enterprises Limited (SHEL), Apollo Hospital (UK) Limited (AHUKL), Apollo Health and Lifestyle Limited (AHLL), Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL), Pinakini Hospitals Limited (PHL), Imperial Hospital and Research Centre Limited (IHRCL), ISIS Healthcare India Private Limited (ISIS) and Mera Healthcare India Private Limited (MERA) pursuant to section 212 of the Companies Act, 1956, is attached to this report.

Unique Home Health Care Limited (UHHCL)

UHHCL, a wholly owned subsidiary of the Company provides medical and paramedical services including doctors consultation, physiotherapy direct to patient homes and also offers paramedical service in hospitals to critically ill patients. For the year ended 31st March 2010, UHHCL recorded a revenue of Rs.23.60 million and net profit of Rs.11.08 million.

AB Medical Centres Limited (ABMCL)

ABMCL, a wholly owned subsidiary of the Company does not have any commercial operations as it has leased out its infrastructure viz., land, building and medical equipment to the Company for running the hospital. For the year ended 31st March 2010, ABMCL recorded an income of Rs.6.64 million and a net profit of Rs.3.98 million.

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 2010 SHEL recorded revenues of Rs.216.79 million and a net profit of Rs. 17.40 million.

Apollo Hospital (UK) Limited (AHUKL)

AHUKL is a wholly owned foreign subsidiary of the Company and is yet to commence its operations.

Apollo Health and Lifestyle Limited (AHLL)

AHLL, a subsidiary of the Company is engaged in the business of providing primary healthcare facilities through a network of franchised clinics across India offering specialist consultation, diagnostics, preventive health checks, telemedicine facilities and a 24-hour pharmacy all under one roof. For the year ended 31st March 2010 AHLL recorded a consolidated revenue of Rs.87.97 million and a net loss of Rs. 2.45 million.

Pinakini Hospitals Limited (PHL)

As a part of its strategy to reach out to the tier II towns and cities, the company intends to build a hospital in Nellore at a total project cost of Rs.600 million through a subsidiary company, Pinakini Hospital Limited.

Apollo Cosmetic Surgical Centre Pvt Limited (ACSPL)

ACSPL, a 66.91% subsidiary of the company is engaged in the business of running cosmetic surgical centres. For the year ended 31st March 2010 ACSPL recorded a revenue of Rs.10.72 million and a net loss of Rs.6.88 million

Imperial Hospital and Research Centre Limited (IHRCL)

IHRCL, a 51% subsidiary of the company owns a 240 bed multi speciality hospital at Bengaluru. For the year ended 31st March 2010 IHRCL recorded a revenue of Rs.704.17 million and a net loss of Rs. 67.94 million.

ISIS Healthcare India Private Limited (ISIS)

ISIS, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of providing healthcare services. For the year ended 31st March 2010, ISIS recorded a revenue fo Rs. 14.02 million and a net loss of Rs.1.58 million.

Mera Healthcare India Private Limited (MERA)

MERA, a subsidiary of Apollo Health and Lifestyle Limited is engaged in the business of providing healthcare services. For the year ended 31st March 2010, MERA recorded a revenue of Rs.8.99 million and a net loss of Rs.0.16 million (Mera was acquired by AHLL on July 11th 2009, the revenue and profitability is for the period 11th July 2009 to 31st March 2010)

Corporate Social Responsibility

This year too Apollo Hospitals undertook several initiatives as an expression of its deep commitment to societal welfare. Some of the more significant ones are listed below:

- "Billion Hearts Beating" campaign, our Corporate Social initiative in association with the Times of India Foundation for increasing awareness of Heart diseases across the country has evoked a tremendous response with more than 16,000 pledges within three weeks of launch. The momentum is expected to accelerate with several leading corporates expressing eagerness to participate in this fight against heart disease.

- The Apollo Hospitals Group signed a memorandum of understanding with the Union Government to set up "Central Government Health Scheme - Apollo Dialysis Clinics" to provide specialised services to kidney patients enrolled under the CGHS.

- Apollo Group completed 2,500 cardiac surgeries performed under the auspices of SACH - Save A Childs Heart, our endeavour to support the medical treatment expenses of underprivileged children ailing with serious congenital heart disease.

- Under SAHI, our initiative to aid the hearing impaired children, almost 1,000 children were screened, over 150 were referred for surgery and 160 were provided with hearing aids.

- Apollo Hospitals set up on-site medical centres, to provide immediate attention at various international sports events, exhibitions and pilgrim congregations. This apart different hospitals in the group conducted several free medical camps in their neighbouring areas, which were highly appreciated.

Increase in Paid-up Share Capital

During the year, the paid-up share capital of the Company increased from Rs.602,357,020/- (consisting of 60,235,702 equity shares of Rs.10/- each) to Rs.617,848,590/- (consistingof 61,784,859 equity shares of Rs.10/- each) consequent to the allotment of 1,549,157 equity shares to Dr. Prathap C Reddy upon conversion of 1,549,157 warrants on 18th April 2009 at a price of Rs.497.69 per share including a premium of Rs. 487.69 per share.

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

Issue of Foreign Currency Convertible Bonds (FCCBs)

During the year, your company issued 1500 Unsecured Foreign Currency Convertible Bonds (FCCB) with a face value of USD 10,000 each aggregating to US$ 15,000,000 to International Finance Corporation, Washington, with an option of converting the FCCBs into equity shares at a price of Rs.605/- per share.

Issue of warrants convertible into equity shares to Dr. Prathap C Reddy

Your company has issued 1,544,621 convertible share warrants to Dr. Prathap C Reddy, one of the promoters of the company on a preferential basis under the applicable SEBI guidelines.

These warrants have been issued with a convertible option to be exercised within a period of 18 months from the date of allotment. Each warrant issued can be converted into one equity share of the company of nominal value of Rs.10/- each at a price of Rs.771.76 which includes a premium of Rs.761.76 per share calculated in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

The objective of this preferential issue was to part fund the expansion activities, finance additional working capital requirements and general corporate purposes.

Proceeds of Preferential Issues

The details of utilization of proceeds of preferential issues upto 31st March 2010, are set out in the statement attached herewith as Annexure - A.

Corporate Governance

Pursuant to clause 49 (VII) of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance forms part of the Directors Report in the Annual Report. Your Company is compliant with the requirements of the Listing Agreement and necessary disclosures have been made in this regard in the Corporate Governance Report.

A certificate from the Auditors of the Company regarding compliance with conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Human Resources Development

We at Apollo believe that employees are our most valued assets who live the values of the enterprise in delivering excellence in patient care at every touch point 24/7 symbolizing a ray of hope for millions, looking for a cure. All our employees embrace the philosophy of "Tender Loving Care" (TLC) as a way of life and the entire Apollo family is committed towards touching a billion lives.

Our human resources team strives to align the HR policies with the business goals and help in creating a performance driven culture. Various initiatives such as performance linked to rewards, transparent and consultative review process, building a high performance work system have facilitated businesses growth. The total employee strength as on March 2010 is 21,080 as against 19,088 for the year ended March 2009.

We believe that "employee opinion matters "and hence carry out climate surveys on a regular basis. The Organization Climate Survey 2009 covered responses from employees on various themes such as Sense of belonging, Organization, Work environment, Role of HOD / Superior, Role Clarity, Employees Initiatives, Communication, Decision Making process, Training, Team Building, Interdepartmental Coordination, Compensation, Staff Welfare & Customer satisfaction and based on the feedback development action plans were evolved.

Highly structured Performance Management System (Apollo Performance Management System) across the Group covering all Management cadre employees was institutionalized focusing on alignment, measurement and reward and recognition including Personal Development Plan.

In our endeavour to improve the efficiency and effectiveness of our processes, we embarked on the journey of Lean Six Sigma (LSS) with an objective to become the pioneer in Indian Healthcare adopting LSS for "next practices" in establishing world class reliability standards for excellence in patient care service.

To integrate Six Sigma with every part of our organization we have launched Mission 2012 with a unique Apollo Logo - To have certified 50 Black belts, 500 Green belts & 5,000 Yellow belts across the group. Today we have 400 Trained Green Belts in our group and 12 Black Belts. Black Belt and Green Belt certification will be based on projects focusing on cost saving and process improvement which helps in improving customer satisfaction followed by an examination by the Indian Statistical Institute.

The HR teams have prioritized Excellence in Patient Care through TLC as a way of life as the theme for the year with focus on Personal productivity and Team work, improving young talent ratios and developing the next generation leadership for the Group.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the Directors of the Company hereby state and confirm that:

- In the preparation of the annual accounts for the year, the applicable accounting standards had been followed along with proper explanations and there were no material departures;

- The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

- The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Directors had prepared the annual accounts on a going concern basis.

Fixed Deposits

The total deposits with the Company as on 31st March 2010 was Rs.510.67 million (Rs.136.15 million as on 31st March 2009) which include deposits for an aggregate value of Rs. 7.53 million (Rs.4.64 million as on 31st March 2009) not claimed by the depositors. Out of these deposits, an aggregate value of Rs.2.37 million have since been repaid / renewed.

Directors

As per the provisions of the Articles of Association of Company, four Directors of the Company viz., Shri. N. Vaghul, Shri. T.K. Balaji, Shri. Rajkumar Menon and Shri.Khairil Anuar Abdullah retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Shri. Neeraj Bharadwaj resigned as a Director with effect from 29th October 2009.

Shri. P. Obul Reddy relieved from the Board with effect from 28th January 2010 consequent to his inability to continue as a director on health grounds.

The Board wishes to place on record its appreciation for the contributions made by Shri.P.Obul Reddy and Shri.Neeraj Bharadwaj during their tenure on the Board of the Company.

New Directors

Shri. Sandeep Naik, was appointed as an Additional Director with effect from 29th October 2009.

Smt. Shobana Kamineni was appointed as an Additional Director and Whole Time Director designated as Executive Director - Special Initiatives with effect from 1st February 2010.

Auditors

The Auditors, M/s. S. Viswanathan, Chartered Accountants, retire at the ensuing Annual General

Meeting and have confirmed their eligibility and willingness to accept office, if reappointed.

Particulars of Employees as per Section 217(2A) of the Companies Act, 1956.

In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

Particulars as required to be disclosed as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the statement attached herewith as Annexure - B.

Acknowledgement

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders, of the Company for their continued support.

For and on behalf of the Board of Directors

Place : Chennai Dr. Prathap C Reddy

Date : 28th May 2010 Executive Chairman