Nawaloka Hospitals PLC Annual Report 2015/16

Transcription

Nawaloka Hospitals PLC
Annual Report 2015/16
Pioneering Modern Healthcare
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Annual Report 2015/16
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Health is our greatest wealth...
Contents
08
10
12
14
16
Highlights
Milestones
About this
Report
Chairman/CEO’S
Message
Director/General
Manager’s Review
18
30
70
103
145
Business Model
Management Discussion
and Analysis
Stewardship
Financial Reports
Annexes
70 Board of Directors
18 Organisational Structure
30 Financial Capital
74Senior
Management Team
104 Annual Report of the
Board of Directors
145Independent
Assurance Report
40 Investor Capital
108 Report of the
Remuneration Committee
147 GRI Content Index
21 Operating Environment
109 Audit Committee Report
23 Goals and Strategies
54 Employee Capital
154 Ten Year Statistical
Summary
18 About Nawaloka
24Stakeholders
28 Materiality and Value Creation
36 Intellectual Capital
42 Customer Capital
64 Business Partner
Capital
66 Social and Environmental Capital
76 Executive Clinical
Management Team
78 Corporate Governance
96 Risk Management
111 Board Related Party
Transactions Review
Committee Report
102Awards and Accolades
112 Directors’ Responsibility
in Financial Reporting
113Independent
Auditors’ Report
114 Statement of
Financial Position
116 Statement of Profit or Loss
and Other Comprehensive
Income
117 Statement of
Changes in Equity
118 Cash Flow Statement
2
119 Notes to the Financial
Statements
151 Investor Information
156 Quarterly Statistics
157 Corporate Information
158 Notice of Meeting
Enclosed Form of Proxy
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Pioneering Modern Healthcare
mjpetPd kUj;Jtj;jpy; Kd;Ndhbahfr; nraw;gLgtu;fs;
30 years ago we pioneered the establishment of the first fully-fledged
multi specialty private hospital in Sri Lanka. That pioneering spirit and
the eagerness to push boundaries have been the defining characteristics
of Nawaloka through the years. Today these qualities are well evidenced
by the state-of-the-art medical technologies and inventions – from
CT Scanners to the first ever purpose built, equipped and operated cardiac
care centre and many more.
We see no reason to change this 30-year old entrepreneurial spirit in the
years to come.
Our Vision
“To be the hospital of tomorrow”, to provide quality and safe
healthcare to the people whilst maintaining leadership and
excellence in the healthcare facility.
Our Mission
“Healing with feeling” to provide the best quality healthcare in
accordance with international standards to the needy in a cost
effective, timely and professional manner.
Our Purpose
We are committed to achieving and maintaining
a standard of excellence in all we do.
– Excellence in clinical care, service and communication
– Collaboration within our Institution and with others who
share our mission and goal
– Leadership that sets the standards for healthcare today and
innovations of the future
– Accountability to our patients, community and each other for
providing the best services in the most cost-effective way
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MIHINTALAYA ANCIENT HOSPITAL
The architectural plan on this page is that of a hospital built by King Sena II (853-887AD) at
Mihintalaya. The plan illustrates a complete hospital complex, with 31 rooms arranged on an
elevated platform. These rooms and illustrated areas consist of a consulting room, hot water
baths, an outer court, inner verandah courtyard, a shrine room and a room for medicinal baths.
The ruins seen today speak of an advanced medical ‘culture and discipline’ that was far
beyond its time in history and attest to a well-developed medical system operating within
a ‘hospital’ environment.
Medicinal trough
^fnfy;A Trej&
PLAN OF THE HOSPITAL
MONASTERY
Rooms for
the patients
^l=á fm<&
Inner verandah
Court yard
Shrine room
^nqÿ f.h&
Refectory
ôdk Yd,dj&
Outer court
(Communal space)
Room for hot
water baths
Grinding stone
^WKq mekA f.h&
^weUreï .,&
Preparation &
Storage of medicine
Consulting room
îdhkh&
^fnfy;A .nvdj&
Entrance
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MIHINTALAYA ANCIENT HOSPITAL (ARTIST’S IMPRESSION)
This is an artist’s impression of the ancient Mihintalaya hospital
complex as it would have appeared in its day.
Many scholars have commented on this historic siteProfessor Arjuna Aluvihare wrote, “The oldest archaeological
evidence we have so far of a hospital is in the ruins of Mihintale,
where the remains of a hospital built in the 9th Century could
still be seen”.
Heinz E. Muller-Dietz in his publication ‘Historia Hospitalium’ of 1975
describes Mihintale hospital as perhaps the oldest in the world.
Ajith Prasanna Kannangara in his study of dermatology, venereology
and dermatopathology in different countries, expounded, “A piece
of equipment or stamp which is now considered the hallmark for the
identification of an ancient hospital in Sri Lanka, is the medicine trough
or ‘behethoruwa’”.
HIGHLIGHTS
Group
2015/16
Rs.
Company
2014/15
Rs.
Variance
%
2015/16
Rs.
2014/15
Rs.
Variance
%
Income Statement
Revenue
5,860,218,161
4,602,433,640
27
2,833,195,719
2,497,830,914
13
(2,906,572,342)
(2,331,583,775)
25
(1,490,055,615)
(1,229,903,547)
21
2,953,645,819
2,270,849,865
30
1,343,140,104
1,267,927,367
94,495,240
65,199,571
45
86,694,974
152,643,920
Profit from Operations
637,208,825
352,342,610
81
201,126,820
375,219,106
(46)
Net Profit after Taxation
206,034,228
87,470,836
136
(127,565,499)
89,938,006
(242)
3,994,897,962
3,887,681,839
3
1,466,336,065
1,693,759,266
(13)
50
49
2
47
51
(7)
Net Profit Ratio (%)
4
2
110
(5)
4
(225)
Return on Capital Employed (%)
5
2
122
(9)
5
(264)
Current Asset Ratio
0.89
1.03
(13)
1.83
1.62
Quick Asset Ratio
0.70
0.80
(13)
1.75
1.53
2
1
Debt/Equity Ratio
1.27
0.84
51
3.21
1.78
81
Earnings/(Loss) per Share (Rs.)
0.15
0.06
142
(0.09)
0.06
(242)
Net Assets per Share (Rs.)
2.83
2.76
3
1.04
1.20
(13)
Dividend per Share (Rs.)
0.07
0.06
17
0.07
0.06
17
Interest Cover Ratio (Times)
1.71
1.24
38
0.57
1.35
(58)
46.67
96.68
(52)
(77.34)
94.03
(182)
Cost of Services
Gross Profit
Other Operating Income
6
(43)
Balance Sheet Data
Shareholders’ Funds
Financial Ratios
Gross Profit Ratio (%)
Return on Assets (%)
Dividend Payout Ratio (%)
98
Net Profit (Rs. Mn)
Gross Profit (Rs. Mn)
500
3,000
400
2,400
300
1,800
200
1,200
2011/12
2012/13
2013/14
2014/15
2015/16
0
2011/12
Net Asset per Share (Rs.)
Revenue (Rs. Mn)
3.0
6,000
2.4
4,800
1.8
3,600
1.2
2,400
0.6
0
8
2
14
(206)
600
100
0
(2)
13
2012/13
2013/14
2014/15
2015/16
2012/13
2013/14
2014/15
2015/16
1,200
2011/12
2012/13
2013/14
2014/15
2015/16
0
2011/12
Negombo Hospital
successfully completed
1st year of operation
Construction of new
car park building in
progress
Passed 11,000
heart surgeries
with 100% recovery
Successfully completed
over 41,000 Angiogram
with PTCA
Cosmetic Centre
successfully
completed 1st year
Achieved 22,000
Bone Marrow transplant 100%
recovered 11 patients with
2 Leukaemia patients
Upgraded the
Endoscopy with
latest technology
1st time in Sri Lanka
Upgraded the
Chemotherapy
treatment (Cancer
Patients) with latest
safety procedure
Introduced
Fibro Scan
to quantify
liver fibrosis
Passed 16,000
operation theatre
surgeries during
the year
Shareholders’ Funds (Rs. Mn)
5,000
15
4,000
12
3,000
9
2,000
6
3
1,000
0
births in total
2011/12
2012/13
2013/14
2014/15
2015/16
0
2011/12
2012/13
2013/14
2014/15
2015/16
Annual Report 2015/16 Nawaloka Hospitals PLC
9
MILESTONES
1985
1992
2000
zzEstablished
zzFirst
zzWe
as the first fully-fledged
private hospital in Sri Lanka
zzFirst
Intensive Care Unit in a private
hospital
Mammography Unit in Sri Lanka
1993
zzFirst
Minimally Invasive Laparoscopic
Surgery in Sri Lanka
became the only ISO-Certified
Hospital in Sri Lanka
zzAwarded
the ‘Baby Friendly Hospital’
status from the WHO and United
Nations Children’s Fund
1994
zzFirst
Cardiac Catheterisation
Laboratory in Sri Lanka
zzFirst
Coronary Artery Bypass Surgery
Unit in a private hospital
1987
zzFirst
2005
CT Scanner in Sri Lanka
zzMade
significant advances in Neuro
Surgery and Cardiac Surgery
zzIntroduced
Laser Eye Surgery
zzTogether
1995
zzFirst
MRI Scanner in Sri Lanka
1998
zzWe
are the only Hospital to win the
Sri Lankan National Quality Award
with our Indian affiliates,
introduced a very successful IVF
Treatment centre
2006
zzCommenced
construction of the
new building providing modern
surgical units
zzComputerising
the entire operation
of the Hospital
2007
zzFirst
to introduce the Flat Panel –
Angiography System with
state-of-the-art technology
zzFirst
to introduce a Comprehensive
Polysomnography System
zzIntroduction
of a state-of-the-art
Pulmonary testing facility
10
2008
2011
2015
zzFirst
zzCommissioned
zzCommenced
zzAwarded
zzIntroduced
to introduce the Arcadis Orbics
Isocentric Digital C-Arm X-Ray system
for Orthopedics
zzIntroduction
of Digital Video
Endoscopy System
2009
zzFirst
Private Hospital in Sri Lanka
with 400 beds
zzFirst
Private Hospital to introduce
ERCP (Endoscopic Retrograde
Cholangiopancreatography)
zzInstalled
the most technologically
advanced Hemodialysis machine
zzFirst
Hospital to introduce ‘LED
LAMPS’ in Operating Theatres
2010
zzIntroduced
16 slice CT Scanner with
all accessories
zzNew
4-D Scanner for Radiology and
Gynaecology Introduced Ultrasonic
Defector
first state-of-the-art
3TESLA MRI Scanner in Sri Lanka
ISO 9001:2008 Certification
zzInaugurated
Weight
Management Centre
zzInaugurated
Breast Cancer
Screening Centre
zzSingle
Balloon Enteroscope
zzDoppler-Guided
Hemorrhoid Artery
Ligation and Rectal Anal Repair
Bone Marrow
Transplant Unit
zzInstalled
the most technologically
advanced Mammography machine
zzRetained
the ‘Gold’ Award in the
healthcare sector at the Annual Report
Awards 2014 organised by ICASL
zzOnly
hospital to be recognised at the
ACCA Business Awards 2014
zzInitiated
2012
zzFirst
LIVE Donor LIVER
Transplant surgery in Sri Lanka
zzLaunch
of Life Member
Hospitality Card
the construction of
Car Park Building
2016
zzIntroduction
of Fibro Scan to
quantify Liver Fibrosis
zzIntroduction
2013
zzVitro
Regional Hospital
operations in Negombo
Retinal Eye Surgery
zzEndovenous
(Vericose) Laser
Treatment - EVLT
zzHigh
Definition (HD) Arthroscopy
System
zzInfant,
CPAP Ventilation for Paediatric
Intensive Care Unit (PICU)
2014
zzInstalled
of Self-Channeling System
a new Chemotherapy Machine
zzOnly
Hospital to be recognised
at the ACCA Sustainability Business
Awards 2015
zzRetained
the ‘Gold’ Award in the
healthcare sector at the Annual Report
Awards 2015 organised by ICASL
zzAchieved
100% success rate in Bone
Marrow Transplants
zzIntroduced
zzInstalled
South Asia’s first and world’s
fastest, most accurate 640-slice
CT scanner
zzInstalled
a Neuro Navigation System
during the year
Gold Standard Acu
Pulse, a safe, simple CO2 laser,
manufactured in the USA, which is
the Industry Standard that delivers
outstanding results
zzCertified
as a CarbonConscious®
hospital, making it Sri Lanka’s FIRST
hospital to achieve this distinction
zzApplied
for the JCI Accreditation
zzInstalled
Advanced Lasik Eye Surgical
Equipment for Eye Surgery
zzIntroduced
C-Arm machine for
theatre unit
11
ABOUT THIS REPORT
This is our third consecutive integrated Annual Report which
effectively and coherently communicates how our strategy,
governance, performance and prospects lead to value creation
over time.
Value creation is a two-way process, as the ability of our
business to create sustainable value for itself is also related to
the value it creates for its stakeholders.
To better demonstrate this duality of our value creation
process at Nawaloka, we have seamlessly integrated financial
reporting with sustainability reporting.
Capital Formation
Value creation leads to capital formation. We classify capital
that is owned by Nawaloka as ‘internal’ capital, while capital
that is not owed as ‘external’ capital.
Our internal capital consists of financial capital and
intellectual capital. The financial capital is reported mainly
in our Financial Statements whilst intellectual capital are
intangibles like brand image, corporate culture, integrity
and specialised knowledge.
Our external forms of capital thus centre on key
stakeholders and comprise investor capital, customer capital,
employee capital, business partner capital and social and
environmental capital.
Reporting Period
The Annual Report 2015/16 covers the 12-month period from
1st April 2015 to 31st March 2016 and is consistent with our
usual annual reporting cycle as regards to our financial and
sustainability reporting. The previous Annual Report covered
the period 1st April 2014 to 31st March 2015.
Report Boundary
The boundary of this Report entails the affairs and activities of
Nawaloka Hospitals PLC including those of its three subsidiaries
– New Nawaloka Hospitals (Pvt) Ltd., New Nawaloka Medical
Centre (Pvt) Ltd., Nawaloka Medicare (Pvt) Ltd. and joint
venture – Nawaloka Metropolis Laboratory (Pvt) Ltd.
12
Compliance
This Report also reflects the Company’s compliance with the
laws and regulations of the Companies Act No. 07 of 2007 and
the subsequent amendments and Listing Rules of the Colombo
Stock Exchange (CSE).
The information contained in this Report is in compliance
with all applicable laws, regulations and standards as well as
guidelines for voluntary disclosures. In particular the Report
adheres to the recommendations and guidelines set out by
the International Financial Reporting Standards (IFRS) and
the Sri Lanka Financial Reporting Standards (SLFRS)/LKAS
applicable for financial periods beginning on or after
1st January 2012. The accounting policies adopted are
detailed in the Financial Statements.
In preparing this Report we have also drawn on the
concepts, principles and guidance of the Global Reporting
Initiatives (GRI) Sustainability Reporting Guidelines G4, the
International Integrated Reporting Framework (December
2013) and the Smart Integrated Reporting MethodologyTM
(September 2013) where applicable.
Compared to the previous reporting periods, there are
no significant changes in the scope and aspect boundaries.
Precautionary Principle
The Company applies the precautionary principle in relation to
social and environmental sustainability. We are highly mindful
of the impacts caused to society and environment by our
actions and take necessary steps to mitigate such risks and the
Company has taken necessary steps to mitigate environmental
risks in operational planning and activities.
Queries
We welcome your comments or questions on this
Annual Report. Please contact –
The Accountant
No. 23, Deshamanya H.K. Dharmadasa Mawatha,
Colombo 00200,
Sri Lanka.
Email Address: [email protected]
‘Beheth Oruwa’ ^fnfy;a Trej& was a medical instrument found in the historic Mihintalaya hospital site. The length of it is 7 feet and the width is 2.5 feet
which is spacious enough for an individual to lie comfortably for treatments as it is carved in the shape of the human body.
13
CHAIRMAN/CEO’S MESSAGE
Our foresighted aspiration
to be ‘The Hospital of
Tomorrow’ enables us to
provide the most modern
cutting edge treatments
which go beyond
advanced care
Positioned as the
people’s hospital, we are
transforming the care
we provide today and
preparing for the future
Nawaloka set the stage for
private healthcare service
providers to commence
operations in our nation
AS CHANGE AND
CHALLENGE BRING
OPPORTUNITY,
NAWALOKA REMAINS
WELL POSITIONED TO
SUCCEED FAR INTO
THE FUTURE
14
iNdm;s$m%Odk úOdhl ks,Odßjrhdf.a mKsúvh
Dear Shareholders,
ys;j;a fldgiaysñhks"
I warmly welcome you to the 27th Annual General Meeting of
Nawaloka Hospitals PLC and present to you the Annual Report
for the financial year 2015/16.
kjf,dal frday,a mSt,aiS wdh;kfha 27 jk jd¾Isl uyd iNd
/iaùug Tn ieu ud b;d iqyo j ms<s.kakd w;r" 2015$16 uQ,H
j¾Ifha jd¾Isl jd¾;dj fï iu. bÈßm;a lrkq leue;Af;ñ'
Y%S ,xldfõ fi!LH i;aldrl l¾udka;h úma,ùh fjkilg
md;% lrñka" 1985 § kjf,dal frday, mßj¾;kd;aul ux fm;la
újr lf<ah' by< u ;dlaIK Ys,amSh frda. ks¾Khsh yd m%;sldrl
myiqlï j,ska iukaú; úYsIag;ajh imsß uOHia:dkhla f,i wms m;a
lf<uq' kjf,dal frday," ck;djf.ka wm ,;a wkqmfïh m%;spdrhka
;=<ska" m%ikak mßirhl iqmsß fi!LH i;aldrhka ,eîu i|yd ;snQ
wjYH;dj ukdj úoyd olajk ,§' m%ñ;sh" frda.Skaf.a ;Dma;su;a
Ndjh" há;, myiqlï" uQ,H ld¾hidOkh" iqrlaIs;;dj we;=`:
;j;a fndfyda foa ms<sn| j woaú;Sh úYsIag;ajhla we;s lrñka"
w;sYhska ÈhqKq frda. ks¾KhSh yd m%;sldrl ;dlaIK Ys,amSh fuka u
úfYaI{ ffjoH i;aldrhka o i|yd wms m%fõYhka y÷kajd ÿkafkuq'
wmf.a ck;djg ksrka;rfhka u fiajh iïmdokh lsÍug wm ;=<
mj;akd lemùu" ck;d mßyrKh i|yd fkdfnda Èklska u újD;
lsÍug bÈflfrñka mj;sk r: .d,a lefrk f.dvke.s,a, ms<sìUq
fjhs' ck;djg kùk;u fi!LH i;aldrhka y÷kajd§fï wmf.a
mqfrda.dó;ajh" zu;= ojfia frday,Z jYfhka wm ¥ro¾YS jQ wNs,dIh
u.ska iy;sl lrkq ,en we;'
ck;djf.a frday, jYfhka kula Èkd we;s wm úiska" wo ojfia
imhkakd jQ o" fyg fjkqfjka iQodkï jkakd jQ o i;aldrhka
j¾OkSh fjkilg Ndckh flf¾' fiiq ixj¾Okh fjñka mj;akd
rgj,a iu. ixikaokh lsÍfï § Y%S ,xldj ie,lsh hq;= fi!LHuh
id¾:l;ajhka ,nd ;sìh §;a" ckúldYkSh yd jix.;-mdol lreKq
fya;=fldgf.k isÿ jkakdjQ mßj¾;khkag uqyqK§ug wms iQodkï j
isáuq' jhia.; ck.yk j¾Okh" fnda fkdjkakd jQ frda. m%jk;dj
by<hdu" ffjoH myiqlï i|yd ixpdrlhkaf.a meñKSu jeäùu
wdÈh fulS mßj¾;khkag we;=<;a fõ' wmf.a frda.Ska yd m%cdjka
flfrys wm olajk fkdief,k lemùu" fuu jd¾;dj ;=< úoyd
±lafõ' wm úiska w;am;alrkq ,en úfYAI{;djfhka hq;= j Ndú;d
lrkakd jQ w;sYh ÈhqKq ffjoH ;dlaIKhka iy ld,dkqrEmS j Ôú;
iqrlaIs; lrk yd iEu fokdf.a u fi!LHh j¾Okh flfrk kjuq
l%shd ms<sfj;a tys olajd ;sfí' wdh;ksl md,kh" wdpdrO¾u yd
;sridr;ajh ms<sn| m%;sm;a;Ska u; msysgd" wm iud.u wLKAvj u
úYsIag m%;sM, Wodlrk njg uu yqfola u iy;sl lrkq leue;af;ñ'
fï nj fuu jd¾;dfjys wdh;ksl md,kh yd ;sridr;ajh
mßÉfþohkays olajd we;'
mßj¾;khka iy wNsfhda.hka ;=<ska j¾OkSh ux fm;a Wodlrkq
,nk fyhska" wkd.;fha § o id¾:l;ajh Èkd .ekSug kjf,dal
frday, ie§ meye§ isà' kjf,dal frdayf,a ld¾h uKAv,fha iy
úfYaI{ ffjoHjrekaf.a wm%;sy; fiajd iïmdokh yd lemùu ksid
fkdjkakg" wmf.a id¾:l;ajh fuka u fjk;a fndfyda
ch.%ykhka o w;alr .ekSu myiq fkdjkakg ;sìKs' wmf.a frda.Skag
yd Tjqkaf.a mjq,aj, idudðlhskag iEu Èkl u wdo¾Yu;a
i;aldrhka msßkeóug Tjqka ork m%h;akhka ms<sn| j uu w;sYhska
wdvïnr fjñ' wmf.a fiajd,dNSkaf.a wLKav wkq.%dyl;ajh;a" wmf.a
fldgialrejka jYfhka Tn wm ;=< ;nd we;s wp, úYajdih yd
j.lSu;a uu ±ä fia w.h lrñ'
In 1985, Nawaloka Hospital embarked on a transformative
journey that revolutionised the healthcare industry of
Sri Lanka. Established as a centre of excellence in high
technology diagnostic and curative facilities, Nawaloka set the
stage for private healthcare service providers to commence
operations in our nation. The overwhelming response we
received from the people demonstrated a long felt need
for superior healthcare in a pleasant environment. Pursuing
unsurpassed excellence in every aspect – quality, patient
satisfaction, infrastructure, safety and more, we provide access
to most advanced diagnostic and treatment technologies and
expert medical care. Our unwavering commitment to serving
our people is reflected in the new car park building which would
be opened very soon for public patronage. Our foresighted
aspiration to be ‘The Hospital of Tomorrow’ enables us to
provide the most modern cutting edge treatments which go
beyond advanced care.
Positioned as the people’s hospital, we are transforming the
care we provide today and preparing for the future. Even as
Sri Lanka has made noteworthy achievements in health outcomes
compared to other developing countries, we have geared
ourselves to face changes brought on by demographic and
epidemiological transitions. These changes include the increase
in the aging population, rising incidents of non-communicable
diseases and the gaining popularity of medical tourism. The
unwavering commitment towards our patients and community is
evidenced in the pages of this Report. They include our acquisition
and expert use of the most advanced medical technology, and
the innovative procedures that save lives and improve health of
all, in sync with the times. I strongly assure that our Company
delivers exceptional results consistently without compromising
the principles of corporate governance, ethics and sustainability.
This is further reflected in the corporate governance and
sustainability sections of this Report.
As a responsible corporate citizen, our strategies are aligned
with sustainable business practices that balance the needs and
aspirations of a multitude of stakeholders. Even as change and
challenge bring opportunity, Nawaloka remains well positioned
to succeed far into the future. Our success and many other
achievements would not have been possible without the
hard work and dedication of the staff and the consultants of
Nawaloka Hospital. I take great pride in their efforts as they
deliver exemplary care to our patients and families each day.
I deeply appreciate the continued patronage of our customers
and the unwavering confidence and trust placed in us by you;
our valued shareholders.
chka; O¾uodi
iNdm;s$m%Odk úOdhl ks,Odß
Jayantha Dharmadasa
Chairman/Chief Executive Officer
2016 uehs 25
25th May 2016
Chairman/CEO’s Message
15
DIRECTOR/GENERAL MANAGER’S
REVIEW
Sri Lanka’s healthcare
industry has seen a rapid
transformation in the
recent years and we
embrace these changes
to help people to live
healthier lives
Our state-of-the-art
Nawaloka Metropolis
laboratory performs
an extensive range of
diagnostic tests and is
equipped to conduct
screening procedures
as well
With the recent
refurbishment and
upgrading of technology
in the expanded coronary
incentive care unit, our
heart centre is in par
with any international
heart centre
The newly established fully
equipped 75 bed regional
hospital in Negombo
has made a significant
contribution to
our image and profitability
Benchmarked for quality,
Nawaloka Hospitals has
gained recognition both
locally and internationally
as evidenced by the many
awards we have won over
the years
16
THE GROUP’S
TURNOVER
INCREASED BY 27%
YEAR ON YEAR
The healthcare landscape is changing rapidly along with the aging and
growing population. The potential impacts of a growing aging population
on Sri Lanka’s healthcare system, workforce and budgets are profound.
As a consequence of increased life expectancy, the Non-communicable
deceases (NCDs) are also on the rise, in particular, cardiovascular
deceases, cancers, asthma, bone deceases and eye deceases, are becoming
widespread and persistent health problems. The Health Ministry estimates
that 25% of the adult population is already suffering from hypertension
and half the population is likely to suffer from diabetes by 2050. However,
due to the rising per capita income over the years, there is also a greater
demand for better treatment procedures in Sri Lanka.
Sri Lanka’s healthcare industry has seen a rapid transformation in the
recent years and we embrace these changes to help people to live healthier
lives. Being an innovator and leader in healthcare is our responsibility as
Sri Lanka’s pioneering private hospital. It is also essential to realize our
vision of becoming ‘The Hospital of Tomorrow’. Futuristic technologies
were introduced by us, as and when the need arose. The milestones which
began from 1985 unravel a fascinating change of events which are detailed
elsewhere in this report. They all underscore our commitment to staying
at the leading edge of medical technology. Coupled with skillful and
compassionate practitioners, we extend a matchless care for even the most
complicated medical conditions.
We established the first-ever purpose built, state-of-theart Bone Marrow Transplant Unit in the country. We are the
first hospital to perform a successful transplant for leukaemia,
in addition to bone marrow transplants for thalassaemia
patients. I am happy to state that we have not only pioneered
cutting edge technology but kept up with the advancements
and continually raised the bar of the healthcare industry in
Sri Lanka.
Percentage of individuals over 60 years is expected to
grow at an unprecedented rate. Care of the elderly will be a
challenge for the next few decades. Advancements in the field
of Geriatric Medicine is of paramount importance to our nation.
Hence this year, we developed a specialised unit for the care of
the elderly.
Incidents of cancer have steadily risen in the past few
years to an extent where it has become the second highest
cause of hospital deaths in Sri Lanka which is a significant
burden for the Government. Screening programmes for early
detection of cancers will lead to both better health outcomes
and considerable savings in treatment costs. Our state-of-theart Nawaloka Metropolis laboratory performs an extensive
range of diagnostic tests and is equipped to conduct screening
procedures as well.
Along with the growing popularity for wellness and
healthier lifestyles, aspects such as weight management,
aesthetic and cosmetic surgery care needs are gaining
prominence among both males and females. Addressing to this
demand, our state-of-the-art Skin Care and Cosmetic Centre
was established and board certified professionals providing
the best service in par with international standards whilst
maintaining strict confidentiality of patients.
Cardiovascular diseases are the biggest cause of death
in Sri Lanka and has increased to 24% in 2013, according
to the World Bank. Pre-empting this fact, we were the
first private hospital to establish a cardiac catheterisation
laboratory in Sri Lanka, way back in 1994. The success of this
pioneering effort spurred the development of cardiac units
in the private sector. However, we still remain ahead with
our most ultramodern cutting-edge technology, equipment
and experienced staff providing 24 hours service to the heart
patients in this country. The fact that we have performed over
12,000 open heart surgeries and over 20,000 catheterisation
procedures is indeed a remarkable achievement. With the
recent refurbishment and upgrading of technology in the
expanded coronary incentive care unit, our heart centre is
on par with any international heart centre.
Sri Lanka is also fast becoming a global healthcare
destination offering some of the best available medical
treatments. This is evident when considering the increasing
patronage by foreign patients in major city hospitals in the
country. Our nation has a significant competitive advantage
with its highly-skilled and internationally-trained medical
doctors and specialists with extensive knowledge and
experience.
Director/General Manager’s Review
We opened our first fully-fledged regional hospital in
Negombo a year ago. Not only has this facility provided
the people in the region convenient access to world-class
healthcare but is positioned as a medical tourism destination as
it lies within an area of geographic relevance and importance
to tourists. Our aim is to attract high net worth tourists, as an
effective way to draw foreign exchange to our country.
Our performance during the fiscal year 2016 is noteworthy.
The Group’s turnover increased by 27% Year on Year to
Rs. 5,860 Mn largely contributed by increased Admissions,
Investigation services like Laboratory, Radiology and Surgical
services. The newly established fully equipped 75 bed regional
hospital in Negombo has made a significant contribution to
our image and profitability. The strong brand image we have
built over the years, our dedicated team of staff members and
the state-of-the-art technology contributed significantly to the
performance during the year.
The 14 floor building with a multi-storey car park and
specialist centre once completed this year will make Nawaloka
Hospitals the single largest private hospital complex with
900,000 square feet of built-up area. The new building will
have 550 parking spaces, modular channelled consultation
chambers, pharmacy, laboratory, radiology services and
dedicated areas for wellness centres, diabetes and renal
care which will offer exceptional patient comfort and family
centred care.
Looking forward, the citizens of our country need urgent
access to comprehensive medical insurance schemes, which are
currently accessible only to a limited sector of the population.
This will enable better healthcare to be accessible to more
people and to fulfil its growth potential.
In addition, the scarcity of trained professional medical
staff remains a challenge for the industry as a whole. As the
healthcare needs of Sri Lanka grow, matching the demand for
trained medical professionals, and nurses remains an obstacle.
Shortage of skilled workforce is a major hindrance
to healthcare development in Sri Lanka.
Benchmarked for quality, Nawaloka Hospitals has gained
recognition both locally and internationally as evidenced by the
many awards we have won over the years. We are extremely
proud to work with our committed, dedicated and talented
staff of professionals who bring life to our vision and mission.
Finally my deep appreciation goes to our customers,
medical staff, business associates and other stakeholders for
the continued loyalty and trust placed on Nawaloka Hospitals.
Professor Lal Chandrasena
Director/General Manager
25th May 2016
17
BUSINESS MODEL
Founded in 1985,
Nawaloka Hospitals PLC,
is the first fully-fledged
private hospital in Sri Lanka
Our own Nurses’
Training School has
enabled us to become a
key employment generator
in the private sector
Our pioneering spirit is
reflected in the many
‘firsts’ we have introduced
to the healthcare sector
in Sri Lanka – from the
first CT Scanner to the
first fully-fledged
Cardio-Thoracic Unit
and many others
Our objective is to ensure
premium healthcare is
accessible to a wider
community of people in
our country
We mirrored the most
reputed hospitals in the
region, their expert medical
systems and technology
platforms
ABOUT NAWALOKA
Founded in 1985, Nawaloka Hospitals PLC, is the first fully-fledged private
hospital established in Sri Lanka. Set up under the visionary guidance
of our late Chairman, Deshamanya H.K. Dharmadasa, Nawaloka Hospital
paved the way for the proliferation of a vibrant private sector healthcare
system in Sri Lanka which was then, state dominated.
The Hospital’s ‘reason for being’ is to be a centre of excellence
embracing high technology diagnostic and curative facilities supported
by excellence in leadership. We mirrored the most reputed hospitals in
the region, their expert medical systems and technology platforms. Our
aim was to provide the finest healthcare facilities available in the world to
Sri Lanka and thereby eliminate the need for the people of our nation to
travel abroad to seek specialised medical treatment.
Driven by the vision to be the Hospital of Tomorrow, we have gained
recognition as a centre of excellence and a preferred healthcare institution
in the country. Our pioneering spirit is reflected in the many ‘firsts’ we
have introduced to the healthcare sector in Sri Lanka - from the first CT
Scanner to the first fully-fledged Cardiothoracic Unit and many others. Our
own Nurses’ Training School has enabled us to become a key employment
generator in the private sector.
We are today truly a people’s hospital serving customers from all walks
of life with an ethos that enshrines the ‘healthcare over profit’ philosophy.
Nawaloka Hospitals PLC consists of three subsidiaries – New Nawaloka
Hospitals (Pvt) Ltd., New Nawaloka Medical Centre (Pvt) Ltd., Nawaloka
Medicare (Pvt) Ltd. and one joint venture – Nawaloka Metropolis
Laboratory (Pvt) Ltd. Nawaloka Hospital was listed on the Colombo
Stock Exchange in 2004.
ORGANISATIONAL STRUCTURE
New Nawaloka Hospital
(Pvt) Ltd.
New Nawaloka Medical
Centre (Pvt) Ltd.
Fully
Owned
Subsidiaries
Nawaloka Medicare
(Pvt) Ltd.
Nawaloka Metropolis
Laboratories (Pvt) Ltd.
18
Joint
Venture
‘Kuti Pela’ ^l=á fm<& was the second section of the hospital consisting of a house of statues with chambers, surrounded by compound in the centre. There
are 27 chambers, all connected with a passage open to the compound in the centre, designed to give both physical and mental wellness to patients.
19
Sri Lanka remains ahead of
its regional peers in terms
of health indicators largely
due to the Government’s
policy of providing free
universal healthcare
The private sector adopts
the most advanced medical
technology in the world
The number of private
hospitals registered stood
at 241 by end of 2015,
with a capacity of
5,883
beds
The total Government
expenditure on health had
increased to
Rs. 177.8 Bn
in 2015
‘Baraniya’ ^nrKsh& was a Persian vase found in the Mihintalaya historic
hospital site. It belongs to 9th century A.D. approximately. This was
used to store medicine.
20
OPERATING ENVIRONMENT
The Global Economy
Global economic activity remained subdued in 2015 and is
estimated to have grown by 3.1% in 2015, with 1.9% growth for
advanced economies and 4.0% growth for emerging market
and developing economies. Growth in emerging market and
developing economies accounted for over 70% of global
growth, however, declined for the fifth consecutive year.
A modest recovery continued in advanced economies.
The recession in Russia in 2015 was broadly in line
with expectations and conditions worsened in most other
Commonwealth of Independent States (CIS) economies. This
was consequent to the, spillover effects from Russia as well
as the adverse impact of lower oil prices on net oil exporting
countries. Global industrial production, particularly of capital
goods, remained subdued throughout 2015. This weakness was
consistent with depressed investment worldwide-particularly
in energy and mining-as well as the deceleration of China’s
manufacturing activity.
Global growth is projected to remain modest in 2016, at
3.2%, before picking up to 3.5% in 2017. Emerging market and
developing economies will still account for the lion’s share of
world growth in 2016.
The proliferation of chronic diseases, in part, is a
consequence of increased life expectancy which has serious
repercussions in both developed and emerging countries.
Non-Communicable Diseases (NCDs) such as obesity,
cardiovascular diseases, hypertension, and dementia are
becoming persistent. The widespread health problems related
to NCDs in particular will be challenging public health systems
to meet increasing demand for drugs and treatments. The
health sector needs to strengthen its healthcare organisation,
provision and regulation not only to deliver services effectively
and efficiently, but also to provide quality care and guarantee
patient satisfaction.
The Local Economy
The Sri Lankan economy grew by 4.8% in 2015 marginally
lower than the 4.9% growth recorded in 2014. The growth of
the export sector was impacted by slowdown in the growth
of demand in Sri Lanka’s traditional export markets. However,
the strengthening US economy prompted short-term capital
outflows. The lower international commodity prices offset
the impact of these developments to a certain extent during
the year.
The economy benefited by the increased tourist arrivals
and higher spending by tourists. Inflation based on CCPI
(2006/7=100) remained below mid-single levels.
Inflation Based on CCPI (%)
10
8
6
4
2
0
2011/12
2012/13
CCPI Annual Average
2013/14
2014/15
2015/16
CCPI Year on Year
The Industry
Sri Lanka remains ahead of its regional peers in terms of
health indicators largely due to the Government’s policy of
providing free universal healthcare. However, the industry faces
numerous challenges such as the increase of NCDs owing to
the ageing population and dietary and lifestyle changes, the
ongoing epidemiological transition, resource constraints and
the need to improve the quality of healthcare facilities.
Recent developments such as the increased demand for
fast food has reduced the demand for organic food exerting a
negative impact on organic farmers. This has led to a reduction
of supply of healthy food in the long run. Additionally,
consumption of fast food leads to unhealthy lifestyles and also
increases the probability of high blood pressure, cholesterol
and cancers.
The increased number of women in the workforce impacts
the society at large. As a result, there has been a rise in the
consumption of convenient foods and children getting less
attention from their parents.
In addition, the continuous use of chemicals in agriculture
has increased the tendency of kidney diseases to an alarming
rate. The Government is moving towards organic products and
carbon neutral products to reverse this trend. There is a high
demand for health-related services as well. However, due to
unaffordability and lack of education, the process of increasing
carbon neutral products is still in progress.
The Private Sector and the Industry
The private sector mainly consisted of a few leading hospital
chains and a large number of small regional players. The
capacity concentration is moderate, with the top five hospitals
accounting for close 45% of the private healthcare sector. Sri
Lanka’s private hospitals are poised for strong growth, with
one of the world’s fastest-growing, ageing populations, rising
incidence of non-communicable diseases (NCDs) and the
increase in per capita income.
The private sector adopts the most advanced medical
technology in the world and its dependence on medical
technology cannot be overstated. The technology of these
medical equipments needs to be upgraded, every three years
on average to keep abreast of the latest medical advances and
also in compliance with best practices.
Business Model
21
The majority of pharmacies are privately run and there is
a high degree of bargaining power among pharmaceutical
suppliers. This has posed challenges to the hospital services due
to continuous supplier evaluations and vendor management.
As per the available statistics, more than half of all Out
Patients Department (OPD) patients seek treatment at private
sector healthcare institutions. In addition, a substantial number
of state sector medical personnel are routinely engaged in
some part of part-time private consultancy.
Contribution of Private Hospitals
As per the Central Bank of Sri Lanka, the number of private
hospitals registered with the Private Health Services Regulatory
Council stood at 241 by end 2015, with a capacity of 5,883
beds. The medical tourism market was a key growth driver for
the private sector, especially with the increased tourist arrivals
to Sri Lanka.
Major Policy Changes in the Health Sector
in the Year 2015
In 2015, the Government implemented a number of new health
policies to improve the well-being of the general public,
whilst taking measures to enhance the quality of healthcare
services. In this context, a National Policy and Strategy on
Health of young individuals was introduced with the broad
objective of addressing the health issues faced by young
people in the contemporary society. Also, a National Policy
on Alcohol Control was approved by the Ministry of Health
incorporating Government’s obligations under the World
Health Organisation’s (WHO) Global Alcohol Policy Initiative
and the WHO Global Plan to reduce mortality caused by NCDs
by 25% by 2015. To ensure that necessary medical drugs and
devices of high quality are available at affordable prices all over
the country, the Parliament approved the National Medicines
Regulatory Authority Act in March 2015.
Sri Lanka’s Healthcare Sector Performance
The universal healthcare and the robust public health
network across the country has enabled Sri Lanka to make
a noteworthy achievement in health outcomes compared to
other developing countries.
Private Sector – Beds (Nos.)
Sri Lanka has performed well in areas of child mortality,
maternal mortality, reproductive health and combating
epidemics, such as Malaria. This is evident by the decline in
maternal mortality rate from 92 deaths per 100,000 live births
in 1990 to 30 in 2015. The child mortality rate too has declined
from 21 per 1,000 live births in 1990, to 10 in 2015.
Whilst institutional deliveries have improved to almost
100%, the coverage of Rubella vaccination, Tetanus toxoid and
Venereal Disease Research Laboratory (VDRL) test are nearing
100%, for expectant mothers. In addition, Sri Lanka qualified as
a Malaria-free country as no indigenous cases of Malaria have
been reported for three consecutive years. The number of
Dengue cases dropped drastically to 29,777 in 2015, compared
to 47,502 cases recorded in 2014. The fatality rate also dropped
to 0.17% in 2015, compared to 0.21% in 2014.
NDCs which include cardiovascular diseases, diabetes,
cancer and chronic respiratory diseases are the leading cause
of mortality in Sri Lanka. The Sustainability Development
Goal (SDG) of reducing premature mortality from NCDs by
one-third by 2030 through prevention and treatment and
promoting mental health and well-being has helped set targets
to mitigate the threat posed by these diseases. The strategy
on preventing chronic NCDs includes addressing risk factors,
such as smoking, alcohol, obesity, unhealthy diet and sedentary
lifestyles, especially in adults and adolescents. The main causes
for increasing NCDs in Sri Lanka is the prevalence of smokers,
consuming a higher percentage of saturated fats compared
to unsaturated fats, high daily intake of salt and added sugar,
insufficient consumption of fruits and vegetable-based foods,
poor engagement with regular recreational activities and the
increased usage of alcoholic beverages.
In order to promote the health and well-being of the
population, ‘Healthy Lifestyle Centres’ (HLCs) have been
established across the country to provide primary healthcare
facilities as per the National NCD Policy. Accordingly, there
were 814 HLCs island-wide as at end 2015, which provide
services to check fasting blood sugar, Body Mass Index (BMI),
total cholesterol and blood pressure. To effectively face the
issues emanating from NCDs in the future, it is imperative to
continue the strategic decisions oriented towards populationbased prevention and clinic and hospital-based care policies.
The total Government expenditure on health had
increased to Rs. 177.8 Bn in 2015 compared to Rs. 138.4 Bn
in 2014 reflecting a Year on Year (YoY) increase of 29%. The
Government expenditure on health, increased from 1.35% of
Gross Domestic Product (GDP) to 1.55% of GDP in 2015.
6,000
5,500
5,000
4,500
4,000
3,500
22
2013/14
2014/15
2015/16
Operating Environment Business Model
GOALS AND STRATEGIES
Regional Expansion
2015
2014
2013
610
601
603
76,781
76,918
74,636
475
484
481
19,429
17,903
17,553
1,017
1,055
1,057
32,272
31,964
30,928
Attendants
8,689
8,215
8,091
Doctor Person Ratio
(Population Served by a Doctor)
1,079
1,155
1,175
650
683
662
22,672
22,422
21,060
Total Government Expenditure
on Health (Rs. Bn)
177.8
138.4
119.5
Current Expenditure
140.6
116.2
99.6
Capital Expenditure
37.2
22.3
19.9
Government (No.)
Hospitals
(Practicing Western Medicine)
Beds
Primary Healthcare Units
Doctors
Assistant Medical Practitioners
Nurses
Nurse Person Ratio
(Population Served by a Nurse)
Ayurvedic (No.)
Ayurvedic Physicians
The Company is planning to invest further in expanding its
presence by establishing more regional hospitals across the
country. Our objective is to ensure premium healthcare is
accessible to a wider community of people in our country
due to the lack of medical coverage in certain regional areas.
Furthermore, we are establishing hospitals in strategic locations
specialised to provide services in niche segments of healthcare.
Medical Tourism
Medical tourism has gained significant recognition in recent
years and recorded exceptional performance. Accordingly,
Nawaloka achieved significant growth in medical tourism
during the reporting year. There was a steady increase in the
number of foreign patients who sought specialised medical
treatment from the hospital due to affordability and the stateof-the-art medical technology used in diagnosis and treatment.
Nawaloka Medicare (Pvt) Ltd., our regional hospital
in Negombo is the main hospital that caters towards
medical tourism.
A greater contribution of medical tourism is expected in
deriving future value as we are the only hospital in the South
Asian Region which provides certain treatments with the
latest technology.
The Company is working towards Joint Commission
International Accreditation (JCIA) to improve the presence
of Nawaloka Hospitals in the global arena.
Private Sector – Hospitals (Nos.)
250
Introduction of New Products and Services
240
We have introduced many new services during the financial
year in concern, such as the painless and non-invasive fibro
scan, the first bone marrow transplant unit, state-of-the-art
cosmetic unit, upgrades for the neurological units and further
expansions to our laboratory chain.
230
220
210
200
2013/14
2014/15
2015/16
Our action plan is to embrace continuous advancement in
medical technology which is a significant aspect of our vision
of being the leader of excellence.
Business Model Operating Environment
23
STAKEHOLDERS
Our business is significantly
impacted by the flow of
relationships and influence
that we share with many
important stakeholders
Identifying Stakeholders
As a responsible entity
we communicate with
our stakeholders
throughout the year and
engaging with them is
integrated into our business
decision-making processes
Our stakeholders are individuals or organisations that interact with us
and are significantly affected by our activities, products and services and
whose actions can reasonably affect our ability to successfully implement
our strategies and achieve our objectives.
The strategies and
processes of Nawaloka
Hospital are driven by a
set of values it upholds,
which enables the hospital
to achieve the desired
standard of excellence
Our business is significantly impacted by the flow of relationships and
influence that we share with many important stakeholders. Therefore, we
attach great importance to correct identification and timely engagement
with our key stakeholders who contribute immensely to our value creation
process. The extent of value creation depends not only on our capabilities
but also through the interaction among our stakeholders.
In this context, our primary stakeholders are investors, customers,
business partners, employees, society and the environment, in which we
operate as well as regulators and Government authorities.
Our service is under the influence of the nature of interaction we share
between our stakeholders. Thus it is important for us to prioritise the
stakeholders based on our own mechanism and ensure their needs are
addressed appropriately towards deriving optimum value.
Engaging with Our Stakeholders
As a responsible entity we communicate with our stakeholders
throughout the year and engaging with them is integrated into our
business decision-making processes. The relationship we foster with them
has a direct impact on our business.
In formulating our strategic
priorities, we consider
the full range of topics
or aspects that have
the potential to impact
Nawaloka’s ability to
create value over the short,
medium and long term
24
Business Model
The mode and frequency of engagement vary depending on the stakeholder group and the nature of a specific aspect to be
addressed. These aspects are summarised below:
Stakeholder
Strategies
Mode of
Engagement
Frequency of
Engagement
Key Topics
Discussed
Methodologies
Employed to Respond
Customers
Innovation – New
package/new test/
new high technology
medical treatment
Public relationship
officer, social media,
corporate website and
other forms of ATL
(Above the Line) and
BTL (Below the Line)
advertising
Customer counter,
Feedback forms
Corporate website,
Social media
Daily
Availability of
services. The
Advantages in
terms of pricing,
time consumption,
quality
Meetings by public
relationship officers
Customer Complaints
Management
(ISO Procedure)
Public Relation Officer,
Corporate website,
Social media
Whenever required
Human Resource
Development
Inbound and
Outbound Training
Monthly/Weekly
Employee engagement
Continuous benefit
schemes
Rewards and recognition
Grievance handling
Meetings/Workshops
Monthly meetings
Whenever required
Monthly
Evaluation
Grievance Committee
Quarterly
Whenever required
Employee forums
Monthly
Social events like
employee gettogether/cricket fiesta
Operational updates
via Emails
Annually
Service excellence
of the hospital
Customer network
Employees
Occupational health
and safety and
employee welfare
Legislation
and
Regulators
Responding to concern
raised through Email
and letters
Customer support desk
Whenever required
Annually
Quality of the
services received
New services/
technologies
introduced
Service locations
outside NH premises
Leadership Skills,
Negotiation Skills,
Crisis Resolution
Skills
Operational issues
New procedure
introduced
Customer
suggestions and
complaints
Risk involved in
work place
Periodic customer
satisfaction survey
feedback system
Quarterly
performance appraisal
Post meeting feedback
Emails
Memos
Training and
awareness
Achieving objectives One to one
Targets vs.
discussion
achievements
Whenever required
Promote voluntary
compliance codes
Submitting reports
Whenever required
Private healthcare
regulatory council
Ongoing dialogue
and reviews
Adherence to all
mandatory regulations
Filling reports/returns
Annually
Legal and compliance
department
Press releases
Corporate website
Whenever required
Whenever required
Adherence to
environmental
regulations
Taxes
Other mandatory
requirement
Business Model Stakeholders
25
Stakeholder
Strategies
Mode of
Engagement
Frequency of
Engagement
Key Topics
Discussed
Suppliers
Laid down supplier
selection policy
Meetings
Weekly meetings
Tender procedure that
optimises the level of
competition throughout
the supplier selection
process
Ethical sourcing
practices
Local sourcing and
inclusive sourcing policy
Effective dispute
resolution mechanism
News Papers, Emails
Tender Committee
Whenever required
Prices, New products Ongoing dialogue and
delivery local time
Tender Committee
meetings
On time delivery
Site visits
Whenever required
Services
and periodic
maintenance
Contractual
performance
Community
development and
capacity building
Education and literacy
Sponsorships
Whenever required
Whenever required
Health and nutritional
development of society
Participation in
public events
Press conferences
Medical campaign
Enhancing water
Awareness programme
and sanitary facilities Mainly dialogues
and communications
Promoting health
through letters and
of the schools
e-communications
Enhancing facilities
Direct communication
of the general
with the consultants
hospitals
Ethical sourcing
Call centre
Whenever required
Innovation – New
package/new test
High technology
Annual General
Meeting
Media both ATL
and BTL
Annually
Society
Investor
Quality
Upgrading
of equipment
Whenever required
Whenever required
Annual Report
Annually
Quarterly Report
Quarterly
Announcements to
stock exchange
Press conferences
Whenever required
Whenever required
Consultants
Modern Technology
Individual meetings
Whenever required
Customer network
Consultant forum
Monthly basis
Service excellence
of the hospital
26
Methodologies
Employed to Respond
Governance of the
Company
Advantages
of the new machine,
time consumption
Financial and
non-financial
performance and
improvement
of CSR activities
Quarterly financial
performance
AGM
Annual Reports
Meetings
Changes and
improvement
of governance
Shareholder benefits
Availability
Ongoing dialogue
of facilities
Time schedules
for practice
New Technologies
available in the
global arena
Contribution
to the Hospital
Consultant payments
Additional facilities
required
Stakeholders Business Model
‘Abarum Gala’ ^weUreï .,& was a granite stone used for grinding medicine. This was used to prepare ingredients or substances by crushing and
grinding them into a fine paste or powder. The hardness of granite was adequate to crush the substance and its cohesiveness prevented small particles
of it being mixed with the ingredients.
27
MATERIALITY AND VALUE CREATION
External Initiatives
Material Aspects
Nawaloka Hospital has memberships and affiliations with the
following institutions; through which it maintains external
dialogues-on related aspects of the business:
In formulating our strategic priorities, we consider the full
range of topics or aspects that have the potential to impact
Nawaloka’s ability to create value over the short, medium and
long term. The extent of materiality of the aspect depends on
its relevance and importance. The importance of an aspect
depends on the magnitude of its impact and the probability
of its occurrence.
zzThe
Association of Accounting Technicians of Sri Lanka
(Accredited Training Partner)
zzEmployees
Federation of Ceylon
zzCertified
Management Accountants of Sri Lanka
zzInstitute
of Certified Professional Managers of Sri Lanka
Values We Live By
The strategies and processes of Nawaloka Hospital are driven
by a set of values it upholds, which enables the hospital to
achieve the desired standard of excellence.
zzBe
a forerunner in setting standards for current paediatric
care and innovations of the future.
zzAlways
pursue excellence in clinical care, service and
communication.
zzCollaborate
within our Institution and with others who share
our mission and goals.
zzBe
a pioneer in setting standards for current paediatric care
and innovations of the future.
zzAlways
be accountable to our patients, the community and
to each other in providing the best service in the most cost
effective manner.
An aspect can be material from both perspectives; the
hospital and its stakeholders. Therefore, Nawaloka has
developed a two dimensional materiality matrix, which takes
into consideration both perspectives in concern. We have
mapped the economic, social and environmental aspects which
are considered material to both Nawaloka and its stakeholder.
Materiality Matrix
High
Institute of Chartered Accountants of Sri Lanka
(Accredited Training Partner)
6, 8
Medium
Sri Lanka-Malaysia Business Council
zzThe
2, 3, 4, 7,
13, 15, 17, 25
1, 5, 9, 10, 11, 12, 14,
16, 18, 19, 20, 21,
22, 23, 24, 26, 27
Low
Private Hospitals Association of Sri Lanka
zzThe
Importance to Stakeholders
zzThe
Low
Medium
High
Importance to Nawaloka
28
Stakeholders Business Model
No. Aspect
Indicators
Importance to
Nawaloka
Importance to
Stakeholders
1
Economic Performance
G4-EC1
G4-EC2
G4-EC3
G4-EC4
High
High
2
Market Presence
G4-EC6
Medium
Medium
3
Indirect Economic Impacts
G4-EC8
Medium
Medium
4
Procurement Practices
G4-EC9
Medium
Medium
5
Materials
G4-EN1
High
High
6
Energy
G4-EN6
Medium
High
7
Water
G4-EN8
Medium
Medium
8
Effluents and Waste
G4-EN23
Medium
High
9
Employment
G4-LA1
High
High
G4-LA4
High
High
G4-LA6
High
High
High
High
Medium
Medium
G4-LA2
G4-LA3
10
Labour Management Relations
11
Occupational Health and Safety
G4-LA7
12
Training and Education
G4-LA9
G4-LA10
G4-LA11
13
Diversity and Equal Opportunity
G4-LA12
14
Equal Remuneration for Women and Men
G4-LA13
High
High
15
Labour Practice Grievance Mechanism
G4-LA16
Medium
Medium
16
Non-Discrimination
G4-HR3
High
High
17
Freedom of Association and Collective Bargaining Power
G4-HR4
Medium
Medium
18
Child Labour
G4-HR5
High
High
19
Human Right Grievance Mechanisms
G4-HR12
High
High
20
Local Communities
G4-SO1
High
High
21
Anti-Corruption
G4-SO3
High
High
22
Anti-Competitive Behaviour
G4-SO7
High
High
23
Compliance
G4-SO8
High
High
24
Customer Health and Safety
G4-PR1
High
High
25
Product and Service Labelling
G4-PR5
Medium
Medium
26
Marketing Communications
G4-PR6
High
High
High
High
G4-PR2
G4-PR7
27
Customer Privacy
Business Model Materiality and Value Creation
G4-PR8
29
MANAGEMENT DISCUSSION
AND ANALYSIS
FINANCIAL CAPITAL
Group revenue
increased by
27%
Year on Year (YoY)
Performed over
16,000
surgeries and
550
Coronary Artery
Bypass Grafting (CABG)
procedures during
the year
Economic Performance
Despite the uncertainties and the challenging operating environment,
particularly in the context of the Sri Lankan economy, that prevailed during
the year as detailed in operating environment on page 21, we performed
extremely well during the year, exceeding the expectations we had set for
the year at the beginning. This strong performance is primarily attributed
to the close integration we had with all our operating units, from top tier
managers to lower level staff. We are pleased to record that we have
seen growth across all major operational divisions. Our flexibility to swiftly
respond to various requirements of patients is another critical factor
behind this exceptional performance.
Results of Operations
At the Group level, revenue grew by 27% to Rs. 5,860 Mn compared to
Rs. 4,602 Mn in 2014/2015. This double-digit growth was made possible
as a result of the contribution from new services and new locations such
as Bone Marrow, Cosmetic Centre, Operation Theatre and the regional
hospital in Negombo.
Revenue (Rs. Mn)
6,000
4,800
Total assets of the Group
grew by 30% to Rs. 11,198 Mn
as at year end
3,600
2,400
1,200
0
Nawaloka was the first private
healthcare service provider to
be awarded the ‘Baby Friendly’
status by the World Health
Organisation and United Nations
Children’s Fund
2011/12
2012/13
2013/14
2014/15
2015/16
The mammography unit, LASIK procedure and MRI and CT units made
significant contribution towards investigating and diagnosing ailments
through the provision of well women packages and surgery. The 640-slice
CT scanner aided our cause in excelling in investigations. The success of
Nawaloka is attributed to the strong brand image as the pioneer in modern
healthcare, the immensely dedicated team members and the state-of-theart technology.
Radiology Department which consist 3 Tesla MRI Machine, 640-slice
one of the fastest CT machine had contributed to the success of the
Company during the financial year too. The Company has continued
upgrading theatres to Laminar flow to ensure that Nawaloka is in par with
the modern theatre technology.
Revenue Composition
While the inward contribution continued to be the main driver of revenue,
we experienced a shift in the composition of revenue in favour of Outward
Contribution during the reporting period. The OPD Unit made a significant
contribution during the financial year 2015/16, on account of the expansion
in channelling. This is mainly due to the convenience and expediency
services offered with the use of new technology and systems in place.
30
Revenue Composition (%)
1985
Inward
59
Outward
41
The profit from operations had increased substantially
compared to the last year as a result of decrease in cost of
sales, administration and other costs and an increase in other
income. Despite the constraints such as the steady increase
in inflation, the acute shortage of healthcare professionals
and intense competition, Nawaloka recorded a noteworthy
performance in the year under review.
The following control mechanisms were implemented to
ensure efficient cost management:
zzEmployee
awareness campaigns were implemented through
meetings and circulars to ensure better use of Company
resources.
zzProcurement
Managers were placed at key points providing
performance based incentives to ensure aligning cost
efficiency policies with decision-making.
zzSupplier
selection policy is revisited to ensure greater
emphasis placed on transparency and cost reduction.
Despite the intense competition in the healthcare sector
in Sri Lanka, Nawaloka Medicare (Pvt) Ltd., recorded a steady
performance during the financial year and made a positive
contribution to the Group being the first regional hospital
located in Negombo.
From a single building in Colombo we began our
journey of revolutionising the healthcare industry
of Sri Lanka. Over the years we have expanded
our operations, widened our service offer and
geographical cover to serve a wider population
of our country.
Here’s how we expanded our presence over
the years 1985 -Nawaloka Hospitals PLC
1995 -New Nawaloka Hospital (Pvt) Ltd.
2007-New Nawaloka Medical Centre (Pvt) Ltd.
2014 -Nawaloka Medicare (Pvt) Ltd. (Negombo)
2017 -Car Park – Proposed to be completed
This indicates the confidence of the public in our services
and motive of providing superior healthcare towards being the
hospital of tomorrow.
Other Operating Income
The gross profit margin of the Group increased by 1% from
49% in year 2014/15 to 50 % in 2015/16. The growth was as a
result of setting challenging targets to each department and
establishing a monitoring mechanism to provide due diligence.
Proportionate to the revenue, all costs including cost of
sales, administration expenditure and staff cost declined.
Other Operating Income (Rs. Mn)
100
80
60
40
20
0
2011/12
2012/13
2013/14
2014/15
Management Discussion and Analysis Financial Capital
2015/16
31
Financial Position
Radiology and Imaging Sciences
In terms of financial position, total assets of the Group grew
by 30% to Rs. 11,198 Mn as at 31st March 2016 primarily as a
result of additions to capital work-in-progress on account
of multistoried car park project and investment on medical
equipment funded primarily through borrowings from the
banking sector. Consequently, debt to equity ratio increased
from 0.84 in 2014/15 to 1.27 as at 31st March 2016. With the
profits retained, the Group net assets per share marginally
increased to Rs. 2.86 as at 31st March 2016 compared to
Rs. 2.76 a year ago.
Being the Pioneer in Modern Healthcare Services, we have left
our mark in the aspects of radiology as well.
We introduced our third CT (Computed Tomography)
scanner in 2014. This Toshiba Aquillion ONE VISION CT scanner
is one of the world’s fastest and accurate 640-slice CT scanner
available in South Asia providing the following features:
zzMotion-free
zzNext
imaging with routine 0.275 second scanning
Generation Quantum Vi detector
zzTransform
your diagnosis from morphological to functional
zzIntegrated
dose – reduction solutions assured
Business Unit Performance
The following section provides a detailed analysis of the
performance and trends of the key departments in Nawaloka
Hospitals PLC.
Surgical Department
The features of the above novelty ensure that the diagnosis
we perform are accurate and ensures effective decision-making.
Furthermore, we introduced the first state-of-the-art
3 Tesla MRI (Magnetic Resonance Imaging) Scanner in
Sri Lanka in 2011.
This is one of Nawaloka’s most successful departments
that have continually proved itself in generating value.
The department performed over 16,000 surgeries and 550
Coronary Artery Bypass Grafting (CABG) procedures during
the year. The number of surgeries performed during the year
reflects that Nawaloka is the preferred healthcare institution in
the country, especially with the surge in medical tourism.
As a fully-fledged imaging unit, functioning 24/7, manned
by radiologists and equipped with state-of-the-art technologies
as mentioned above, we have been able to record excellent
performance in this department.
As in the past, the Surgical Intensive Care Unit (SICU) had
the highest occupancy and attributed to the expansion of
affordable surgical packages and the product mix on offer,
factoring the affordability of the patients. Using this unique
formula, the surgical department excelled in pre/intra/post
operative care, gaining the confidence of visiting surgeons,
prompting a pragmatic shift to major surgical procedures in
liver, neuro and vascular.
150
The use of the theatres is optimised by a unique
combination of visiting and resident surgeons, while the
24/7 call roster for all major sub-specialties with 24 hour
Anaesthetists’ cover is available. All of these factors
contributed towards maximising the volume of the surgeries.
We have recorded a growth of 30% in cases reported in
2015/16 compared to cases in 2014/15.
Operation Theatre Revenue (%)
150
90
60
90
60
30
0
Base Year - 2013/14
2014/15
2015/16
Lasik Department
The laser-assisted in situ keratomileusis (LASIK) established in
Nawaloka Hospitals PLC is a state-of-the-art solution provider
for disorders such as short sightedness, far sightedness, and
astigmatism.
We are functioning 24/7 and offer emergency and laser
treatment.
30
32
120
Taking just 20 minutes to complete, LASIK can most
importantly be provided as an outpatient service which ensures
convenience, affordability and minimal disruption.
120
0
Revenue from CT/MRI/X–RAY Cases (%)
Base Year - 2013/14
2014/15
2015/16
With the help of highly skilled ophthalmologists and nurses
and access to the latest technology, we can provide the
patients the best eye care they deserve.
Financial Capital Management Discussion and Analysis
Nawaloka was the first private healthcare service provider to
be awarded the ‘Baby Friendly’ status by the World Health
Organisation and United Nations Children’s Fund.
Lasik Cases (%)
175
The Nawaloka Maternity Unit provides comprehensive
care, from pregnancy through childbirth to after care. Special
seminars were organised for ‘Mothers to be’ which were free
for all expectant mothers.
140
105
70
35
0
Base Year - 2013/14
2014/15
2015/16
During the financial year 2015/16, we have recorded a 30%
growth in cases compared to the year 2013/14 and a 7% growth
in comparison to 2014/15.
Mammography Unit
As the hospital of tomorrow we are constantly on the look
out for possible avenues to ensure maintaining our standards
and hence, we had introduced the world’s most accurate
mammography machine.
With an investment of Rs. 48 Mn., the unit recorded a
robust increase in the number of cases as follows:
Our paediatric unit is equipped with the only PICU
(Paediatric Intensive Care Unit) in Sri Lanka and is attended
by the top paediatricians in the country. The Maternity Unit
was refurbished and promoted via an effective advertising
campaign during the year. The Company continues their
maternity and paternity for the normal and caesarean patients
where all costs are fixed.
Admissions (%)
109
106
103
100
97
Mammography Cases (%)
94
250
Base Year - 2013/14
2014/15
2015/16
The Company has performed exceptionally in terms of
admissions in the current year and this reflects the trust
our patients place on us in relevance to our best healthcare
services provided by the most experienced staff.
200
150
100
50
0
Base Year - 2013/14
2014/15
2015/16
As per the above chart, we can confirm that we have
performed exceptionally well as there is a 42% growth from
the year 2014/15 to 2015/16.
Cath Lab Cases (%)
150
120
90
60
Maternity and Paediatric Unit
30
0
Base Year - 2013/14
2014/15
2015/16
Our Cath Lab, the first ever in Sri Lanka demonstrated a
steady growth from years 2014 to 2015. A 12% growth was
realised in the year 2014/15, and another 12% increase in the
year 2015/16.
Management Discussion and Analysis Financial Capital
33
Value Generated and Distributed
2015/16
Rs.
2014/15
Rs.
2013/14
Rs.
2012/13
Rs.
2011/12
Rs.
Value Added
Revenue
Less: Cost of Materials and Services Obtained
5,860,218,161
4,602,433,640
3,993,473,302
4,222,907,733
3,710,878,442
(3,646,563,430)
(2,983,613,751)
(2,418,803,334)
(2,432,734,726)
(2,333,546,116)
Add: Other Income
94,495,240
65,199,571
64,194,796
44,047,999
30,210,655
2,308,149,971
1,684,019,460
1,638,864,764
1,834,221,006
1,407,542,981
Salaries, Wages, Incentive and Other Benefits
1,151,309,690
968,758,629
832,696,146
865,042,371
717,949,353
Total Employees
1,151,309,690
968,758,629
832,696,146
865,042,371
717,949,353
Interest on Loans and Leases
372,317,361
285,092,893
202,170,943
104,009,192
59,932,975
Total Interest on Loans and Leases
372,317,361
285,092,893
202,170,943
104,009,192
59,932,975
109,218,200
9,176,683
83,783,780
2,832,483
91,418,057
109,218,200
9,176,683
83,783,780
2,832,483
91,418,057
Distribution Value Added
To Employees
To Lenders
To Government
Taxation
Total Government
To Provision
Results of Associate Companies
–
–
–
–
–
Impairment Profit/(Loss)
–
–
–
–
–
Revaluation Deficit
–
–
–
–
–
Total Provision
–
–
–
–
–
To Expansion and Growth
Excess on Acquisition
469,423,205
351,695,092
303,447,828
265,422,430
267,556,033
Depreciation
205,881,515
69,296,227
216,766,067
596,914,530
270,686,563
Retained Profit/(Loss)
675,304,720
420,991,319
520,213,895
862,336,960
538,242,596
2,308,149,971
1,684,019,460
1,638,864,764
1,834,221,006
1,407,542,981
Total Expansion and Growth
Financial Assistance Received from Government
A tax exemption was granted to Nawaloka Medicare (Pvt) Ltd.
for 6 years commencing either from two years of commencing
business or the first year in which profit is reported.
A tax exemption was granted to the new Nawaloka Medical
Centre for 10 years commencing from 2009 to 2019.
34
Financial Capital Management Discussion and Analysis
‘Sayanaya’ îdhkh& was a chamber close to the gate and located in the first section of the hospital. A clinic generally provides outpatient services.
Patients are examined at the clinic and then sent to the inpatient unit for treatments if required.
35
INTELLECTUAL CAPITAL
Nawaloka has
a storehouse of
knowledge, expertise and
professional excellence
with a history spanning
over 30 years
Nawaloka is an ethical
institution which
embraces the highest
business principles
and integrity which
are deployed across
the Organisation. It is
reflected in every aspect
of our operation
The Nawaloka brand is
30 years strong and it
was built on the ideals
of pioneering spirit,
integrity, innovativeness,
loyalty, quality,
affordability, customer
satisfaction and the
fostering of long-term
relationships
Intellectual capital comprises the intangible aspects of our Company.
This non-financial capital which is accounting for an increasingly
significant proportion of the value of our Company includes the corporate
culture, organisational knowledge, business ethics and integrity, brand
equity likewise.
Organisational Knowledge
Nawaloka has a storehouse of knowledge, expertise and professional
excellence with a history spanning over 30 years. It is the pioneering
private, modern healthcare service provider in Sri Lanka, offering premium
healthcare solutions at an affordable price.
We set up the first Cath Lab Heart Unit in Sri Lanka and made an
immense contribution to address heart-related diseases in the country.
Over 12,000 cardiac surgery interventions were performed by our
professional team during the year. Embracing cutting-edge technology,
we introduced the first CT Scanner, MRI Scanner, the latest 640-slice CT
Scanner, 4D Ultra Sound Scanner and the Fibro Scanner to Sri Lanka.
Our Bone Marrow Unit recorded an exemplary performance by
achieving a 100% success rate in all transplants performed. In addition,
we are the only hospital in the country to treat leukaemia related Bone
Marrow Transplants. The newly established Cosmetic Centre and the
Serene Centre showcase our prowess in providing medical solution to
emerging healthcare trends.
The recognition received by Nawaloka from professional institutions
such as The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka),
Association of Chartered Certified Accountants and the Sri Lanka Institute
of Training and Development reflect the calibre of our skilled staff.
Nawaloka became the first ISO–Certified hospital in Sri Lanka in
the year 2000 which speaks volumes of the quality of our systems and
procedures.
Corporate Ethics
Nawaloka is an ethical institution which embraces the highest business
principles and integrity which are deployed across the Organisation.
It is reflected in every aspect of our operation.
The corporate governance section on page 78 to 94 of this Report
details our compliance to various ethical and regulatory regimes,
enactments, codes and control mechanisms. These are reviewed and
updated from time to time to ensure they remain valid and relevant always.
Brand Equity
The Nawaloka brand is 30 years strong and it was built on the ideals of
pioneering spirit, integrity, innovativeness, loyalty, quality, affordability,
customer satisfaction and the fostering of long-term relationships.
As mentioned, our vision is 'to be the hospital of tomorrow’, to provide
quality and safe healthcare to the people whilst maintaining leadership
and excellence in the healthcare industry. Thus we would ensure
achievement of our aspiration by sustained brand equity development.
36
Management Discussion and Analysis
We have undertaken numerous projects during the
reporting year to ensure that our brand equity is geared
towards serving future generations and a majority of those
constitute medical camps, awareness programmes, corporate
sponsorships and other brand building campaigns.
Furthermore, our unique culture is a source of enhancing
our brand equity as a means of being an exceptional employer
and an entity which positively responds to the needs of the
local community and the broader stakeholder categories.
The reporting year under consideration focused mainly on
brand development and enhancing the scope of our market.
Brand Platforms
Nawaloka’s major brand platforms are –
zzPioneering
Spirit
Centric Culture
zzInnovative Services
zzInnovative Cutting Edge Technology
zzHighest Successful Clinical Outcomes
zzReputation of Clinical Staff
zzEthical Governance Policy
zzFinancial Stewardship
zzCost Effectiveness
zzStrategic Location
zzCustomer
IT Capabilities and Developments
Description of the Process
Business Impact
(High/Medium/Low)
Remarks
OPD Queue Management System (QMS)
High
Improved public relations and better
patient management
LAB Queue Management System (QMS)
High
Improved public relations and better
patient management
Online Medical and Surgical Package Payment
through www.nawaloka.com Hospital Website
High
Improved services
Online Final Bill Payment through
www.nawaloka.com Hospital Website
High
Improved services
Automated OPD Consultation
Medium
Electronic Medical Record for OPD Patients
Automated ETU Consultation
Medium
Electronic Medical Record for ETU Patients
Facebook Page and a Group for Nawaloka
for Social Network Promotions
High
Better social network
Maintenance Agreement with MIT for
Sun Servers and Disk Array
High
Part of disaster recovery plan
Microsoft Windows Licensing
High
Adhere ethics of industry
Introduced Fingerprint for Attendance and
Register Points
High
Improve controls and accurate data
Integrated Consultation of OPD, ETU and IPD
medium
Much more accurate electronic medical records
Electronic Discharge Summary
High
Accurate and efficient electronic medical records
Electronic Diagnosis Card
High
Accurate and efficient electronic medical records
New Discharge Procedure for Patients
High
Minimise the delay and monitor department-wise
discharge time
User ID/Password Registration – New Format
High
More security and individual responsibilities
has been implemented
New System Implementation at Negombo
High
Growth of business
Wi-Fi Facility
Medium
Improved services
Management Discussion and Analysis Intellectual Capital
37
Description of the Process
Business Impact
(High/Medium/Low)
Remarks
New Accounting Software – Tally
High
Minimise to workload on Final Account preparation
New Call Billing System
High
Automated call system
New Fibber Backbone Cablings
High
Zero down time and fasten the Internet LAN
New IT System (ERP Solution)
High
Better cost and staff controls, greater efficiency
and reliability
New Virus Guard – Eset Smart Security
High
Secured Local Area Network (LAN)
Heart Centre Website
High
Market and Promote Hospital Cardiac Centre
OPD System
High
Streamline hospital outpatient caring process
Maternity Package System
High
More efficient system for drug request
Automated Blue Card
High
More accurate and efficient system for nurse station
to request drugs from utilities
Introducing Privilege Card for Co-operate and
Individual Clients In Different Categories Platinum,
Gold and Silver
High
This will facilitate clients with a dedicated counter
to serve them on top priority basis and provide them
with online service and room reservation
Online Appointment Booking through
www.nawaloka.com
High
Patient convenient, more speedy way to access
hospital channel appointments
SMS Campaign
High
Improve public relations with awareness
Unique Patient Identification Number (UPIN)
with Patient Registration
High
Much accurately identify the patient and history
of the patient
Document Management System (DMS)
High
High availability of the scanned documents
through network
Firewall
High
Data protection
CT/MRI, Di-Com Image Reporting System
High
Most accurate reporting result
HIS Server Migration
High
From the legacy infrastructure to a new platform
Oracle Licensing
High
Compliant with regulations
New Payroll System
Medium
In-house maintained, easy controlled
New PBX and Call Centre Solution
High
Improve customer service and revenue
Doctor Find Touch Screens in Lobbies
High
Better customer service
Hospital Mobile Application
High
Improve patient’s convenience. Easy access
38
Intellectual Capital Management Discussion and Analysis
Corporate Culture
As a company recognised for sustainable human resource
management by independent accredited bodies, we are
confident in assuring you that our culture is exceedingly
customer centric and employee friendly.
1987
Our culture is deemed unique as we explore out of the
box strategies to ensure employee satisfaction such as
flexible working arrangements, continuous employee training,
educational reimbursements, sponsoring employees for
seminars to improve skills and capabilities, on site medical care
and so on.
This is embedded deep in our culture as we take pride in
being customer centric and we are always committed towards
being the best employer.
Procurement Policy
The procurement policy of Nawaloka is geared to achieve
cost optimisation and operational excellence through efficient
and standardised procurement procedures. It is formulated
to promote favourable outcomes for the hospital’s economic
performance, the environment and the society.
The following measures are implemented to ensure the
effectiveness of our procurement policy:
zzAssess
and continuously monitor supplier agreements to
ensure they have the proper licenses to operate.
zzEstablish a Standard Operating Procedure (SOP) in
procurement and vendor management, communicate the
SOP to relevant parties and provide the necessary training
to staff.
zzMaintain an updated vendor master file and implement
supplier selection criteria.
zzPriorities suppliers with sound environmental and
labour policies.
zzConduct regular audits to assess suppliers according to
defined environmental performance.
zzEstablish and update standards to measure performance
of suppliers in terms of OTD (On Time Delivery), quality,
and rejection.
zzEstablish clear roles and responsibilities for
procurement staff.
zzTrain procurement staff to correctly identify and select
suppliers who meet the procedures.
zzReview at least three quotations prior to making a purchase
decision to ensure an equal opportunity to all suppliers.
zzIn addition, the procurement staff are given performance
goals, objectives and sustainable procurement aspects for
which they are held accountable through their personal
development evaluations and assessments.
Management Discussion and Analysis Intellectual Capital
Constant innovation is the hallmark of Nawaloka
Hospitals. We don’t just keep up with technology,
but we continually introduce, anticipate and build
on advances to ensure our patients receive the
finest care available.
We are committed to be the ‘Hospital of
Tomorrow’. These are some of the ‘Firsts’
we introduced to Sri Lanka 1987 - First CT Scanner
1995 - First MRI Scanner
2010 - Fully-loaded 16 Slice CT Scanner
2011 - Commissioned the first state-of-the-art
3TESLA MRI Scanner
2014 - South Asia’s first and world’s fastest,
most accurate 640-slice CT Scanner
39
INVESTOR CAPITAL
The Dividend Policy
Market Activity
2015/16
2014/15
Highest Price (Rs.)
3.90
3.90
Lowest Price (Rs.)
2.90
2.90
Year End Price (Rs.)
No. of Share Transactions
3.50
2.90
2,690
3,853
No. of Shares Traded
372,106,762
38,729,490
Share Turnover (Rs.)
1,463,392,640.00
132,721,899.60
9.65
12.59
Shares held by public (%)
Performance of Nawaloka Share
Ordinary Share Information
Nominal Value Per Share Rs. 1.00
Market Price per Share (Rs.)
31.03.2016
31.12.2015
30.09.2015
30.06.2015
31.03.2015
31.12.2014
30.09.2014
30.06.2014
High
3.7
3.7
3.9
3.2
3.5
3.6
3.9
3.5
Low
3.1
3.0
2.9
2.9
2.9
3
3.2
3.2
Closing
3.5
3.3
3.6
3.1
2.9
3.3
3.7
3.2
2.83
2.84
2.78
2.8
2.76
2.79
2.76
2.8
Financial Measures
Net Assets per Share
Key Financial Indicators – Over Five-Year Period
Group
2015/16
Company
2014/15
2013/14
2012/13
2011/12
2015/16
2014/15
2013/14
2012/13
2011/12
Financial Ratios
5
2.25
5.35
12.02
8.54
5.31
6.32
15.36
10.18
0.89
1.03
1.11
0.71
0.58
1.83
1.62
1.12
0.53
0.57
0.7
0.80
0.85
0.48
0.42
1.75
1.53
1.01
0.48
0.53
2
1
3
8
5
2
2
7
5
Debt/Equity Ratio
1.27
0.84
0.58
0.25
0.28
3.21
1.78
1.20
0.16
0.20
Earnings/(Loss) per Share (Rs.)
0.15
0.06
0.15
0.32
0.19
(0.09)
0.06
0.08
0.18
0.11
Net Assets per Share (Rs.)
2.83
2.76
2.77
2.67
2.25
1.04
1.20
1.21
1.18
1.06
Dividend per Share (Rs.)
0.07
0.06
0.05
0.05
0.05
0.07
0.06
0.05
0.05
0.05
Current Assets Ratio
Quick Assets Ratio
Return on Assets (%)
40
(9)
(2)
‘Vaidya Mewalam’ ^ffjoH fuj,u& was made out of metal and was used to prepare medicine.
41
CUSTOMER CAPITAL
Our Products and Services
Nawaloka offers its customers an extensive portfolio of healthcare services which are premium in quality and interventions that
meet a spectrum of healthcare needs of customers with a strong brand identity. These include –
Radiology Services
Hospital Services
Cardiac Services
C.T. Scanning
Doppler Scanning
MRI Scanning
Ultra Sound Scanning
X Ray Facilities
Mammogram
OPD Services
Consultation
Pharmacy
Physiotherapy and Rehabilitation
Speech Therapy
Fully-Equipped ICUs
Pain Clinic
Immunisation Clinic
Home Nursing
ETU and Ambulance Service
CABG Normal
CABG (High risk without IABP)
CABG (High risk with IABP)
Coronary Angiogram
PTCA
Angiography
ECHO Cardiography
ECG, Exercise ECG
ENT Services
Audiology Clinic
Speech Therapy
ENT Tymponoplasty
EEG
Ophthalmology Services
Vitrectomy Ultrasound Laser System (TPPV)
Vitrectomy Ultrasound Laser System (RP)
Fluid Gas Exchange
Silicon Oil Removal
Repeat TPPV
Squint Correction Surgery
Keratoplasty Surgery
Cataract Eye Package (OPD/Inward)
Avesting Eye Injection
Special Laser Cataract Package
Gynaecology Services
Dental Unit
Gynaecology – Abdominal Hysterectomy
Abdominal Myomectomy
Gynaecology – L.S.C.S
Gynaecology – Normal Delivery
Maternity Packages
Diagnostic Laparoscopy
Laparoscopy and Dye Test
Laparoscopy Adhesiolysis
Laparoscopy Sterilisation
Laparoscopy Salpingectomy
Laparoscopy Cystectomy
Laparoscopy Ovarian Drilling
Oopherectomy
Antenatal Exercise Classes
Maternity Awareness Programme
Cardiac Units
Echo Cardiography, ECG/EEG,
Exercise ECG
Angiography
Other Health Services
Ambulatory Blood Pressure Monitor
Holter Monitor
Sleep Study
Carpal Tunnel Release
Lung Function Test
Dialysis
Haemodialysis unit
DEXA Scanning
Fibro Scan
Laboratory services
Surgical Services
Specialist Consultations Services
Serene Health Screening Centre Services
Diabetic Centre
Sleep Lab
Serene Health Screening Centre
Fertility Center
Centre for Liver Disease
Dental Unit
Obstetrics and Gynaecology
Eye Centre (Lasik)
Heart Centre
Serene Centre for Weight Management
Paediatric Immunisation Unit
Serene Breast Cancer Screening Unit
Headache Unit
Neo Natal Unit
Dementia Clinic
Preliminary Screen package (Under 40 years)
Classic Screening Package (Under 40 years)
Premier Packages (Under 40 years)
Standard Package (Under 40 years)
Comprehensive Screening Package (Over 40 years)
Cardiac Screening Package
Andropause Check (Over 50 years)
Screening Package for Senior Citizens (Over 50 years)
Joint Pain and Arthritis Package (Over 50 years)
Premarital Screening Package
Feminine Package for Teens
Diabetic Screening Package
Food Handler’s Check
Dementia Package
42
Dementia Clinic
Laparoscopic Cholecystectomy
Laparoscopic Appendectomy (Open)
Appendectomy
Haemorrhoids
Circumcision
TURP
Laminectomy
Headache Clinic
Thoracoscopy Package
Laser Varicose Package
Sleep Lab Package
Enterscopy
Day Care Packages – OPD Surgical Packages
General Surgery – Appendectomy
General Surgery – Circumcision
General Surgery – Lap Appendectomy
General Surgery – Lap Cholecystectomy
Lung/Kidney/Liver Transplants
Cosmetic Unit Services
Phototherapy
Skin Rejuvenation
Scar Removal
Laser Hair Removal
Body Contouring Surgery
Hair Transplant
Wrinkle Reduction
Niche Market Products
Most of our products are offered to the mass market. However,
certain services such as Cosmetic Centre Services and Geriatric
Care are extended to a niche comprising high income earners.
1998
Nawaloka Metropolis
The only referral laboratory chain in Sri Lanka, Nawaloka
Metropolis is a joint venture between Metropolis India and
Nawaloka Hospitals PLC. The 5000-sq.ft state-of-the-art facility
is attuned with the changing face of the diagnostic market,
and continuously strives to upgrade and facilitate a higher
quality of service to the people it serves. For doctors and
patients across Sri Lanka, Nawaloka Metropolis has become
synonymous with reliability and accuracy. Offering an extensive
range of services, Nawaloka Metropolis remains committed to
innovation and ethical practices.
The lab offers world class quality services in –
Immunology/Special Chemistry
Microbiology
zzBiochemistry
zzGenetics
zzHistopathology
zzPreventive Health Check-up
zzHome Health Services
zzClinical Trial Services
zz
zz
Our overarching ambition is to be the very best
in everything we do. Therefore, we continually
strive to achieve a level of clinical and service
excellence that will raise the bar of the healthcare
industry in Sri Lanka. That’s why we work to
exceed the most rigorous standards of quality
and be the Centre of Excellence.
Nawaloka Hospitals is now a benchmark in
healthcare and is no stranger to winning awards.
The impressive list of awards given below is
a testament of the high standards we have
achieved 1998 - The only Hospital to win the Sri Lankan
National Quality Award
2000 - The ISO-Certified Hospital in Sri Lanka
2011 - Awarded ISO 9001:2008 Certification
2014 - The only Hospital to be recognised at the
ACCA sustainability Award 2014
2014 - Certified as a Carbon Conscious®
Hospital, making Nawaloka Sri Lanka’s
first hospital to achieve this distinction
2015 - The only Hospital to be recognised
at the ACCA Sustainability Business
Award 2015
Management Discussion and Analysis Customer Capital
43
Nawaloka offers its
customers an extensive
portfolio of healthcare
services
Nawaloka Medicare (Pvt) Ltd.
As the pioneer of the
private healthcare
industry in Sri Lanka,
our vision is to lead
the healthcare industry
by delivering superior
services aided by most
advanced technology
and the best care to
our patients
The first regional
hospital of Nawaloka
is a state-of-the art
75 bed hospital in
Negombo
We offer laboratory
services at the doorstep
of the patients to
enhance convenience
The first hospital in
Sri Lanka to have won
the ISO 9001:2008
Sri Lanka Quality Award
and National Business
Excellence Award
The state-of-the-art 75 bed hospital in Negombo is a subsidiary
of Nawaloka Hospitals PLC. It is the first regional hospital of Nawaloka,
in the Gampaha District. The Hospital is equipped with three operating
theatres, a technologically advanced Intensive Care Unit and an
Emergency Treatment Unit; It offers an extensive range of diagnostic
and treatment facilities including CT and Ultrasound scanning, ECG,
physiotherapy, and dental screening and treatment services as well
as a fully-fledged Dialysis Centre. Nawaloka Medicare (Pvt) Ltd., has
made a significant impact on the lives of people in the region by
providing them with convenient access to world class healthcare and
thereby eliminating the need for people to get medical treatment from
hospitals in Colombo for their serious health issues.
We have contributed to achieve the Millennium Development
Goals of the country by meeting the healthcare needs of the local
communities.
For the 16 months of operations, Nawaloka Medicare has achieved
significant milestones -

Over
150 visiting medical consultants from different specialties

Performed

A
over 200 successful deliveries
customer base of more than 100 corporate clients

Completed
over 2,500 corporate medical screenings

Performed
more than 3,000 OPD medical screenings

Set
up three specialty centres – a fully-fledged orthopaedic
surgery facility, an advanced Urology Centre and a state-of-the-art
Dialysis Centre

Over
44
2,000 theatre surgeries
Customer Capital Management Discussion and Analysis
Pharmacy Revenue 2015/16 (%)
Over 150
Medical Specialists
Visiting the Hospital
Covering all
Specialities
250
200
150
100
50
Over 6,500
Patients
Admitted for
Indoor Treatment
Nawaloka Medicare
(Pvt) Ltd.
Achievements
for the past
16 months
Over 90,000
Channel
Appointments
Successfully
Performed
more than
2,000 Surgeries
including Total
hip replacement,
Whipple Surgery
and Caesarean
Surgeries
0
Apr May Jun
15
15
15
Jul Aug Sep Oct Nov Dec Jan Feb Mar
15
15
15
15
15
15
16
16
16
Theatre No. of Cases 2015/16 (%)
200
160
120
80
40
0
Apr May Jun
15
15
15
15
15
15
15
15
15
16
16
16
CT Scan No. of Cases 2015/16 (%)
Admissions 2015/16 (%)
250
200
200
160
150
120
100
80
50
40
0
0
Apr May Jun
15
15
15
15
15
15
15
15
15
16
16
16
Channel Appointments 2015/16 (%)
250
200
150
100
50
0
Apr May Jun
15
15
15
15
15
15
15
15
15
16
16
16
Note:
All graphs have been drawn as a ratio considering April 2015 as the
base month.
Apr May Jun
15
15
15
15
15
15
15
15
15
16
16
16
Our Presence
As the trendsetter of the private healthcare industry in Sri
Lanka, our vision is to lead the healthcare industry by delivering
superior services aided by most advanced technology and the
best care to our patients. To make this a reality, we adopt a
bottom up approach to obtain the most relevant and effective
ideas in the market.
We are one of the largest and most sought after employers
in the country. Through continuous training we have achieved
a high staff retention rate and empowered our employees to
perform exceptionally. Therefore, we employ a large number
of skilled employees with diverse exposure and skills.
One of our objectives is to disperse our facilities island-wide
to make them accessible to all citizens. With many medical
centres set up across the island we have lessened the burden
on the national healthcare system to meet the healthcare needs
of all Sri Lankans.
45
Jaffna District
Point Pedro
Nelliyadi
Puttur
Chankanai
Moolai
Kokuvil
Kondavil
Thirunelveli
Pasayur
Main Street
Jaffna Town
Nallur
Thondamanaru
Nawaloka Metropolis
Gampaha District
Seeduwa
Katunayake
Pitipana
Pohorathota
Kochchikade
Mukalangamuwa
Colombo District
Moratuwa
Koralawalla
Ratmalana
Boralesgamuwa
Kalubowila
Mattakkuliya
Athurugiriya
Thalagala Juntion
Thalawatugoda
Mattakkuliya
Mulleriyawa
Thotalanga
Thalwatta
Jaffna
Killinochchi
Mullaitivu
Vavuniya
Mannar
Trincomalee
Anuradhapura
Puttalam
Batticaloa
Kurunegala
46
Matale
Kandy
Negombo
Kegalle
Gampaha
Ampara
Colombo
Moneragala
Galle
Galle District
Karapitiya
Gintota
Deveta
Morawaka
Mapalagama
Hikkaduwa
Imaduwa
Kotapola
Udugama
Ambalangoda
Ahangama
Deniyaya
Thawalama
Balapitiya
Weligama
Neluwa
Elpitiya
Pitabaddara
Trincomalee District
Eravur
Chenkalady
Santhyveli
Valaichchenai
Pesalai
Ottamavady
Badulla
Nuwara Eliya
Kalutara
Kalutara District
Bulathsinhala
Raigama
Egaloya
Wadduwa
Agalawatta
Bandaragama
Pimbura
Kalutara
Govinna
Mahavila
Aluthgama
Horana
Eluvila
Dargatown
Pokunuvita
Nagoda
Atalugama
Gorakapola
Mathugama
Millaniya
Horana
Wathara
Polonnaruwa
Ratnapura
Matara
Hambantota
Ratnapura District
Avissawella
Minnana
Dala
Thalduwa
Panukarapitiya
Kalawana
Yatiyantota
Eheliyagoda
Hangamuwa
Karawanella
Kiriella
Kuruwita
Ruwanwella
Ingiriya
Dehiowita
Kithulgala
Nivithigala
Batticaloa District
Kattankudy
Kalmunai
Sainthamaruthu
Nintavur
Sammanthurai
Kokadicholai
Hambantota District
Dikwella
Walasgala
Ranna
Beliatta
Gatamanna
Weerakatiya
Kirinda
Embilipitiya
Dondra
Walasmulla
Sooriyawewa
Hakmana
Middeniya
Hambantota
Gandara
Hungama
Ambalantota
Customer Growth
The following graph illustrates the total number of patients
who patronised Nawaloka through channelling services
compared monthly over two financial years:
Nawaloka Cosmetic Unit
Total Channelling (Nos.)
50,000
40,000
30,000
20,000
10,000
0 Apr May Jun
2015/16
2014/2015
Web-Based Channelling
This is an illustration of web-based channelling usage over the
financial year 2015/16.
Web-Based Channeling 2015/16 (Nos.)
We are pleased that our recent strategic expansion into
the Cosmetology Sector in March 2015 has enhanced our
market presence. The Nawaloka Cosmetic Unit offers the
following services:
zzPhototherapy
zzSkin
Rejuvenation
zzScar
Removal
14,500
zzLaser
Hair Removal
14,000
zzBody
Contouring Surgery
13,500
zzHair
13,000
zzWrinkle
12,500
12,000 Apr May Jun
15
15
15
15
15
15
15
15
15
16
16
16
Base month April 2015 - 100%
Growth in Foreign Customers
We achieved commendable results in our efforts to increase
our foreign customer base by promoting our services in new
markets. As a result, foreign patient admissions increased by
14% compared to the previous financial year.
Transplant
Reduction
All these services are performed under safe and sterile
conditions by Board certified professionals including
consultant dermatologists, plastic surgeons and an
oculoplastic surgeon.
We are proud to be the first private healthcare facility
to provide state-of-the-art FDA approved full body
Phototherapy, CO2 Laser and Diode Laser to Sri Lanka.
For example the Gold Standard Acu Pulse, a safe, simple
CO2 laser, manufactured in USA is the latest Industry
standard that delivers outstanding results. It can be used
for 34 aesthetic indications, more than any other CO2 laser
available in Sri Lanka. It offers a multitude of capabilities
which includes skin rejuvenation, removal of stretch marks,
scar removal and wrinkle reduction thus allowing the
patient to have flawless smooth skin. Furthermore, Gold
Standard Acu Pulse stands out providing quick, painless
and much needed personalised treatments for each
individual.
Our aspiration of being the ‘Hospital of Tomorrow’
had resulted in us committing ourselves to achieving the
latest standard.
47
Financial Implications and Other Risks and Opportunities Due to Climate Change
Description of
Climate Change
Classification
(Risk/Opportunity)
Impact (Both Financial
and Other)
Management
Response
Cost of
Response
Increase in medical
tourism as a result
of Sri Lanka being
perceived as a top
tourist destination
Opportunity
Increases the revenue
potential that could be
derived from foreign
customers
Enhanced marketing
response to promote
brand image
Marketing and
advertising
expenditure
Investment on
capacity improvement
to cater to the
demand
High capital
expenditure in
expansion
Continuous
improvement in global
standards of medical
technology resulting
in the need to update
medical technology
frequently
Risk
May lose the
reputation as the
pioneer in modern
healthcare
Upgrade technology
to match the standards
Inability to recover the
capital expenditure of
high-valued machines
as they are replaced
frequently
Increased foreign
direct investments and
increased emergence
of international
businesses
Opportunity
Increases the revenue
potential that could
be derived from local
customers
Recruit more staff to
cater to the increased
demand
Increased staff cost
Emergence of a
market interested in
luxury services
Increased service
opportunities for
new clients
Staff salary reforms to
increase allowances
48
Risk
May face reputational
risk and legal
implications on failure
to comply
Ensure new
investments for luxury
services
Enhanced marketing
response to promote
brand image
Investments towards
improving capacities
to cater to demand
Comply with
reforms to ensure
conformance
Increased capital cost
in enhancing luxury
services
Marketing and
advertising
expenditure
High capital
expenditure for
expansion
Increased staff costs
‘Unu Pangeya’ ^WKq mekaf.h& had been used from ancient times. It is a special type of treatment with leaves of medicinal plants simmered and the body
is exposed to the resulting steam.
49
Measuring Customer Satisfaction
Multistoried Car Park
Due to the rapid growth in the scale of our operations, the
need for an organised car park emerged. The Management
took a prompt decision to build a state-of-the-art car park
adjoining the main hospital to address the grievances of
customers, employees and the other stakeholders. A wellstructured car parking facility is a critical success factor for
efficient operations and deliver value to clients.
Having earned the reputation as ‘The Pioneer’ in the
industry, we constantly broaden our horizon by pioneering
and delivering value to the nation. Therefore, we have
ensured this building once completed would be the tallest
steel structure in Sri Lanka.
The 14 floor building includes six floors of car parking
space consisting of 550 parking slots. The remaining floors
will house the new modular concept Channel Section,
Laboratories, 24/7 Pharmacy, Information Counter and a
Physiotherapy Section; each area segregated for patient
comfort and safety and deliver additional services.
This project is expected to derive a high return as there
is a very high demand for parking facilities. Due to the lack
of incentive for a project of this nature, it is difficult to find
investors who would invest. Considering the vast number
of vehicles without parking facilities in the vicinity, we are
confident that the parking facility will be fully utilised.
The project is in the final stage of completion and has
progressed as per the budgeted expenditure and timelines
for the reporting period. We are assured that the project
will progress in a similar manner until completion in the
ensuing financial year.
As the ‘People’s Hospital’ we continually strive to provide a
superior service that enhance customer value. We have priced
our medical products and services affordably and facilitated
patients from all walks of life to receive our expert medical
care without any discrimination. Our customers are the ideal
stakeholders to measure the quality of our service and we value
their feedback immensely. Accordingly, we have designed an
effective mechanism to measure, evaluate and fine tune our
operations to meet their expectations. Several measures were
implemented to monitor customer satisfaction –
zzNawaloka
distributes complaints and suggestion forms to
customers/patients at the time of admission. The completed
responses are collected when the patients are discharged
from the Hospital. This feedback is monitored and committed
to a prompt response. The Marketing Division executes the
needed action.
zzThe
Mystery Patient System is implemented to continuously
monitor the performance of the employees. This is an
effective mechanism to identify lapses in the service
delivered to the customers and take corrective action.
zzSuggestion
boxes were placed in public areas around the
Hospital to encourage and welcome customer suggestions
about services.
zzActive
involvement in social network sites to address any
concerns raised by our stakeholders.
Quality
Benchmarked for quality, Nawaloka Hospitals has nurtured
an environment which is healthy and safe and implemented a
quality management system, compliant with ISO 9001:2008
International Standards. It is the first hospital in Sri Lanka to
have won the ISO 9001:2008 Sri Lanka Quality Award and
National Business Excellence Award. The standards have been
maintained to ensure continuity of the certification and the
Hospital is in the process of upgrading to ISO 9001:2015.
A strong Quality Management Programme is in place to
provide patients with efficient access to healthcare, enhance
the departmental clinical and operational quality and thereby
achieve 100% patient satisfaction. Quality related data is
reviewed regularly by the Quality Improvement and Patient
Safety Committee. The Quality Assurance Department
maintains and analyses all data pertaining to patient safety
and infection control to ensure safety of the patients and
staff members.
The Nawaloka Metropolis Laboratory is accredited and
certified for ISO 15189 by Sri Lanka Accreditation Board. These
accreditations have spurred the reliability and accuracy of the
test results, conducted at the laboratory.
50
In addition, the 5S Japanese Concept was implemented
in year 2014 to improve productivity and streamline the
work environment. This 5S concept is followed daily by
the Nawaloka employees in the process of their daily
tasks. Inter-departmental 5S competitions are conducted
annually to motivate staff and sustain the activity.
During the year under review, there were no incidents
of non-compliance with regulations and voluntary codes
concerning marketing communications, including advertising,
promotion and sponsorship by type of outcomes.
Marketing Communications
We believe in portraying the true identity and character of
our organisation in our marketing communication processes.
Therefore, we strictly ensure that all communications uphold
the values we abide by and conform to the regulatory
provisions and any other applicable codes of conduct that
prevail in Sri Lanka.
We keep a close tab on all our communications to ensure
they are ethical and are within the bounds of law and good
taste. Hence, all medical camps for public, TV and radio
advertising, printed media, PR activities and sponsorships are
subject to close scrutiny.
Since our brand image is highly sensitive to matters related
to confidentiality and sensitive data, we conform to the latest
information technology security policies as well.
The Hospital also conducts other quality related training
programmes to improve knowledge, skills and attitudes of
staff. We promoted a work improvement culture to implement
the 5S concept in the Hospital. The 5S concept has effected a
speedy enhancement in the working environment and service
quality by involving all the staff members of the Hospital.
We have set targets for the Marketing Division which
are linked to the ethics of the organisation. Performance
appraisal is carried out for ethical compliance as well. There
is clear segregation of duties to ensure responsibility and
accountability of the decisions made by the Department. Also,
all decisions taken are reviewed every quarter to identify and
address any disparities.
During the year under review, there were no incidents
of non-compliance with regulations and voluntary codes
concerning marketing communications, including advertising,
promotions and sponsorships.
Sale of Banned or Disputed Products
Product and Service Labelling
As a provider of an essential service in the healthcare sector,
Nawaloka conforms to the highest standards to provide
customers comprehensive information pertaining to the service
offered. Therefore, treatments, procedures and interventions
are clearly explained at every patient – hospital touch point.
When using third party products such as pharmaceuticals,
we ensure they are sourced from reputed and reliable suppliers
who adhere to the quality and information standards.
Nawaloka does not provide services which are banned or
are against the law of the country. We organise awareness
campaigns for the general public on our services and about
the developments in the healthcare industry. In addition, we
provide continuous medical education and organise events
to commemorate days of special significance to health. We
strictly abide by the relevant codes of conduct and regulatory
codes in doing so. There were no incidence of non-compliance
pertaining to the sale of banned or disputed products during
the year in review.
Customer Privacy
As a responsible private hospital in the country, Nawaloka
conforms to the norms and regulations pertaining to customer
information, its storage and use.
Whilst we treat all patient information and records
with strict confidentiality, effective measures have been
implemented to ensure protection of personal data. Our
systems and processes, IT in particular are designed to deliver
such protection at all times.
51
We are pleased to record that there were no complaints
regarding breach of customer privacy and losses of customer
data during the year under review.
Bone Marrow Transplant Unit
The following measures have been implemented by
Nawaloka to ensure customer privacy.
zzOur
organisation culture is designed to ensure customer
privacy.
zzOur
clinical staff, nurses and general employees are
continuously given training on ethical behaviour to ensure
confidentiality.
zzElectronic
medical records (EMR) to store the patient’s
information.
zzElectronic
Diagnosis Card system to store information.
zzStrict
enforcement of access controls such as passwords
and biometrics.
Patient Health and Safety
Nawaloka has in place a well-developed health and safety
regime to ensure the well-being of patients at every instance.
We strictly comply with regulations on health and safety, food
and hygiene and all the relevant voluntary codes to avert
any incidents that compromise the safety of our customers.
Prior to introducing a service to the market, we conduct a
comprehensive check to assess its safety. The Internal Audit
Division of Nawaloka conducts periodic checks to identify risk
exposure, assess the impact and provide recommendations to
mitigate.
We pride in being the only functioning Bone Marrow Unit
that has performed 11 successful bone marrow transplant
surgeries. It is the first and only hospital to treat bone
marrow transplant surgeries related to Leukaemia as
well. We have made a special effort to keep the cost of
transplant procedures affordable to a wider cross section
of the population compared to other countries.
During the year there were no recorded incidents of
non-compliance pertaining to patient health and safety.
Anti-Corruption/Anti-Competitive Behaviour/
Compliance
Corruption exerts a strong negative implication on businesses
and it is a common manifestation in South Asian economies.
To eliminate exposure to corruption, the Risk Management
Committee of Nawaloka Hospitals has put in place a range of
controls. We always ensure that ethical principles and integrity
are maintained in our business operations. Since, competition
helps to develop the industry; we welcome competition and
strictly follow fair business practices in our organisation.
We are pleased to report that there were no incidents
related to the non-compliance of regulations and voluntary
codes concerning health and safety impacts of our services.
52
‘Hunugal Abarum Gala’ ^yqKq.,a weUreï .,& was used to grind medicine. It is made of Calcium Carbonate which is of medicinal value. When ingredients
or substances are crushed using this grinder, a small amount of Calcium is also mixed in and is good for the health.
53
EMPLOYEE CAPITAL
Our success is largely
attributable to the
knowledge, skills
and commitment of
this closely knit and
motivated team
We employed a total of
2,157
persons by year end
In order to promote
mutual trust and promote
mutual prosperity,
Nawaloka encourages
open communication
between staff members
and management
531
employees were
recruited to the
Organisation
during the year
At Nawaloka, we recognise that our employees are our most important
asset. They drive our business. Our success is thus largely attributable to
the knowledge, skills and commitment of this closely knit and motivated
team. We attract best of talent, develop and retain employees of the
highest calibre, who are qualified professionals in their respective fields
of expertise. We nurture a fair and collaborative workplace that promotes
diversity and upholds the highest ethical practices. Healthcare is all about
caring for people, hence it is imperative that our employees also be infused
by passion, care and integrity for their job, extending an exemplary care to
people at all times.
The human resource development agenda is geared to develop our
people by offering a range of personal and professional development
opportunities that enables them to utilise their full potential. We provide
equal opportunities for all employees. In turn, we reward performance.
Our employees have a strong affinity towards the Organisation and
most have been with the Company for long years. As an employer of
choice, our human resource practices have gained recognition. Winning the
Peoples Award 2014/15 for best practice in human resource development
is a testament of this fact.
Our Workforce
At Nawaloka we employed a total of 2,157 persons by year end, with the
composition of gender, age, service period and geographic location, all
reflecting the desired levels of diversity.
Analysis by Region (%)
Central - 5
Sabaragamuwa - 2
Western - 79
Southern - 9
Eastern - 0
Uva - 1
North Central - 3
Northern - 0
North Western - 1
The reduction in
employee turnover is
a strong indication of
the employee friendly
status and the increased
value generated for our
employees
54
Analysis by Gender
Analysis by Employee Category
Employee Category
Female
Male
Grand Total
1
4
5
Employee
Category
Executive
Female Male
Director
Executive
52
59
111
General
670
339
1,009
Medical
42
23
Nursing
852
1,617
Grand Total
Director
Total
Female Male
1
4
5
–
–
–
5
52
59
111
–
–
–
111
65
General
–
–
–
670
339
115
967
Medical
42
23
65
540
2,157
Nursing
95
86
181
–
–
65
115
967
967
1,522
454
1,976
2,157
1,000
1,250
800
1,000
600
750
400
500
200
250
Female
General
Medical
0
Nursing
Director
Executive
1,009
–
Analysis by Employee Category (Nos.)
Executive
1,009
852
Analysis by Gender (Nos.)
Director
Total
Executive
Grand Total
0
Grand
Total
Non-Executive
General
Medical
Nursing
Male
Age Analysis
Employee Category
18-29 Years
Female
Male
30-50 Years
Total
Female
Male
More than 51 Years
Total
Female
Male
Grand
Total
Total
Director
–
–
–
1
2
3
–
2
2
5
Executive
18
10
28
17
35
52
17
14
31
111
General
387
123
510
230
169
399
53
47
100
1,009
Medical
3
1
4
28
13
41
11
9
20
65
Nursing
409
45
454
373
61
434
70
9
79
967
Grand Total
817
179
996
649
280
929
151
81
232
2,157
Analysis by Gender (Nos.)
Service Analysis (Nos.)
1,000
1,500
800
1,200
600
900
400
600
200
300
0
Director
Female
Executive
General
Medical
Male
Management Discussion and Analysis Employee Capital
Nursing
0
Female
Less than
10 Years
10 - 20
Years
More than
50 Years
Male
55
Service Analysis
Employee Category
Less than 10 Years
Female
10-20 Years
Male
Total
Female
Male
More than 20 Years
Total
Female
Male
Grand
Total
Total
Director
–
–
–
1
2
3
2
2
5
Executive
42
47
89
5
5
10
5
7
12
111
General
538
257
795
85
57
142
47
25
72
1,009
Medical
30
15
45
11
6
17
1
2
3
65
Nursing
Grand Total
–
613
87
700
143
16
159
96
12
108
967
1,223
406
1,629
245
86
331
149
48
197
2,157
Recruitment and Retention
Parental Leave
To ensure long-term success we review our staff structures at
Nawaloka periodically. We recruits employees based on merit,
such as skills, experience and ability, regardless of age, race,
gender, religion or ethnicity.
Retention of staff is an important area of focus in maintaining
operational efficiencies.
Our Human Resources team is actively involved in sourcing
new talent in the market. We also provide career guidance to
the new graduates as a means of our social responsibility.
During the year under review our staff strength increased
by 2.4% from 2,105 to 2,157 persons.
Recruitment by Employee Category and Gender
Employee Category
Female
Male
Our high rates of retention and return to work serves in up
lifting employee morale as well as productivity.
Return to work – 85%
Retention Rate – 100%
Training and Development
Grand Total
Director
–
–
–
Executive
19
24
43
General
170
96
266
Medical
10
8
18
Nursing
172
32
204
Total
Our female employees are entitled to maternity leave.
We provide them the opportunity to avail this benefit without
any constraints while also facilitating their return to work.
531
Our shared success at Nawaloka is driven by the calibre and
performance of our people. We recognise that it is essential to
equip our employees at all levels to meet the changing needs
in the industry. Training not only enhances the efficiency of
employees but helps to build a motivated and highly engaged
team that enhances the Company’s competitive position.
A range of professional development opportunities
including career development, education, talent management
and leadership programmes are offered to our employees to
realise their career goals.
All senior managers of Nawaloka are recruited from within the
country. Senior managers include heads of departments.
Localised recruitments refer to hires from within Sri Lanka.
Significant locations of operations are businesses generating
revenue of over Rs. 1 Bn in the year under review.
56
Employee Capital Management Discussion and Analysis
Investment on Training (Rs. Mn)
Company-wide training to support
professional staff
25
20
Knowledge
skill training
Training based on
staff qualifications
15
OJT
10
5
Self
development
Advance training for
assistant manager staff
qualifications
Language
training
Orientation training for
newly promoted staff
Advance training for
specialists
Focused OJI with special them
0
2011/12
2012/13
2013/14
2014/15
2015/16
2013/14
2014/15
2015/16
Training Hours (Nos.)
2,500
2,000
1,500
1,000
500
0
2011/12
2012/13
All training needs are effectively identified through the
staff performance evaluation process. Training provides an
avenue to bridge any gaps identified in the target and actual
performance of employees.
Orientation training for
newly specialists
All training programmes are aligned with the long-term
goals of the Organisation, staff performance appraisals and
career aspirations of employees. Our programmes are of very
high quality; they enhance staff motivation and empower our
employees to effectively discharge their responsibilities.
During the year, Nawaloka provided development
opportunities to many categories of employees to
ensure continued employability. They included the senior
management, medical officers, front office staff, sales and
marketing staff, nurses and para-medical staff.
Investment on Training
Year
Cost
Rs.
Hours
2015/16
23,926,176
2,499
2014/15
21,465,321
2,141
2013/14
19,210,425
1,785
2012/13
14,100,221
1,582
2011/12
13,978,300
1,262
57
Training Programmes Conducted for the Year
Training
Programme
Internal/
External/
Foreign
Main
Subject
Basic Life Support
Internal
Cardiopulmonary
Resuscitation
Palliative Care
External
Elders Nursing
Programme
16
Nurses
2
Lead Auditor
Transition Training
Programme
External
Auditor Transition
16
Auditors
7
Basic Life Support
Internal
Cardiopulmonary
Resuscitation
84
Healthcare Workers
National HR
Conference
External
HR
18
Front Office
Internal
Customer Care
36
Front Office
The Game of a CFO –
Executive Training
External
CFO
16
Head of Finance
Performance
Excellence
External
Quality Standard
18
ISO Team
Overseas Training
Foreign
Sectorial
32
Secretaries to the
Chairman DGM
Workshop on Energy External
Efficiency and Energy
Saving
Energy Efficiency
and Energy Saving
24
Maintenance
Department
Training Programme
Fire Survey and
Report
External
Fire Survey and
Report
IVF Training
Foreign
IVF
16
Embryologist
Safety
External
Fire
33
All Employees
Nursing
Internal
Palliative Care
12
PCN
Instructional Course
External
Urology
64
Urology Nurses
Embryologist
Training
Foreign
Embryologist
36
Trainee
Embryologist
1
Strategic CFO
Training
External
Strategic CFO
8
Director and
Head of Finance
Auditors Conference
External
Auditing
9
Auditors
Nurses Training
Internal
Nurses Training
Training
Hours per
Persons
60
9
1,920
To Whom to
Conduct
No. of Participants
Healthcare Workers
HR Team
Lab Staff
Nurses
Conducted by
Organised
by
Training Manager
HRM
Japanese Elders
Nursing Programme
Head of
Finance
9
SGS Lanka
(Pvt) Ltd.
Head of
Finance
178
4
Training Manager
HRM
4
6
IPM
HRM
163
15
Training Manager
HRM
Female
Male
178
4
1
15
17
1
Sri Lanka Standards
Institution
ISO
Manager
1
Malaysia
HRM
2
HRM
Chairman
Construction Industry
Development
Authority
18
8
Mr. M.N.P.
Harischandra
HRM
1
Indian Company
HRM
335
49
External Trainer
HRM
26
0
Training Manager
HRM
8
0
Urology Department
HRM
India Embryologist
Association
HRM
2
Strategic CFO
Association
Chairman
1
2
The Institute of
Internal Auditors
Sri Lanka Chapter
Head of
Finance
93
–
NTS
NTS
PRAG Service
(Pvt) Ltd.
ISO
Manager
Sri Lanka
Accreditation
Board
HRM
Seminar - Disciplinary External
Procedure
Disciplinary
Procedure
8
HR Team
Seminar on
Supporting the
Delivery of Health
and Social Care
External
Health and
Social Care
8
Nurses
Infection Prevention
Workshop
Foreign
Infection Prevention
16
HR and Medical
Superintendant
1
IMEXPO –
Sri Lanka
External
Import and Export
16
Accountant
1
Pre Congress
Workshop on Soft
Tissue Management
in Trauma
External
Soft Tissue
Management
24
Surgeons
2,499
58
The Institute of
Head of
Chartered Accountants Finance
of Sri Lanka
1
12
3
HRM
1
4
1,044
International
Chamber
of Commerce
Sri Lanka
Head of
Finance
The College of
HRM
Surgeons of Sri Lanka
130
‘Beheth Gabadawa’ ^fnfy;a .nvdj& was similar to a pharmacy. This is where the preparation and storage of medicine takes place.
59
Employees are given professional training to equip them
with the required skills to better perform their jobs. These
include aspects such as patient care, health and safety
and resuscitation procedures amongst many. Customised
programmes were offered to the senior management, on
areas such as knowledge management, change management,
and conflict management whilst lower and middle level staff
members were trained on aspects such as negotiation skills
and task management.
Soft Skills Development
Interpersonal Skill
Self Management
Goal Management
Innovation and
Creativity
Conflict Resolution
Memory
Enhancement
Rapport Building
Negotiation Skill
Anger Management
Leadership
People Skill
Coping Skill
Emotional Intelligence
Decision-Making
Train the trainer
Management Skill
Personality
Development
Interviewing Skill
Motivation
Business Etiquette
Presentation Skill
Stress Management Attitude & Skill building
Team Building
Business Communication
Art of delegation
Assertive Skills
Language Skill
Change Management
Art of influence
Employee Engagement
As an Organisation which ensures higher degree of work ethics
and professionalism, we encourage open communication
between management and employees in order to strengthen
mutual trust and mutual prosperity. This is further supported by
our four basic principles of personnel management.
Creating a workplace environment where employees can work
with their trust in the Company.
zzStable employment where layoff and dismissals are not
readily made.
zzSteadily maintain and improve working conditions from a
medium to long-term perspective.
zzEnsure fairness and consistency.
Creating a mechanism for promoting constant and voluntary
initiatives in continue improvement.
zzShare the management mindset and sense of critical urgency
through thorough communication.
zzReflect working results in working conditions.
Given below is an analysis of how the organisation
responded to the key topics and concerns raised by employees.
Category
% of Employees
Evaluated
Male
Female
Job related knowledge and skills:
80
89
Quality of work:
(Neatness, Accuracy, Creativeness
and Timely Action)
91
96
Reliability:
(Dependability on him/her)
77
82
Work Attitude:
(Co-operation, Sense of responsibility etc.)
92
96
Leadership:
(Ability to get a job done)
94
97
Inter-Personal Relationship:
(Ability to get on with the staff)
94
94
Public Relations:
(Positive relationship with the customer)
98
99
General Conduct:
(Observation of Rules and Regulations)
94
98
Carrier Development:
(Learning through experience)
91
89
Punctuality:
(Unauthorised leave and
Absenteeism records)
90
93
A Conducive Working Environment
The Company strives to be as inclusive as possible by
involving staff in its forward journey. Whilst promoting
inter-staff communication, we also offer opportunities for
them to offer their ideas and opinions on several aspects
of how the Company is run and should develop. We conduct
the ‘Nawaloka Nawa Adahas’ programme which optimally
captures such staff comments.
Employee welfare is enhanced by improving the working
conditions and promoting a holistic and balanced lifestyle for
employees. As a measure of employee satisfaction Nawaloka
welcomes feedback from employees by providing confidential
channels through which employee feedback and staff
suggestions could be submitted.
Quarterly
No. of Ideas
No. of Ideas Implemented
Fully committed and thorough human resource development.
zzPromote
personal growth through work.
1st Quarter
2nd Quarter
Promoting teamwork aimed at pursuit of individual roles
and optimisation of the entire team.
zzTeam results and creating a sense of unity
8
3
12
4
3rd Quarter
6
2
4th Quarter
10
5
zzThorough
consensuses building and achievement in
signal trust
60
Grievance Handling
An effective mechanism is in place to handle grievances in a transparent, fair, sensitive and expeditious manner. The employee is
able to complain with dignity with the assurance of obtaining a fair resolution from an impartial decision-maker. An institutionalised
mechanism has also been set up for conflict resolution.
The grievances about labour practices filed, addressed and resolved through formal grievance mechanisms are detailed below:
Identified and Filed Grievances
Priority
Addressed
Remarks
1. Employee Accommodation
High
√
Fully-fledged hostel complex
2. Employee Vehicle Parking
High
√
Extra parking facilities with shuttle services
3. Staff Meals
Moderate
√
In-house meals provided to departments at a concessionary rate
4. Long Shifts
High
√
Short hour shift rotations
Collective Bargaining and Freedom of Association
Remuneration
Nawaloka has, over the years, implemented many enablers
to encourage employee engagement within the Group.
Periodic surveys are conducted to benchmark our
remuneration levels against the industry, to ensure an equitable
reward system that is also competitive in the market.
Our policy on freedom of association and collective
bargaining allows formal and informal types of collective
bargaining within the Group. All permanent staff members
are covered by collective bargaining agreements.
Due to the effective transparent policies in place, there were
no incidents of violation of freedom of association of employees
and collective bargaining during the reporting period.
Whistle-blowing Policy
The whistle-blowing policy encourages employees to raise
concerns and bring any violations on human rights to the
notice of the Human Resource Department at an early stage.
The performance-based pay implemented at Nawaloka is
a transparent process that rewards employees based on the
skills, effort, working conditions and the level of responsibility
attached to the job.
Benefits Offered to Permanent Employees
Nawaloka offers an emolument structure that is fair and
equitable to all employees across all grades. The pay scales
conform to the minimum wage levels established in Sri Lanka.
Given below are the benefits offered to our permanent
employees.
zzFixed
Minimum Notice Periods
There were no significant changes in the operations during the
year under review. However the general policies regarding the
operational changes are as follows.
Type of Change
Minimum Notice Period
Transfer
Immediate or 2 weeks
Termination
1 Month
Retirements
3 Months
Dismissal
Immediate
Resignation
1 Month
monthly salary, annual bonus-based on the overall
performance of the Company, performance based incentives
and festival advances
zzTravelling
allowances, fuel allowances, vehicle allowances,
staff loans at concessionary interest rates, reimbursement
of membership fees
zzHostel/Apartment
facilities
zzFree
medication, ODP medical scheme, death donations
and insurance
zzForeign
zzStaff
training
meals at concessionary rates and dry ration packs
zzMarriage
allowance, a discount of 50% on the hospital bill
for the first baby, scholarships for children of employees
who passed GCE A/Level and O/Levels.
For more details on employee defined benefit plan
obligations, please refer notes to the financials on page 133
of this Annual Report.
61
Health and Safety
Due to the nature of operations, Nawaloka is exposed to
a significant level of occupational hazards. Therefore, the
Company has designed a hazard identification and mitigation
framework to identify, assess, prioritise and manage risk
exposure to deliver a secure healthcare system.
Before a new service is launched by Nawaloka, it is subject
to a thorough risk assessment. This is an assurance that our
processes are free from risk exposure. Safety features are
embedded in the business process at each level and all staff
members are provided with adequate training to ensure
employee and patient safety.
The following preventive measures are implemented at
Nawaloka to minimise occupational hazards:
Analysis of Injuries and Occupational Diseases
Description
% from
Workforce
Lost
Days
Absenteeism
Rate from
Workforce
zzProvision
zzProvide
training on handling medical instruments
zzTraining
Injuries
Occupational
Diseases
Male
0.5
17
1.0
Female
1.0
35
2.5
0.75
12
1.0
2.5
18
1.1
Male
Female
Major Risk Involved
Safety Measurement
Phlebotomist
Risk of injuries due
to sharp items
Regular-training and
ISO procedures
Nurses
All type of
communicable
diseases
Vaccination/
Infection Control
Department
Doctors
All type of
communicable
diseases
Vaccination/
Infection Control
Department
Janitorial staff
Risk of germs/
Chemical allergies
Industry accepted
safety practices
nurses on hygiene factors
zzSetting
up triage counters manned by qualified and
experienced nurses to make an initial determination
about the nature and severity of a patient’s illness/injury
zzAdopting
zzRegular
Occupation
of surgical gloves and masks to staff members
zzOverall
special surgical preventive policies
supervision by senior medical personnel
supervision by Medical Superintendents
zzRegular
Radiology Staff Radiation risk
Following atomic
energy authority
guide
Others
Regular evaluation
of risk and
preventive actions
Depend on the
situation
monitoring by the Medical Risk Management
Committee
Diversity and Equal Opportunity
As an equal opportunity employer, Nawaloka is committed
to hiring, developing and promoting individuals who best
meet the requirements of the Company. We understand that
diversity enrich our human capital and strengthen the collective
human talent of the Organisation.
We treat employees fairly and with respect irrespective
of their ethnicity, gender, race, religion or age. We maintain a
workplace that is free from harassment or discrimination on
any basis. Therefore, all training programmes are developed
based on employees’ strengths and needs, to enable them to
perform to their highest potential. Rewards are based solely
on competencies, performance, contribution and experience
of each staff member. The reduction in employee turnover is
a strong indication of the employee friendly status and the
increased value generated for our employees.
Among the many examples of diversity at Nawaloka,
the initiatives taken to create a conducive and enabling work
environment for women stands out. We strive to facilitate
women to build a career with us by making Nawaloka a
workplace that facilitates women to work and raise their
families as well. We also prioritise localised recruitment
that contributes to sustainable development of the local
communities.
62
Gender Equity in Remuneration
Our unbiased remuneration policy rewards people irrespective
of their gender differences, which speak volumes about the
organisational values and human resource ethos.
The Ratio of Basic Salary of Women to Men by Employee
Category
We also offer equal opportunities in recruitment,
development and retention of human resources and adhere
to the relevant national regulations concerning employees
and their interests.
Suggestions Received by Year
Category
Category
Director
2015/16
%
2014/15
%
75
73
2013/14
%
67
2012/13
%
2011/12
%
65
60
Managers and
Executives
80
79
77
65
62
Clerical and
Minor Staff
70
68
60
55
45
Nursing
97
96
90
84
80
Medical Officer
85
84
81
83
77
Non-Discrimination
We abide by applicable labour laws and adhere to the
regulatory framework pertaining to human resources. During
the year, there were no incidents of discrimination reported in
our Company.
The following measures are implemented at Nawaloka
to facilitate equal opportunity and non-discrimination.
zzA
strong value system that ensures every employee is
provided with equal opportunities.
zzA
performance driven culture where rewards are based
on merit.
zzContinuous
training and rewards for management staff
to effectively implement a zero tolerance policy on
discrimination.
zzA
Grievance Management Committee to resolve grievances.
zzA
whistle-blower policy to address grievances in a timely and
appropriate manner.
Adhering to Human Rights
Nawaloka fully supports basic principles of human rights
and has implemented a number of practices throughout the
Company to support these principles. These include freedom
of association, right to collective bargaining, elimination of
child labour and sexual harassment. In addition, we follow best
practices on working hours, minimum working age limit and
health and safety measures at the workplace.
2015/16
2014/15
2013/14
2012/13
Organisation Oriented
218
195
176
184
Employee Oriented
281
280
282
264
Patient Oriented
326
318
267
249
825
793
725
697
Suggestions Received (by Year)
350
280
210
140
70
0
Organisation
Oriented
2012/13
Employee
Oriented
2013/14
2014/15
2015/16
Patient
Oriented
During the year under review, the security personnel were
trained on human rights policies, relevant to their operations.
Nawaloka being a healthcare Organisation, all operations
have been subject to human rights assessment. The medical
suppliers who entered into a business agreement with
Nawaloka during the year were assessed on their adherence
to human rights principles.
Child Labour
We do not engage children in employment. As a general
practice, person below the age of 18 years are not employed
in any of our companies. The Human Resource Recruitment
Policy has been communicated to all employees to prevent
child labour. We do not engage with business associates and
suppliers who engage child labour in their businesses.
The HR Department has imposed stringent screening
procedures to avert recruitment of individuals below 18 years
to the Organisation. Therefore, documents such as Grama
Niladari certificates, police reports, referees reports, character
certificates and educational certificates are scrutinised prior to
recruitment.
No grievances pertaining to human rights were recorded
during the year under review.
63
BUSINESS PARTNER CAPITAL
As the hospital of tomorrow we ensure that we possess
the best possible solutions in managing Nawaloka’s vendors
and partners.
Nawaloka attracts the highest number of visiting
consultants of all private sector hospitals in the country.
They make an important contribution to the Company by
providing superior professional inputs to patient care and
treatment. Their presence also enhances our standing and the
portfolio of services we provide to the patients. Hence we are
committed to furthering mutual prosperity in establishing,
strengthening and growing our relationships with the
Company’s business partners.
The suppliers are responsible for the timely provision
of goods and services that meet the stringent quality
requirements of our Company. The Hospital’s close
engagement with suppliers helps to keep the enterprise
operating smoothly.
As illustrated in the diagram below, the business partners of
Nawaloka, mainly comprise visiting consultants and suppliers.
Business Partners
Consultants
To address issues and streamline operations pertaining to
consultants, we have a feedback form process and arrange
weekly meetings between consultants and senior management.
2015/16
2014/15
2013/14
2012/13
2011/12
369
365
314
295
289
Pharmacy
199
164
147
128
115
General
376
255
235
226
215
Consultants
Suppliers
Growth in Consultants and Suppliers (Nos.)
400
300
200
100
0
2011/12
Visiting
Consultants
2012/13
2013/14
Suppliers –
Pharmacy
2014/15
2015/16
Suppliers –
General
Consultants
Average Length of Relationships
2015/16
2014/15
2013/14
2012/13
2011/12
7 Years
6 Years
6 Years
4 Years
3 Years
Pharmacy
16 Years
16 Years
15 Years
13 Years
13 Years
General
10 Years
9 Years
8 Years
6 Years
5 Years
Suppliers
Consultant
Suppliers
64
‘Sethkam Ayudhaya’ îe;alï wdhqOh& was a metallic tool that was used in ancient days to perform surgeries.
65
Nawaloka has a portfolio
of sustainable CSR
activities to deliver a
meaningful value and
uplift the people and
communities across the
country
SOCIAL AND ENVIRONMENTAL CAPITAL
The Society
As the pioneering healthcare institution in the country, Nawaloka
embrace many responsibilities towards the society at large. We ensure
that our organisation conduct business in a responsible manner minimising
the impact on the local community and the environment. We strongly
believe the value we create for ourselves is linked with the value we
create for others.
Nawaloka and Local Communities
Since its inception Nawaloka has prioritised corporate accountability and
social responsibility.
‘Nawaloka Sathkara’
is our flagship CSR
programme focused on
providing specialised
water filtering systems,
water tanks and fittings
to rural schools in areas
afflicted by chronic
kidney disease
We understand that sustainable national development is achieved by
social development and the empowerment of communities and individuals.
Therefore, Nawaloka has a portfolio of sustainable CSR activities to
deliver a meaningful value and uplift the people and communities across
the country. These are conducted with the participation of the employees
who are encouraged to be generous with their time, effort and talent in
serving the community.
CSR Project Investment (%)
115
110
‘Nawaloka Sathkara’
programme donated
stationary and school
bags to impoverished
children
In order to minimise
pollution caused by
our operation, we
continuously upgrade
our equipment to use
energy-efficient latest
technology
105
100
95
90
2011/12
2012/13
2013/14
2014/15
2015/16
‘Nawaloka Sathkara’ – Our CSR Engine
‘Nawaloka Sathkara’ is our flagship CSR programme focused on providing
specialised water filtering systems, water tanks and fittings to rural schools
in areas afflicted by chronic kidney disease.
Kidney disease is prevalent due to high fluoride content in ground
water and the exposure of the farming communities to inorganic pesticides
and fertilizers. We organise awareness campaigns to raise awareness of
these problems. These efforts are in keeping with our mission of providing
best healthcare and continually striving to serve the society in the most
effective and professional manner.
Promoting Health through Sanitation Care
Proper sanitation facilities are important for the health and hygiene of
people. During the year in review, we provided sanitation facilities to three
schools, namely, Baduraliya Vidyalaya, Bolluna Vidyalaya and Hedigolla
Vidyalaya which are located in remote areas of Sri Lanka. These schools
were in critical need for proper sanitation facilities and the facilities were
provided and upgraded under the ‘Nawaloka Sathkara’ programme.
Promoting Education Towards a Better Future
Children in certain areas in the Anuradhapura District have poor access to
education. They need the assistance from the Government and external
parties to obtain a proper education. Identifying this need, the ‘Nawaloka
66
Sathkara’ programme donated stationary and school bags
to 125 children of the Lunuwetiyawea Daham Vidyalaya in
Kebithigollewa, which were sufficient for a whole year.
Simultaneously, Nawaloka is positioned to reap the benefits
of medical tourism in the nation. As a hospital that offers most
advanced medical technology, and excellent medical care on
par with reputed hospitals in the region at an affordable price,
there is an increased number of foreign nationals who obtain
medical treatment from us. This has become valuable foreign
currency generator for the country.
We make a significant contribution to uplift the nursing
standards in Sri Lanka. The skills and competencies of the
nurses are developed through our Nurses Training School.
Nawaloka extended their care towards the community by
continuing to conduct free medical camps in rural and suburb
areas in the country.
Public awareness campaigns are conducted by our expert
panel of consultants on contemporary diseases, possible
precautionary methods and treatment. These are conducted
by way of medical camps and television programmes. Several
medical and awareness camps were conducted during the
year in numerous companies to ensure a hazard free work
environment.
The Environment
We use materials, energy, electricity and water in our
operations and emit waste and other effluents to the
environment. Hence, responsible consumption and disposal
of these aspects are critical to ensure sustainability of our
enterprise and all the stakeholders.
Compliance
Healthcare deals with patients. Hence, it is a sensitive area
associated with a high level of risk. Therefore, it is important
to identify the related risks and respond effectively. Nawaloka
has assessed the associated risks in all its operations and taken
appropriate measures to mitigate.
Materials
No legal actions were taken against Nawaloka for anticompetitive behaviour, anti-trust and monopoly practices
during the year in review. Neither were there incidents of
non-compliance with relevant laws and regulations.
Nawaloka does not manufacture any line of product or
ancillary items it uses, in the provision of premium healthcare
services. All the required raw materials are sourced from other
companies and most materials are sourced locally without
resorting to expensive foreign imports.
Indirect Economic Impact
We have built a reliable network of local suppliers. By
imparting technical know-how we help them to upgrade their
manufacturing skills so that they continue to meet our exacting
quality standards. We only engage reputed suppliers who are
able to meet our high quality standards.
The entry of Nawaloka Hospitals into the state-dominated
healthcare sector paved the way for the private healthcare
system take root in Sri Lanka. Mirroring reputed hospitals
in the region, Nawaloka offer advanced medical technology
and expert medical care to the people of Sri Lanka. This has
eliminated the need for people to travel out of the country
for specialised medical treatment, resulting in the saving of
substantial foreign currency outflows from Sri Lanka.
Management Discussion and Analysis Social and Environmental Capital
Energy
Nawaloka is a high energy intensive company. Since it’s a 24/7
operation, the demand on energy is considerably high. Energy
use results energy waste which could cause pollution if not
disposed in an appropriate manner, either by reusing for a
value adding purpose.
67
Although healthcare industry causes the least amount of
pollution in comparison to other industries, as a responsible
company, we need to constantly minimise pollution caused
by our operations. In order to achieve this, we continuously
upgrade our equipment to use energy-efficient latest
technology. Inter departmental competitions are organised by
us on efficient management of energy.
Since ours is a 24/7 operation, we have been consciously
reviewing and addressing energy conservation methods across
our operations. Given below are some of the measures adopted
to effectively manage energy consumption.
zzEnergy
Leader
The Hospital has appointed an ‘Energy Leader’ for each high
energy consumption unit with authority to take appropriate
action and implement effective methods to manage energy
consumptions. They are rewarded for their efforts and the
results.
zzAutomatic
Damper System
An automatic damper system was installed in the channelling
rooms which resulted in the reduction in the energy cost as
given below:
Monthly Saving by using automatic dampers (102 Nos.)
Total cost without using Dampers
Total cost with Dampers
Monthly Savings by using Dampers
zzAir
- Rs. 3,608,842/- Rs. 1,443,535/- Rs. 2,165,305/-
Conditioners
All the gas, split and window type air conditioners in the
hospital were converted to the chill water system. The monthly
energy use decreased by 14% from Kwz1590 to Kwz1818 as
a result. All the air-conditioning units were set at a constant
minimum of 25oC.
zzIntelligent
Automatic System and LED Lighting
Sensor lights and LED bulbs were fixed in certain high energy
consuming locations such as the ground-floor reception and
lobby area.
zzLED
TV
All the CRT televisions were replaced with new LED televisions
in the entire Hospital.
In addition, we implemented several other measures
to conserve energy. They include conducting awareness
campaigns and training on conservative energy consumption
for employees, promoting energy conservation through
sign boards and announcements. One such measure was
programming the computers to revert to standby mode in five
minutes. Our new car park building is designed to derive the
maximum benefit from natural light and adopt energy-efficient
building codes. In addition to conducting annual energy audits,
a building management system has been introduced for
efficient control of energy consumption. We plan to introduce
an intelligent automatic system in the ensuing year which
would contribute towards energy conservation.
68
Electricity
Monthly Electricity Consumption against Revenue 2011-2016
2015/16
Rs.
2014/15
Rs.
2013/14
Rs.
2012/13
Rs.
2011/12
Rs.
Apr-15
632.02
525.68
515.79
517.39
426.13
May-15
626.74
540.37
548.70
506.52
392.08
Jun-15
683.25
560.20
640.49
585.57
463.86
Jul-15
708.83
543.30
598.35
622.32
475.06
Aug-15
659.21
611.00
578.18
556.92
450.30
Sep-15
716.01
563.75
592.16
562.19
489.09
Oct-15
754.49
594.89
556.33
543.35
463.51
Nov-15
808.54
713.76
528.05
561.84
496.36
Dec-15
848.22
697.81
651.39
608.76
567.71
Jan-16
806.36
659.54
606.74
635.07
568.91
Feb-16
795.10
687.27
622.86
553.51
480.81
Mar-16
716.92
629.18
526.24
495.07
503.82
Water
The water consumption of Nawaloka is very high. Water is
used for a range of activities in its daily operations, including
sanitation, heating, ventilation, air-conditioning, food
preparation, laundry and many others. The two main sources of
water for the Hospital are well and pipe-borne water. The latter
is from the national water supply.
The Hospital has adopted several measures to reduce the
consumption of water.
To generate a behavioural change in employees to conserve
water, charts were displayed in departments tracking monthly
water usage. We raised awareness and displayed notices to
make employees conscious about saving water.
Sensor taps were installed in public areas and solar power
to generate hot water in patient rooms. A sewerage plant was
installed in the Negombo hospital to optimise waste water.
The Maintenance Department checks for leaks each
week to reduce water wastage and we have installed highly
efficient equipment to minimise evaporation of water from
cooling towers.
Emissions
We make a conscious effort to minimise emissions from our
operations. Many green concepts have been adopted in the
Hospital to reduce our carbon footprint.
We also upgrade machinery and systems to make our
operations efficient. In addition, incinerators are used to
dispose of medical waste without the emission of harmful
gases. We are pleased to state that our activities do not result
in the emission of Nitrogen Dioxide or Sulfur Dioxide.
Social and Environmental Capital Management Discussion and Analysis
Effluents and Waste
Systematic waste disposal is imperative for Nawaloka. Given
the nature of its operations, high amounts of medical waste
get generated daily. Therefore, Nawaloka have installed a
state-of-the-art waste disposal system to dispose waste in a
safe and responsible manner. The Standards Department of the
Hospital continuously engages in upgrading the technology to
minimise waste.
1993
A garbage separation system enables to dispose waste
responsibly. Nawaloka are moving towards a paperless office
environment, which substantially reduces the use of paper.
Using recyclable paper bags, recycling print cartridges also
contribute towards the Company’s efforts of minimising waste.
The employees are regularly trained on safe practices and
the proper handling of hazardous material. Implementing the
‘5S’ concept has contributed towards increasing the efficiency
of Nawaloka’s operations.
The different categories of waste generated by Nawaloka
Hospital are as follows:
Clinical Waste
Potentially dangerous and carry a high risk of infection to the
general public and employees.
Laboratory Waste
Includes chemicals used in the pathological laboratory,
microbial cultures and clinical specimens, slide, culture
dish, needle, syringes, as well as radioactive waste such as
Iodine-125, Iodine-131 etc. These are high in risk as well.
Non-clinical Waste
Includes organic material, paper, polythene or plastic, which
have not been in contact with the body fluid of a patient.
Nawaloka Hospitals is the nationally recognised
leader in medical care. Embracing medical,
surgical and technological innovations, we offer
breakthrough treatments to our patients. This has
made Nawaloka Hospitals the place to turn to for the
best, most current treatments in Sri Lanka.
Here are some of the ground breaking innovative
treatments we introduced to our nation –
1993- First Minimally Invasive Laparoscopic
Surgery in Sri Lanka
1994- First Coronary Artery Bypass Surgery
Unit in a private hospital
2011 - First ever lung transplant in Sri Lanka
2015- First bone marrow transplant in Sri Lanka
Kitchen Waste
Includes food waste and waste water used for food
preparation. They breed pests and therefore, pose an indirect
potential hazard to employees and patients.
Monthly Insulator Details (Inclusive of the Lab,
Negombo Hospital and the Medical Centre)
Waste
Kg.
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Diesel Per L/per Kg
Ltr.
7,235
2,614
2.77
7,265
2,616
2.78
7,300
2,652
2.75
7,325
2,640
2.77
7,460
2,688
2.78
7,110
2,562
2.78
7,375
2,658
2.77
7,160
2,580
2.78
7,225
2,601
2.78
7,360
2,652
2.78
7,060
2,544
2.78
7,225
2,601
2.78
Management Discussion and Analysis Social and Environmental Capital
69
STEWARDSHIP
BOARD OF DIRECTORS
Mr. Jayantha Dharmadasa
Mr. Rienzie Theobald Wijetilleke
Chairman and C.E.O. – Executive Director
FCIB (UK), FIB (Sri Lanka), CCMI (UK)
Mr. Jayantha Dharmadasa has been a
Director of the Company since 1985.
He is a businessman by profession and
counts over 39 years of experience in
Executive Management and 30 years in the
healthcare industry. He is a Fellow Member
of the Institute of Certified Professional
Managers (FCPM).
He is the Chairman/CEO of Nawaloka
Hospitals PLC. He is also the Chairman of
Nawaloka Holdings (Pvt) Ltd., Nawaloka
Aviation (Pvt) Ltd., Nawaloka Polysacks
Sharjah., Sasiri Polysacks (Pvt) Ltd.,
Nawaloka Construction Company (Pvt)
Ltd., Nawaloka Trading Co. Ltd., Nawaloka
Petroleum (Pvt) Ltd., Koala (Pvt) Ltd.,New
Ashford International (Pvt) Ltd., New
Nawaloka Hospitals (Pvt) Ltd., Nawaloka
Medical Centres (Pvt) Ltd., New Nawaloka
Medical Centre (Pvt) Ltd., Nawaloka
Medicare (Pvt) Ltd., Nawaloka Metropolis
Laboratories (Pvt) Ltd., Outstanding Song
Creators’ Association (OSCA), Cinestar
Foundation and Nation Lanka Finance
PLC., Nawaloka Hospitals International
(Pvt) Ltd., Nawaloka Engineering (Pvt)
Ltd., International Medical Institute (Pvt)
Ltd., Ceyoka (Pvt) Ltd., Nawaloka College
of Higher Studies (Pvt) Ltd., East West
Marketing (Pvt) Ltd., Nawaloka Steel
Industries (Pvt) Ltd., Millennium Housing
Development (Pvt) Ltd., Nawaloka Guardian
International (Pvt) Ltd., Waves Destinations
(Pvt) Ltd., Nawaloka Air Services (Pvt) Ltd.,
Nawaloka Agri (Pvt) Ltd., Nawaloka
MEP Concept (Pvt) Ltd., Ceyoka Overseas
(Pvt) Ltd.
Independent Non-Executive Director and
Vice-Chairman
Director/General Manager, Executive Director
Mr. Rienzie T. Wijetilleke has been a
Director of the Company since 2003 and
appointed as Vice-Chairman in August 2011.
He is a Fellow of the Chartered Institute of
Bankers, United Kingdom and also Fellow
of the Institute of Bankers, Sri Lanka and
Companion of the Chartered Management
Institute, UK.
Professor Chandrasena has been a Director
of the Company since 2003. He is a Clinical
Biochemist by profession and counts
24 years of University Academic Service
and 28 years experience in Hospital and
Healthcare Administration and Laboratory
Sciences. He is the Emeritus Professor
of Biochemistry and Clinical Chemistry,
Faculty of Medicine, University of Kelaniya.
In late 2010, Mr. Wijetilleke completed
50 years as a Practicing Banker and in 2011
retired from the position of Chairman, HNB.
He is a past chairman and Director of the
Colombo Stock Exchange.
He is also the settlor and the main
trustee of ‘The Rehabilitation of Buddhist
Temples Foundation’ (incorporation) Act
No. 17 of 2014.
Mr. Dharmadasa is the Honorary
Consul-General of the Republic of
Singapore in Sri Lanka. He was a Director
of Sri Lanka Telecom, former President
of Sri Lanka Cricket and a past President
of the Asian Cricket Council. He was the
Former Chairman of the National Film
Corporation. He is also the Vice-President
of Sri Lanka Cricket.
70
Professor Lal Gotabhaya
Chandrasena
Professor Chandrasena has a Doctorate
in Philosophy from the University of
Liverpool (UK), a Bachelor of Science
(Hons.) from the University of Liverpool
(UK). Fellow of the Institute of Chemistry,
Ceylon and is a Chartered Chemist. Fellow
of Royal Society of Chemistry (UK) and
Fellow of the National Academy of Sciences
of Sri Lanka, Post-Doctoral Fellow, Colorado
State University, USA.
He is also a Fellow Member of
the Institute of Certified Professional
Managers and hold a certificate in Hospital
Administration from the Indian Institute
of Management, Ahmedabad. He is also a
Director of Nawaloka Medicare (Pvt) Ltd.,
Nawaloka Hospitals International (Pvt) Ltd.,
Nawaloka Metropolis Laboratories (Pvt)
Ltd., Nawaloka College of Higher Studies
(Pvt) Ltd. and Non-Executive Director of
Sri Lanka Insurance Corporation Ltd.
He is presently the President of the
Association of Private Hospitals and
Nursing Homes, and a member of the
Private Health Services Regulatory
Council – Ministry of Health.
Stewardship
Deshabandu Tilak de Zoysa
Mr. Tissa K. Bandaranayake
Mr. D. Sunil AbeyRatna
FCMI (UK), FPRI (SL)
FCA, BSc
Senior Independent Non-Executive Director
Senior Independent Non-Executive Director
PhD (UH-USA), FCA (SL), FCMA (SL),
FCMA (UK), CMA (Aust.)
A well-known figure in the Sri Lankan
business community, Tilak de Zoysa,
FCMI (UK) FPRI (SL), Honorary Consul
for Croatia and Global Ambassador for
HelpAge International was conferred the
title of ‘Deshabandu’ by His Excellency
the President of Sri Lanka in recognition
of his services to the country and was the
recipient of ‘The Order of the Rising Sun.
Gold Rays with Neck Ribbon’ conferred by
His Majesty the Emperor of Japan.
Mr. Tissa K. Bandaranayake joined the
Company as a Director in 2009. He is
a Fellow of The Institute of Chartered
Accountants of Sri Lanka and graduated
with a BSc from the University of Ceylon.
In addition to being the Chairman of the
Supervisory Board and Advisor to the
Al-Futtaim Group of Companies in
Sri Lanka, he Chairs Carsons Cumberbatch
PLC, Associated CEAT (Pvt) Ltd., Amaya
Hotels and Resorts USA (Radisson), AMW
Capital Leasing and Finance PLC, Jetwing
Zinc Journey Lanka (Pvt) Ltd. and HelpAge
Sri Lanka, Trinity Steel (Pvt) Ltd., CG Corp
Global Sri Lanka.
He is also the Vice-Chairman of Ceat
Kelani Holdings (Pvt) Ltd., Orient Insurance
Ltd., and serves on the Boards
of several listed and private companies
which include John Keells PLC, Taj Lanka
Hotels PLC, TAL Hotels and Resorts Ltd.,
Lanka Walltiles PLC, Nawaloka Hospitals
PLC, Dutch Lanka Trailer Manufacturers
(Tata Group), Associated Electrical
Corporation Ltd., Inoac Polymer
Lanka (Pvt) Ltd.,Cinnovation INC., GVR
Lanka (Pvt) Ltd. and Varun Beverages
Lanka (Pvt) Ltd. (Pepsi).
Deshabandu Tilak de Zoysa is a
past Chairman of the Ceylon Chamber
of Commerce, the National Chamber
of Commerce of Sri Lanka, HelpAge
International (UK) and served as Member
of the Monetary Board of Sri Lanka
(2003-2009).
Stewardship Board of Directors
Independent Non-Executive Director
He has more than 45 years of
commercial and professional experience.
He was with Ernst & Young, Sri Lanka for
27 years until retirement as a Senior Partner
in April 2009, managing a large portfolio
of clients both local and multinational in
various industries.
He is a Director of Brown & Co. PLC,
Samson International PLC, Laugfs Gas PLC,
Harischandra Mills PLC, Renuka Foods PLC,
Renuka Holdings PLC, Overseas Reality
(Ceylon) and Micro Holdings (Pvt) Ltd.
Also serves as an Advisor/Consultant to
the Board of Directors of Noritake Lanka
Porcelain (Pvt) Ltd.
Mr. Bandaranayake was a past Chairman
of the Audit Faculty of The Institute of
Chartered Accountants of Sri Lanka and a
past president of the Practicing Chartered
Accountants Forum.
Mr. D. Sunil AbeyRatna counts over
40 years of experience in the fields of
Finance, Audit and Tax. He is a Fellow of
The Institute of Chartered Accountants
of Sri Lanka, The Institute of Management
Accountants of UK and Certified
Management Accountants of Sri Lanka.
He is also a Member of the Certified
Management Accountants of Australia and
has a Doctorate in Philosophy from the
University of Honolulu, USA.
He is the sole proprietor of AbeyRatna
& Company – Chartered Accountants and a
Director of AGN International Ltd. UK, which
is the 4th largest Independent Accounting
Association in the World based in over 108
countries and 478 office locations.
He is also a Director of KBSL
Information Technologies Ltd., East West
Properties PLC, Rosewell Investment (Pvt)
Ltd., Eastern Brokers (Pvt) Ltd., Carplan
Ltd. and KIA Motors (Lanka) Ltd., and the
Managing Director of Lankem Tea & Rubber
Plantations (Pvt) Ltd.
Mr. Bandaranayake is also a VicePresident of National Stroke Association of
Sri Lanka, Member of Rotary International
Finance Committee 2013-2016 and Rotary
International District Governor for Sri Lanka
1999-2000.
He currently serves as the Chairman
of the Quality Assurance Board of
Sri Lanka comprising representatives
of the private sector and regulators.
71
Mr. Ugitha Harshith Dharmadasa
Mr. Anisha Givantha Dharmadasa
Ms. Ashani Givanthi Dharmadasa
Executive Director
Executive Director
Executive Directress
Mr. Harshith Dharmadasa has been a
Director of the Company since 2000.
He has 21 years of experience in Executive
Management.
Mr. Anisha Dharmadasa has been a Director
of the Company since 2000. He has 19 years
of experience in Executive Management.
Ms. Givanthi Dharmadasa has been a
Directress of the Company since 2003
and has 15 years experience in Executive
Management.
He is the Chairman of Millennium
Housing Developers PLC, Managing Director
of Ceyoka (Pvt) Ltd., Nawaloka Trading
(Pvt) Ltd., Nawaloka Agri (Pvt) Ltd., Ceyoka
Engineering (Pvt) Ltd., Nawaloka Mep
Concepts (Pvt) Ltd., Koala (Pvt) Ltd., and
Ceyoka Overseas (Pvt) Ltd.
Mr. H. Dharmadasa is also a Director of
Nawaloka Holdings (Pvt) Ltd., Nawaloka
Hospitals PLC, New Nawaloka Hospitals
(Pvt) Ltd., Nawaloka Hospitals International
(Pvt) Ltd., Nawaloka Engineering (Pvt) Ltd.,
Nawaloka Aviation (Pvt) Ltd., International
Medical Institute (Pvt) Ltd., Nawaloka
College of Higher Studies (Pvt) Ltd., East
West Marketing (Pvt) Ltd., Nawaloka
Petrolium (Pvt) Ltd., Nawaloka Guardian
International (Pvt) Ltd., Nawaloka Air
Services (Pvt) Ltd., Nawaloka Construction
Co. Ltd., Nawaloka Medicare (Pvt) Ltd.,
Nawaloka Metropolis Clinical Laboratories
(Pvt) Ltd., Nation Lanka Finance PLC,
Sasiri Polysacks (Pvt) Ltd., Melvin Wirenail
Industries (Pvt) Ltd., Ceyoka Exports (Pvt)
Ltd. and Concord Ventures Exports
Lanka (Pvt) Ltd.
72
Mr. Anisha Dharmadasa is the Chairman
of Sikure Security Services (Pvt) Ltd.,
Director of Nawaloka Medical Centre
(Pvt) Ltd., Ceyoka (Pvt) Ltd., Waves
Destinations (Pvt) Ltd., Nawaloka Holdings
(Pvt) Ltd., Nawaloka Hospitals PLC,
Nawaloka Hospitals International (Pvt)
Ltd., Nawaloka Engineering (Pvt) Ltd.,
International Medical Institute (Pvt) Ltd.,
Nawaloka College of Higher Studies (Pvt)
Ltd., East West Marketing (Private) Ltd.,
Nawaloka Petroleum (Pvt) Ltd., Nawaloka
Guardian International (Pvt) Ltd., Nawaloka
Air Services (Pvt) Ltd., Concord Ventures
Exports Lanka (Pvt) Ltd., Nawaloka
Medicare (Pvt) Ltd., New Nawaloka Trading
(Pvt) Ltd., Nawaloka Trading (Pvt) Ltd.,
Nawaloka Construction Co. Ltd., Nawaloka
Aviation (Pvt) Ltd., Nawaloka Professional
Academy (Pvt) Ltd., Quincy (Pvt) Ltd., Sasiri
Polysacks (Pvt) Ltd., and Melvin Wirenail
Industries (Pvt) Ltd.
She is a Directress of Nawaloka
Holdings (Pvt)Ltd., Nawaloka Hospitals PLC,
Nawaloka Engineering (Pvt) Ltd., Nawaloka
Medicare (Pvt) Ltd., East West Marketing
(Pvt) Ltd., Nawaloka Guardian International
(Pvt) Ltd., Nawaloka Air Services (Pvt) Ltd.,
Redline Services(Pvt) Ltd., Redline Design
& Printing (Pvt) Ltd. Redline International
(Pvt) Ltd., Nawaloka Professional Academy
(Pvt) Ltd., Nawaloka Aviation (Pvt) Ltd.,
Sasiri Polysacks (Pvt) Ltd. and Melvin
Wirenail Industries (Pvt) Ltd.
Board of Directors Stewardship
Mr. Palitha Kumarasinghe PC
Mr. Victor R. Ramanan
Independent Non-Executive Director
Non-Executive Director
Mr. Palitha Kumarasinghe is leading
President’s Counsel specialised in civil
commercial litigations. He was enrolled as
an Attorney-at-Law on 27th September
1982. He had his education at Mahinda
College, Galle and thereafter, entered to
Sri Lanka Law College in 1979. Having
devilled in the Chambers of Mr. Romesh de
Silva, President’s Counsel, Mr. Kumarasinghe
is now in active practise in the District
Court of Colombo, Commercial High Court
of the Western Province and the Superior
Courts. He has an extensive commercial law
practise and he is the Counsel for a large
number of Banks and Finance Houses.
Mr. Victor Ramanan is a BSc Graduate and
holds a Diploma in Software Engineering,
Business Admin. & Sales Techniques (UK).
He was a Vice-President and Executive
Committee Member of Bar Association and
Chairman of Various committees inclusive
of National Law Conference, Ethics and
Professional Conduct and Continuing Legal
Education. He was once the President
of Colombo Law Society.
He served in the Public Service
Commission for a period of six years and
was a member of Council Legal Education
(2010-2015) and its Board of Studies,
Chairman of Environment Council (20102013), a member of Advisory Commission
on Intellectual Property (2001-2004).
He is a versatile marketer and
administrator with more than 28 years
of hands on experience working in many
countries including United Kingdom,
Kuwait, Dubai, Bahrain, Germany, France,
USA and Sri Lanka. He has worked in areas
such as IT, HR, Marketing and Business
Development of which more than 17 years
has been in the fields of Oil, Gas and
Logistics sectors.
Presently holds positions as a Director
and Chairman in the under mentioned
companies:
- Adventus Education (Pvt) Ltd. – Chairman
- Nawaloka Hospitals PLC – Director
- Nation Lanka Finance PLC – Director
- Nawaloka College of Higher Studies
(NCHS) – Deputy Chairman
- Millennium Housing Developers PLC –
Non-Executive Director/Deputy Chairman
- Ideal Getaways (Pvt) Ltd. – Director
He also served as the Chairman of
Disciplinary Committee of Sri Lanka Cricket,
since 2012, the Chairman of Legal Advisory
Committee in 2012-2015 and the Chairman
of the Governance Committee (2012).
He is an Independent Non-Executive
Director of Laugfs Gas PLC, since 2012.
Stewardship Board of Directors
73
SENIOR MANAGEMENT TEAM
Dr. Uthpala Malawara Arachchi
Ms. G. Warusavithana
Mr. Kanishka Warusavitarana
Medical Superintendent
Chief Nursing Officer
Senior Manager – Operations
Dr. Uthpala Malawara Arachchi
graduated with MBBS from Faculty
of Medical Sciences, University of
Sri Jayewardenepura in 2002.
Ms. G. Warusavithana Graduated as a
Staff Nurse from the Nurses Training
School, Galle. Postgraduated in
Post-Basic School of Nursing, Colombo.
Qualified in Midwifery Diploma in
Nursing Administration, Management
and Supervision, Maternal and child
health international special training
in Khon Kaen University – Thailand
and Neurosurgery special training in
Fujitha University – Japan, Accident and
Emergency special training at Royal
Hospital – Oman. She Has over 40 years
experience in the State Sector, Overseas
and Private Sector.
Mr. Kanishka Warusavitarana is a member
of the Association of Accounting
Technicians, Sri Lanka. He joined
Nawaloka Hospitals in 1988. He has
8 years experience in a reputed firm of
Chartered Accountants and 28 years
experience in the Healthcare Industry.
Mr. Indika Prasath Balasuriya
Mr. Chaminda Rupasena
Head of Information Technology
Manager – Human Resources/
Administration/Training
He holds MSc in Medical
Administration awarded by the
Postgraduate Institute of Medicine and
a Diploma in Occupational Health and
Safety from the University of Colombo.
He has served as a Medical Officer-inCharge in many Government institutions.
From 2007 to 2009, he was
attached to the National Health Service,
United Kingdom in the field of Medical
Administration.
He joined Nawaloka Hospitals as a
Medical Superintendent in 2014. He has
over 14 years experience in Clinical and
Medical Administration.
Mr. I.P. Balasuriya has obtained the MSc
in IT – University of KEELE (UK) in 2005
and a member of BCS, CSSL & CPM.
He has also followed NIBM Diploma
in IT. He has over 18 years experience
in the fields of Project Management,
ERP Project Consulting, Application
Development, Implementation and User
Training. He also has working experience
with multinational companies. He joined
Nawaloka Hospitals in 2008.
74
Mr. C. Rupasena is a holder of BSc.
Business Administration (Human
Resources Management) Special Degree
at the University of Sri Jayewardenepura.
He is an Attorney-at-Law, Notary Public,
Commissioner of Oaths and registered
Company Secretary. He is also a holder
of Diploma in Psychological Counselling
and possess over 12 years of experience
in Human Resources Management.
Stewardship
Mr. Nalaka Niroshana
Mr. Upatissa Mannapperuma
Mr. M.D. Ariyawansa
Head of Finance and Corporate Planning Unit
Senior Co-ordinating Officer and
Maintenance Manager
Senior Co-ordinating Officer
Mr. Nalaka Niroshana is an Associate
Member of the Chartered Institute of
Management Accountants – UK and
Associate Member of Chartered Global
Management Accountants, Member
of Certified Professional Manager
and is a Graduate from University
of Sri Jayewardenepura. He joined
Nawaloka Hospitals in 2011 and has
over 9 years executive experience in
Diversified Conglomerates in Sri Lanka.
Mr. M.D. Ariyawansa obtained his
Diploma in Business Management
from the National Institute of Business
Management in 1983 and joined Nawaloka
Hospitals in 1985 as an Executive Officer
and worked in several business units of
the Hospital. He has obtained a Certificate
in Hospital Management from Japan
Overseas Health Administration Centre,
Yokohama in 1999. He is presently the
Senior Co-ordinating Officer responsible
for Co-ordinating Public Relations
functions of the strategic business
units. He has 31 years experience in the
Healthcare Industry.
Mr. Upatissa Mannapperuma obtained
his National Certificate of Technology
from the University of Moratuwa in
1980 and joined Nawaloka Group of
Companies, Construction Division and in
1983, he joined the Maintenance Division
of Nawaloka Hospitals. He is certified
in Hospital Management from Japan
Overseas Health Administration Centre,
Yokohama in 1995. He has 31 years
experience in the Healthcare Industry.
Mr. Lakmal Sooriyapperuma
Mr. Anura Samaradiwakara
Mr. A.A. Weraniyagode
Head of Marketing
Senior Co-ordinating Officer
Electrical and Mechanical Engineer
Mr. Sooriyapperuma has over 18 years
experience in Marketing/International
Trade and Business Development. He
has obtained the Masters in Business
Administration from University of
Wales in UK.
Mr. Samaradiwakara is working as
Senior Co-ordinating Officer of
Nawaloka Hospitals since 2003 and he
has more than 35 years experience in the
service sector.
Mr. A.A. Weraniyagode has obtained
a Diploma on Refrigeration & Airconditioning from City & Guilds Institute
of London in 1983. He has a work
experience of 25 years as a Maintenance
Engineer in the Hotel Trade in Sri Lanka
and overseas. He joined Nawaloka
Hospitals in 2009 as an Electrical and
Mechanical Engineer.
Stewardship Senior Management Team
75
EXECUTIVE CLINICAL MANAGEMENT TEAM
Dr. Maiya Gunasekera
Dr. V.I. Tennekoon
Dr. W.A.M. Gunasekera
MBBS, FRCS (Eng), FICS, FRCS (Ed),
MS (Surgery)
MBBS, MD, FRCP, FRACP, FCCP
MB, MRCP (UK), FRCP (Lon), FCCP
Consultant Chest Specialist/Physician and
Physician-in-charge in Medical Intensive
Care Unit
Consultant Physician and Physicianin-Charge Ward Medical Services
Dr. Sandeep K. Sharma
Dr. Hemant Digambar Waikar
Dr. A.G. Jayakrishnan
MD (Anaesthesiology)
MBBS, MS, DA (ANAE), PDCC,
(Cardiac and Neuroanaesthesia)
MS, FRCSI, FRCS (CTh)
Consultant Surgeon
General Surgery/Gastroenteroscopy/
Laparoscopy and Endoscopy Consultant
in-charge of Surgical Service
Consultant Cardiac Anaesthetist
and Intensivist
Consultant Cardiac Anaesthetist
Dr. (Mrs.) Roshan Z Zaid
Dr. Chandana Kanakaratna
MBBS (Cey), MRCOG (UK), DFSRH (UK),
FMAS (Delhi), UK Board Certified
Consultant Geriatrician (Geriatric Physician) MBBS
(SL), MD (SL), FRCP (LONDON), MSC Geriatric
Medicine (UK), Diploma in Geri. Med. (London),
Diploma in Geri. Med. (Glasgow)Board Certification
in General Medicine (SL) CCT General Medicine
(UK), CCT Geriatric Medicine (UK)
Consultant Obstetrician, Gynaecologist and
Laparoscopic Surgeon
Chief Cardiothoracic, Vascular and
Transplant Surgeon
Consultant Physician
76
Stewardship
Dr. Duminda Pathirana
Dr. Harindu Wijesinghe
Dr. Chandima De Mel M.D.
MBBS (Col), DCH (Col), MD (Col), MRCP (UK),
MRCP, CH (UK), FCCP
MBBS, MD, MRCP (UK)
FRCP (Lond), FCCP, M. Phil (Lond),
D. Path
Consultant Paediatrician
Consultant in Rheumatology, Rehabilitation
and Sports Medicine, Consultant-in-Charge
Nawaloka Pain Management Centre
Dr. Punsith Gunewardene
Dr. D. Maruthini Deivanayagam
MBBS (Colombo), MS (Colombo)
MBBS, MS (Col), MRCOG (UK), MD (UK), DGO
Consultant Neurosurgeon Consultant Subspecialist in Reproductive
Medicine and Surgery, Consultant Obstetrician
and Gynaecologist
Stewardship Executive Clinical Management Team
Consultant Physician
77
CORPORATE GOVERNANCE
Clinical Governance Policy
Purpose of the Clinical Governance Standards
The continuous involvement of the healthcare practices, diseases
and ailments had resulted in the requirement of a unified set of
healthcare standards which are on par with the global context.
Therefore our Hospital designs and continuous updates to
clinical standards, controls and processes in order to provide
superior healthcare services to our customers and to be the
leader in the healthcare profession. Our standards ensure that
our managers, clinicians, health professionals and users of
health services are provided with the following assistance:
zzDevelop
and implement clinical governance processes and
systems within the Hospital.
zzIncrease
organisational awareness of clinical governance and
contribute to the development and implementation of clinical
governance systems and processes.
zzAssist
clinicians and management to embed clinical
governance within the organisational culture.
zzAssist
Nawaloka Hospitals PLC to demonstrate improved
accountability for the delivery of safe, high quality healthcare
services through the implementation of clinical governance
systems and processes.
Clinical Governance is Defined as:
A framework through which the Hospital is able to continually
improve the quality of its services and safeguard high
standards of care by creating an environment in which
excellence in clinical care will flourish.
There are seven key elements to clinical governance. These
are outlined below, along with the mechanisms in use in the
practice to deliver each of the elements and the expectations
that are placed on partners and staff at the Practice.
zzContinuing
Professional Development: This includes the
ongoing and regular education and research activities linked
to the responsibilities and needs of the clinicians employed
by the Hospital.
It is the professional duty of all clinical staff to ensure active
participation in regular Continuing Professional Development
(CPD) to keep their knowledge updated. Medical Officers
(MOs) and the Nursing Staff should be –
zzEngaging
in professional support within the workplace in the
context of the Performance Appraisal and Development Plan.
zzUtilising
education and training opportunities to demonstrate
ongoing professional development.
zzEngaging
in Continuing Professional Development through
an accreditation programme.
All clinicians are expected to document their learning for the
purpose of individual learning portfolios. Following any external
CPD paid for by the Hospital, MOs and nurses are expected to
share their learning with colleagues, either formally in clinical
or nurse team meetings, documentation or through informal
means. It is the responsibility of each clinician to ensure
that any urgent updates are brought to the attention of all
colleagues to whom the information is relevant immediate after
the learning event.
MOs have a responsibility to support the nursing team
through formal teaching sessions, on the job learning and other
forms of disseminating knowledge. The Hospital will arrange a
clinical meeting each month at which one of the functions is to
allow clinicians with specialised knowledge to share updates
with the rest of the clinical team.
It is recognised that non-clinical staff also need to update
their skills regularly in order to support the delivery of high
quality medical services.
Education and Training
Towards ensuring retention of capable, skilled and experienced
staff of our existing workforce and continuously expanding
our Human Resources Personnel, the following actions are
considered:
zzCompetency
Standards: The Hospital must be confident
that the current staff possess adequate skills; experience
and training related to their field, towards undertaking their
responsibilities of their positions within the Hospital. The
Hospital’s Management verifies and approves competencies,
standards and qualifications. This validation process is
in place to justify that the competencies, standards or
qualifications are authentic or evidence-based.
Validation processes at the level of the individual include (but
are not limited to) the following elements:
zzVerifying
that the individual is registered or accredited.
Clinical Audit
Clinical audit is defined as ‘the systematic measurement and
evaluation of the efficiency and effectiveness of organisational
systems and processes’. Clinical audits analyse the quality
of clinical care outcome, including the procedures used
for diagnosis and treatment, the use of resources and the
adequacy of evaluation of clinical outcome and patient quality
of life. This may refer to:
zzThe
application of the results of independent international
and local audits to our patient population and the
identification of areas of improvement.
zzThe
use of case studies to highlight specific issues that
are then generalised within our patient population. The
monthly clinical meeting provides a forum for the purpose of
disseminating results of audits and the exchange of opinions
in improving clinical practice.
zzVerifying
that the individual has evidence of Continuing
Professional Development.
78
Stewardship
These meetings will be held on different days of the week and
will be attended by all MOs and members of the nursing team
who are required to be present. Those clinicians who are not
called to attend meetings may choose to do so in their own
time but in any case the responsibility of raising awareness
at the conclusion of the meeting is vested with the clinician
chairing the meeting.
When appropriate, the meetings will be attended by the
Medical Superintendent (MS) or other senior administrative
staff to aid the process of dissemination and to ensure that any
administrative changes needed to support improvement to the
proposals are carried through. The range of topics covered in
local audits should meet one of the following key criteria:
zzRespond
to newly-published local pathways
zzRespond
to newly-published national evidence
zzRespond
to newly-available drug or other therapy
(if recommended by the relevant Authority)
zzRespond
to a clinically significant event or
substantiated complaint
zzProvide
a balance across a range of specialties (i.e. clinicians
should not at all focus on a narrow range of conditions)
zzProvide
a general update in an area of the clinician’s
own expertise
Clinical indicators are measures or benchmarks that enable
the Hospital to compare them against similar health services.
To facilitate health system improvement clinical indicators must
be meaningful and reflect clinical practice standards.
In addition, clinicians are expected to read journals and/or
websites regularly to maintain current awareness of best
practice. This should include regular scanning of national
guidelines for changes in recommended practice.
Patient and Public Involvement – Openness
Processes which are open to public scrutiny, while respecting
the individual patient and practitioner confidentiality, are an
essential part of quality assurance.
The Hospital uses various mechanisms to enable patients
and other interested parties to be involved in identifying needs
and improvements. These include Patient Bill of Rights.
zzThe
Hospital website – promotes regular and ad hoc services,
along with information about the staff, the complaints
procedure and a comment facility.
zzPatient
Reference Group – Group representatives of the
Hospital’s demographic make-up conducts annual patient
survey and scrutinizes the Hospital’s response to the views
expressed by patients.
zzComplaints
The MS is designated to:
zzManage
the agenda of clinical meetings.
zzTo
ensure that the areas selected at clinical meetings meet
the criteria of knowledge transfer.
zzTo
arrange for a clinical evaluation to be presented on
any topic that is causing particular concern either locally
or more widely.
All papers presented at a clinical meeting should be made
available to participants through respective emails. It is the
responsibility of the clinician presenting the paper to ensure
that this is completed.
– all patient complaints are analysed regularly for
learning points and for patterns. Complaints about clinical
care are shared immediately with the clinician concerned
and those that give rise to clinical learning points are shared
more widely at a clinical meeting.
zzSuggestions
– a suggestion box with forms to complete are
available at the waiting area.
The Hospital aims to co-operate at all times in a spirit of
openness with other healthcare providers, local authority
organisations, and any organisation which has an interest in
our operations.
Risk Management
Clinical Effectiveness
Clinical Effectiveness is about providing the best evidencebased care for the patient, whilst making good use of available
clinical resources. Clinicians in the Hospital are expected to
work within formalities, protocols and pathways where these
have been developed for specific conditions. These include:
Clinical standards incorporate clinical guidelines, pathways
and local practice protocols. These standards may be set by
bodies such as the Sri Lanka Medical Council, which is the
authoritative body of the Ministry of Health in setting clinical
standards and the Sri Lanka Medical Association.
Stewardship Corporate Governance
Risks – to patient, clinicians, other staff and the Organisation
as a whole – are managed through a range of policies and
protocols, through risk assessment. This is achieved through
the identification and reduction of potential risks and
examination of adverse incidents for causative and contributing
factors and trends within and across the services. To maximise
learning opportunities lessons should be shared within the
Hospital. Some aspects of clinical risk management are:
zzIncident
and adverse event reporting, monitoring and trend
analysis: This incorporates activities such as learning from
local incidents or patterns of incidents, including near hits
and management of serious adverse events and maintaining
a risk register and monitoring medico-legal cases.
79
zzSentinel
data for clinical governance purposes. Patient records will
be searched to provide evidence for internal audits and case
studies and to ensure clinical effectiveness.
zzRisk
Human Resources
event reporting, monitoring and clinical
investigation: Defines the process for identification, reporting
and investigating sentinel events in line with Quality and
Patient Safety Committee.
profile analysis: including the identification,
investigation, analysis and evaluation of clinical risks and
the selection of the most appropriate method of correcting,
eliminating or reducing identifiable risks.
The key policies relating to minimising risk for patients are:
zzPatient
Bill of Rights
zzConsent
zzInfection
Policy
Control Policy
zzIdentification
zzVerbal
zzHigh
of Patients
Policy
Alert Medication Policy
zzCorrect
zzPatient
Site, Correct Procedure, Correct Patient Surgery
Falls Policy
Risks are minimised through other aspects of clinical
governance, especially due to attention provided to education
and training, clinical audit and clinical effectiveness.
The Hospital is committed to delivering medical care through
a team of fully-qualified and suitably-experienced clinicians,
supported by an adequate administrative resource. In order
to achieve this, the Hospital regularly reviews the skill set of
its clinical team, offering development opportunities where
appropriate and ensuring that the full range of primary care
skills is available at an appropriate level. This means that all
clinical staff are encouraged to work within the higher range
of their skill set rather than carrying out tasks that could be
fulfilled by a less qualified clinician. When recruiting potential
new MOs or nurses, the interview will always include questions
designed to demonstrate an awareness of clinical governance
principles. The Hospital operates within a full suite of human
resources policies and protocols to ensure that every member
of the team, whether clinical or not, is working with the best
interests of the patients in mind at all times.
Governance Structure of Nawaloka Hospitals PLC
The Hospital encourages all staff to discuss any incident
that has or could pose a risk. The experience from incidents
is shared across the whole Hospital and any actions are
reviewed until fully-implemented. Clinical incidents are referred
to a clinical meeting, to facilitate a detailed discussion in a
confidential environment.
One of the most vital aspects of conducting the business of
the Hospital is ensuring that it enacts the highest standards
of governance. The governance structure of Nawaloka
Hospitals PLC is designed to satisfy the legitimate claims
of all stakeholders and to fulfil the Hospital’s economic,
environmental and social responsibilities in an accountable,
sustainable and transparent manner.
Information Management
The business activities of the Hospital are conducted by
adhering to the highest standards which are based on the best
contemporary principles and practices whilst conforming to all
applicable laws and regulations. The major external steering
instruments on Governance could be identified as follows:
High quality clinical care depends on high quality information
management. This starts with the generation of good patient
records and it is the responsibility of every clinician to ensure
that the details of their consultations are recorded in a way
that:
- is easily understood by colleagues and by the patient, if
requested
zzCompanies
of Best Practice on Corporate Governance issued
jointly by The Institute of Chartered Accountants of
Sri Lanka and the Securities and Exchange Commission of
Sri Lanka.
- reflects exactly what takes place in the consultation,
including any discussion relating to risk, e.g. consent,
offer of a chaperone
zzListing
- provides clear information about the agreed care plan
zzThe
- uses codes and templates as agreed within the Hospital
to enable effective searching of patient data
- EMR (Electronic Medical Records) with UPIN. This helps us
retrieve patient information on the system with no hassle of
paper documents
The Hospital will use patient data for purposes consistent with
our data protection registration (see Data Protection Policy)
and will maintain patient confidentiality at all times when using
80
Act No. 07 of 2007.
zzCode
Rules of the Colombo Stock Exchange.
Board of Directors, being the highest governance body
of the Hospital, ensures alignment of the Hospital’s business
strategy to sustainable business performance, whilst creating
value to stakeholders.
The Hospital’s Governance Structure portrayed below
demonstrates the linkage mechanism that ensures alignment of
business strategy and direction through effective engagement
and communication with its stakeholders, Board of Directors,
Board Subcommittees and Management.
Corporate Governance Stewardship
Corporate Governance Structure
New Nawaloka Hospitals (Pvt) Ltd. (Fully-owned subsidiary)
New Nawaloka Medical Centre (Pvt) Ltd. (Fully-owned subsidiary)
Nawaloka Medicare (Pvt) Ltd. (Fully-owned subsidiary)
Nawaloka Metropolis Laboratories (Pvt) Ltd. (50% Joint Venture)
Shareholders
Board Subcommittees (Refer page 106).
Board of Directors
(05 ED/05 INED/01 NED)
Audit Committee
04 INED
03 INED
03 INED
Nomination Committee
Related Party Transaction Review Committee
03 INED & DGM
Risk Management Committee
DGM and 03 ED
C hairman/CEO and 03 ED
Strategic Planning Committee
Sustainability Committee
C hairman, DGM and 02 ED
DGM - Director General Manager
The Board comprises five Executive Directors including the
Chairman, five Independent Non-Executive Directors and one
Non-Executive Director, as shown below, who are professional
experts in business and administrative matters in multiple
industrial fields in which they have achieved excellence. Their
contribution is the main driving force in guiding the Hospital to
achieve excellence.
Mr. H.K. Jayantha Dharmadasa
(Chairman/CEO)
- Executive Director
Mr. Rienzie T. Wijetilleke
- Independent
(Non-Executive Vice-Chairman)
ED - Executive Directors
towards good governance of its activities. These Committees
meet regularly to consider and discuss matters falling within
the respective Charters and their recommendations are duly
communicated to the Main Board. These committees consist
of Executive Directors and Non-Executive Directors in varying
proportions as set out in the above structure.
The main responsibilities of the Board are as follows:
zzFormulate
the mission, overall business policy and strategy,
provide directions and establish goals for management,
set priorities and standards for the management and the
conduct of the business.
Deshabandu Tilak De Zoysa
- Senior Independent
(General Manager)
- Senior Independent
Mr. Ugitha Harshith Dharmadasa
Mr. Anisha Givantha Dharmadasa
Ms. Ashani Givanthi Dharmadasa
- Independent
zzEstablish
- Independent
zzApprove/review
Mr. Victor Rajamanner Ramanan
- Non-Executive Director
zzAppoint
the Chief Executive Officer, determine the
remuneration of senior executives and report to the
Shareholders on their stewardship.
zzEnsure
The Hospital has in place a number of mandatory and voluntary
Board Subcommittees to fulfil regulatory requirements and
INED - Independent Non-Executive Directors
that adequate internal controls and highest ethical
standards are maintained.
zzReport
to the Shareholders quarterly on the performance
of the Hospital.
zzBe
conscious of the need for the Company to be
environmentally friendly by placing emphasis on complying
with relevant regulations.
Clinical Governance procedures and continue to
improve the same.
the Hospital’s annual, quarterly and monthly
programmes for the patient safety, quality and care.
zzEstablish
a mechanism to monitor the Hospital’s programmes
for the patient safety, quality and care.
zzReview
on a monthly basis and act on reports of the patient
safety, quality and care.
81
The Board engages with the Shareholders and employees in the
following ways towards communicating relevant information:
Shareholders
zzAnnual
General Meetings and Extraordinary General Meetings
to deliberate on matters which are relevant and are of
concern to the general membership.
zzAccess
to the Board and the Company Secretaries.
zzThe
Hospital’s website which is accessible to all stakeholders
and the general public.
zzInterim
In addition, monthly presentations and review of operations
are conducted by the Senior Management team including the
Chairman/CEO and the DGM. This review covers the operations
for the current month and the year to date, Clinical audit
and review reports, clinical indicator reports, clinical incident
monitoring report as well as future projections and the liquidity
position of the Company.
Reports.
Employees
zzThe
Board of Directors includes one employee Director
namely, the Director/General Manager who bridges the
communication gap between the rest of the employees
and the Board.
zzThe
Hospital’s Board of Directors and Board subcommittees
conduct effective dialogue with the members of the
corporate management on matters pertaining to the overall
strategic direction of the Hospital.
zzStaff
are subjected to are performance appraisal which is
conducted quarterly. This is a well-established process and
has become an ideal forum for employees to engage in
aligning with strategic objectives of the Hospital.
The Board meets on a monthly basis and ad hoc meetings
are held as and when required. At these meetings, the Board
reviews the exposure to key business risk, the strategic
direction of the Hospital, targets and budgets, progress
made towards achieving those budgets, capital expenditure
programmes, reports on patient safety, quality and care,
Sentinel events Monitoring report and Customer/Patient
satisfaction report.
The Board has delegated the primary authority to
implement policies and achieve the strategic objectives of
the Hospital to the Chairman/Chief Executive Officer (CEO)
and the Director/General Manager. The responsibilities of the
Director/General Manager are as follows:
zzRecommend
policies, strategic plans, and budgets to the
Board of Directors.
zzThe Hospital’s overall, day-to-day operations.
zzFinancial Management.
zzQuality Management.
zzCompliance with applicable laws and regulations.
zzRespond to any reports from inspection and
regulatory agencies.
zzSystems to manage and to control human, financial and
other resources.
The Chairman/CEO and the DGM exercise this authority within
the policy framework established by the Board and the ethical
framework and business practices inherent to the Hospital,
in accordance with best practices in dealing with employees,
customers, suppliers, consultants and the community at large.
82
The Chairman/CEO and the Director/General Manager
(DGM) review in detail the monthly performance, budgets,
capital expenditure proposals and business strategies prior
to recommending them to the Board.
Conflict of Interest
The Governance Structure of the Hospital ensures that the
Directors take all necessary steps to avoid conflict of interest,
in their activities with and commitments to, other organisations
or related parties. In pursuance of the requirements under the
Sections 192 and 193 of the Companies Act No. 07 of 2007, the
Directors duly disclose the financial accommodation made.
The framework of rules and practices by which a Board of
Directors ensures accountability, fairness, and transparency in
a company’s relationship with all its stakeholders (financiers,
customers, management, employees, Government and the
community).
The Corporate Governance framework consists of;
1. Explicit and implicit contracts between the Company and
the stakeholders for distribution of responsibilities, rights,
and rewards.
2. Procedures for reconciling the sometimes conflicting
interests of stakeholders in accordance with their duties,
privileges and roles.
3. Procedures for proper supervision, control and information
flows to serve as a system of checks-and-balances.
Good Corporate Governance is globally accepted as being
fundamental to an organisation’s competitiveness, growth and
sustainability. There is great attention on Boards of Directors to
discharge their duties with high ethical values and accountability
in their commitment to good governance practices. Strong
business ethics, sound policies and procedures, effective and
efficient monitoring systems are considered as ingredients of
good Corporate Governance system.
We, as pioneers in Modern Healthcare industry, strictly adhere
to the following regulatory benchmarks:
1. Companies Act No. 7 of 2007
2. Listing Rules of CSE (Colombo Stock Exchange)
3. The Code of Best Practice on Corporate Governance
as published by the SEC (Securities and Exchange
Commission) and the ICASL (The Institute of Chartered
Accountants of Sri Lanka).
4. Recommendations of the UK Corporate Governance Code
as practicable in the context of the nature of business risks
and profiles.
Corporate Governance
Principle
SEC and ICASL Adoption
Code Reference Status
Level of Compliance by the Nawaloka Hospitals PLC
A. Directors
A.1 The Board
Presence of an effective Board to Direct, Lead and Control the Company.
Meeting
A.1.1
Adopted
During the financial year 2015/16, there were 11 Board meetings held
towards reviewing the contemporary organisational strategy.
Decisions in relevance to the organisation’s strategy were made as and
when required.
All meetings are called well in advance and Directors are expected to
participate at the meetings.
Attendance of the Board of Directors:
Name of Director
Board Responsibilities
A.1.2
Adopted
Number of
Meetings
Attended
Attendance
Mr. H.K.J. Dharmadasa
11
100
10
91
11
100
11
100
11
100
Mr. U.H. Dharmadasa
08
73
Mr. A.G. Dharmadasa
08
73
Ms. A.G. Dharmadasa
03
27
Dr. T. Senthilverl
(Resigned w.e.f. 10th March 2016)
07
64
10
91
(Appointed on 24th March 2016)
01
9
Mr. V.R. Ramanan
01
9
%
The Board possesses the required skills and qualifications in the
following:
1. Setting strategic direction and monitoring its effective
implementation.
2. The Non-Executive Directors collaborating with the Executive
Directors to evaluate the systems of Risk Management, Internal
Control and Compliance.
3. The Management appoints the External Auditors of the Company.
4. The Non-Executive Directors are provided with the opportunity to
criticise and question the actions of the Board especially related to
the integrity of the financial reporting process.
5. The Non-Executive Directors ensure that the strategies fall under
the scope of ethical standards.
83
Principle
Rules and Regulations
A.1.3
The Board collectively acted in accordance with the rules and
regulations of the country which are applicable to the Company.
Adopted
The following rules and regulations are adhered to in relevance to
Corporate Governance by our Company:
1. Companies Act No. 7 of 2007.
2. Listing Rules of CSE (Colombo Stock Exchange).
3. The Code of Best Practice on Corporate Governance as published
by the SEC (Securities and Exchange Commission) and the ICASL
(The Institute of Chartered Accountants of Sri Lanka).
4. Recommendations of the UK Corporate Governance Code as
practicable in the context of the nature of business risks and
profiles.
Company Secretaries
A.1.4
Adopted
All Directors have direct access to the Company Secretaries which
is a firm consisting of members from Attorneys-at-Law and qualified
Company Secretaries comprising a Senior Attorney-at-Law and several
Associates who are also Attorneys-at-Law.
The Company Secretaries ensure the effective circulation of
information among Executive and Non-Executive Directors.
The Company Secretaries facilitate the Board meetings and the Annual
General Meeting.
Independent Judgment
A.1.5
Adopted
The Directors are welcome to bring their independent professional
judgments towards the decision-making process.
The Board will create a forum to discuss the suggestions and select the
best solution for the Company.
Adequate time
and Effort
A.1.6
Adopted
The Chairman and the members dedicate adequate time for their
duties. All Board meetings are organised well in advance.
The Company Secretaries ensure that all requested information is
delivered to the Directors for their independent judgment.
In addition to the Board meetings, the Directors attend to the
following Subcommittee meetings:
Audit Committee
Related Party Transaction Review Committee
Strategic Planning Committee
Sustainability Committee
Training
84
A.1.7
Adopted
New Directors are provided with adequate inductions and grooming
for their Director roles. All Directors have well recognised the need for
continuous training and expansion of knowledge and skills required to
effectively perform their duties.
Principle
A.2 The Chairman and Chief Executive Officer
The code requires clear division of responsibilities of the Chairman and Chief Executive Officer.
Division of
responsibilities of the
Chairman and Chief
Executive Officer
A.2.1
Adopted
Role of the Chairman and Chief Executive Officer is held by one
and the same person. The Chief Executive Officer's role includes
developing and implementing high-level strategies and implementing
major corporate decisions.
The Board unanimously agrees to the role of the Chairman and CEO
being handled by one person, due to –
1. Exposure he has in the operations of the relevant Company which
makes him the ideal CEO.
2. The superior skills he possesses in mediating communication
between the Management and the Shareholders.
The Chairman will act as the main pivot of communication between the
Board of Directors and the Shareholders.
As the role of the Chairman and Chief Executive Officer is not
separated. Deshabandu Tilak De Zoysa has been appointed as Senior
Independent Director (SID) in compliance with A.2.1.
A.3 Chairman's Role
The Chairman's role for good Corporate Governance
The Chairman is
responsible for an
effective Board. The
Chairman should ensure
effective discharge of
Board functions.
A.3.1
Adopted
The Chairman is responsible for leadership of the Board. The Chairman
facilitates the effective contribution and performance of all Board
members whilst identifying any development needs of the Board.
He plays the role as a mediator of communication among the
Shareholders and Management towards resolving issues of concern.
Further, the Chairman ensures that the balance of power between
Executive Directors and Non-Executive Directors is adequate.
A.4 Financial Acumen
The Board to ensure the availability within it of those with sufficient financial acumen and knowledge to offer guidance on
matters of finance.
Availability of sufficient
financial acumen
A.4
Adopted
The Board is consistently endowed with sufficient financial acumen as
three of the Board members have sound financial knowledge and hold
fellowships of respective professional accounting bodies.
85
Principle
A.5 Board Balance
It is preferred that the Board has a balance of Executive Directors and Non-Executive Directors such that no individual or small
group of individuals can dominate the Board's decision-making.
Adequate number
of Non-Executive
Directors
A.5.1
Adopted
The Board consists of Eleven Directors out of which Six Directors are
Non-Executive Directors. This has ensured that no additional powers
are vested by an individual or small group of individuals to dominate
the Board. Furthermore, the composition of Non-Executive Directors
exceeds the required 1/3 proportion of the Board.
Adequate number
of Independent
Non-Executive Directors
A.5.2
Adopted
The Board consists Five Independent Non-Executive Directors out
of Six Non-Executive Directors.
Independency
of Directors
A.5.3
Adopted
All Five Independent Non-Executive Directors are free from
any material relationship with the Company which ensures their
independence is not compromised.
Signed declaration of
independence by the
A.5.4
Adopted
All Non-Executive Directors have made written submissions to declare
their level of independence.
Declaration in the
Annual Report
A.5.5
Adopted
The Board has determined the Independence and Non-Independence
of the Non-Executive Directors based on the declaration and all other
available information.
No circumstances have arisen for the determination of independence
by the Board, beyond the criteria set out in the Code.
The following Non-Executive Directors have been declared as the
Independent Non-Executive Directors:
Alternate Director
A.5.6
N/A
During the course of the year there had not been any appointments of
Alternate Directors.
Senior Independent
Director
A.5.7
Adopted
Deshabandu Tilak De Zoysa has been appointed as the Senior
Independent Director (SID), as the role of the Chairman and
Chief Executive Officer is not separated.
Confidential Discussion
with Senior Independent
Director
A.5.8
Adopted
The Senior Independent Director has made himself available for any
material discussion with any of the Directors.
Meeting with the
Chairman and
A.5.9
Adopted
The Chairman meets with the Non-Executive Directors when the need
arises.
Recording of concerns
in Board minutes
A.5.10
Adopted
All concerns arisen had been resolved unanimously, resulting in the
requirement for recording such concerns in minutes being limited.
86
Principle
A.6 Supply of Information
The Board should be fully equipped with timely information to discharge their duties.
Timely Information
A.6.1
Adopted
The Management has provided the Board with the required
information to discharge their duties effectively.
Additional information is dispersed by the Management as and
when required.
Board Papers
A.6.2
Adopted
The Board Paper is sent seven days in advance of the Board meeting
for initial preparation.
A.7 Appointments to the Board
Presence of a formal and transparent procedure for the appointment of new Directors to the Board.
A.7.1
Adopted
The Nomination Committee makes recommendations to the Board for
all new appointments. The Nomination Committee will consist
of the following:
Deshabandu Tilak De Zoysa – Chairman
(Senior Independent Non-Executive Director)
Tissa K. Bandaranayake – Member
Mr. D. Sunil AbeyRatna – Member
(Independent Non-Executive Director)
Assessment of
Board Composition
A.7.2
Adopted
The Board as a whole annually assesses the composition of the Board
to ascertain whether combined knowledge and experience of the
Board match with the strategic demands faced by the Company.
New Board Members will be appointed as and when the need arises.
Disclosure to
Shareholders
A.7.3
Adopted
The Board has disclosed the appointments of new Directors to the
shareholders with the material information.
A.8 Re-election
All Directors should be required to submit themselves for re-election at regular intervals and at least once in every three years.
Appointment of
A.8.1
Adopted
Re-election procedure of the Board of Directors has been performed
as per the Articles of Association of the Company.
Election of the Directors
A. 8.2
Adopted
The Directors are appointed at the Annual General Meeting.
A.9 Appraisal of Board Performance
The Board should appraise their own performance in order to ensure that the Board responsibilities are satisfactorily
discharged.
Appraisal of Board
Performance
A.9.1
Adopted
The Board’s performance is assessed annually against preset targets
relating to self-evaluation of individual performance and collective
performance of the Board as a whole.
Appraisal of selfperformance
A.9.2
Adopted
Please refer above comment. (A.9.1)
Performance criteria
A.9.3
Adopted
Please refer above comment. (A.9.1)
87
Principle
A.10 Disclosure of Information in Respect of Directors
The Shareholders are to be kept advised of relevant details in respect of Directors.
Disclosure in
Annual Report
A.10.1
Adopted
Please refer pages 70 to 73 for the Profiles of the Directors.
A.11 Appraisal of the Chief Executive Officer
The Board should be required to evaluate annually the performance of the Chief Executive Officer.
Targets
A.11.1
Adopted
In each financial year, the Board has set short-term, medium-term and
long-term targets with the consultation of the Chief Executive Officer
along with its objectives. This includes financial and
non-financial targets.
Evaluation of the Targets A.11.2
Adopted
There is an ongoing process of evaluating the performance of the
Chief Executive Officer in achieving the set targets.
B. Directors' Remuneration
B.1 Remuneration Procedure
Establish a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration
packages of individual Directors.
Remuneration
Committee
B. 1.1
Adopted
The Company has established a Remuneration Committee to make
recommendations to the Board within the agreed terms of reference
for compensating the Executive Directors.
Refer page 108.
Composition of
the Remuneration
Committee
B. 1.2
Adopted
The Remuneration Committee comprises the following Non-Executive
Directors:
Refer page 108.
B. 1.3
Adopted
Mr. Tissa K. Bandaranayake – Member
Remuneration of the
B. 1.4
Adopted
The Board collectively decides the remuneration of the Non-Executive
Directors. Non-Executive Directors receive a fee for their presence in
the Board as well as in the Committees.
Advices to the
Chairman and the
Chief Executive Officer
B. 1.5
Adopted
The Chairman and the Chief Executive Officer obtain advice from
the Remuneration Committee in relevance to the procedure in
compensating the Executive Directors. The Remuneration Committee
consults the Chairman in relevance to the remuneration of other
Executive Directors and if required access to professional advice from
within and outside the Company.
88
Principle
B.2 The Level and Make-up of Remuneration
Ensure adequate level of remuneration to retain and motivate the Directors both Executive and Non-Executive to operate the
Company effectively. Further, a proportion of the Executive Directors' remuneration should be structured to link rewards to the
achievement of corporate objectives.
Remuneration for
Executive Directors
B. 2.1
Adopted
The Company is mindful of adequate remuneration to the Executive
Directors to retain and motivate them. The Remuneration package
has been designed to enhance the value of the shareholders through
achieving the Company's short-term, medium-term and the long-term
objectives.
Comparison between
similar companies
B. 2.2
Adopted
The Remuneration Committee decides the remuneration taking into
consideration the comparative levels of remuneration paid by other
similar companies.
Comparison of
Remuneration
across the Group
B. 2.3
Adopted
Consistent reviews are made in relevance to information related to
executive remuneration to ensure that the Company is in par with the
market/industry rates as well as it is aligned to the strategic objectives
of the Company.
Performance-based
remuneration to the
Executive Directors
B. 2.4
Adopted
The Company provides compensation which is variable to the
performance of the allocated responsibilities of the Executives.
Executive Share Option
Schemes
B. 2.5
N/A
The Company has not offered any share option schemes during the
financial year under review.
Deciding the
Performance-related
remuneration
B. 2.6
Adopted
The Company has taken into consideration the guidelines given in
Schedule D in decisions pertaining to performance remuneration
related.
Early termination
of Director
B. 2.7
N/A
Not applicable to the Board except to the CEO whose terms of
employment are governed by the contract of service.
Early termination of
Director not included
in the contract
B. 2.8
N/A
Refer above comment.
Remuneration to the
B. 2.9
Adopted
Non-Executive Directors receive a fee in line with the market price.
No share option scheme has been offered to the Non-Executive
Directors.
B.3 Disclosure of Remuneration
Disclosure of the Remuneration policy in the Annual Report.
Disclosure of
Remuneration
B. 3.1
Adopted
The Remuneration Committee is headed by a Non-Executive Director.
Please refer to the comment on B.1.3 for further information. Refer
page 108 also.
Remuneration policy focuses on the compensation to employees for
the services provided and to retain employees with skills required to
effectively manage the operations.
89
Principle
C. Relations with Shareholders
C.1 Constructive Use and Conduct of General Meetings
The Board to use the Annual General Meeting to communicate with the shareholders and encourage their participation.
Use of Proxy votes
C.1.1
Adopted
The Company has a mechanism to record the Proxy votes and proxy
votes lodged for each resolution.
Separate Resolutions
C.1.2
Adopted
The Company proposes separate resolutions for each substantial item
towards providing shareholders the opportunity to cast their votes
separately in relevance to the above items.
Availability of the
Chairman of Audit,
Remuneration and
Nomination Committees
C.1.3
Adopted
The Chairman of Audit, Remuneration and Nomination Committees are
made available by the Company to clarify any queries, especially
at the time of the AGM.
Notice of Meeting
C.1.4
Refer page 106 – Board Subcommittees.
Adopted
The Annual Report is sent to each shareholder well in advance for their
early preparation for the Annual General Meeting.
All queries are clarified at the Annual General Meeting.
Procedures of voting
at a General Meeting
C.1.5
Adopted
Voting procedures at the General Meeting have been communicated to
the shareholders.
C.2 Communications with Shareholders
The Board should implement effective communication with the shareholders.
Communication
Channels
C.2.1
Adopted
The Board engages with the shareholders in the following ways to
communicate relevant information.
Communication
Methodology
C.2.2
Adopted
Annual General Meetings and Extraordinary General Meetings to
address matters which are relevant and of concern to the General
Membership.
Implementation
C.2.3
Adopted
- Access to the Board and the Company Secretaries.
- The Hospital's website which is accessible to all stakeholders
and the general public.
- Interim Reports – www.cse.lk
Responsibility of
communication
C.2.4
C.2.5
C.2.6
Adopted
The Board of Directors includes one Employee Director namely,
the Director General Manager and the Company Secretaries to
bridge the communication gap between the rest of the shareholders
and the Board.
Shareholder Matters
C.2.7
Adopted
Please refer C. 2.4
C.3 Major Transactions
Disclosure of all material transactions to the shareholders which would materially alter/vary the Company's net assets base or in
the case of a company with subsidiaries, the consolidated Group net assets base.
Shareholder Matters
90
C.3.1
Adopted
All material transactions have been disclosed to the shareholders.
Principle
D. Accountability and Audit
D.1 Financial Reporting
To present a balanced and understandable assessment of the Company's financial position, performance and prospects.
Statutory Reporting
D.1.1
Adopted
Adhering to the statutory and legal requirements, the Company has
published the following reports to disclose relevant information to the
stakeholders:
- Quarterly Financial Statements
- Annual Reports
The Company has strictly complied with the requirements of the
Companies Act No. 07 of 2007 and amended hereto. The Financial
Statements are prepared based on the International Financial
Reporting Standards (IFRS).
Directors’ Report
D.1.2
Adopted
Refer pages 104 to 107.
Auditors’ Report
D.1.3
Adopted
Refer page 113.
Management
Discussion and Analysis
D.1.4
Adopted
Declaration by the
Board that the business
is a going concern
D.1.5
Adopted
Refer page 107 and 112.
Summon an
Extraordinary General
Meeting to notify loss
of capital
D.1.6
Adopted
Likelihood of such circumstances is remote; if such a situation arises
an Extraordinary General Meeting would be summoned to inform the
shareholders.
D.2 Internal Controls
The Board should maintain a sound system of internal controls to safeguard the Shareholders’ investments and the Company
assets.
Review of the Internal
Control System
D.2.1
Adopted
The Board continuously evaluates the effectiveness of the internal
control system in the Company to safeguard the shareholder
investment.
The Board of Directors is satisfied with the presence of the level of
internal controls in business operations.
Refer page 110 – Internal Controls & Internal Audit.
Need for Internal
Audit Function
D.2.2
Adopted
An in-house Internal Audit functions in the Company.
Regular Reviews
of Internal Controls
D.2.3
Adopted
Our Internal Audit Function carries out regular reviews, spot audits to
identify the effectiveness of the internal controls established.
91
Principle
D.3 Audit Committee
The Board is required to establish formal and transparent arrangements for considering as to how they should select and
apply accounting policies, financial reporting and internal control principles and maintaining appropriate relationship with the
Company's Auditors.
Composition of
Audit Committee
D.3.1
Adopted
The Audit Committee is comprised of four Independent
Non-Executive Directors:
Mr. Tissa K. Bandaranayake – Chairman
Mr. Rienzie T. Wijetilleke – Member
Deshabandu Tilak De Zoysa – Member
Duties of Audit
Committee
D.3.2
Adopted
The Audit Committee continuously evaluates the independence,
effectiveness and objectivity of the Auditors.
Further, the Committee evaluates the nature of the non-audit services
carried out by the Auditors.
Terms of Reference
of the Audit Committee
D.3.3
Adopted
The Audit Committee is guided by the Committee Charter which is
reviewed annually.
The Committee assists the Board to oversee the following aspects:
- Preparation, Presentation and Adequacy of Disclosures in the
Financial Statements.
- Compliance with financial reporting requirements, information
requirements of the Companies Act No. 07 of 2007 and other
financial reporting related regulations and requirements.
- Ensuring that the Internal Control System of the Company is
effective.
- Ability to continue as a going concern in the foreseeable future.
- Assessing the independence and performance of the Company’s
External Auditors.
Disclosure
92
D.3.4
Adopted
Principle
D.4 Code of Business Conduct and Ethics –
The Company to develop a Code of Ethics for Directors and members of the Senior Management team and promptly disclose if
there are any waivers of the Code for Directors and others.
Code of Business
Conduct and Ethics
D.4.1
Adopted
The Company has developed a Code of Business Conduct and Ethics
focusing on the following important areas:
- Integrity
- Objectivity
- Professional competence and due care
- Confidentiality
- Fair dealing
- Encouraging the reporting of any illegal or unethical behaviour
- Conflict of interest
- Bribery and corruption
- Entertainment and gifts
- Integrity of Financial Statements
- Corporate opportunities
- Protection and proper use of the Company assets
- Compliance with rules and regulations
All our Directors and Senior Executives have declared their
commitment to operate in adherence to these principles.
Affirmation of the Code
of Business Conduct and
Ethics (Report by the
Chairman affirming that
there were no incidents
involving the breach
of mentioned ethical
policies)
D.4.2
Adopted
Refer the Chairman's Report in pages 14 to 15.
D.5 Corporate Governance Disclosures
The Directors are required to disclose the extent to which the Company adheres to established principles and practices of Good
Corporate Governance.
Disclosure of
D.5.1
Adopted
The Report in pages 78 to 94 provides a detailed disclosure on our
Corporate Governance practices.
93
Principle
E. Institutional Investors
E.1 Shareholder Voting
The institutional shareholders are required to make considered use of their votes and should be encouraged to ensure that their
voting intentions are translated into practice.
Dialogue with the
Shareholders
E.1.1
Adopted
- The Annual General Meeting provides a platform for effective
communication with the shareholders.
- All concerns of the shareholders are recorded in the minutes of the
meeting and addressed thereafter.
- The Board reviews the minutes of the meetings and ensures that the
shareholders’ issues are resolved systematically.
E.2 Evaluation of Governance Disclosure
The Company should encourage Institutional Investors to provide due diligence to all relevant factors in the Board Structure
and Composition.
F. Other Investors
F.1 Investing/Divesting Decision
Individual Shareholders
F.1
Adopted
Individual shareholders are encouraged to carry out adequate analysis
or seek out independent advice for matters related to investing/
divesting decisions.
F.2
Adopted
Individual shareholders are encouraged to participate at General
Meetings and exercise their voting rights.
F.2 Shareholder Voting
Individual
Shareholder Voting
94
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grind herbal foliage for the extraction of juice.
95
RISK MANAGEMENT
Managing the unexpected is an essential daily
concern in high-risk organisations, especially
for service organisations in the healthcare
sector such as ours. Consistent and thorough
processes are the hallmark of Nawaloka
Hospital’s successful risk management process.
Adhering to a bottom-up risk management
approach, the Hospital encourages employees
at all levels to participate in the risk
management process. In addition, Nawaloka
constantly reviews and updates the risk
management process on a regular basis and
thus, believes it to be a common thread,
throughout the entire Hospital.
Risk
Objectives
Monitoring &
Control
Identification &
Prioritising Risk
Analysing &
Quantifying Risk
Communication
Evaluation &
Identification
of Solutions
Implementation
& Documentation
Matching
Solution with the
Identified risk
Summary of Risk Management
Identified Risk
Responding Actions
Objectives
Financial Risk:
zzTimely
zzMaintain
zzProper
zzAppropriate
This includes risks related
to capital structure,
projects invested, asset
utilisation etc.
appropriate decisions on funding,
investing and dividend payment.
management of working capital.
Use of compatible concepts in financing
and investing.
zzNegotiation
of favourable credit terms
and discounts.
zzAppropriate
Operational Risk:
Risk of direct and indirect
losses resulting from
inadequate or failed
internal processes, people
and systems or from
external events.
liquidity while
maximising profit.
capital structure
and gearing.
zzMinimise
the adverse impact
of changes in financial market.
zzCompliance
with covenants.
funding strategies.
zzReview
and continuously update
controls according to the changes in
business operations.
zzRegularly
analyse by cause the deviations
and losses and take action to improve
systems and controls to prevent
recurrence in the future.
zzRevise
and implement business
continuity planning.
zzEradicate
opportunities for
misappropriation.
zzReduce
wastage and increase
cost saving.
zzEnsure
controls are adequate to
curtail business processes, minimise
human error beside systems and
procedural failures.
zzEnsure
that effective independent internal
audits are carried out with objectivity.
zzTake
timely action on the
recommendation given by internal audit.
96
Stewardship
Identified Risk
Responding Actions
Objectives
Clinical Risk:
zzCreate
zzEnsure
and maintain high quality medical
and safety standards.
the provision of a quality service
to the patients.
zzIdentify
any potential risk to involved
parties and take preventive action.
zzThe
Hospital adheres to international
therapist and diagnostic norms to ensure
that it complies with WHO standards.
zzIn
addition, ISO internal/external
audits are carried out to maintain
ISO procedures.
Human Resources Risk:
zzProper
HR and remuneration policies
to be in place.
zzProvide
training and develop staff
skills and knowledge.
zzReduce
staff turnover.
zzReduce
dependence on individual staff.
zzRetain
top performers.
zzPlan
career path progress and
succession planning.
zzJob
rotation and staff training for
multiple skills.
zzImprove
decision-making processes
by motivating employees.
Information
Technology Risk:
zzService
level maintenance agreement
for hardware and software.
zzZero
zzSecurity
zzZero
implementation with firewall
and virus protection.
losses of data during a system
down time.
down time of the application
servers connectivity.
zzOnline
and offline backup procedures
for application data storage.
zzMirror
data storage.
zzAlternative
zzHardware
connections for servers.
backup.
zzRegular
health checks of the systems
and networks.
zzError
zzAd
logs and user logs maintenance.
hoc backup restorations.
zzImplementation
Reputation Risk:
of disaster recovery plan.
zzFocus
on treating employees, patients,
doctors, suppliers, communities and
the environment in the optimum way to
achieve Company objectives.
zzMaintain
a good image among the
Company’s stakeholders and ensure its
positive impact on business.
zzMaintain
regular and effective
communication with shareholders.
zzMaintain
constant improvement in the
quality of the output of the Company.
Stewardship Risk Management
97
Identified Risk
Responding Actions
Objectives
Legal and Regulatory
Environment Risk:
zzEnsure
zzComply
compliance with laws and
regulations with legal advice.
with all statutory or
regulatory obligations.
zzMinimise
claims arising from litigations
initiated by clients by providing proper
and adequate service.
zzReliability.
zzMaintain
an accurate patient data base.
Asset Risk Including
Information:
zzAppropriate
zzMinimise
Impact on the Company’s
assets due to theft, natural
disaster or human error
zzBackup
zzMinimise
Technological
Obsolescence Risk:
zzCompetent
zzEmploy
Procurement Risk:
zzEnsure
zzMinimise
Includes buying quality
products on time.
zzEstablish
The impact of changing
technology on the
Company’s operations.
insurance covers for
identified risks.
of vital machinery and equipment
components.
zzRestrict
access to information and ensure
employee awareness of the importance
of the confidentiality of patient data.
biomedical team to keep
abreast with developments in medical
equipment and introduce new technology
to maintain high technological standards
and continuous investment in medical
equipment.
standardised quality.
relationship with
multiple suppliers.
zzNegotiate
Credit Risk:
zzThe
Includes defaults of
debtors and other parties
who obtain credit from
the Hospital.
zzTimely
Intellectual Risk:
zzCreate
This includes the use of the
Company’s brand name by
other parties.
98
for better prices and discounts.
Company evaluates the credit
worthiness of companies before granting
credit and whether they have a good
credit policy.
breakdown of equipment
and other assets.
the cost on information.
zzMinimise
the loss of assets due
to fire and theft.
all available highly advanced
equipment to provide a better quality
service to patients.
instances of running
out of stock.
zzMinimise
the effect of price increases.
zzQuality
of pharmaceutical products to
be maintained.
zzReduce
debtors’ defaults.
collections from patients are
carried out.
brand awareness through
sustained advertising and marketing.
zzTo
protect against brand infringement.
Risk Management Stewardship
Identified Risk
Responding Actions
Objectives
Competition Risk:
zzIncrease
zzProtect
The possibility of
fluctuation in revenue
caused by changes in
market variables and
competitors.
zzGood
service quality by adopting
market developments in the continuously
changing environment.
and expand market share.
customer relationships.
zzProvide
better quality at affordable
prices.
The Risk Management Committee of Nawaloka Hospital has
been established with a clear and that precise objective to
ensure that proper risk management policies and procedures
are in place. The Committee comprises 32 members, chaired by
Professor Lal Chandrasena who is Director/General Manager of
Nawaloka Hospitals PLC.
Board Members of the Risk Management Committee
The Committee conducts monthly meetings to oversee and
approve the risk management, internal compliance and control
policies and practices of the Company.
Three Lines of Defense
The Company deploys a ‘three lines of defense’ governance
model which facilitates accountability and transparency
through clear identification and segregation of roles as
given below:
Professor Lal Chandrasena – Chairman (DGM/ED)
Mr. U. Harshith Dharmadasa – Member (ED)
Mr. A.G. Dharmadasa – Member (ED)
Ms. A.G. Dharmadasa – Member (ED)
Board of Directors/Audit Committee
Senior Management/Risk Committee
First
Line
Second
Line
Operational
Management
The first line of defense
comprises of a sound
internal control system
which creates employees
accountable for the risks
accepted during the
course of business.
Control of Risk
Third
Line
Risk
Management
This level consists of risk
management, compliance
and other supporting
functions such as
finance, security, quality
assurance and human
resource management.
Confirmation of
Control
Internal Audit
This level consists of
internal and external
audit which provides an
independent assurance to
the Board over the first
and second lines
of defense.
Overview of Control
99
Risks
zzNawaloka
Nawaloka takes bottom-up approach, which encourages
employees at all levels to contribute and be a part of the risk
management process. The risks have been mapped into various
categories prior to implementation of the risk management
process. In accordance with the monthly discussions and
evaluations of the Risk Matrix, the Committee has identified
several risks associated with Nawaloka. Thus, they have been
categorised into the following domains:
zzOperational
zzFinancial
zzLegal
Risk
Risk
and Regulatory Environment Risk
zzReputation
Risk
Operational Risk
Nawaloka has identified operational risks as of the utmost
importance due to the nature of the business. Operational risks
arise due to failure in the internal processes, people, clinical and
IT system. The Committee regularly performs operational risk
monitoring activities in order to promptly detect deficiencies in
the policies, procedures and processes.
Internal Process
Nawaloka ensures risk management in operations by
maintaining proper internal control systems initiating prompt
response to arising risks. Following are some of the standards
in place to ensure that internal process risks have been reduced
within a controlled environment:
zzDesignated
Manager, Head of System and Control who
monitors and controls the risk and internal controls on a daily
basis, assists in identifying failures within the processes and
takes prompt action to mitigate and reduce the risk.
zzNawaloka
is the first healthcare services provider in Sri Lanka
to obtain the ISO 9001:2008. Thus, it conforms to the ISO
procedures and ISO audit standards.
zzAudit
trails have been conducted by the Internal Audit teams
at scheduled times in an appropriate manner. Hence, red
flags (if any) are raised and proper action are recommended
and implemented.
zzOffering
precise and clear job responsibilities to employees
at each level allow the Hospital to adhere to established
standards and follow protocol in a highly vulnerable service
industry. Any deviation will be monitored and immediate
action taken. Employees have been reminded of the job
expectation periodically and continuous on-the-job and
off-the-job training is provided.
Clinical
Risks associated with patient care are extremely important
for a hospital. As a service organisation in the healthcare
sector, clinical risk management plays a crucial role in enabling
Nawaloka to identify, contain and manage risks related to
patient safety.
100 Nawaloka Hospitals PLC Annual Report 2015/16
has identified several key elements that influence
the degree of clinical risk, namely – staff participation, safety
culture, learning from incidents or errors, education
and training.
zzThe
Hospital provides a fully-fledged training programme
to both doctors and nurses. In addition, the programme
encourages maintaining good communication.
zzBiomedical
instruments and equipment play a vital role in
the upkeep of the Hospital as well as the patients; thus,
maintaining and replacing the respective technological
equipment on time.
zzThe
Hospital ensures to enter into service agreements only
with established, esteemed and reputed organisations
so as to abide by Nawaloka’s clinical service policies and
procedures.
zzNawaloka
serves as an ethical service organisation in terms
of drug suppliers. We make sure that the suppliers maintain
high quality business standards, conforms to national and
international guidelines together with recognised quality
parameters.
People
Management of human resources and employee behaviour
can become a major source of operational risk to the Hospital.
Risks range from the potential employee negligence, conflict
of interest, fraud and mismanagement or due to poorly trained
employees.
zzStaff
training is crucial to the successful management of
risk exposures resulting from the interaction of humans and
medical technology. However, Nawaloka has invested time
and money to create an appropriate risk culture, in which
employees are aware of operational risk.
zzNawaloka
offers and conducts comprehensive training
programmes to both in-house staff as well as to external
parties (non-core outsourced businesses). Non-core
outsourced businesses feature the security, cleaning,
maintenance and businesses under service agreements.
zzAs
a measure of monitoring the strengths and weaknesses
of the training programmes, performance appraisals
are conducted every three months. Simultaneously, any
ambiguity that highlights likelihood of risks is being analysed,
evaluated and revised through action plans.
IT System
Complex-designed or poorly implemented systems and
processes can give rise to operational risks. This may result
in the Hospital experiencing a plethora of problems including
information security failures, fraud and processing errors.
Further, the increased automation and adaptability to advances
in technology have the potential to transform risks from minor
manual processing errors to key systematic failures.
zzNawaloka
has converted all manual processes into
computerised systems. The Enterprise Resource Planning
(ERP) system of Nawaloka is subjected to constant updates
Risk Management Stewardship
and upgrades to ensure that risks are minimised. The
design and the implementation of the robust HIS platform
specifically identifies all business processes and healthcarerelated risks.
zzThe
Hospital has taken measures for online and offline
backup procedures for application data storage. In addition,
certain proper security measures have been installed through
firewall and virus protection, thereby ensuring zero losses of
data during a system failure.
Financial Risk
Financial risks associated with Nawaloka are related to capital
structure, project investments, asset utilisation, credit quality
of debtors and counterparts. Thus, enhancing the risk of the
Hospital’s ability to earn, raise or access capital. The following
provides an outline of the risks involved and measures taken as
regards liquidity risk, credit risk and assets risk.
Liquidity Risk
Liquidity risk involves the risk that funds potentially required
on short-term basis cannot be sourced or sold expeditiously.
In addition, the risks associates with the cash on hand and the
availability of credit line facilities. Nawaloka has taken stringent
measures to minimise the risks in relation to liquidity.
zzA
dedicated team of experts, headed by the Financial
Controller, conducts daily cash flow analysis. The analysis
provides a reliable and a valuable perspective on the
Hospital’s financial performance. Further, it assists in
identifying any shortfalls or surpluses, making smart
investment planning decisions and daily cash flow activities.
Thus, it improves cash flow control and helps to ensure that
cash flow concerns are dealt with effectively.
zzImposing
a proper debt collection policy circumventing a
build up of bad debts and debtors.
zzEstablishing
proper authorisation levels in order to control
expenditures.
Credit Risk
Credit risk occurs through the default of the debtors and other
parties who obtain credit from Nawaloka. The main objective
is to reduce the impact of debtors’ defaults. Following strict
protocols are adhered to by the Hospital in managing credit
risks and debtors.
zzIt
operates under a sound credit-granting process, which
maintains an appropriate credit evaluation administration,
measurement and monitoring process. In addition, the
Hospital evaluates the creditworthiness of the companies
prior to the granting of credit, thus ensuring that, payment is
obtained as quickly as possible for such credit.
Asset Risk
Asset risk to an organisation is a threat when an organisation’s
assets are vulnerable to theft, natural disaster or human error.
Implementing precautionary measures helps control and
minimise asset risks.
zzAcquiring appropriate insurance covers for identified
risks provides a relief to the Hospital under unavoidable
circumstances such as breakdown or natural disasters.
zzCreating
backup of vital machinery, equipment components
as well as documentation helps to reduce the cost of loss of
vital information.
Legal Risk
Legal risks crop up during periods when the organisations
have been non-compliant with the laws and regulations. The
Company has taken respective measures and appropriate care
to ensure that risks are minimised in the legal and regulatory
environment. Operating with a clear objective in conforming to
all standards and in compliance with all statutory or regulatory
obligations, the following are specific actions taken by the Risk
Management Committee:
zzEnsure
compliance with laws and regulations with legal
advice.
zzMinimise
claims arising from litigations initiated by clients
by providing proper and adequate services. This highlights
reliability and credibility of the Hospital.
Reputation Risk
Prominent in any service organisation, reputation risk is a risk
related to the credibility of the business. This may be a matter
of corporate trust, which has a great influence on damaging
the reputation and causing a severe impact on shareholder
value. Non-compliance with the risks in the aforesaid domains
(operations, finance and legal), will create a significant impact
and raise the reputation risk of Nawaloka.
zzNawaloka Hospital has been well established for the past
30 years. As an esteemed service organisation,
understanding the vulnerability of saving lives and
importance of medical technology, Nawaloka stands in the
forefront of healthcare in the country.
zzMaintaining
strong relationships with stakeholders by
building confidence and trust, ensuring operational
efficiency, financial transparency and conformance to
international best practices, Nawaloka Hospital can live up
to the vision of maintaining its prestigious reputation for
generations to come.
zzThe
Hospital has established a noteworthy credit policy,
which reduces the risk of bad debt, minimise the costs of
granting credit and help maintain a good cash flow.
101
AWARDS AND ACCOLADES
Institute
Award
Description
Category
Sri Lanka Institute of
Training and Development
People Development
Award (PDA)
Best Practicing Human
Resources Development
Silver Award
Health Sector
The Institute of Chartered
Accountants Sri Lanka (ICASL)
Annual Report
Gold Award
Health Sector
2015
Annual Report
Gold Award
Health Sector
2014
Annual Report
Gold Award
Health Sector
2013
Gold Award
Health Sector
2012
Annual Report
Gold Award
Health Sector
2011
Annual Report
Gold Award
Health Sector
2010
Annual Report
Silver Award
Health Sector
2007
Annual Report
Silver Award
Health Sector
2009
Annual Report
Certificate of Recognition Service Organisation
2006
Annual Report
Merit Certificate
Service Organisation
2005
Runner-up
General Services and Utility Category
2015
Runner-up
General Services and Utility Category
2014
Runner-up
Leisure and Services Category
2013
Certificate of Recognition
Occupational
Safety and Health
Merit Award
Certificate of Award
National Business
Excellence Awards (NBEA)
Asia Pacific Entrepreneurship
Award (APEA)
SGS
2015
Annual Report
ACCA SL Sustainability Award
National Institute of
Occupational Safety and Health
Year of Issue
2012
Health Sector
2015
5 Crowns for Food Hygiene
2015
2014
2013
2012
2012
Silver
Health care and Related Service Sector
Runner-up
Best Tech-Savvy Company
2011
Winner
2011
Winner
2010
Winner
2009
Winner
2007
1st Runner-up
Other Service Sector
2006
Winner
Other Service Sector
2005
Special Achievement
2012
ISO
9001 : 2000
2007
ISO
9001 : 2008
2007
SL National Quality Award
Winner
Nawaloka Group
Best Company
Nawaloka Group
SL National Quality Award
Service Large Category
1998
2001
Winner
Service Large Category
1998
Stewardship
FINANCIAL REPORTS
2015/16
104
108
109
111
112
113
114
116
117
118
119
Annual Report of the Board of Directors
Report of the Remuneration Committee
Audit Committee Report
Board Related Party Transactions Review Committee Report
Directors’ Responsibility in Financial Reporting
Independent Auditors’ Report
Statement of Financial Position
Statement of Profit or Loss and Other Comprehensive Income
Statement of Changes in Equity
Cash Flow Statement
Notes to the Financial Statements
Financial Calendar
2013/2014
2014/2015
2015/2016
2016/2017
12th August 2013
14th August 2014
14th August 2015
August 2016
2nd Quarter Results
12th November 2013
7th November 2014
15th November 2015
November 2016
3rd Quarter Results
12th February 2014
10th February 2015
15th February 2016
February 2017
4th Quarter Results
30th May 2014
22nd May 2015
30th May 2016
May 2017
1st Quarter Results
Annual Report
Annual General Meeting
June 2014
June 2015
June 2016
June 2017
30th June 2014
30th June 2015
30th June 2016
30th June 2017
Annual Report 2015/16 Nawaloka Hospitals PLC 103
ANNUAL REPORT OF THE BOARD OF DIRECTORS
The Directors have pleasure in presenting to
the members, their Report together with the
Audited Financial Statements for the year
ended 31st March 2016
The details set out herein provide the
pertinent information required under the
Companies Act No. 07 of 2007, the Listing
Rules of the Colombo Stock Exchange and
recommendations in adherence with best
accounting practices.
Legal Form
Nawaloka Hospitals PLC is a public company
with limited liability incorporated in Sri Lanka
on 1st July 1982 under the Companies
Ordinance No. 51 of 1938 and re-registered
under the provisions of the Companies Act
No. 07 of 2007 on 07th September 2007,
with the Company Re-Registration No. PQ
78. Since 2004 its shares are quoted on the
Colombo Stock Exchange. This information
is disclosed as required by Section 168 of
the Companies Act No. 07 of 2007, which
also requires the following information to be
disclosed.
Principal Business Activities
Nature of the business of the Company and
the Group are described below as required
by Section 168 (1) (a) of the Companies
Act No. 07 of 2007. There has been no
material change to the activities of the
Company or any of it’s subsidiaries during
the period under review.
Company
Subsidiaries
Review of Business/Future
Development
New Nawaloka Hospitals
(Pvt) Ltd.
This is a private company with limited liability
incorporated in Sri Lanka under the provisions
of the Companies Act No. 17 of 1982 and
re-registered under the new Companies
Act No. 07 of 2007. It is also domiciled in
Sri Lanka and is a wholly-owned subsidiary
of Nawaloka Hospitals PLC.
New Nawaloka Medical Centre
(Pvt) Ltd.
This too is a private company with limited
liability incorporated in Sri Lanka under the
provisions of the Companies Act No. 17
of 1982 and re-registered under the new
Companies Act No. 07 of 2007. It is also
domiciled in Sri Lanka and is a wholly-owned
subsidiary of Nawaloka Hospitals PLC.
Nawaloka Metropolis Laboratories
(Pvt) Ltd.
This joint venture company was established
in the year 2005 along with Metropolis India
to provide laboratory services. Nawaloka
Hospitals PLC holds 50% shares in this
Company.
This is a private company with limited
liability incorporated in Sri Lanka in the
year 2014 under the provisions of the
Companies Act No. 07 of 2007. It is also
domiciled in Sri Lanka and is a wholly-owned
subsidiary of Nawaloka Hospitals PLC.
A review of the business of the Company and
the Group and its performance during the
year is contained in the Chairman’s review/
Chief Executive Officer’s Performance Review
and of the Director/General Manager’s
Operational & Management review at pages
14, 15, 16 and 17 respectively of this Report.
These reviews form an integral part of this
Report and together with the Financial
Statements described in detail of the state
of affairs of the Company and the Group.
Financial Statements
The Financial Statements which include
the Statement of Comprehensive Income,
Statement of Financial Position, Statement of
Changes in Equity, Cash Flow Statements and
Notes to the Financial Statements are given
on pages 114 to 144 and have been prepared
in conformity with the Sri Lanka Accounting
Standards and the requirements of Section
168 (1) (b) of the Companies Act No. 07 of
2007 and the Listing Rules of the Colombo
Stock Exchange.
Auditors’ Report
The Financial Statements for the period
under review were audited by Messrs KPMG
(Chartered Accountants) for the year ended
31st March 2016 and the Independent
Auditor’s Report issued thereon appears at
page 113 of this Annual Report as required
by Section 168 (1) (c) of the Companies
Act No. 07 of 2007.
The principal activity of the Company is the
providing of healthcare and hospital services.
Financial Results
Group
Company
2015/16
Rs.
2014/15
Rs.
Profit before Taxation
315,252,428
96,647,519
Less: Taxation
(109,218,200)
(9,176,683)
26,603,594
Net Profit after Taxation
206,034,228
87,470,836
(127,565,499)
89,938,006
Profit attributable to Equity Holders of the Company
205,881,515
69,296,227
(128,757,809)
73,403,771
0.15
0.06
(0.09)
0.06
(All figures in Sri Lankan Rupees)
Earnings per share
2015/16
Rs.
(154,169,093)
2014/15
Rs.
97,821,426
(7,883,420)
Financial Reports
Accounting Policies and
Changes During the Year
The accounting policies adopted in the
preparation of Financial Statements of the
Company and the Group are given on pages
119 to 126 of this Annual Report as required
by Section 168 (1) (d) of the Companies Act
No. 07 of 2007. There have been no changes
in the accounting policies adopted by the
Company during the period under review
other than the depreciation rates.
Entries in the Interests Register
The interests register is maintained by the
Company, as required by Section 168 (1) (e)
of the Companies Act No. 07 of 2007.
Directors’ Remuneration
and Other Benefits
Directors’ remuneration and other benefits
of Directors are given at Note 24 to the
Financial Statements on page 138 as
required by Section 168 (1) (f) of the
Companies Act No. 07 of 2007.
Donations
Total donations made by the Group during
the year amounted to Rs. 4,480,289/- and
is being disclosed as required by Section
168 (1) (g) of the Companies Act No. 07
of 2007 and this expenditure was incurred
upon the mandate conferred upon the Board
by the shareholders at the last Annual
General Meeting.
Shareholders’ Funds
After the above mentioned appropriation,
the total Group Shareholders’ Funds
as at 31st March 2016, stood at
Rs. 3,994,897,962/-. The total Shareholders’
Funds of the Company as at 31st March 2015
stood at Rs. 3,887,681,839/-. The movements
are shown in the Statement of Changes in
Equity.
Interim Dividend
Interim dividend of Rs. 0.07 per share was
paid in July 2015.
Directorate
The Directors, who served on the Board
during the financial year are the following and
this information is provided as required by
Section 168 (1) (h) of the Companies Act
No. 07 of 2007.
Name of Director
Executive/NonExecutive Status
Status of
Independence
Mr. H.K. Jayantha Dharmadasa
(Chairman and Chief Executive Officer)
Executive
Mr. Rienzie T. Wijetilleke (Non-Executive Vice-Chairman)
Non-Executive
Independent
Deshabandu Tilak de Zoysa (Senior Independent Director)
Non-Executive
Independent
Professor Lal Chandrasena (General Manager)
Executive
Mr. Tissa K. Bandaranayake (Senior Independent Director)
Non-Executive
Mr. U. Harshith Dharmadasa
Executive
Mr. A.G. Dharmadasa
Executive
Ms. A.G. Dharmadasa
Executive
Dr. T. Senthilverl (resigned w.e.f. 10th March 2016)
Non-Executive
Non-Executive
Independent
Non-Executive
Independent
Mr. V.R. Ramanan (Appointed on 24th March 2016)
Non-Executive
Independent
The qualifications and experience of each
of the Directors are given in the individual
profiles of the Board of Directors on pages
70 to 73 of the Annual Report.
Mr. D. Sunil AbeyRatna who retire from the
Board by rotation at the forthcoming Annual
General Meeting and being eligible for
re-election, offer themselves for re-election.
Appointments and Resignations
Additionally, Mr. Rienzie T. Wijetilleke
who has attained the age of 76 and being
eligible for re-election in terms of Section 211
of the Companies Act No. 07 of 2007
offers himself to be reappointed as a Director
of the Company.
New appointments to the Board are based
on the collective decision of the Board.
In making new appointments, the Board
considers the composition of the Board in
order to assess whether they have the right
mix of skills, experience and competence in
the management of the Company.
The information of new appointments and
resignations to the Board of Directors of the
Company are shown as an integral part of
the Annual Report of the Board of Directors,
in compliance with Section 168 (1) (h) of the
New Appointments
There were in fact two new appointments
to the Board during the financial year
under review.
Mr. V.R. Ramanan
Recommendations for
Re-election
In terms of Article 74 of the Articles of
Association of the Company, Mr. U.H.
Dharmadasa, Ms. A.G. Dharmadasa and
Financial Reports Annual Report of the Board of Directors
Mr. Tissa K. Bandaranayake who has
attained the age of 73 and being eligible
for re-election in terms of Section 211 of
the Companies Act No. 07 of 2007 offers
himself to be reappointed as a Director of
the Company.
Further, Professor Lal Chandrasena who has
attained the age of 70 and being eligible for
re-election in terms of Section 211 of the
Companies Act No. 07 of 2007 offers
himself to be reappointed as a Director
of the Company.
Mr. Palitha Kumarasinghe PC who retires
in terms of Article 81 of the Articles of
Association of the Company, offers himself to
be reappointed as a Director of the Company.
Mr. V.R. Ramanan who retires in terms of
Article 81 of the Articles of Association of the
Company, offers himself to be reappointed as
a Director of the Company.
Independent Directors
Nomination Committee Members
Mr. Rienzie T. Wijetilleke, Deshabandu Tilak
De Zoysa who were appointed as Independent
Directors of the Company on 16th October
2013 have served on the Board continuously
for a period of nine years, the Board resolved
on 30th November 2012 as required by
Rule 7.10.3 (b) that despite the said two
Independent Directors serving on the Board for
more than nine years they are yet regarded as
Independent Directors in terms of Rule 7.10.4
(read with sub - rules [a] to [h] of the Revised
Rules of the Colombo Stock Exchange.
Deshabandu Tilak De Zoysa –
Chairman (INED)
Further, Mr. Tissa K. Bandaranayake,
Mr. D. Sunil AbeyRatna and Mr. Palitha
Kumarasinghe PC were appointed as
Independent Directors of the Company on
27th May 2009, 28th February 2012 and
24th March 2016 respectively.
Mr. D. Sunil AbeyRatna –
Member (INED)
Board Subcommittees
Strategic Planning
Committee Members
Mr. H.K. Jayantha Dharmadasa –
Chairman/CEO
Mr. Tissa K. Bandaranayake –
Member (INED)
Professor Lal Chandrasena –
Member (ED)
Member (INED)
Mr. U. Harshith Dharmadasa –
Member (ED)
Related Party Transactions
Review Committee Members
Chairman (INED)
Sustainability Committee Members
Mr. H.K. Jayantha Dharmadasa –
Chairman/CEO
Member (INED)
Member (ED)
Mr. U. Harshith Dharmadasa –
Member (ED)
Member (ED)
Board Members of the Risk
Management Committee
DGM - Director General Manager
ED - Executive Directors
INED - Independent Non-Executive Directors
Chairman (DGM/ED)
The Board Sub-Committees established
by the Board continue to oversee matters
relating to policy and governance. A Related
Party Transactions Review Committee was
established to comply with the new directives
issued by the Securities and Exchange
Commission to ensure that the interests
of shareholders as a whole are taken into
account by a listed entity when entering into
related party transactions. The composition of
the Subcommittees during the Financial year
is as follows:
Mr. U. Harshith Dharmadasa – Member (ED)
Directors’ Meetings
Details of meetings which comprise Board
meetings, the Board’s Subcommittee
meetings of the Audit Committee,
Remuneration Committee, Strategic Planning
Committee, Nomination Committee, Related
Party Transactions Review Committee and
Risk Management Committee are dealt
with on pages 83, 99, 108,110 and 111
Board Audit Committee Members
The aggregate shareholding of the Directors for the year ended 31st March 2016 and the
previous year, are as follows:
Chairman (INED)
Ms. A.G. Dharmadasa – Member (ED)
Directors’ Shareholding
Mr. Rienzie T. Wijetilleke –
Member (INED)
Member (INED)
Member (INED)
Remuneration Committee Members
Chairman (INED)
Member (INED)
Member (INED)
Mr. U.H. Dharmadasa
Mr. A.G. Dharmadasa
Ms. A.G. Dharmadasa
Mr. V.R. Ramanan
2015/16
Ordinary
2014/15
Ordinary
462,736,182
462,736,182
33,332
33,332
218,000
218,000
601,198
601,198
3,360
3,360
3,004,026
3,004,026
5,066,686
5,066,686
NIL
NIL
NIL
NIL
3,400,000
NIL
NIL
NIL
Annual Report of the Board of Directors Financial Reports
Related Party Transactions
Appointment of Auditors
The Directors have also disclosed the transactions if any, that could be classified as Related
Party Transactions’ in terms of LKAS 24 – ‘Related Party Disclosures’ and thus complied with the
CSE Listing Rules. Related Party Transactions are given in Note 28 to the Financial Statements.
Messrs KPMG (Chartered Accountants)
who are willing to continue in office are
recommended for reappointment, at a
remuneration to be decided by the Board
of Directors.
Directors’ Interests
The Interests Register is maintained by the Company, as per the Companies Act No. 07 of 2007.
Capital Expenditure
Details of Property, Plant & Equipment and their movements in the Company and the Group
during the year, are listed in Note 02 to the accounts at pages 127 and 128.
As far as the Directors are aware, the
Auditors do not have any relationship (other
than that of an Auditor) with the Company
or any of its subsidiaries other than those
disclosed above. The Auditors also do not
have any interest in the Company or its
subsidiaries as required by Section 168 (1) (j)
of the Companies Act No. 07 of 2007.
Stated Capital
The stated capital of the Company is 1,409,505,596 ordinary shares. There were no changes in
the Stated Capital during the year.
Group
Company
2015/16
Rs.
2014/15
Rs.
2015/16
Rs.
2014/15
Rs.
At the beginning of the year
1,207,388,876
1,207,388,876
1,207,388,876
1,207,388,876
At the end of the year
1,207,388,876
1,207,388,876
1,207,388,876
1,207,388,876
Stated Capital
The fees paid to the Auditors are disclosed in
Note 24 to the Financial Statements.
For and on behalf of the Board,
Issued and Fully Paid
Share Information
The composition of shareholders and the
information relating to share trading, net
assets, market value per share, are given
on pages 151, 152, 153 and 156 of this
Annual Report.
Major Shareholders
The 20 largest shareholders of the Company
as at 31st March 2016 are given on page 153
The number of persons employed by the
Group as at 31st March 2016 was 2,157.
Jayantha Dharmadasa
Chairman/Chief Executive Officer Group Revenue
The Revenue of the Group was Rs. 5,860 Mn
(2015 – Rs. 4,602 Mn). The analysis thereof
is given in Note 22 to the Financial Statements.
Stock Exchange Listing
The Company was listed on the Main Board of
the Colombo Stock Exchange in the year 2004.
By Order of the Board,
Employment Policy
Going Concern
The Company’s Employment Policy is totally
non-discriminatory, and equality of opportunity
The Company’s Employment Policy is totally
non-discriminatory, and equality of opportunity
for all employees irrespective of ethnic,
origin, religion, political opinion, gender or
marital status.
The Board firmly believes that the Company
and its subsidiaries have sufficient resources
to continue in operational existence for a very
long foreseeable future. Therefore, Financial
Statements of the Group have been prepared
on the principle of a ‘Going Concern’.
The Company applies ‘equal opportunity
policy’ in selection, training, development
and promotion opportunities, ensuring
that all decisions are based on merit and
qualification.
The employees are always encouraged to
discuss issues relating to operations and to
make suggestions to improve performance.
Director/General Manager
Sgd.
M & A Company Secretaries (Private) Limited
25th May 2016
Events Occurring after the
Reporting Date
There are no significant events that have
occurred after the Reporting date which
would have any material effect on the
Company or on the Group that require
adjustments to or disclosure in the
Financial Statements, except as qualified
by the Auditors.
Financial Reports Annual Report of the Board of Directors
REMUNERATION COMMITTEE REPORT
Formation, Composition
and Structure
4. Approving remuneration levels at each
designation of senior management.
The Remuneration Committee is a
Subcommittee, appointed by and responsible
to the Board of Directors, consists of three
Independent Non-Executive Directors.
5. Maintain competitive and attractive
remuneration packages to senior
managers and ensure that it is in par
with the industry levels.
6. Recommend promotion of Key
Management Personnel to BOD.
Mr. Tissa K. Bandaranayake – Member
7. Deciding performance based
remuneration, increments, incentive and
bonus with the regular evaluation of
performance against targets.
The Committee meetings held during the
financial year subject to the following
criteria’s:
8. Make direction regarding to the statutory
payments made by the Company on
behalf of its employees.
Duties and Responsibilities
Challenges
The RC review and recommend the policy
on remuneration of the Executive Staff
and the Specific remuneration package for
the Executive Directors while considering
following:
In a highly competitive environment attracting
and retaining high calibre executives is a key
challenge faced by the Group.
1. Determining the compensation of the
Chairman and the BOD, while ensuring
that no Director is involved in setting their
own remuneration or any other benefit.
2. Establishing transparent procedure to
determine remuneration for Executives
and Directors.
In this context, the Remuneration
Committee took into account:
Evaluation of the Effectiveness
of the Committee
The Board reviews and updates the
Committee Charter annually. The minutes
of meetings and other reports from the
Remuneration Committee are submitted to
the Board of Directors, and in addition, plans
have been initiated for the Non-Committee
members to evaluate the Committee on an
annual basis by way of a checklist.
a.Competition
b. Qualification and experience
c. Market information
d. Business performance
In declaring the overall remuneration
policy of the Group.
3. Recommending corporate management
appointments to the Board.
Chairman
25th May 2016
Financial Reports
AUDIT COMMITTEE REPORT
In keeping with the Code of Best Practice on
Corporate Governance and the requirements
of the Securities and Exchange Commission
for public limited companies, Nawaloka
Hospitals PLC has established an Audit
Committee whose functions, authority and
duties have been clearly identified in the
Audit Committee Charter. This Charter
integrates all the requirements of the
Securities and Exchange Commission
and Code of Best Practice on Corporate
Governance.
The role of the Audit Committee is to
oversee the financial reporting system of the
Company with a view to safeguarding the
interests of all the stakeholders and ensuring
that it has been extended to its subsidiaries.
This includes selecting and applying
appropriate accounting policies for the
purpose of financial reporting, ensuring sound
internal control principles and its effective
implementation, ensuring the integrity of
Financial Statements and maintaining an
appropriate independent relationship with the
Company’s Auditors.
Formation and Composition
of the Committee
Broad Purpose of the Audit
Committee
The Audit Committee was established by
the Board with a formal and transparent
arrangement and it comprises four
Independent Non-Executive Directors.
The Audit Committee assisted the Board
in the following manner:
zzEnsuring
The Chairman of the Audit Committee is
Mr. Tissa K. Bandaranayake, who is an
Independent Non-Executive Director, a
fellow member of The Institute of Chartered
Accountants of Sri Lanka and a former Senior
Partner of Messrs Ernst & Young, Chartered
Accountants with expert knowledge in
Accounting and Finance.
Member of the Audit Committee
Name of Director
Non-Executive
Independent
Mr. Tissa K.
Bandaranayake –
Chairman


Mr. Rienzie T.
Wijetilleke


Deshabandu Tilak
De Zoysa




that the preparation, presentation
and adequacy of disclosure in the Financial
Statements are in accordance with LKAS/
SLFRS and with the requirements of
the Companies Act No. 07 of 2007 and
other relevant Financial reporting related
regulatory requirements.
zzR eviewing
the appropriateness of the
procedures in place for the identification,
evaluation and management of business
risks whilst seeing that the systems of
internal control with regard to all functions
are adequate and functioning properly.
zzAssessing
the Company’s ability to
continue as a going concern in the
foreseeable future and also in addition,
ensuring compliance with Laws and
Company policies.
zzOverseeing
of the independence and
performance of the Company’s External
Auditors.
Duties and Responsibilities
In brief, the duties and responsibilities performed by the Audit Committee are as follows:
External Audit
zzRecommending
the reappointment of Messrs KPMG, Chartered Accountants, as Auditors of
Nawaloka Hospitals PLC for the financial year ended 31st March 2017.
zzExamine
any non-audit work performed by the Auditors and the fees thereon to ensure that their
objectivity and independence is not impaired.
zzReviewing
the scope and result of the audit and its effectiveness.
zzDiscussing
with the External Auditors before commencement of the audit and at the conclusion of
the audit, in relation to audit plan, key audit issues and their resolution, management responses and
the remuneration of the Auditors.
Compliance with Laws and Regulations
and Company policies
Financial Reports
zzReviewing
the Quarterly Financial Statements and discussing with the Management.
zzReviewing
the extent of compliance with the laws of the country, governmental regulations, listing
rules and established policies of the Company.
Internal controls and internal audit
zzReviewing
the internal audit function and making recommendations.
zzEnsuring
that there are satisfactory arrangements for monitoring internal control in keeping with
delegated authorities.
zzEstablishing
mechanisms for the confidential receipt and treatment of complaints alleging fraud
received from internal/external sources and pertaining to internal control, accounting or other such
matters. This is currently in progress.
zzMonitoring
the implementation of strategies, plans, as well as the manning of organisation for internal
auditing in line with the methodologies promulgated as best practices.
zzEnsuring
that if and when employees or former employees of the Auditors are hired the established
regulatory requirements are followed, so that audit independence is not impaired. Also implementing
other internal controls related to IT, HR, Finance, Marketing and Administration etc, as required and
ensuring that these are soundly conceived and effectively administered to seek assurance that the
control systems are in place, and operating efficiently and are regularly monitored.
Risk Management
zzMonitoring
the policies and practices related to risk management.
zzObtaining
statements of business risks; evaluating the severity, the process in place for the
management of these risks and persons responsible for the management of risks within specified
time frames.
zzEnsuring
proper standardised updated systems for financial reporting.
zzHolding
of meetings with the Head of Finance to ensure the proper controls and segregation of
duties to minimise risks.
zzReviewing
Company’s quarterly unaudited and annually Audited Financial Statements and making
recommendations to the Board for their releases.
Meetings
The Audit Committee held four meetings
during the year under review. The proceedings
of the Audit Committee are regularly reported
to the Board of Directors. The attendance of
members at these meetings is given below:
Name of Director
No. of Attendance
Meetings Percentage
Attended
%
Mr. Tissa K.
Bandaranayake
4
100
3
75
Deshabandu Tilak
De Zoysa
3
75
4
100
The Committee has provided the Chairman
of the Audit Committee with all powers to
convene regular meetings with the Financial
Controller, Internal Audit, Sectional Heads
and Company’s External Auditors, separately
and periodically.
Evaluation of the Effectiveness
of the Committee
The Board reviews and updates the
Committee Charter annually according to
the changes in the business environment
and operations of the organisation. The
minutes of meetings and other reports from
the Audit Committee are submitted to the
Board of Directors, and also in addition, plans
have been initiated for the non-committee
members to evaluate the Committee on an
annual basis by way of a checklist.
Chairman
25th May 2016
Audit Committee Report Financial Reports
BOARD RELATED PARTY TRANSACTIONS REVIEW COMMITTEE REPORT
Composition of the Committee
The Board appointed Related Party
Transactions Review Committee (BRPTRC),
comprising one Executive Director and three
Independent Non-Executive Directors, as
stipulated by the Code of Best Practices
on Related Party Transactions, issued by
the Colombo Stock Exchange (CSE). The
(BRPTRC) as at the end of the year was
comprised the following members:
Mr. Tissa K. Bandaranayake – Chairman
Mr. Palitha Kumarasinghe PC – Member
Professor Lal Chandrasena – Member
(Executive Director)
Terms of Reference of the Committee
The BRPTRC was formed by the Board at the
end of 2014, to assist the Board in reviewing
all Related Party Transactions (RPT) carried
out by the Group, by adopting the Code of
Best Practice on Related Party Transactions,
as issued by the CSE, which is mandatory
from 1st January 2016.
The mandate of the Committee includes
inter alia the following:
zzDeveloping and recommending for
adoption by the Board of Directors of
the Company and its related parties, a
RPT policy consistent with that proposed
by the CSE.
zzUpdating
the Board of Directors on
the RPT of each of the related parties
of the Group.
zzMaking
immediate market disclosures on
applicable RPT, as required by Section 9
of the Continuing Listing requirements of
the CSE.
zzMaking
appropriate disclosures on RPT in
the Annual Report, as required by Section
9 of the Continuing Listing Requirements
of the CSE.
The Committee will schedule quarterly
meetings to review and report to the Board,
on matters involving RPT falling under its
Terms of Reference.
Activities in 2015/16
A committee meeting was held and all
related party transactions occurred during
the financial year 2015/16 was reviewed
and the Committee is in the opinion that
the transactions are on normal commercial
terms, and are not prejudicial to the interests
of the entity and its minority shareholders.
Proceedings of the Committee meetings were
regularly reported to the Board of Directors.
Chairman
25th May 2016
Financial Reports
111
DIRECTORS’ RESPONSIBILITY IN FINANCIAL REPORTING
The responsibility of the Directors in relation
to the Financial Statements is set out in the
following statement.
The Board of Directors of Nawaloka Hospitals
PLC are responsible under Section 148 of
the Companies Act No. 07 of 2007 for
keeping proper accounting records which
have been disclosed with reasonable
accuracy, at all times, the financial position
of the Company and of the Group and to
enable them to ensure that the Financial
Statements comply with, inter alia the
In preparing these Financial Statements, the
Directors of the Company have to comply
with the requirements specified in Sections
150 (1), 151 (1), 152 (1) and 153 (1) of the
Companies Act No. 07 of 2007. In accordance
therewith the Directors of the Company and
the Group maintain proper Books of Accounts
of all the transactions and prepare Financial
Statements that give a true and fair view of
the state of affairs of the Company at the
date of the Statement of Financial Position
and the profit or loss for the year ending
on that date of the Statement of Financial
Position.
Accordingly, the Directors are of the
view that 1. Appropriate accounting policies have
been selected and applied in a consistent
manner and material departures if any,
have been disclosed and explained;
2. All applicable and relevant Accounting
Standards have been followed; and
3.They have exercised due and proper
judgment and estimates which are
reasonable and prudent.
112
The Financial Statements of the Company
and the Group have been certified by the
Company’s Chief Financial Officer, the person
responsible for its preparation, as required by
the Act. Financial Statements of the Company
and the Group have been signed by two
Directors on 25th May 2016 as required
by Sections 150 (1) (c) and 152 (1) (c) of
the Companies Act. Accordingly, the Board
of Directors wish to confirm that they have
complied with all the requirements of the
Companies Act No. 07 of 2007 and have
also met all the requirements under
Section 7 of the Listing Rules of the
Colombo Stock Exchange.
The Directors also have taken reasonable
steps to safeguard the assets of the
Company and to prevent and detect frauds
and other irregularities. In this regard, the
Directors have instituted an effective and
comprehensive system of internal controls
and an effective system of monitoring its
effectiveness, internal audit being one of
them. The Board has been provided
additional assurance on the reliability
of the Financial Statements through a
process of independent and objective
reviews conducted by the Audit Committee.
The Report of the Audit Committee is on
pages 109 to 110 of this Annual Report.
Compliance Report
The Directors also confirm that to the best of
their knowledge, all taxes, duties and levies
payable by the Company, all contributions,
levies and taxes payable on behalf of and in
respect of the Employees of the Company
and other known statutory dues as were due
and payable by the Company as at the date
of the Statement of Financial Position have
been paid or where necessary provided for,
in arriving at the financial results for the year
under review.
Further, all documents required by the
Companies Act No. 07 of 2007 to be filed
with Registrar of Companies have been duly
filed and compliance has been made with all
the other legal requirements in connection
with the said Companies Act and all dividend
cheques have been dispatched by the
due date.
Sgd.
M & A Company Secretaries (Private) Limited
25th May 2016
The Directors are also of the view that the
Company has adequate resources to continue
in business for the foreseeable future and
have applied the ‘Going Concern’ basis in
preparing these Financial Statements.
The Directors are confident that they have
discharged their responsibility as set out in
the statement.
Financial Reports
INDEPENDENT AUDITORS’ REPORT
TO THE SHAREHOLDERS OF
NAWALOKA HOSPITALS PLC
Report on the Financial Statements
We have audited the accompanying Financial
Statements of Nawaloka Hospitals PLC,
(“the Company”), and the Consolidated
Financial Statements of the Company and its
subsidiaries (“Group”), which comprise the
statement of financial position as at
31st March 2016, and the statement of profit
or loss and other comprehensive income,
statement of changes in equity and, cash
flow statement for the year then ended, and
a summary of significant accounting policies
and other explanatory information as set out
on pages 114 to 144.
Board’s Responsibility for the
The Board of Directors (“Board”) is
responsible for the preparation of these
Financial Statements that give a true and fair
view in accordance with Sri Lanka Accounting
Standards, and for such internal control as
Board determines is necessary to enable the
preparation of Financial Statements that are
free from material misstatement, whether due
to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion
on these Financial Statements based on our
audit. We conducted our audit in accordance
with Sri Lanka Auditing Standards. Those
standards require that we comply with ethical
requirements and plan and perform the
Financial Reports
Report on Other Legal and
Regulatory Requirements
audit to obtain reasonable assurance about
whether the Financial Statements are free
from material misstatement.
An audit involves performing procedures to
obtain audit evidence about the amounts
and disclosures in the Financial Statements.
The procedures selected depend on the
Auditors’ judgment, including the assessment
of the risks of material misstatement of the
Financial Statements, whether due to fraud
or error. In making those risk assessments,
the Auditor considers internal control relevant
to the entity’s preparation of the Financial
Statements that give a true and fair view in
order to design audit procedures that are
appropriate in the circumstances, but not
for the purpose of expressing an opinion
on the effectiveness of the entity’s internal
control. An audit also includes evaluating
the appropriateness of accounting policies
used and the reasonableness of accounting
estimates made by Board, as well as
evaluating the overall presentation of the
We believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion, the Consolidated Financial
statements give a true and fair view of the
financial position of the Group as at
31st March 2016, and of its financial
performance and cash flows for the year
then ended in accordance with Sri Lanka
Accounting Standards.
As required by Section 163 (2) of the
Companies Act No. 07 of 2007, we state
the following:
(a) The basis of opinion and scope and
limitations of the audit are as stated above.
(b) In our opinion:
- we have obtained all the information and
explanations that were required for the
audit and, as far as appears from our
examination, proper accounting records
have been kept by the Company,
- The Financial Statements of the
Company give a true and fair view
of its financial position as at
31st March 2016, and of its financial
performance and cash flows for the
year then ended in accordance with
Sri Lanka Accounting Standards.
- The Financial Statements of the
Company, and the Group comply with
the requirements of Sections 151
and 153 of the Companies Act
No. 07 of 2007.
CHARTERED ACCOUNTANTS
Colombo,
25th May 2016.
113
STATEMENT OF FINANCIAL POSITION
Group
Company
Note
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
Property, plant & equipment
2
8,009,872,280
5,842,254,219
2,428,987,577
2,453,512,945
Leasehold Right Over Land
3
224,975,452
227,910,976
48,617,196
49,510,203
Investment property
4
–
–
192,417,100
192,417,100
Investment in subsidiaries
5
–
–
2,016,985,376
1,245,933,056
Equity accounted investee
6
118,230,763
90,241,313
2,500,000
2,500,000
Advance for land
7
952,343,085
952,343,085
9,305,421,580
7,112,749,593
4,689,507,249
3,943,873,304
As at 31st March
Assets
Non-current assets
Total non-current assets
–
–
Current assets
Inventories
8
409,117,083
335,763,359
144,130,234
114,650,320
Trade and other receivables
9
519,018,172
428,373,535
319,919,013
265,300,017
Deposits and advances
10
192,351,662
144,112,688
124,249,177
112,077,389
Receivable from related parties
11
204,079,352
160,381,424
2,272,862,092
1,434,884,270
Short-term investments
427,886,374
415,601,334
321,319,481
39,011,945
Cash and cash equivalents
135,605,771
48,988,035
99,298,780
34,538,792
Total current assets
Total assets
1,888,058,414
1,533,220,375
3,281,778,777
2,000,462,733
11,193,479,994
8,645,969,968
7,971,286,026
5,944,336,037
1,207,388,876
1,207,388,876
Equity and Liabilities
Capital and reserves
Stated capital
12
1,207,388,876
1,207,388,876
Revaluation reserve
13
990,872,361
990,872,361
Retained earnings
1,796,636,725
1,689,420,602
258,947,189
486,370,390
Total equity
3,994,897,962
3,887,681,839
1,466,336,065
1,693,759,266
1,480,047,383
–
–
Non-current liabilities
Debentures
14
1,484,104,507
1,480,047,383
1,484,104,507
Employee benefits
15
184,237,790
170,953,704
166,252,434
158,673,474
Deferred tax liabilities
16
305,060,480
227,899,587
92,347,774
119,113,956
Borrowings falling due after one year
17
3,002,368,366
1,269,045,093
2,970,442,441
1,260,255,153
Finance leases payable after one year
18
108,000,000
116,000,000
5,083,771,143
3,263,945,767
Total non-current liabilities
–
4,713,147,156
–
3,018,089,966
Financial Reports
Group
Company
Note
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
19
486,959,763
473,368,248
424,381,781
424,320,318
2,721,515
2,610,056
2,721,515
2,610,056
As at 31st March
Current liabilities
Trade creditors and other payables
Unclaimed dividends
Current tax liabilities
20
24,765,638
2,250,608
–
Payable to related companies
21
15,595,918
13,849,554
8,747,060
8,491,106
Borrowings falling due within one year
17
594,325,684
351,370,388
545,401,924
311,369,588
Finance leases payable within one year
18
–
8,000,000
8,000,000
982,442,371
642,893,508
810,550,525
485,695,737
Total current liabilities
2,114,810,889
1,494,342,362
1,791,802,805
1,232,486,805
Total liabilities
7,198,582,032
4,758,288,129
6,504,949,961
4,250,576,771
11,193,479,994
8,645,969,968
7,971,286,026
5,944,336,037
2.83
2.76
1.04
1.20
Bank overdrafts
Total equity and liabilities
Net assets per share
–
–
Notes form an integral part of these Financial Statements.
Figures in brackets indicate deductions.
It is certified that the Financial Statements have been prepared and presented in compliance with the requirements of the
Mr. Nalaka Niroshana
Head of Finance
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
Approved and signed for and on behalf of the Board of Directors;
Mr. Jayantha Dharmadasa
Chairman/Chief Executive Officer
Director Colombo
25th May 2016
Financial Reports Statement of Financial Position
115
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Group
Note
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
22
5,860,218,161
4,602,433,640
2,833,195,719
2,497,830,914
(2,906,572,342)
(2,331,583,775)
(1,490,055,615)
(1,229,903,547)
2,953,645,819
2,270,849,865
1,343,140,104
1,267,927,367
94,495,240
65,199,571
86,694,974
152,643,920
For the year ended 31st March
Revenue
Cost of services
Gross profit
Other income
Company
23
Staff cost
(1,151,309,690)
(968,758,629)
(544,111,104)
(477,481,620)
Administrative expenses
(1,089,179,752)
(916,087,291)
(567,391,842)
(497,222,102)
(170,442,792)
(98,860,906)
(117,205,312)
(70,648,459)
Other operating expenses
Profit from operations
24
637,208,825
352,342,610
201,126,820
375,219,106
Finance cost
25
(372,317,361)
(285,092,829)
(355,295,913)
(277,397,680)
Share of profits of equity accounted investee, net of tax
Profit/(loss) before tax
Tax expense
26
Profit/(loss) for the year
50,360,964
29,397,738
–
–
315,252,428
96,647,519
(154,169,093)
97,821,426
(109,218,200)
(9,176,683)
26,603,594
(7,883,420)
206,034,228
87,470,836
(127,565,499)
89,938,006
Other comprehensive income
Defined benefits plan actuarial losses
15.3
Deferred tax impact on defined benefits plan actuarial losses
16.4
(309,060)
27,860
(17,481,666)
2,500,039
Equity accounted investee’s share of OCI
128,487
(3,192,982)
Other comprehensive income/(loss) for the year, net of tax
(152,713)
(18,174,609)
(1,354,898)
162,588
–
(1,192,310)
(18,820,799)
2,286,564
–
(16,534,235)
Total comprehensive income/(loss) for the year
205,881,515
69,296,227
(128,757,809)
73,403,771
Net profit/(loss) attributable to equity holders of the Company
205,881,515
69,296,227
(128,757,809)
73,403,771
0.15
0.06
(0.09)
0.06
Earnings/(loss) per share
27
Financial Reports
STATEMENT OF CHANGES IN EQUITY
For the year ended 31st March 2016
Stated Capital
Rs.
Revaluation Reserve
Rs.
Retained Earnings
Rs.
Total Equity
Rs.
1,207,388,876
990,872,361
1,704,694,711
3,902,955,948
Group
Balance as at 01st April 2014
Profit for the year
–
–
87,470,836
87,470,836
–
–
(18,174,609)
(18,174,609)
–
–
(84,570,336)
(84,570,336)
Transaction with the owners of the Company
Dividends paid
Balance as at 31st March 2015
1,207,388,876
990,872,361
1,689,420,602
3,887,681,839
206,034,228
206,034,228
Profit for the year
–
–
–
–
(152,713)
(152,713)
–
–
(98,665,392)
(98,665,392)
Dividends paid
1,207,388,876
990,872,361
1,796,636,725
3,994,897,962
1,704,925,830
Company
Balance as at 01st April 2014
–
497,536,954
Profit for the year
1,207,388,876
–
–
89,938,006
89,938,006
–
–
(16,534,235)
(16,534,235)
Dividends paid
–
1,207,388,876
–
(84,570,336)
–
486,370,390
(84,570,335)
1,693,759,266
Loss for the year
–
–
(127,565,499)
(127,565,499)
–
–
(1,192,310)
(1,192,310)
–
–
(98,665,392)
(98,665,392)
–
258,947,189
Dividends paid
1,207,388,876
1,466,336,065
Financial Reports
117
CASH FLOW STATEMENT
Group
Note
Company
2016
Rs.
2015
Rs.
315,252,428
96,647,519
2016
Rs.
2015
Rs.
Cash flows from operating activities
Profit/(Loss) before tax
(154,169,093)
97,821,426
Adjustments for:
2/3
479,732,756
397,776,647
326,152,985
300,670,179
Finance cost
25
372,317,361
285,092,829
355,295,913
277,397,680
Interest income
23
(30,384,641)
(31,311,710)
(50,360,964)
(29,397,738)
33,427,021
26,235,983
9,114,875
Depreciation and amortisation
Share of profit of equity accounted investee net of tax
Provision for employee benefits
15.2
(13,734,180)
–
(13,047,638)
–
25,530,843
22,473,388
8,006,844
7,376,592
Provision for bad and doubtful debts
24
3,272,625
Provision for deemed interest tax
24
26,668,154
–
26,668,154
8
2,000,000
–
2,000,000
23
(7,006,687)
24
42,758,125
54,244,933
41,528,139
39,101,201
1,187,676,178
802,813,774
587,772,918
616,432,929
Provision for slow moving inventories
Profit on disposal of property, plant & equipment
–
Dividend income
Impairment for other receivable balances
Operating profit before working capital changes
(5,589,564)
–
–
–
(7,006,687)
(5,589,564)
(22,500,000)
(109,770,335)
Changes in working capital
(75,353,724)
(29,413,830)
(31,479,914)
(176,328,559)
(206,080,084)
(107,739,965)
(91,865,890)
Increase/decrease in related party balances
(50,537,364)
(157,547,002)
(1,617,359,990)
(1,107,077,221)
Decrease in creditors and other payables
(13,076,639)
27,482,268
Increase in inventories
Increase/decrease in debtors, deposits and advances
(26,606,691)
(5,427,820)
(365,558,648)
(1,783,186,560)
(1,202,302,802)
872,379,892
437,255,126
(1,195,413,642)
(585,869,873)
(368,260,237)
(281,536,637)
(351,238,789)
(273,841,489)
(19,306,781)
(17,045,448)
(315,296,286)
Cash generated from operating activities
Interest paid
Gratuity paid
Current tax paid
15.1
(20,451,995)
(17,385,483)
20
(9,514,418)
(17,585,304)
Net cash generated from/(used in) operating activities
2,068,129
474,153,242
120,747,702
–
–
(1,565,959,212)
(876,756,810)
(293,727,923)
(653,617,450)
Cash flows from investing activities
(2,639,234,088)
Purchase of property, plant & equipment
2
Purchase of investment property
4
–
–
–
(192,417,100)
Investment in subsidiary
5
–
–
–
(300,000,000)
Investment in land
7
–
(1,917,055,176)
(68,789,654)
–
Interest received
28,360,063
31,311,710
During the year investment
(10,260,462)
(32,430,344)
(270,860,706)
Dividend received
22,500,000
24,999,999
22,500,000
–
Expenses incurred on related parties
1,825,482
Proceeds from disposal of property, plant & equipment
Net cash used in investing activities
471,956,698
58,046,338
(2,596,809,005)
(1,431,960,429)
2,828,645,181
1,390,867,211
2,287,350
–
–
(539,801,279)
–
13,047,638
247,592,487
109,770,335
471,956,698
58,046,338
(245,621,054)
Cash flows from financing activities
Proceeds from long-term borrowings and leases
17
Repayments of long-term borrowings and leases
17/18
Dividends paid
Net cash generated from financing activities
2,697,409,436
(860,366,612)
(298,508,344)
(753,189,812)
(98,553,933)
(84,570,336)
(98,553,933)
1,869,724,636
1,007,788,531
1,845,665,691
1,252,076,271
(200,508,144)
(84,570,335)
966,997,792
Net increase/(decrease) in cash and cash equivalents
during the year
(252,931,127)
(303,424,197)
(260,094,800)
Cash and cash equivalents at the beginning of the year
(593,905,473)
(290,481,276)
(451,156,945)
(295,776,873)
Cash and cash equivalents at the end of the year
(846,836,600)
(593,905,473)
(711,251,745)
(451,156,945)
(155,380,072)
Analysis of cash and cash equivalents at the end of the year
Cash at bank and in hand
Bank overdraft
135,605,771
48,988,035
99,298,780
34,538,792
(982,442,371)
(642,893,508)
(810,550,525)
(485,695,737)
(846,836,600)
(593,905,473)
(711,251,745)
(451,156,945)
Financial Reports
NOTES TO THE FINANCIAL STATEMENTS
1.1 Reporting Entity
1.1.1 Legal Form
1.1.2 Total Number of Employees
a.Nawaloka Hospitals PLC (‘Company’) is a
quoted public company with limited liability
incorporated in Sri Lanka under
the provisions of the Companies Act
No. 17 of 1982 and re-registered under
the new Companies Act No. 07 of 2007.
The Company does not have an identifiable
parent of its own. The registered office
and the principal place of business of the
Company is located at No. 23, Deshamanya
H.K. Dharmadasa Mawatha, Colombo 02.
Company
1,052
(2015 – 1,002)
Group
2,157
(2015 - 2,105)
b.New Nawaloka Hospitals (Pvt) Ltd., is
a private company with limited liability
incorporated in Sri Lanka under the
provisions of the Companies Act No. 17
of 1982 and re-registered under the
new Companies Act No. 07 of 2007.
The Ultimate Parent of the Company is
c. New Nawaloka Medical Centre (Pvt)
Ltd., is a private company with limited
liability incorporated in Sri Lanka under
No. 17 of 1982 and re-registered under
the new Companies Act No. 07 of 2007.
The Ultimate Parent of the Company is
d.Nawaloka Metropolis Laboratories (Pvt)
Ltd. is a private company with limited
liability incorporated in Sri Lanka under
No. 17 of 1982 and re-registered under the
new Companies Act No. 07 of 2007, which
is also a 50:50 joint venture investment
between Nawaloka Hospitals PLC and
Metropolis Health Services (India)
Private Ltd.
e. Nawaloka Medicare (Pvt) Ltd. is a limited
liability company incorporated in Sri Lanka
under the Companies Act No. 07 of 2007
(Registration No. PV 93186) and the
Board of Investment Law No. 04 of 1978.
It is having its registered office at No. 23,
Deshamanya H.K Dharmadasa Mawatha,
Colombo 02. The Ultimate Parent of the
Company is Nawaloka Hospitals PLC.
The ‘Company’, in the Financial Statements,
refers to Nawaloka Hospitals PLC and ‘Group’
refers to the Company and all its subsidiaries
and joint venture, whose Financial Statements
have been consolidated.
Financial Reports
a going concern. Therefore, the Financial
Statements continue to be prepared on a
going concern basis.
Basis of Measurement
1.1.3 Principal Activities and Nature
of Operations
The principal activities of the Company and
the Group is to provide health and laboratory
services. There were no significant changes
in the nature of principal activities of the
Company and the Group during the financial
year under review.
1.2 Basis of Preparation
1.2.1 Statement of Compliance
The Financial Statements of the Company
and the Group comprise the Statement of
Financial Position, Statement of Profit or Loss
and Other Comprehensive Income, Statement
of Changes in Equity and Cash Flows together
with the Notes to the Financial Statements.
financial instruments
classified as ‘Loans and receivables’ and
‘other financial liabilities’ measured at
amortised cost;
zzBuildings
on leasehold lands are measured
at fair value;
zzDefined
benefit obligations are measured
at its present value, based on an actuarial
valuation as explained in Note 15.
1.2.4 Functional and
Presentation Currency
These Consolidated Financial Statements
were authorised for issue by the Board of
Directors on 25th May 2016.
1.2.2 Responsibility for Financial
Statements
The Board of Directors of the Company
is responsible for the preparation and
presentation of the Financial Statements for
the Group and the Company according to the
requirements of Companies Act No. 07 of
2007 and SLFRSs and LKASs.
The management has made an assessment
of its ability to continue as a going concern
and is satisfied that it has the resources to
continue in business for the foreseeable
future. Furthermore, the management is
not aware of any material uncertainties
that may cast significant doubt upon the
Group’s/Company’s ability to continue as
zzNon-derivative
These Financial Statements have been
prepared on the basis that the Company and
the Group would continue as a going concern
for the foreseeable future.
The Consolidated Financial Statements have
been prepared in accordance with Sri Lanka
Accounting Standards (SLFRS/LKAS) laid
down by The Institute of Chartered
Accountants of Sri Lanka and the
requirements of Companies Act No. 07
of 2007.
1.2.3 Going Concern
The Consolidated Financial Statements have
been prepared on the historical cost basis
and applied consistently with no adjustments
being made for inflationary factors affecting
the Financial Statements, except for the
following material items in the Statement of
Financial Position:
Items included in the Financial Statements
of each of the Group’s entities are measured
using the currency of the primary economic
environment in which the entities operate
(‘the functional currency’). The Consolidated
Financial Statements are presented in
Sri Lankan Rupees, which is the Company’s
functional and presentation currency. All
financial information presented in Rupees has
been rounded to the nearest Rupee.
1.2.5 Materiality and Aggregation
Each material class of similar item is
presented separately in the Financial
Statements. Items of dissimilar nature or
function are presented separately, unless they
are immaterial as permitted by the LKAS 1
– ‘Presentation of Financial Statements’.
1.2.6 Comparative Information
The Financial Statements for the comparative
periods comprise results for the 12 month
periods from 1st April 2014 to 31st March
2015. In this circumstance, the comparative
119
information for the Statement of Financial
Position, Statement of Profit or Loss and
Other Comprehensive Income, Statement of
Changes in Equity and Cash Flow Statement
and related notes are comparable with the
current period.
The previous year figures and phrases have
been rearranged wherever necessary to
conform with current year’s presentation.
1.2.7 Significant Accounting
Judgments, Estimates and
Assumptions
The preparation of the Consolidated Financial
Statements inconformity with SLFRS/LKAS
requires management to make judgments,
estimates and assumptions that affect the
application of Accounting Policies and the
reported amounts of assets, liabilities, income
and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the
period in which the estimates are revised and
in any future periods affected.
Information about critical judgments in
applying accounting policies that have the
most significant effect on the amounts
recognised in the Consolidated Financial
Statements is included in the following notes;
Assessment of Impairment –
Key Assumptions Used in
Discounted Cash Flow Projections
The Company and Group assesses at each
Reporting Date whether there is objective
evidence that an asset or portfolio of assets
is impaired. The recoverable amount of an
asset or cash-generating unit (CGU) is
the greater of its value in use and its fair
value less costs to sell. In assessing value
in use, the estimated future cash flows are
discounted to present value using appropriate
discount rates that reflects the current market
assessments of the time value of money and
risks specific to the asset.
Useful Life Time of the Property,
Plant & Equipment
The Group reviews the residual values, useful
lives and methods of depreciation of property,
plant & equipment at each Reporting Date.
Judgment of the management is exercised in
the estimation of these values, rates, methods
and so, they are subject to uncertainty.
Deferred Taxation –
Utilisation of Tax Losses
zzThe
fair value of the consideration
transferred; plus
zzThe
Deferred tax assets are recognised for all
unused tax losses to the extent that it is
probable that taxable profit will be available
against which the losses can be utilised.
Management judgment is required to
determine the amount of deferred tax assets
that can be recognised, based upon the level
of future taxable profits together with future
tax planning strategies.
Defined Benefit Plan
The assessment of the liability of defined
benefit obligations involves a significant
element of assumptions; including discount
rates, future salary increases, mortality rates
and future pension increases and due to
the long-term nature of these plans, such
estimates are subject to uncertainty.
Current Taxation
Current tax liabilities are provided for in the
Financial Statements applying the relevant
tax statutes and regulations which the
management believes reflect the actual
liability. There can be instances where the
stand taken by the Company and Group
on transactions is contested by revenue
authorities. Any additional costs on account
of these issues are accounted for as a tax
expense at the point the liability is confirmed
on any Group entity.
Significant Accounting Policies
The Accounting Policies set out below
have been applied consistently to all
periods presented in these Consolidated
Financial Statements and have been applied
consistently by the Group’s entities.
1.3 Basis of Consolidation
1.3.1 Business Combinations
Business combinations are accounted
for using the acquisition method as at
the acquisition date-i.e. when control is
transferred to the Group. Control is the power
to govern the financial and operating policies
of an entity so as to obtain benefits from its
activities. In assessing control, the Group
takes into consideration potential voting
rights that are currently exercisable.
The Group measures goodwill at the
acquisition date as:
recognised amount of any noncontrolling interests in the acquire; plus
zzIf
the business combination is achieved in
stages, the fair value of the pre-existing
equity interest in the acquire; less
zzThe
net recognised amount (generally fair
value) of the identifiable assets acquired
and liabilities assumed.
When the excess is negative, a bargain
purchase gain is recognised immediately in
the profit or loss.
The consideration transferred does not
include amounts related to the settlement of
pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Transaction costs, other than those
associated with the issue of debt or
equity securities, that the Group incurs in
connection with a business combination
are expensed as incurred. Any contingent
consideration payable is measured at fair
value at the acquisition date. If the contingent
consideration is classified as equity, then it is
not remeasured and settlement is accounted
for within equity. Otherwise, subsequent
changes in the fair value of the contingent
consideration are recognised in profit or loss.
1.3.2 Non-Controlling Interests
For each business combination, the Group
elects to measure any non-controlling
interests in the acquire either:
zzat
fair value; or
zzAt
their proportionate share of the
acquirer’s identifiable net assets, which
are generally at fair value.
Changes in the Group’s interest in a
subsidiary that do not result in a loss of
control are accounted for as transactions
with owners in their capacity as owners.
Adjustments to non-controlling interests are
based on a proportionate amount of the net
assets of the subsidiary.
Notes to the Financial Statements Financial Reports
1.3.3 Subsidiaries
Subsidiaries are those enterprises controlled
by the Group. The Financial Statements of
subsidiaries are included in the Consolidated
Financial Statements from the date that
control commences until the date that
control ceases.
Adjustments required to the accounting
policies of subsidiaries have been changed
whereever necessary to align them with the
policies adopted by the Group.
In the Company’s Financial Statements
investments in subsidiaries are carried at cost
less impairment if any in net recoverable value.
The consolidated accounts are prepared to a
common financial year end of 31st March.
1.3.4 Loss of Control
On the loss of control, the Group
derecognises the assets and liabilities of the
subsidiary, any non-controlling interests and
the other components of equity related to
the subsidiary. Any surplus or deficit arising
on the loss of control is recognised in profit
or loss. If the Group retains any interest in
the previous subsidiary, then such interest is
measured at fair value at the date that control
is lost.
Subsequently that retained interest is
accounted for as an equity-accounted
investee or as an available-for-sale financial
asset depending on the level of influence
retained.
1.3.5 Transactions Eliminated
on Consolidation
Intra-group balances and transactions are
eliminated in preparing the Consolidated
1.3.6 Joint Ventures
Joint ventures are those entities over whose
activities that the Group has joint control
established by contractual agreement and
requiring unanimous consent for strategic
financial and operating decisions.
The result of the joint venture, Nawaloka
Metropolis Laboratories (Pvt) Ltd., in which
the Company has a 50% holding has been
accounted for using the equity method.
They are initially recognised at cost, which
includes transaction costs, subsequent to
initial recognition, the Consolidated Financial
Statements include the Group’s share of
the Profit & Loss and other comprehensive
income of equity accounted investees, until
the date on which significant influence or
joint control ceases.
1.4 Foreign Currency Translation
The Financial Statements of the Group are
presented in Sri Lankan Rupees, which is the
functional and presentation currency of the
Group. Recorded at the functional currency
rate ruling at the date of the transaction.
Monetary assets and liabilities denominated
in foreign currencies are retranslated at the
functional currency rate of exchange ruling at
the date of Statement of Financial Position.
Non-monetary items that are measured in
terms of historical cost in foreign currency are
translated using the exchange rates as at the
dates of the initial transactions. Non-monetary
items measured at fair value denominated
in a foreign currency are translated using
the exchange rates at the date when the fair
value was determined.
Foreign Currency differences arising on
retranslation are generally recognised in
profit or loss.
1.5 Financial Instruments
Non-Derivative Financial Assets
The Company and Group initially recognises
loans and receivables on the date that they
are originated. All other financial assets are
recognised initially on the trade date, which
is the date that the Company and the Group
becomes a party to the contractual provisions
of the instrument.
The Company and the Group derecognises
a financial asset when the contractual
rights to the cash flows from the asset
expire, or it transfers the rights to receive
the contractual cash flows in a transaction
in which substantially all risks and rewards
of ownership of the financial asset are
transferred. Any interest in such transferred
financial assets that is created or retained by
the Company and the Group is recognised as
a separate asset or liability.
Financial Reports Notes to the Financial Statements
Financial assets and liabilities are offset and
the net amount presented in the Statement
of Financial Position when, and only when,
the Company and the Group has a legal right
to offset the amounts and intends either to
settle them on a net basis or to realise the
asset and settle the liability simultaneously.
The Company and the Group only holds
financial assets that are categorised into the
‘loans and receivables’ classification.
Loans and Receivables
Loans and receivables are financial assets
with fixed or determinable payments that are
not quoted in an active market. Such assets
are recognised initially at fair value plus
any directly attributable transaction costs.
Subsequent to initial recognition, loans and
receivables are measured at amortised cost
using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash
equivalents and trade and other receivables.
Cash and Cash Equivalents
Cash and cash equivalents comprise
cash balances, placement in Government
Securities and placements in repurchase
agreements with maturities of three months
or less from the acquisition date that are
subject to on insignificant risk of changes in
their fair value and are used by the Company
and the Group in the Management of its
short-term commitments.
1.6 Non-Derivative
Financial Liabilities
The Company and Group initially recognises
subordinated liabilities on the date, which is
the date that the Company and the Group
becomes a party to the contractual provisions
of the instrument.
The Company and Group derecognises
a financial liability when its contractual
obligations are discharged, cancelled
or expired.
The Company and Group classifies
non-derivative financial liabilities into the
‘other financial liabilities’ category. Such
financial liabilities are recognised initially
at fair value less any directly attributable
transaction costs. Subsequent to initial
121
recognition, these financial liabilities are
measured at amortised cost using the
effective interest method.
Other financial liabilities comprise loans
and borrowings, refundable rental and other
deposits, bank overdrafts and trade and
other payables.
Bank overdrafts that are repayable on
demand and form an integral part of
the Company’s and the Group’s cash
management are included as a component
of cash and cash equivalents for the
statement of cash flows.
Stated Capital
Ordinary Shares
Ordinary shares are classified as equity. Costs
attributable to the issue of ordinary shares
are recognised as an expense.
1.7 Assets and Bases
of Their Valuation
1.7.1 Property, Plant & Equipment Owned Assets
1.7.1.1 All items of Property, Plant &
Equipment are initially recorded at cost.
Where items of Property, Plant & Equipment
are subsequently revalued, the entire class
of such assets is revalued. Revaluations are
made with sufficient regularity to ensure
that their carrying amounts do not differ
materially from their fair values at the
Reporting Date. Revaluation of Property,
Plant & Equipment are undertaken by
professionally qualified valuers.
Subsequent to the initial recognition of
the asset at cost, the revalued Property,
Plant & Equipment are carried at revalued
amounts less accumulated depreciation
thereon and accumulated impairment losses.
Revaluation of Property, Plant & Equipment
are undertaken by professionally-qualified
valuers.
Revaluation model is applied for buildings
on leasehold land by the Company and
the Board has decided to revalue the said
buildings every 3-5 years thereafter to comply
with requirement of Revaluation Model under
the Sri Lanka Accounting Standard
(LKAS) 16 – ‘Property, Plant & Equipment’.
Property, Plant & Equipment other than the
buildings on leasehold land are recorded
at cost less accumulated depreciation
and accumulated impairment losses, in
accordance with the ‘Cost Model’ as set out
in LKAS 16 – ‘Property, Plant & Equipment’.
1.7.1.2 The cost of an item of Property,
Plant & Equipment comprises its purchase
price and any directly attributable costs of
bringing the asset to working condition for
its intended use.
1.7.1.3 Expenditure incurred for the purpose
of acquiring, extending or improving assets
of a permanent nature by means of which
to carry on the business or to increase the
earning of the business has been treated as
capital expenditure.
The corresponding principal amount payable
to the lessor is shown as a liability. Lease
payments are apportioned between the
finance charges and reduction of the lease
liability so as to achieve balance of the
liability. The interest payable over the period
of the lease is transferred to an interest in
suspense account. The interest element
of the rental obligations pertaining to each
financial year is charged to the Statement
of Comprehensive Income over the period
of lease. The cost of improvements to
leasehold property is capitalised, disclosed
as leasehold improvements and depreciated
over the unexpired period of the lease or the
estimated useful life of the improvements,
whichever is shorter.
1.7.3 Leasehold Right Over Land
Leasehold right over land are amortised over
the lease term in accordance with the pattern
of benefits provided.
1.7.1.4 Depreciation is provided on the
straight-line method at the following rates
per annum, so as to write-off the cost or
revaluation of the assets over its effective
useful life:
1.7.4 Investment Property
1.7.1.5 The useful life, depreciating methods
and residual values are assessed annually
or in an earlier date where any circumstance
indicates such assessment is required.
Category
Rate
Leasehold Property
Over the lease period
Buildings Leasehold Land Over 60 years
Investment property is property held either to
earn rental income or for capital appreciation
or for both, but not for sale in the ordinary
course of business, use in the production
or supply of goods or services or for
administrative purposes.
Investment property is measured at cost.
When the use of a property changes such
that it is reclassified as property, plant and
equipment, its carrying value at the date
of reclassification becomes its cost for
subsequent accounting.
Fixtures and Fittings
10%
Plant and Machinery
20%
Hospital Equipment
10%
Medical Equipment
10%
Motor Vehicles
20%
1.7.5 Investments
Furniture and Fittings
10%
1.7.5.1 Long-Term Investments
Computer Equipment
25%
In the Parent Company’s Financial
Statements, the investments in unquoted
subsidiaries and joint venture are carried
at cost. The Carrying amounts of long-term
investments are reduced to recognise a
decline which is considered other than
temporary, in the value of investments,
determined on an individual investment basis.
In the Company’s Financial Statements,
investments in subsidiaries and joint ventures
have been accounted for at cost, net of any
impairment losses which are charged to the
Statement of Comprehensive Income.
Depreciation is provided from the date of
available for use up to the date of disposal.
1.7.2 Property, Plant & Equipment Leased Assets
Property, Plant & Equipment on finance
leases, which effectively transfer to the
Company substantially all risks and benefits
incidental to ownership of the leased items,
are capitalised and disclosed as finance
leases at their cash price and depreciated
over the period the Group is expected to
benefit from the use of the leased assets.
1.7.6 Inventories
ii. Non-Financial Assets
1.8.3 Employee Benefits
Inventories have been valued at lower of cost
and net realisable value after making due
allowance for obsolete items. The First-In
First-Out (FIFO) basis is adopted to arrive at
the cost of inventories.
The carrying amounts of the Company’s and
the Group’s non-financial assets, other than
inventories are reviewed at each Reporting
Date to determine such indication exists,
and then the asset’s recoverable amount is
estimated. An impairment loss is recognised
if the carrying amount of an asset or
cash-generating unit (CGU) exceeds its
recoverable amount.
1.8.3.1 Defined Benefit Plan –
Employee Benefits
1.7.7 Impairment
i. Non-Derivative Financial Assets
Financial assets classified as ‘loans and
receivables’ are assessed at each Reporting
Date to determine whether there is objective
evidence that it is impaired. A financial asset
is impaired if there is objective evidence of
impairment as a result of one or more events
that occurred after the initial recognition
of the asset and that loss event(s) had an
impact on the estimated future cash flows of
that asset that can be estimated reliably.
Objective evidence that financial assets are
impaired includes default or delinquency by a
debtor, restructuring of an amount due to the
Company and the Group on terms that the
Company and the Group would not consider
otherwise, indications that a debtor or issuer
will enter bankruptcy, adverse changes in
the payment status of borrowers or issuers,
economic conditions that correlate with
defaults or the disappearance of an active
market for a security.
Financial Assets Measured at
Amortised Cost
The Company and the Group considers
evidence of impairment for financial assets
measured at amortised cost (loans and
receivables and held-to-maturity financial
assets) on specific assets. Accordingly, all
individually significant assets are assessed
for specific impairment. An impairment loss
in respect of financial asset measured at
amortised cost is calculated as the difference
between its carrying amount and the present
value of the estimated future cash flows
discounted at the asset’s original effective
interest rate. Losses are recognised in
profit or loss and reflected in an allowance
account against loans and receivables or
held-to-maturity investment securities.
Interest on the impaired asset continues
to be recognised. When an event occurring
after the impairment was recognised causes
the amount of impairment loss to decrease,
the decrease in impairment loss is reversed
through profit or loss.
The liability recognised in the Statement
of Financial Position in respect of defined
benefit plan is the present value of the
defined benefit obligation at the Reporting
Date. Benefits falling due more than 12
months after the Reporting Date are
discounted to present value. The defined
benefit obligation is calculated annually by
Independent Actuaries using Projected Unit
Credit (PUC) method as recommended by
LKAS 19 – ‘Employee Benefits’.
The recoverable amount of an asset or CGU
is the greater of its value in use and its fair
value less costs to sell. In assessing value
in use, the estimated future cash flows are
discounted to their present value using a
pre-tax discount rate that reflects current
market assessments of the asset or CGU.
For impairment testing, assets are grouped
together into the smallest group of assets
that generates cash inflows from continuing
use that are largely independent of the cash
inflows of other assets or CGUs.
Actuarial gains and losses in the period in
which they occur have been recognised in the
Statement of Other Comprehensive Income.
The assumptions based on which the results
of the actuarial valuation was determined,
are included in Note 15 to the Financial
Statements.
Impairment losses are recognised in profit or
loss. Impairment losses recognised in respect
of CGUs are allocated to reduce the carrying
amounts of the assets in the CGU (group of
CGUs) on a pro rata basis.
An impairment loss is reversed only to the
extent that the asset’s carrying amount does
not exceed the carrying amount that would
have been determined, net of depreciation or
amortisation, if no impairment loss had been
recognised.
1.8 Liabilities and Provisions
However, under the Payments of Gratuity Act
No. 12 of 1983, the liability to an employee
arises only on completion of five years of
continued service.
The Company is liable to pay gratuity in terms
of the relevant statute.
The Gratuity liability is not externally funded.
1.8.1 Liabilities
1.8.1.1 Liabilities classified as Current
Liabilities in the Statement of Financial
Position are those, which will fall due for
payment on demand or within one year from
the Reporting Date.
1.8.1.2 Liabilities classified as Non-Current
Liabilities in the Statement of Financial Position
are those, which will fall due for payment after
one year from the Reporting Date.
1.8.2 Provisions
Provisions are recognised when the Company
has a legal or constructive obligation as a
result of past events and it is probable that an
outflow of economic benefits will be required
to settle the obligation.
Gratuity liability was computed from the first
year of service for all employees in conformity
with Sri Lanka Accounting Standard
(LKAS) 19 – ‘Employee Benefits’.
Defined Contribution Plan
Employees’ Provident Fund and Employees’
Trust Fund is a post-employment benefit plan
under which an entity pays fixed contribution
into a separate entity and will have no legal or
constructive obligation to pay further amounts.
All the employees who are eligible for
Employees’ Provident Fund and Employees’
Trust Fund are covered by relevant
contribution funds in line with the respective
statutes. Employer’s contribution to the
defined contribution plans are recognised
as an expense in the Statement of
Comprehensive Income when incurred.
1.9 Statement of
Comprehensive Income
1.9.1 Revenue Recognition
Revenue is recognised to the extent that it
is probable that the economic benefits will
flow to the Group and the revenue can be
reliably measured. Accordingly, hospital and
pharmaceutical revenue is recognised at the
point of delivering the service. However, the
professional fees of medical specialists which
are collected by the Group do not form part of
revenue are excluded from the revenue.
1.9.2 Other Income
Other income comprises gain on disposal of
Property, Plant & Equipment, dividend income,
interest income and rental income. Net gains
and losses of a revenue nature resulting from
the disposal of Property, Plant & Equipment
have been accounted for in the Statement
of Comprehensive Income. Dividend
income is recognised in the Statement of
Comprehensive Income on the date that the
Company’s and the Group’s right to receive
payment is established, which in the case of
quoted securities is normally thee x-dividend
date. Interest income and rental income are
accounted on accrued basis in the Statement
of Comprehensive Income.
1.9.3 Expenditure
All expenditure incurred in the running of the
business and in maintaining the Property,
Plant & Equipment in a state of efficiency has
been charged to revenue in arriving at the
profit/loss for the year.
1.9.4 Borrowing Costs
Borrowing costs are recognised as an
expense in the period in which they are
incurred, except to the extent where
borrowing costs are directly attributable to
the acquisition, construction or production
of Property, Plant & Equipment, that takes
a substantial period of time to get ready for
its intended use or sale and are capitalised
as part of that asset during the period of
construction/development.
on the profit for the year adjusted for taxation
purposes in accordance with the provisions
of the Inland Revenue Act No. 10 of 2006, as
amended by subsequent legislation.
a. The Company is liable for income tax at
the rate of 12% (2014/15 – 12%) on the
taxable profits.
b. New Nawaloka Hospitals (Pvt) Ltd. is
liable for income tax at the rate of 12% on
the taxable profits (2014/15 – 2% based
on its turnover).
c. New Nawaloka Medical Centre (Pvt) Ltd.
is exempt from income tax for a period
of ten years commencing from year of
assessment 2008/09 in terms of the
agreement entered into with the Board
of Investment (BOI) of Sri Lanka.
d. Nawaloka Metropolis Laboratories (Pvt)
Ltd. (‘Joint Venture’), is liable for taxation
at the rate of 12% (2014/15 – 12%).
e. Nawaloka Medicare (Pvt) Ltd. is exempt
from income tax for a period of six year
started from where profit making financial
year or after loss-making two years
whichever is earlier.
f. Income on other sources is liable for
taxation at the rate of 28%
(2014/15 – 28%).
1.9.5.2 Deferred Tax
Deferred tax is recognised in respect of
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes and the amounts used for
taxation purposes.
Deferred tax is not recognised for:
zztemporary
differences on the initial
recognition of assets or liabilities in
a transaction that is not a business
combination and that affects neither
accounting nor taxable profit or loss;
zztemporary
differences related to
investments in subsidiaries, associates and
jointly controlled entities to the extent that
the Group is able to control the timing of
the reversal of the temporary differences
and it is probable that they will not reverse
in the foreseeable future; and
1.9.5 Income Tax Expenses
1.9.5.1 Current Taxation
Company’s tax expense is made up with
current taxation and deferred tax gain or loss
during the year. Provision for taxation is based
The measurement of deferred tax reflects
the tax consequences that would follow the
manner in which the Company and the Group
expects, at the end of the Reporting Period,
to recover or settle the carrying amount of its
assets and liabilities. For investment property
that is measured at fair value, the resumption
that the carrying amount of the investment
property will be recovered through sale has
not been rebutted.
Deferred tax is measured at the tax rates
that are expected to be applied to temporary
differences when they reverse, using tax
rates enacted or substantively enacted at the
Reporting Date.
Deferred tax assets and liabilities are offset
if there is a legally enforceable right to
offset current tax liabilities and assets and
they relate to taxes levied by the same tax
authority on the same taxable entity, or on
different tax entities, but they intend to settle
current tax liabilities and assets on a net
basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for
unused tax losses, tax credits and deductible
temporary differences to the extent that it is
probable that future taxable profits will be
available against which they can be utilised.
Deferred tax assets are reviewed at each
Reporting Date and are reduced to the extent
that it is no longer probable that the related
tax benefit will be realised, based on the level
of future taxable profit forecasts and tax
planning strategies.
1.9.5.3 Tax Exposures
In determining the amount of current and
deferred tax, the Company and the Group
takes into account the impact of uncertain
tax positions and whether additional taxes
and interest may be due. This assessment
relies on estimates and assumptions and
may involve a series of judgments about
future events. New information may become
available that causes the Company to change
its judgment regarding the adequacy of
existing tax liabilities; such changes to tax
liabilities will impact tax expense in the period
that such a determination is made.
1.9.5.4 Withholding Tax on Dividends
Distributed by Subsidiaries and Joint
Venture Company
Dividend distributed out of taxable profit of
the subsidiaries and joint venture company
attracts a 10% deduction at source and is not
available for set off against the tax liability
of the Company. Accordingly, the withholding
tax deducted at source is added to the tax
expense of the subsidiary companies and
joint venture company in the Group Financial
Statements as a consolidation adjustment.
1.10 Contingent Liabilities and
Contingent Assets
A contingent liability is a possible obligation
that arises from paste vents whose existence
will be confirmed by the occurrence or
non-occurrence of one or more uncertain
future events beyond the control of the
Company and the Group or a present
obligation that is not recognised because it
is not probable that an outflow of resources
will be required to settle the obligation. A
contingent liability also arises in extremely
rare cases where there is a liability that
cannot be recognised because it cannot
be measured reliably. The Company and
the Group does not recognise a contingent
liability but discloses its existence in the
Financial Statements. A contingent asset is
a possible asset that arises from past events
whose existence will be confirmed by the
occurrence or non-occurrence of one or more
uncertain future events beyond the control of
the Company and the Group. The Company
and the Group does not recognise contingent
assets but discloses its existence where
inflows of economic benefits are probable,
but not virtually certain. In the acquisition of
subsidiaries by the Group under business
combinations, contingent liabilities assume
dare measured initially at their fair value at
the acquisition date, irrespective of the extent
of any minority interest.
1.11 Related Party Transactions
Disclosure has been made in respect of
the transactions in which one party has
the ability to control or exercise significant
influence over the financial and operating
policies/decisions of the other, irrespective
of whether a price is charged.
1.12 Events after the
Reporting Date
Events after the Reporting Date are those
events favorable and unfavorable that occur
between the Reporting Date and the date
when the Financial Statements are authorised
for issue.
1.17 Cash Flow Statement
All material and important events which
occur after the Reporting Date have been
considered and disclosed in Note 32.
1.17.1 The Cash Flow Statement has
1.13 Earnings Per Share
The Company and the Group presents
basic earnings per share (EPS) data for its
ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to
ordinary shareholders of the Company by the
weighted average number of ordinary shares
outstanding during the period.
1.14 Dividends on Ordinary Shares
Dividends on ordinary shares are recognised
as a liability and deducted from equity
when they are approved by the Company’s
shareholders. Interim dividends are deducted
from equity when they are declared and are
no longer at the discretion of the Company.
1.15 Presentation
Assets and liabilities are grouped by nature
and listed in an order that reflects their
relative liquidity and maturity pattern.
Where appropriate, the significant accounting
policies are disclosed in the succeeding
notes.
(a) Offsetting Income and Expenses
Income and expenses are not offset
unless required or permitted by accounting
standards.
1.17.2 Interest paid is classified as operating
cash flows, while interest received is classified
as investing cash flows, for the purpose of
presentation of the Cash Flow Statement,
reported based on the indirect method.
1.18 Determination of Fair Values
A number of the Company’s and the Group’s
accounting policies and disclosures require
the determination of fair value, for both
financial and non-financial assets and
liabilities. Fair values have been determined
for measurement and/or disclosure purposes
based on the following methods. Where
applicable, further information about the
assumptions made in determining fair values
is disclosed in the notes specific to that asset
or liability. When measuring the fair value of
an asset or liability the Group uses market
observable data as far as possible. Fair values
are categorised into different levels in a fair
value hierarchy based on the inputs used in
the valuation techniques as follows:
zzLevel
(b) Offsetting Assets and Liabilities
Assets and liabilities are offset and the net
amount reported in the Statement of Financial
Position only where there is;
zza
current enforceable legal right to offset
the asset and the liability; and
1– Quoted prices (Unadjusted) in
active markets for identifiable assets and
liabilities.
zzLevel
2 – Inputs other than quoted prices
included in Level 1 that are observable
from the asset or liability either directly
(as Prices) or indirectly (derived prices).
zzLevel
3 – Inputs from the asset or liability
that are not based on observable market
data (unobservable inputs).
zzan
intention to settle the liability
simultaneously
1.16 Segmental Information
A segment is a distinguishable component
of an enterprise that is engaged in either
providing products or services (Business
segment) or in providing products or services
within a particular economic environment
(Geographical segment), which is subject to
risk and rewards that are different from those
of other segments. However, there are no
distinguishable components to be identified
as segments for the Group.
been prepared using the indirect method
in accordance with Sri Lanka Accounting
Standard (LKAS) 7 – ‘Statement of Cash
Flows’. Cash and cash equivalents consist
of cash in hand and at banks and short-term
highly liquid investments, readily convertible
to loan amounts net of outstanding bank
overdrafts.
If the inputs used to measure the fair
value of an asset or a liability might be
categorised in different levels of the fair value
hierarchy, then the fair value measurement
is categorised in its entirety in the same
level of the fair value hierarchy as the lowest
level input that is significant to the entire
measurement.
(a) Property, Plant & Equipment
The fair value of Property, Plant & Equipment
recognised as a result of a business
combination is the estimated amount for
which property could be exchanged on the
acquisition date between a willing buyer and
a willing seller in an arm’s length transaction
after proper marketing wherein the parties
had each acted knowledgeably. The fair
value of items of plant, equipment, fixtures
and fittings is based on the market approach
and cost approaches using quoted market
prices for similar items when available
and depreciated replacement cost when
appropriate. Depreciated replacement cost
reflects adjustments for physical deterioration
as well as functional and economic
obsolescence.
(b) Inventories
The fair value of inventories acquired in a
business combination is determined based
on the estimated selling price in the ordinary
course of business less the estimated costs
of completion and sale and a reasonable
profit margin based on the effort required to
complete and sell the inventories.
(c) Trade and Other Receivables
The fair values of trade and other receivables,
excluding construction work-in-progress,
are estimated at the present value of future
cash flows, discounted at the market rate of
interest at the measurement date. Short-term
receivables with no stated interest rate are
measured at the original invoice amount if
the effect of discounting is immaterial. Fair
value is determined at initial recognition
and, for disclosure purposes, at each annual
Reporting Date.
(d) Other Non-Derivative Financial
Liabilities
SLFRS 9 – Financial Instruments
Other non-derivative financial liabilities are
measured at fair value, at initial recognition
and for disclosure purposes, at each
Reporting Date. Fair value is calculated based
on the present value of future principal and
interest cash flows, discounted at the market
rate of interest at the measurement date.
SLFRS 9 – ‘Financial Instruments’ replaces
the existing guidance in LKAS 39 – ‘Financial
Instruments: Recognition and Measurement’.
SLFRS 9 includes revised guidance on the
classification and measurement of financial
instruments including a new expected credit
loss model for calculating impairment on
financial assets.
For finance leases the market rate of interest
is determined with reference to similar lease
agreements.
SLFRS 9 is effective for annual period
beginning on or after 1st January 2018
with early adoption permitted.
(e) Contingent Consideration
SLFRS 15 – Revenue Recognition from
Customer Contracts
The fair value of contingent consideration
arising in a business combination is
calculated using the income approach based
on the expected payment amounts and their
associated probabilities. When appropriate,
it is discounted to present value.
1.19 New Accounting Standards
Issued But Not Effective as at
Reporting Date
The Institute of Chartered Accountants of
Sri Lanka has issued the following new
Sri Lanka Accounting Standards which will
become applicable for financial periods
beginning on or after 1st January 2018.
Accordingly, the Group has not applied the
following new standards in preparing these
Consolidated Financial Statements.
SLFRS 15 – ‘Revenue from Contracts with
Customers’ establishes a comprehensive
framework for determining whether, how
much and when revenue is recognised.
It replaces existing revenue recognition
guidance LKAS 18 – ‘Revenue’ – LKAS 11
– ‘Construction Contracts’.
SLFRS 15 is effective for annual reporting
period beginning on or after 1st January
2018, with early adoption permitted.
The Group is assessing the potential impact
on its Consolidated Financial Statements
resulting from the above standards.
2. Property, Plant & Equipment
2.1 Group
Freehold
Land
Rs.
Buildings
Constructed
on Leasehold
Land
Rs.
Balance as at
01st April 2014
42,188,000
2,644,392,467
1,000,576
254,036,428
54,001,945
264,919,376
273,329,654
2,986,823,915
96,544,443
60,078,507
6,677,315,311
Additions
192,417,100
694,915,637
49,395,728
103,035,721
49,567,259
53,331,742
120,122,651
574,031,683
42,955,019
37,282,636
1,917,055,176
Disposal
Balance as at
31st March 2015
–
234,605,100
Additions
–
Disposal
–
Balance as at
31st March 2016
234,605,100
–
Work-inProgress
Fixture and
Fittings
Plant and
Machinery
Motor
Vehicles
Hospital
Equipment
Medical
Equipment
Computer
Equipment
Furniture and
Fittings
Total
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
–
–
–
(15,153,382)
–
(80,472,624)
–
–
(95,626,006)
3,339,308,104
50,396,304
357,072,149
103,569,204
303,097,736
393,452,305
3,480,382,974
139,499,462
97,361,143
8,498,744,481
102,951,698
2,150,580,057
54,232,632
146,619
54,198,946
17,202,830
235,322,679
22,943,727
14,154,900
2,651,734,088
(14,231,332)
(461,490)
–
3,442,259,802
–
–
2,200,976,361
–
–
411,304,781
103,715,823
343,065,350
410,193,645
3,715,705,653
–
162,443,189
–
(14,692,822)
111,516,043 11,135,785,747
Accumulated
depreciation
Balance as at
1st April 2014
–
160,433,610
–
149,683,700
54,001,945
163,896,421
140,206,098
1,550,860,102
61,803,136
23,910,158
2,304,795,170
Charge for the year
–
39,043,157
–
20,728,259
3,373,290
52,452,316
24,544,636
230,306,238
16,398,617
8,017,811
394,864,324
Disposals
–
Balance as at
31st March 2015
–
199,476,767
Charge for the year
–
Disposals
–
Balance as at
31st March 2016
–
77,133,018
–
–
–
–
–
(9,977,946)
–
(33,191,286)
170,411,959
57,375,235
206,370,791
34,587,111
8,947,341
30,382,039
29,695,960
(7,316,790)
(57,237)
1,069,598
–
–
–
164,750,734 1,747,975,054
257,169,546
–
–
78,201,753
24,000,433
–
(43,169,232)
31,927,969 2,656,490,262
13,812,186
–
–
476,797,232
(7,374,027)
276,609,785
1,069,598
204,999,070
66,322,576
229,436,040
194,389,457
2,005,144,600
102,202,186
45,740,155
3,125,913,467
Written down value
As at 31st
March 2016
234,605,100
3,165,650,017
2,199,906,763
206,305,711
37,393,247
113,629,310
215,804,188
1,710,561,053
60,241,003
65,775,888
8,009,872,280
As at 31st
March 2015
234,605,100
3,139,831,337
50,396,304
186,660,190
46,193,969
96,726,945
228,701,571
1,732,407,920
61,297,709
65,433,174
5,842,254,219
2.1.1 The buildings constructed on leasehold lands of the Group were revalued at Rs. 2,598.6 Mn. by Mr. P.B. Kalugalagedara, Chartered Valuer in
March 2013 and the value of these assets has been reflected in the Financial Statements at the revalued amounts.
2.1.2 Freehold Land reflects a land extent of 20.2 perches situated at No. 15, Nelson Lane, Kollupitiya, Colombo 03 and a land extent of
1019.1 perches situated at No. 169, Colombo Road, Negombo.
2.1.3 Details of fully depreciated assets in Property, Plant & Equipment are as follows;
Group
Buildings constructed on leasehold land
Fixture and fittings
2016
Rs.
–
76,991,488
Company
2015
Rs.
–
76,991,488
2016
Rs.
–
15,794,731
2015
Rs.
–
15,794,731
54,001,945
54,001,945
11,332,408
11,332,408
149,126,149
149,126,149
110,363,907
110,363,907
Hospital equipment
79,570,688
79,570,688
53,892,194
53,892,194
Medical equipment
Plant and machinery
Motor vehicles
937,380,304
887,738,283
221,366,527
211,963,814
Computer equipment
46,236,973
43,431,654
28,692,203
25,886,884
Furniture and fittings
8,029,881
5,754,751
7,064,782
4,789,652
1,351,337,428
1,296,614,958
448,506,752
434,023,590
2.1.4 There were no restrictions to the title of Property, Plant & Equipment of the Group as at Reporting Date.
2.2 Company
Balance as at
1st April 2014
Freehold
Land
Work-inProgress
Rs.
Plant and
Machinery
Motor
Vehicles
Hospital
Equipment
Medical
Equipment
Computer
Equipment
Furniture and
Fittings
Total
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
11,332,408
–
455,031,912
122,050,869
Additions
–
–
130,679,750
48,259,174
Disposal
–
–
Balance as at
31st March 2015
42,188,000
Fixture and
Fittings
Rs.
Buildings
Constructed
on Leasehold
Land
Rs.
42,188,000
Additions
–
Disposal
–
Balance as at
31st March 2016
42,188,000
–
61,403,714
–
585,711,662
170,310,043
17,399,709
24,907,050
–
61,403,714
–
–
–
206,598,996
195,648,619
2,067,378,344
78,189,306
52,332,458 3,230,750,912
–
48,861,792
62,419,779
331,192,730
16,823,809
15,380,416
–
(15,153,382)
11,332,408
240,307,406
–
34,175,940
–
(12,438,332)
–
(80,472,624)
258,068,398 2,318,098,450
12,422,420
–
133,504,885
–
653,617,450
(95,626,006)
95,013,115
67,712,874
3,788,742,356
17,446,319
4,967,886
306,227,923
–
270,490,818 2,451,603,335
–
–
112,459,434
–
603,111,371
195,217,093
11,332,408
262,045,014
11,332,408
110,416,302
88,158,194
731,957,539
44,102,858
19,745,246
49,226,750
17,644,208
192,793,820
14,191,598
5,515,523
(12,438,332)
72,680,760 4,082,531,947
Accumulated
Depreciation
Balance as at
1st April 2014
–
–
26,479,016
46,429,910
Charge for the year
–
–
6,997,592
13,407,679
Disposal
–
–
Balance as at
31st March 2015
–
–
33,476,608
59,837,589
Charge for the year
–
–
18,574,088
21,274,233
Disposal
–
–
Balance as at
31st March 2016
–
–
–
–
–
–
–
–
11,332,408
(9,977,946)
–
(33,191,286)
–
149,665,106
105,802,402
891,560,073
58,294,456
–
26,267,603
19,563,705
214,845,566
17,483,335
–
(6,945,019)
11,332,408
168,987,690
–
–
–
75,777,791
299,777,170
(43,169,232)
25,260,769 1,335,229,411
7,251,448
–
125,366,107 1,106,405,639
1,078,621,473
–
325,259,978
(6,945,019)
52,050,696
81,111,822
32,512,217 1,653,544,370
551,060,675
114,105,271
–
93,057,324
145,124,711
1,345,197,696
36,681,643
40,168,543
552,235,054
110,472,454
–
90,642,300
152,265,996
1,426,538,377
36,718,659
42,452,105 2,453,512,945
Net Book Value
As at
31st March 2016
42,188,000
As at
31st March 2015
42,188,000
61,403,714
–
2,428,987,577
2.2.1 The buildings constructed on leasehold lands of the Company were revalued by Mr. P.B. Kalugalagedara, Chartered Valuer in March 2013.
2.2.2 Freehold land with a land extent of 20.2 perches is situated at No. 15, Nelson Lane, Kollupitiya, Colombo 03.
2.2.3 Leasehold period for the three companies is 99 years and remaining leasehold periods as at 31st March 2016 are as follows:
55 years
New Nawaloka Hospitals (Pvt) Ltd.
76 years
New Nawaloka Medical Centre (Pvt) Ltd.
87 years
2.2.4 There were no restrictions to the title of Property, Plant & Equipment of the Company, as at the Reporting Date.
2.3
The leasehold properties with a land extent of 511.80 perches are located in No. 23, Deshamanya H.K. Dharmadasa Mawatha, Colombo 02.
3. Leasehold Right Over Land
Group
As at 31st March
Balance as at beginning of the year
Company
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
227,910,976
230,823,300
49,510,203
50,403,212
(2,935,524)
Amortisation for the year
Balance as at the end of the year
(893,007)
(2,912,324)
224,975,452
227,910,976
(893,009)
48,617,196
49,510,203
4. Investment Property
–
–
192,417,100
192,417,100
–
–
192,417,100
192,417,100
4.1 Investment property reflects a land leased out to Nawaloka Medicare (Pvt) Ltd. by Nawaloka Hospitals PLC on 99-year lease agreement.
Nawaloka Medicare (Pvt) Ltd. commenced its operations during 2014/15.
4.2 The Company has earned rental income of Rs. 1,816,152/- for the year ended 31st March 2016. (2015 – Rs. 587,120/-)
4.3 During the year, Director’s valuation was carried out for the investment properties and market value has not been changed materially over the year.
4.4 No items of investment properties of the Company were pledged as security as at the Reporting Date.
4.5 There were no restrictions to the title of the investment properties of the Company as at the Reporting Date.
4.6 Investment property reflects a land extent of 1,019.1 perches situated at No. 169, Colombo Road, Negombo.
5. Investment in Subsidiaries
Group
As at 31st March
Holding
%
2016
Rs.
Company
2015
Rs.
2016
Rs.
2015
Rs.
100
–
–
245,933,056
245,933,056
100
–
–
1,071,052,320
300,000,000
100
–
–
700,000,000
700,000,000
–
–
2,016,985,376
1,245,933,056
Holding
%
2016
Rs.
2015
Rs.
50
118,230,763
90,241,313
50
2,500,000
2,500,000
6. Equity Accounted Investee – Group
As at 31st March
Investment in Joint Venture – Nawaloka Metropolis Laboratories (Pvt) Ltd.
Equity Accounted Investee – Company
Investment in Joint Venture – Nawaloka Metropolis Laboratories (Pvt) Ltd.
250,000 Ordinary Shares
Nawaloka Metropolis Laboratories (Pvt) Ltd. is a joint venture company between Nawaloka Hospitals PLC and Metropolis Health Services (India)
(Pvt) Ltd. a company incorporated in India. Nawaloka Metropolis Laboratories (Pvt) Ltd. was incorporated to provide laboratory services in
Sri Lanka. The summarised financial information of the Group’s investment in Nawaloka Metropolis Laboratories (Pvt) Ltd. is given below:
6.1 Share of the Joint Venture’s Statement of Financial Position
Group
2016
Rs.
2015
Rs.
60,500,956
69,577,464
Current assets
117,282,100
104,297,476
Non-current liabilities
(11,861,134)
(11,476,877)
Current liabilities
(47,691,159)
(72,156,750)
Net assets
118,230,763
90,241,313
368,583,777
324,011,505
(153,899,026)
(138,507,042)
214,684,751
185,504,463
3,441,807
1,045,251
As at 31st March
Non-current assets
6.2 Share of Joint Venture’s Revenue and Profit
Revenue
Cost of services
Gross profit
Other income
Expenses
Profit before tax
(157,201,306)
(153,030,721)
60,925,252
33,518,993
Income tax expenses
(10,564,288)
(4,121,255)
Profit for the year
50,360,964
29,397,738
128,487
(3,192,982)
Total comprehensive income for the year
50,489,451
26,204,756
Dividend
(22,500,000)
(12,500,000)
27,989,451
13,704,756
6.3 SLFRS 11 replaces LKAS 31 – ‘Interest in Joint Ventures’ and SIC on Jointly Controlled Entities (JCEs) and non-monetary contributions by
ventures. SLFRS 11 removes the option to account for JCEs using proportionate consolidation. Instead JCEs that need the definition of a joint
venture must be accounted for using equity method of accounting.
The application of the above standard had an impact on the financial position of the Group. This was due to the proportionate consolidating of the
joint venture being changed to equity accounting. The Group has applied the equity method of accounting in the Financial Year of 2014/15.
7. Advance for Land
Group
As at 31st March
Company
2016
Rs.
2015
Rs.
952,343,085
952,343,085
2016
Rs.
2015
Rs.
–
–
This represents a payment of Rs. 952,343,085/- by New Nawaloka Hospitals (Pvt) Ltd. to Nawaloka Construction Company (Pvt) Ltd. which is a
related party due to common Directorship, to purchase a land.
This land was originally meant for the establishment of a private medical training institution, but due to the delay in obtaining the necessary
approval, the management is now in the process of exploring alternative ways for the property.
Group
As at 31st March
Company
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
8. Inventories
396,204,933
323,268,846
140,407,087
108,995,263
General stocks
14,912,150
12,494,513
5,723,147
5,655,057
(2,000,000)
Pharmaceutical items
–
(2,000,000)
–
409,117,083
335,763,359
144,130,234
114,650,320
465,020,367
352,128,366
289,833,552
231,981,482
9. Trade and Other Receivables
Trade receivables
Provision for bad and doubtful debts
(46,168,101)
418,852,266
(42,295,476)
309,832,890
(39,387,355)
(30,780,511)
250,446,197
201,200,971
ESC recoverable
46,394,997
56,018,804
37,277,411
49,881,774
Other debtors
53,770,909
62,521,841
32,195,405
14,217,272
519,018,172
428,373,535
319,919,013
265,300,017
77,333,650
25,725,038
17,408,157
3,294,863
10. Deposits and Advances
Import control
Staff loans
Pre-payments
Other deposit and advances
3,919,393
3,088,179
2,554,200
1,660,293
46,867,947
61,964,567
46,867,947
57,798,564
64,230,672
53,334,904
57,418,873
49,323,669
192,351,662
144,112,688
124,249,177
112,077,389
11. Receivables from Related Parties
Alcobronz (Pvt) Ltd.
Battaramulla Medical Centre
Dehiwala Medical Centre
East West Marketing (Pvt) Ltd.
5,000,000
–
10,651
20,731,658
–
2,236,943
3,150
–
–
–
1,054,365
2,236,943
10,651
3,150
1,119,377
–
117,965
185,068
117,965
185,068
Kiribathgoda Medical Centre
2,364,551
2,879,310
5,358,496
2,879,310
Karapitiya Medical Centre
5,832,570
–
5,832,570
Panadura Medical Centre
10,353,330
–
10,353,330
–
Sasiri Polysacks (Pvt) Ltd.
3,400,000
–
3,400,000
–
499,164
–
508,859
–
2,797
–
2,797
–
–
403,259
–
Kandana Medical Centre
Kottawa Medical Centre
Moratuwa Medical Centre
Mount Lavinia Medical Centre
–
–
621,932
414,358
621,932
414,358
Nawaloka College of Higher Studies
64,793,701
64,793,700
64,793,701
64,793,700
Nawaloka Construction Company (Pvt) Ltd.
29,181,230
27,494,860
Nawaloka Aviation (Pvt) Ltd.
Nawaloka Guardian International (Pvt) Ltd.
Nawaloka Polysacks (Pvt) Ltd.
Wattala Medical Centre
Nawaloka Hospitals Internationals (Pvt) Ltd.
–
1,806,750
22,429,200
12,207,543
9,707,543
–
17,770,108
699,206,107
–
1,806,750
–
22,429,200
26,429,200
–
–
245,810,857
167,275,655
–
–
1,842,326,479
425,808,401
–
75,000
75,000
26,429,200
–
36,858,853
35,944,835
36,858,853
35,944,835
204,079,352
160,381,424
2,272,862,092
1,434,884,270
131
Group
As at 31st March
Company
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
1,207,388,876
1,207,388,876
1,207,388,876
1,207,388,876
990,872,361
990,872,361
12. Stated Capital
1,409,505,596 ordinary shares
13. Revaluation Reserve
Balance as at 01st April
–
Revaluation during the year
Balance as at 31st March
–
–
990,872,361
990,872,361
–
–
–
–
–
The revaluation reserve relates to revaluation of buildings on leasehold lands and represents the fair value changes of the buildings on leasehold
lands as at the date of revaluation.
Group
As at 31st March
14. Debentures
Company
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
1,484,104,507
1,480,047,383
1,484,104,507
1,480,047,383
During the financial year 2013/14, the Company has issued 15 Mn rated unsecured redeemable debentures at a par value of Rs. 100/- and its allocation is
as follows:
Class
Issue
Coupon
Rate
Listing
Status
Interest Payable
Frequency
Issued
Date
Maturity
Date
%
Quantity
Consideration
Received
Nos.
Rs.
Value as at Comparative
31st March Government
2016 Bonds Rates
Rs.
%
Yield to
Maturity
%
A
Public
14.15
Listed
Quarterly
9/30/2013
9/30/2018
10,427,900
1,042,790,000
1,032,512,184
8.65
B
Public
14.15
Listed
Quarterly
9/30/2013
9/30/2019
2,696,000
269,600,000
266,514,564
11.17
13.33
D
Public
14.35
Listed
Quarterly
9/30/2013
9/30/2021
1,645,500
164,550,000
162,346,275
11.55
11.96
E
Public
14.40
Listed
Quarterly
9/30/2013
9/30/2022
120,000
12,000,000
11,831,829
11.77
12.14
Quarterly
9/30/2013
9/30/2023
110,600
11,060,000
10,899,655
11.80
12.47
15,000,000
1,500,000,000
1,484,104,507
F
Public
14.45
Listed
11.09
14.1 Market Summary
Class
A
B
Highest
Rs.
–
111.80
Lowest
Rs.
–
–
Last Traded
Rs.
–
111.80
Traded
Quantity
Last
Traded Date
–
1,000,000
–
16/11/2015
D
–
–
–
–
–
E
–
–
–
–
–
F
–
–
–
–
–
14.2 Purpose of the Issue
Purpose of the debenture issue was to repay high interest cost borrowings and finance the construction of a building including car park facilities,
channelling, Outpatients Department and Indoor admission facilities.
14.3 Credit Ratings
ICRA (Lanka) Ltd., has reaffirmed Nawaloka Hospitals PLC’s long and short-term corporate credit ratings as SLA – (Stable) which is read as
[SL] A minus (Stable).
Group
Company
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
184,237,790
170,953,704
166,252,434
158,673,474
134,424,735
15. Employee Benefits
The amount recognised in the Statement of Financial Position
Present value of defined benefit obligations
15.1 Movement in the Present Value of
Defined Benefit Obligations (PV DBO)
170,953,704
144,621,538
158,673,474
Current service cost (Note 15.2)
17,186,421
11,412,094
10,456,863
8,262,450
Interest cost (Note 15.2)
16,240,600
14,823,889
15,073,980
14,210,938
309,060
17,481,666
1,354,898
18,820,799
Liability for defined benefit obligation at 1st April
Actuarial (Gain)/Losses on PV DBO (Note 15.3)
Payments made
(20,451,995)
(17,385,483)
(19,306,781)
(17,045,448)
Liability for defined benefit obligation at 31st March
184,237,790
170,953,704
166,252,434
158,673,474
Company service cost
17,186,421
11,412,094
10,456,863
8,262,450
Interest cost
16,240,600
14,823,889
15,073,980
14,210,938
33,427,021
26,235,983
25,530,843
22,473,388
309,060
17,481,666
1,354,898
18,820,799
15.2 Amount Recognised in Income Statement
15.3 Amounts Recognised in
Other Comprehensive Income
Actuarial losses recognised during the year
15.4 Employee Benefits as at 31st March 2016 is calculated based on an actuarial valuation carried out by Mr. Piyal Gunathilaka,
a qualified Actuary.
As recommended by the Sri Lanka Accounting Standard (LKAS) 19 – ‘Employee Benefits’ the Projected Unit Credit (PUC) method has been used
in this valuation.
15.5 Actuarial Assumptions
Retirement age
Discount rate
Salary increment rate
2016
2015
55 Years
55 Years
11.00%
9.50%
8%
8%
15.6 Sensitivity Analysis
Reasonably possible changes at the Reporting Date to one of the relevant actuarial assumptions, holding other assumptions constant, would have
affected the defined benefit obligation by the amounts shown below:
Group
Company
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
1% Increase in discount rate
175,998,868
163,779,249
160,094,126
152,795,905
1% decrease in discount rate
190,361,468
177,144,652
172,964,081
165,079,157
1% increase in salary increment rate
190,152,570
176,950,258
172,778,065
164,901,621
1% decrease in salary increment rate
176,074,128
163,849,284
160,159,514
152,858,312
As at 31st March
15.7 The above provision is not externally funded.
Group
As at 31st March
Company
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
305,060,480
171,569,526
92,347,774
119,113,956
16. Deferred Tax Liability
Deferred tax liability (Other)
Deferred tax liability (Revaluation reserve)
–
56,330,061
–
–
305,060,480
227,899,587
92,347,774
119,113,956
227,899,587
216,762,224
119,113,956
113,517,100
77,160,893
11,137,363
305,060,480
227,899,587
92,347,774
Temporary differences of PPE
414,670,547
303,679,460
199,927,963
187,722,702
Temporary differences of retirement provision on gratuity
(21,980,170)
(19,886,910)
(19,950,292)
(19,040,817)
Tax loss carried forward
(87,629,897)
(55,892,963)
(87,629,897)
(49,567,929)
227,899,587
92,347,774
Originating/(Reversal) during the year (Note 16.2)
(26,766,182)
5,596,856
119,113,956
16.1 Deferred Tax Provision as at the
Year end is Made up as Follows:
Deferred Tax Provision from
305,060,480
119,113,956
16.2 Originating during the Year
Statement of other comprehensive income (Note 16.4)
Statement of comprehensive income (Note 16.3)
(27,860)
(2,500,039)
(162,588)
(2,286,564)
77,188,753
13,637,402
(26,603,594)
7,883,420
77,160,893
11,137,363
(26,766,182)
5,596,856
77,188,753
13,637,402
(26,603,594)
7,883,420
77,188,753
13,637,402
(26,603,594)
7,883,420
16.3 Amount Recognised in Comprehensive Income
Originating during the year
16.4 Amount Recognised in Other Comprehensive Income
Deferred tax Impact on defined benefits plan actuarial losses
(27,860)
(2,500,039)
(162,588)
(2,286,564)
(27,860)
(2,500,039)
(162,588)
(2,286,564)
16.5 Deferred tax has been computed using a tax rate of 12% (2014/15 - 12%).
17. Borrowings
DFCC Bank loan
410,149,446
442,683,700
410,149,446
442,683,700
BOC
304,704,983
379,365,571
304,704,983
379,365,571
Commercial Bank
Sampath Bank PLC
Nations Lanka PLC
Hatton National Bank loans
Borrowings falling due within one year
Borrowings falling due after one year
994,894,896
1,628,417,300
–
681,980,100
988,572,636
681,980,100
67,595,370
59,000,000
67,595,370
59,000,000
199,527,425
48,790,740
125,000,000
3,596,694,050
1,620,415,481
3,515,844,365
(594,325,684)
3,002,368,366
(351,370,388)
1,269,045,093
–
1,628,417,300
(545,401,924)
2,970,442,441
–
1,571,624,741
(311,369,588)
1,260,255,153
17.1 Borrowings
Opening balance as at 1st of April
1,620,415,481
520,056,614
1,571,624,741
520,056,614
Loans obtained during the year
2,828,645,181
1,390,867,211
2,697,409,436
1,252,076,271
Loans paid during the year
Closing balance as at 31st March
(852,366,612)
3,596,694,050
(290,508,344)
1,620,415,481
(753,189,812)
3,515,844,365
(200,508,144)
1,571,624,741
17.2 Details of loans obtained by the Group are set out below:
Financial
Institution
Repayment
Terms
Principal
Rs.
Interest Security
Rate
%
Annual
Repayment
Rs.
Balance as at
31.03.2016
Rs.
82,534,254.00
360,149,446.00
Long-Term Loan
DFCC Bank
59 equal monthly
instalments of
Rs. 7,503,114/-
450,000,000
AWPLR+1.25 Primary concurrent mortgage over
leasehold rights of the land and building
situated at Sir James Peiris Mawatha
and Sugathodaya Mawatha owned
by Nawaloka Hospitals PLC and New
Nawaloka Hospitals (Pvt) Ltd.
Joint and several Guarantees of
Directors Mr. H.K.J. Dharmadasa,
Mr. Ugitha Harshith Dharmadasa and
Mr. Anisha Givantha Dharmadasa.
DFCC Bank
60 equal monthly
instalments of
Rs. 1,666,667/-
100,000,000
AWPLR+1.25 Primary concurrent mortgage over
–
50,000,000.00
leasehold rights of the land and building
situated at Sir James Peiris Mawatha
and Sugathodaya Mawatha owned
by Nawaloka Hospitals PLC and New
Nawaloka Hospitals (Pvt) Ltd.
Joint and several Guarantees of
Directors – Mr. H.K.J. Dharmadasa,
Bank of Ceylon To be repaid in 60 equal
monthly Instalments
363,000,000
Bank of Ceylon 60 equal monthly
instalments of
Rs. 3,166,667/-
190,000,000
Sampath Bank 60 equal monthly
instalments of
Rs. 9,166,667/-
550,000,000
instalments of
Rs. 13,888,889/-
1,000,000,000
instalments of
Rs. 1,083,300
39,000,000
AWPLR+0.5 Joint and several Guarantees of
61,060,584.00
169,531,339.00
38,000,004.00
135,173,643.77
AWPLR+0.5 Joint and several Guarantees of
AWPLR+0.5 Loan Agreement for Rs. 550,000,000/-,
–
550,000,000.00
–
1,000,000,000.00
Corporate Guarantee of Nawaloka
Construction Company (Pvt) Ltd. for
Rs. 550,000,000/-.
AWPLR+0.5 Loan Agreement for
Rs. 1,000,000,000/-.
Assignment over credit card receivables
for Rs. 1,000,000,000/- including the
receivables of the existing hospital
operations and the car park, channelling
centre and new rooms of the proposed
building complex. Corporate Guarantee
of the New Nawaloka Hospitals (Pvt)
Ltd. for Rs. 1 Bn.
AWPLR+0.5 Loan Agreement for Rs. 39,000,000/-
12,999,600.00
18,417,300.00
Primary Mortgage Bond over machinery
for Rs. 39,000,000/Undertaking to mortgage over Machinery.
instalments of
Rs. 6,994,500/-
500,000,000
AWPLR+0.5 Loan Agreement for Rs. 500,000,000/-
–
60,000,000.00
Financial
Institution
Repayment
Terms
Principal
Rs.
1,000,000,000
Commercial
Bank
First 24 months
Rs. 12,500,000, Next 35
months 19,400,000 and
Final Rs. 21,000,000
instalments
Hatton
National Bank
Monthly rollover basis
50,000,000
Hatton
National Bank
Monthly rollover basis
75,000,000
Interest Security
Rate
%
Annual
Repayment
Rs.
Balance as at
31.03.2016
Rs.
–
988,572,636.00
AWPLR+1 Money Market loan
–
50,000,000.00
AWPLR+1 Money Market loan
–
75,000,000.00
AWPLR+0.5 Primary mortgage Bond over
debit and credit card sales for
Rs. 1,200,000,000/- to be executed
over the card sales of the total hospital
operations, Corporate Guarantee from
New Nawaloka Hospitals (Pvt) Ltd. for
Rs. 500,000,000/- to be signed by the
Directors of the Company, Corporate
Guarantee from New Nawaloka Medical
Centre (Pvt) Ltd. for Rs. 500,000,000/to be signed by the Directors of the
Company, General Terms and
Conditions relating to Term Loan for
Rs. 1,000,000,000/- to be signed by
the Directors of the Company.
Hatton
National Bank
60 equal monthly
instalments of
Rs. 3,333,400
200,000,000
AWPLR+1 Join and Several Guarantee of
96,000,800.00
51,203,425.00
2,496,000.00
17,504,000.00
680,000.00
5,820,000.00
H.K.J. Dharmadasa, U.H. Dharmadasa
and A.G. Dharmadasa.
Existing Primary Concurrent
Mortgage Bond for Rs. 390.0 Mn
(HNB – Rs. 260.0 Mn, Seylan –
Rs. 130.0 Mn) over Leasehold Nawaloka
Hospitals premises.
Hatton
National Bank
48 equal monthly
instalments of
Rs. 416,000/-
20,000,000
AWPLR+1 Join and Several Guarantee of
H.K.J. Dharmadasa, U.H. Dharmadasa
and A.G. Dharmadasa.
Existing Primary Concurrent
Rs. 130.0 Mn) over Leasehold land
of Nawaloka Hospitals premises.
Hatton
National Bank
48 equal monthly
instalments of
Rs. 136,000/-
6,500,000
AWPLR+1 Existing Primary Concurrent
Rs. 130.0 Mn) over Leasehold
Nawaloka Hospitals premises.
Bank Over Draft
Financial
Institution
Closing Balance as at
31st March 2016
Rs.
Principal
Rs.
Interest
Rate
%
(249,324,750)
200,000,000
AWPLR+1
(89,217,979)
90,000,000
AWPLR+0.75
1,499,172
50,000,000
AWPLR+1
Security
Hatton National Bank
DFCC Bank
Sampath Bank
Corporate Guarantee of New Nawaloka Hospitals (Pvt) Ltd.
for Rs. 75 Mn.
Joint & several Guarantees of Directors –
Mr. H.K.J. Dharmadasa, Mr. Ugitha Harshith Dharmadasa
and Mr. Anisha Givantha Dharmadasa
Bank overdrafts Agreement for Rs. 50,000,000/-.
Join and Several Guarantee of H.K.J. Dharmadasa,
U.H. Dharmadasa and G.A. Dharmadasa –
Directors of the Company for Rs. 50,000,000/-.
Hatton National Bank
(88,967,841)
100,000,000
AWPLR+1
Existing Primary Concurrent Mortgage Bond for Rs. 390 Mn
(HNB – Rs. 260 Mn, Seylan – Rs. 130 Mn) Over Leasehold
Nawaloka Hospital Premises.
Group
As at 31st March
Company
2016
Rs.
2015
Rs.
116,000,000
124,000,000
2016
Rs.
2015
Rs.
18. Finance Leases
Finance lease liability
–
–
–
108,000,000
116,000,000
–
–
Finance leases payable between 1 to 5 years
40,000,000
40,000,000
–
–
Finance leases payable more than five years
68,000,000
76,000,000
–
–
108,000,000
116,000,000
–
–
124,000,000
132,000,000
–
–
–
–
–
–
Finance leases payable within one year
Finance leases payable after one year
(8,000,000)
–
(8,000,000)
18.1 Finance Leases
Opening balance as at 1st April
Lease paid during the year
Closing balance as at 31st March
(8,000,000)
(8,000,000)
116,000,000
124,000,000
334,144,474
363,785,188
328,819,183
1,718,808
2,362,905
1,718,808
2,362,905
151,096,481
107,220,155
93,843,790
63,844,114
486,959,763
473,368,248
424,381,781
424,320,318
19. Trade Creditors and Other Payables
Trade payables
Doctors payable
Other payables
358,113,299
20. Income Tax Payable
Under/(Over) provision during prior year
2,250,608
(990,683)
24,304,885
–
–
(25,662,263)
–
–
–
Provision for the year
33,020,131
21,193,290
–
Income tax paid during the year
(9,514,418)
(17,585,304)
–
–
24,765,638
2,250,608
–
–
Group
As at 31st March
2016
Rs.
Company
2015
Rs.
2016
Rs.
2015
Rs.
21. Payable to Related Parties
Nawaloka Construction Co. (Pvt) Ltd.
Nawaloka Metropolis Laboratories (Pvt) Ltd.
Battaramulla Medical Centre
Mount Lavinia Medical Centre
–
813,630
14,725,333
12,601,805
209,014
–
–
8,056,987
–
–
661,571
434,119
15,595,918
13,849,554
8,747,060
2016
Rs.
2015
Rs.
2016
Rs.
2015
Rs.
1,821,182,146
Group
For the year ended at 31st March
–
8,747,060
–
434,119
8,491,106
Company
22. Revenue
Hospital revenue
Pharmacy revenue
3,907,597,012
3,162,539,922
1,845,366,168
1,952,621,149
1,439,893,718
987,829,551
676,648,768
5,860,218,161
4,602,433,640
2,833,195,719
2,497,830,914
22,500,000
109,770,335
23. Other Income
Dividend income
–
Savings interest
–
Interest on fixed deposits
Profit on sale of property, plant & equipment
Sundry income
Rent
–
20,343
–
20,343
30,384,641
31,311,710
13,734,180
13,027,295
7,006,687
5,589,564
7,006,687
5,589,564
50,800,087
22,905,323
37,150,282
18,182,695
6,303,825
5,372,631
6,303,825
6,053,688
94,495,240
65,199,571
86,694,974
152,643,920
45,590,061
41,400,675
45,590,061
41,400,675
24. Profit from Operations
The operating profit has been arrived after charging all expenses
including the following:
Emoluments paid to Directors
2,020,000
1,819,000
705,000
635,000
Depreciation and amortisation
479,732,756
397,776,647
326,152,985
300,670,179
Staff costs
404,831,075
Auditors’ remuneration – Audit services
992,907,444
838,604,192
462,458,524
Employees’ Provident Fund
93,534,592
82,674,032
44,891,706
40,141,726
Employees’ Trust Fund
23,390,181
20,668,507
11,230,031
10,035,431
Charge/(Reversal) of provision for bad debts
Provision for employee benefits
Charity and donation
Impairment for other receivable balances
Exchange loss on foreign currency
Provision for Deemed Int. Tax
3,272,625
9,114,875
8,006,844
7,376,592
33,427,021
26,235,983
25,530,843
22,473,388
4,480,289
7,082,114
4,283,789
6,715,114
42,758,125
54,244,933
41,528,139
39,101,201
–
7,830,431
–
–
2,000,000
–
2,000,000
–
26,668,154
–
26,668,154
–
Group
For the year ended at 31st March
2016
Rs.
Company
2015
Rs.
2016
Rs.
2015
Rs.
25. Finance Costs
Overdraft interest
37,848,420
24,041,066
26,030,496
19,143,926
Debenture interest
216,727,641
216,198,471
216,727,641
216,198,471
Lease and loan interest
111,704,749
42,618,062
106,868,737
40,383,815
6,036,551
2,235,230
5,669,039
1,671,468
372,317,361
285,092,829
355,295,913
277,397,680
Bank charges
26. Income Tax Expenses
Income tax on current year profit (Note 26.1)
Under/(over) provision during prior year
(Reversal from)/transfer to deferred taxation (Note 16.3)
Dividend tax on inter-company dividend
33,020,131
(990,684)
77,188,753
20,273,290
–
(25,654,009)
–
13,637,402
–
920,000
109,218,200
–
–
(26,603,594)
7,883,420
–
9,176,683
(26,603,594)
96,647,519
(154,169,093)
–
7,883,420
26.1 Reconciliation of Accounting Profit and Taxable Profit
Profit/(loss) before tax
Other comprehensive income (loss) for the year
Total comprehensive income
Inter-company dividend
Aggregate expenses disallowed for tax
315,252,428
(309,060)
(20,674,648)
314,943,368
75,972,871
–
84,770,335
496,985,267
498,759,885
97,821,426
(1,354,898)
(18,820,799)
(155,523,991)
79,000,627
–
–
416,158,577
412,123,712
(48,512,436)
(109,770,335)
(43,240,867)
(109,770,335)
(516,234,025)
(506,201,970)
(466,781,873)
(493,320,056)
Adjustments for tax losses
254,195,117
116,532,725
254,195,117
116,532,725
Profit exempt from tax
(251,197,109)
(29,216,388)
(4,806,963)
(4,566,673)
Aggregate income not liable for tax
Aggregate deductible expenses for tax
Tax loss utilised during the year
Taxable income for the year
–
–
(4,806,963)
(4,566,673)
245,373,219
126,280,450
–
–
Income tax 12 %
25,753,816
15,153,654
–
–
Income tax 28%
7,266,315
5,119,636
–
–
33,020,131
20,273,290
–
–
423,964,479
311,998,427
26.2 Reconciliation of Tax Losses
Tax losses brought forward
Tax loss utilised during the year
(4,806,963)
(4,566,673)
423,964,479
311,998,427
(4,806,963)
(4,566,673)
Loss for the year of assessment
254,195,117
116,532,725
254,195,117
116,532,725
Tax loss carried forward
673,352,633
423,964,479
673,352,633
423,964,479
27. Earnings/(Loss) Per Share
The Company’s earnings/(loss) per share is based on the profit/(loss) attributable to the ordinary shareholders and the weighted average number
of ordinary shares outstanding during the year.
Group
Profit/(loss) for the year (Rs.)
Weighted average number of ordinary shares in issue during the year
Earnings/(loss) per share (Rs.)
2016
Company
2015
206,034,228
87,470,836
1,409,505,596
1,409,505,596
0.15
0.06
2016
(127,565,499)
1,409,505,596
(0.09)
2015
89,938,006
1,409,505,596
0.06
28. Related Party Transactions
The Company carries out transactions in the ordinary course of its business with parties who are defined as related parties in Sri Lanka Accounting
Standard (LKAS) 24 – ‘Related Party Disclosures’, the details of which are reported below. The pricing applicable to such transactions is based on
the assessment of risk and pricing model of the Company and is comparable with what is applied to transactions between the Company and its
unrelated customers.
28.1 Transactions with Subsidiaries – Company
Name of the Company
New Nawaloka Hospitals
(Pvt) Ltd.
New Nawaloka Medical Centre
(Pvt) Ltd.
100%
Shareholding
2016
Rs. ’000
100%
2015
Rs. ’000
167,276
Opening balance due (to)/from subsidiaries
(5,675)
–
Share issue
100%
2016
Rs. ’000
2015
Rs. ’000
2016
Rs.
2015
Rs.
425,808
352,980
699,207
471,957
(771,052)
(300,000)
–
–
Nawaloka Medicare
(Pvt) Ltd.
–
Provision of services
328,380
(522,102)
302,382
(224,681)
(2,183)
Cost of pharmaceutical and general stores items
723,410
658,800
419,861
215,705
77,505
Drugs income transferred
(121,830)
(124,567)
Fund transfer
(851,425)
160,820
694,275
81,804
14,293
277,287
245,811
167,276
1,842,326
425,808
17,770
699,207
Closing balance due (to)/from subsidiaries
Directors
–
–
86,147
163,816
–
–
Mr. H.K.U.H. Dharmadasa
Mr. A.G. Dharmadasa
Mrs. C.S. Dharmadasa
Mr. A.G. Dharmadasa
Ms. A.G. Dharmadasa
Transactions with subsidiaries are carried out in the ordinary course of the business.
28.2 Transactions with Equity Accounted Investees – Company
Name of the Company
Shareholding
Nawaloka Metropolis
50%
2016
Rs. ’000
2015
Rs. ’000
8,057
(52,269)
Dividend received
(22,500)
(25,000)
Provision of services
(21,610)
Opening balance due (to)/from equity accounted investees
Joint venture company collection transfer
Transfer revenue
Closing balance due (to)/from equity accounted investees
2,081
(355,061)
(278,174)
399,861
361,419
8,747
8,057
Transactions with jointly controlled entities are carried out in the ordinary course of the business. Outstanding current account balances at year end
are unsecured, interest free and settlement occurs in cash.
28.3 Key Management Personnel
According to Sri Lanka Accounting Standard (LKAS) 24 – ‘Related Party Disclosures’, Key Management Personnel, are those having authority and
responsibility for planning, directing and controlling the activities of the entity. Accordingly, the Board of Directors (including Executive and
Non-Executive Directors) of Nawaloka Hospitals PLC have been classified as Key Management Personnel of the Company.
Group
Company
2016
Rs. ’000
2015
Rs. ’000
2016
Rs. ’000
2015
Rs. ’000
45,590
41,401
45,590
41,401
28.3.1 Compensation of Key Management Personnel
Short-term employee benefits
Post employment benefits
–
–
–
–
Other long-term benefits
–
–
–
–
Termination benefits
–
–
–
–
Share based payments
–
–
–
45,590
–
45,590
41,401
41,401
28.4 Transactions with Other Related Entities – Company
Name of the Company
Nawaloka Aviation (Pvt) Ltd.
Nawaloka Medical Centre (Pvt) Ltd.
Relationships
Common Directorship
Common Directorship
Common Directorship
Nawaloka Hospitals Internationals (Pvt) Ltd.
Common Directorship
Nawaloka College of Higher Studies
Common Directorship
Year Opening Balance
Due (to)/from
Rendering of
Services/
Sale of Goods
Rs. ’000
Rs. ’000
Common Directorship
Nawaloka Polysacks Sharjah U.A.E
Common Directorship
Sasiri Polysacks (Pvt) Ltd.
Common Directorship
Koala (Pvt) Ltd.
Common Directorship
Ceyoka ( Pvt) Ltd.
Common Directorship
Ceyoka Engineering ( Pvt) Ltd.
Common Directorship
Sikure Security Services (Pvt) Ltd.
Common Directorship
Nation Lanka Finance PLC
Common Directorship
Nawaloka Petroleum (Pvt) Ltd.
Common Directorship
Sampath Bank PLC
Affiliate of Significant
Shareholder
Fund
Transfer
Closing
Balance
due (to)/from
Rs. ’000
Rs. ’000
2016
9,708
–
–
2,500
12,208
2015
9,396
–
–
312
9,708
2016
414
1,659
2015
138
1,652
–
(1,451)
622
(1,376)
414
13,364
2016
4,870
19,066
–
(10,572)
2015
5,782
16,311
–
(17,223)
4,870
2016
35,945
2,676
(1,762)
36,859
2015
East West Marketing (Pvt) Ltd.
Receiving of
Services/
Purchase of
Goods
Rs. ’000
2016
–
64,794
14,947
–
–
–
–
2015
–
–
2016
–
–
2015
–
–
–
–
–
2016
26,429
(6,723)
20,998
35,945
–
64,794
64,794
64,794
7,842
1,119
–
–
(4,000)
22,429
2015
–
–
–
26,429
26,429
2016
–
–
–
3,400
3,400
2015
–
–
–
2016
(3,515)
(38,983)
–
–
40,861
(1,637)
2015
(2,539)
–
(44,619)
43,643
(3,515)
2016
(36,653)
–
(202,797)
197,859
(41,591)
2015
(31,316)
–
(135,988)
130,651
(36,653)
2016
–
–
(5,767)
5,349
(418)
2015
–
–
2016
(1,100)
2015
2016
2015
137,000
–
–
49
(17,607)
16,218
(1,611)
–
(15,441)
15,952
67,595
–
–
(2,440)
(1,100)
–
(8,595)
59,000
(69,405)
67,595
–
–
2016
–
–
(240)
240
2015
–
–
(387)
387
–
–
(946,437)
(1,628,417)
–
–
(681,980)
(681,980)
2016
2015
(681,980)
–
–
–
The amount payable to Nation Lanka Finance PLC is the remaining balance of the loan taken to acquire the investment property (Note 4) in
2014/15. Outstanding current account balances at year end are unsecured, interest free and settlement occurs in cash.
141
28.5 Non-Recurrent Related Party Transactions
Name of the Company
Relationship
Transaction value
Entered During
2015/16
Rs.
Transaction
as a %
of Equity
Transaction as a %
of Total Assets
Terms and
Conditions
Rationale for
Entering into the
Transaction
Subsidiary
1,088,524,407
64%
18%
Note 28.5.1
Note 28.5.1
Subsidiary
771,052,320
46%
13%
Note 28.5.2
Note 28.5.2
28.5.1 New Nawaloka Medical Centre
(Pvt) Ltd. is a fully owned subsidiary of
the Company which is located next to the
Company and operated as a single business
unit under Nawaloka Hospitals brand name.
Nawaloka Hospitals assist the construction of
multi storied building with car park facilities,
Channelling, Outpatient Department and
Indoor admission facilities adjoining the
existing hospital building of the subsidiary.
Construction of new car park would benefit
to the subsidiary as well as the Company
through allowing more patients to access to
the Company and its subsidiary. Repayment
of the investment would occur after
commencing the operations of the car park
building. Nawaloka Hospitals PLC charges
AWPLR+1% for the funds transferred.
28.5.2 Nawaloka Medicare (Pvt) Ltd.,
fully-owned subsidiary of the Company has
been restructured their balance sheet through
issuing 77,105,232 shares to the Company
by setting of the payable amount to its
Parent Company.
28.6 Recurrent Related Party
Transactions
There were no other recurrent related party
transactions which in aggregate value
exceeds 10% of the consolidated revenue
of the Company according to 31st March
2016 audited Financial Statements, except
the transactions between New Nawaloka
Hospitals (Pvt) Ltd. and New Nawaloka
Medical Centre (Pvt) Ltd. which are fullyowned subsidiaries of the Company. The
two subsidiaries are situated in the same
premises and operate under the Nawaloka
Hospitals brand name with the Company and
therefore revenue and the expenses could
occur mutually. However, the net transactions
value does not exceed the 10% of the
consolidated revenue of the Company.
There were no material contingent
liabilities existed as at 31st March 2016.
32. Events after the
Reporting Date
There are no events that have occurred after
the Reporting Date, which would require
adjustments to, or disclosure in the Financial
Statements.
33. Directors’ Responsibilities
The Board of Directors is responsible for
the preparation and presentation of these
Financial Statements according to the
Sri Lanka Accounting Standards and
29. Changes in Classification
To facilitate comparison, relevant balances
pertaining to the previous year, have been
reclassified to conform to current year’s
classification and presentation.
34. Accounting Classifications
and Fair Values
30. Capital Commitments
Nawaloka Hospitals construct a multistoried
building with car park facilities, Channelling,
Outpatients Department and Indoor
Admission facilities adjoining the existing
hospital building of the subsidiary and
Rs. 1,249,234,452/- those to be invested.
There were no material capital commitments
existed as at 31st March 2016 other than
disclosed above.
31. Contingent Liabilities
The Group do not designate any of its
financial assets/liabilities at fair value, so, a
classification between fair value hierarchy do
not apply.
34.1 Fair Values vs. Carrying Amounts
Fair Value
Through
Profit or Loss
Rs.
31st March 2016
Held-to-Maturity
Rs.
Loans and Available-for-Sale
Receivables
Rs.
Other Financial
Liabilities
Total Carrying
Amount
Fair Value
Rs.
Rs.
Rs.
Rs.
–
–
563,492,145
–
–
563,492,145
563,492,145
–
–
519,018,172
–
–
519,018,172
519,018,172
–
–
1,082,510,317
–
–
1,082,510,317
1,082,510,317
Debentures
–
–
–
–
1,484,104,507
1,484,104,507
1,484,104,507
Borrowings
–
–
–
–
3,596,694,050
3,596,694,050
3,596,694,050
Finance Leases
–
–
–
–
116,000,000
116,000,000
116,000,000
Trade and other payables
–
–
–
–
486,959,763
486,959,763
486,959,763
–
–
–
–
5,683,758,320
5,683,758,320
5,683,758,320
Other Financial
Liabilities
Rs.
Total Carrying
Amount
Rs.
Fair Value
31st March 2015
Fair Value Through Held-to-Maturity
Profit or Loss
Rs.
Rs.
Loans and Available-for-Sale
Receivables
Rs.
Rs.
Rs.
–
–
453,619,833
–
–
453,619,833
453,619,833
–
–
439,343,071
–
–
439,343,071
439,343,071
–
–
892,962,904
–
–
892,962,904
892,962,904
Debentures
–
–
–
–
1,480,047,383
1,480,047,383
1,480,047,383
Borrowings
–
–
–
–
1,620,415,481
1,620,415,481
1,620,415,481
Finance Leases
–
–
–
–
124,000,000
124,000,000
124,000,000
Trade and other payables
–
–
–
–
473,368,248
473,368,248
473,368,248
–
–
–
–
3,697,831,112
3,697,831,112
3,697,831,112
35. Financial Instruments
Risk Management Framework
Financial Risk Management
The Board of Directors has overall
responsibility for the establishment and
oversight of the Group’s risk management
framework.
Overview
The Group has exposure to the following risks
arising from financial instruments:
zzCredit risk
zzLiquidity
zzMarket
risk
risk
This note of presents information about
the Group’s exposure to each of the above
risks, the Company’s objectives, policies and
processes for measuring and managing risk,
and the Groups’ management of capital.
The Group’s risk management policies are
established to identify and analyse the
risk faced by the Group, to set appropriate
risk limits and controls and to monitor risk
and adherence to limits. Risk management
policies and systems are reviewed regularly
to reflect changes in market conditions and
the Group’s activities. The Group, through
its training and management standards and
procedures, aims to develop a disciplined and
constructive control environment in which
all employees understand their roles and
obligations.
The Group Audit Committee monitors the
process through which business risks are
identified for action by the management
and for the Board’s attention, monitors the
effectiveness of the Company’s internal
controls. The Audit Committee is assisted
in its role by Internal Audit. Internal Audit
undertakes both regular and ad hoc reviews
of controls and procedures, the results of
which are reported to the Audit Committee.
Credit Risk
Credit risk is the risk of financial loss to
the Group if a customer or counterparty
to a financial instrument fails to meet its
contractual obligations, and arises principally
from the Group’s receivables from customers
and investment securities.
Exposure to Credit Risk
The carrying amount of the financial assets
represents the maximum credit exposure.
The maximum exposure to credit risk at the
Reporting Date was as follows:
2016
Rs.
2015
Rs.
Trade debtors and
other receivables
519,018,172
428,373,535
Short-term
Investment
427,886,374
415,601,334
(846,836,600)
(593,905,473)
100,067,946
250,069,396
Description
Cash and cash
equivalents
Total
Trade and Other Receivables
The Group’s exposure to credit risk
is influenced mainly by the individual
characteristics of each customer. However,
the management also considers the
demographics of the Group’s customer base,
including the default risk of the industry and
country in which customers operate, as these
factors may have an influence on credit risk.
The Group establishes an allowance for
impairment that represents its estimate of
incurred losses in respect of trade and other
receivables. The main component of this
allowance area specific loss component that
relates to individually significant exposures
and a collective loss component established
for Groups of similar assets in respect of
losses that have been incurred but not yet
identified. The collective loss allowance
is determined based on historical data of
payments statistics for similar financial assets.
The Group maintains the level of its cash
and cash equivalents at an amount in excess
of expected cash outflows on financial
liabilities (other than trade payables) over the
succeeding 60 days. The Group also monitors
the level of expected cash inflows on trade
and other receivables together with expected
cash outflows on trade and other payables.
In addition, the Group maintains Rs. 415 Mn
overdraft facility that is unsecured. Interest
would be payable at market rate.
The disclosure shows net cash flow amounts
for derivatives that are net cash settled and
gross cash inflow and outflow amount for
derivatives that have simultaneous gross cash
settlement. It is not expected that cash flows
included in the maturity analysis would occur
significantly earlier or at significantly different
amount.
Market Risk
Market risk is the risk that changes in market
prices, such as foreign exchange rates,
interest rates and equity prices will affect the
Group’s income or the value of its holdings of
financial instruments. The objective of market
risk management is to manage and control
market risk exposures within acceptable
parameters, while optimising its returns.
Currency Risk
The Group is exposed to currency risk on
receipts, payments and borrowings that are
denominated in a currency other than
Sri Lankan Rupees.
In respect of other monetary assets and
liabilities denominated in foreign currencies,
the Company’s policy is to ensure that its net
exposure is kept to an acceptable level by
buying or selling foreign currencies at spot
rates when necessary to address short-term
imbalances.
Interest Rate Risk
The Company does not account for any
fixed rate financial assets and liabilities
at fair value through profit or loss and the
Company does not designate derivatives as
hedging instruments under a fair value hedge
accounting model. Therefore, a change in
interest rates at the Reporting Date would
not affect profit or loss.
Capital Management
The Board’s policy is to maintain a strong
capital base so as to maintain investor,
creditor and market confidence and to sustain
development of the business. Capital consists
of ordinary shares, retained earnings and
revaluation reserve of the Company. The
Board of Directors monitors the return on
capital as well as the level of dividends to
ordinary shareholders.
The Company’s net debt to adjusted equity
ratio at the Reporting Date was as follows:
Total liabilities
Less: cash
and cash
equivalents
2016
Rs.
2015
Rs.
7,198,582,032
4,758,288,129
563,492,145
464,589,369
Net debt
6,635,089,887
4,293,698,760
Impairment Losses
Total equity
3,994,897,962
3,887,681,839
Trade and other receivable at the Reporting
Date was neither past due nor impaired.
Net debt to
equity ratio
1.66
1.04
Liquidity Risk
Liquidity risk is the risk that the Group will
encounter difficulty in meeting the obligations
associated with its financial liabilities that are
settled by delivering cash or another financial
asset. The Group’s approach to managing
liquidity is to ensure, as far as possible, that
it will always have sufficient liquidity to meet
its liabilities when due, under both normal
and stressed conditions, without incurring
unacceptable losses or risking damage to the
Group’s reputation.
36. Segmental Analysis
District
Revenue
Profit for the year
Total assets
Total liabilities
Colombo
Rs. ’000
Gampaha
Rs. ’000
Total
Rs. ’000
5,384,753,416
475,464,745
5,860,218,161
189,835,689
16,198,539
206,034,228
10,075,482,636
1,117,997,358
11,193,479,994
7,097,290,142
101,291,890
7,198,582,032
Based on geographical analysis.
ANNEXES
INDEPENDENT ASSURANCE REPORT
We have been engaged by the directors of
Nawaloka Hospitals PLC (“the Company”)
to provide reasonable assurance and
limited assurance in respect of the Assured
Sustainability Parameters as identified
below for the year ended 31 March 2016.
The Assured Sustainability Parameters are
included in the Nawaloka Hospitals PLC’s
annual report for the year ended 31 March
2016 (the “Report”).
The Reasonable Assurance Sustainability
Parameters covered by our reasonable
assurance engagement are:
Assured Sustainability Parameters
Highlights (Financial Performance)
Sustainability
Report Page
8
The Limited Assurance Sustainability
Parameters covered by our limited assurance
engagement are:
Limited Assurance
Sustainability Parameters
Sustainability
Report Page
Highlights (Non-Financial
Performance)
9
Stakeholder Relationships
24-26
Information provided on
following stakeholder groups
Financial Capital and Intellectual Capital
Investor Capital
30 - 39
40
Customer Capital
42 - 52
Employee Capital
54 - 63
Business Partner Capital
Social and Environmental Capital
64
66 - 69
Our conclusions:
Our conclusion has been formed on the basis
of, and is subject to, the matters outlined in
this report.
We believe that the evidence we have
obtained is sufficient and appropriate to
provide a basis for our conclusions.
Management is responsible for preventing
and detecting fraud and for identifying and
ensuring that the Company complies with laws
and regulations applicable to its activities.
Reasonable Assurance Sustainability
Parameters
In our opinion, the Reasonable Assurance
Sustainability Parameters, as defined above,
for the year ended 31st March 2016 are, in all
material respects, are prepared and presented
in accordance with the Global Reporting
Initiative (GRI) G4 Content Index Guidelines.
Management is also responsible for ensuring
that staff involved with the preparation and
presentation of the description and Report
are properly trained, information systems are
properly updated and that any changes in
reporting encompass all significant business
units.
Our Responsibility
Limited Assurance
Based on the limited assurance procedures
performed and the evidence obtained, as
described below, nothing has come to our
attention that causes us to believe that the
Limited Assurance Sustainability Parameters,
as defined above, for the year ended 31st
March 2016, have not in all material respects,
been prepared and presented in accordance
with the GRI G4 Content Index Guidelines.
Management’s Responsibility
Management are responsible for the
preparation and presentation of the
Parameters and the Limited Assurance
Sustainability Parameters in accordance with
the GRI G4 Content Index Guidelines.
These responsibilities include establishing
such internal controls as management
determines are necessary to enable the
preparation of the Reasonable Assurance
Sustainability Parameters and the Limited
Assurance Sustainability Parameters that are
free from material misstatement whether due
to fraud or error.
Our responsibility is to express a reasonable
assurance conclusion on the Company’s
preparation and presentation of the
Parameters and a limited assurance
conclusion on the preparation and
presentation of the Limited Assurance
Sustainability Parameters included in the
Report, as defined above.
We conducted our assurance engagement
in accordance with Sri Lanka Standard on
Assurance Engagements SLSAE 3000:
Assurance Engagements other than Audits
or Reviews of Historical Financial Information
(SLSAE 3000) issued by the Institute of
Chartered Accountants of Sri Lanka.
The Firm applies Sri Lanka Standard on
Quality Control 1 and accordingly maintains
a comprehensive system of quality control
including documented policies and
procedures regarding compliance with ethical
requirements, professional standards and
applicable legal and regulatory requirements.
We have complied with the independence
and other ethical requirements of the Code
of Ethics issued by the Institute of Chartered
Accountants of Sri Lanka, which is founded on
fundamental principles of integrity, objectivity,
professional competence and due care,
confidentiality and professional behaviour.
SLSAE 3000 requires that we plan and
perform the engagement to obtain reasonable
assurance about whether the Reasonable
Assurance Sustainability Parameters are
free from material misstatement and limited
assurance about whether the Limited
Assurance Sustainability Parameters are free
from material misstatement.
Reasonable assurance over
Parameters
The procedures selected in our reasonable
assurance engagement depend on our
judgment, including the assessment of
the risks of material misstatement of the
Parameters whether due to fraud or error.
In making those risk assessments, we
have considered internal control relevant
to the preparation and presentation of
the Reasonable Assurance Sustainability
Parameters in order to design assurance
procedures that are appropriate in the
circumstances, but not for the purposes
of expressing a conclusion as to the
effectiveness of the Company’s internal
control over the preparation and presentation
of the Report.
Our engagement also included assessing
the appropriateness of the Reasonable
Assurance Sustainability Parameters, the
suitability of the criteria, being the GRI
G4 Content Index Guidelines, used by
the Company in preparing and presenting
the Reasonable Assurance Sustainability
Parameters within the Sustainability Report,
obtaining an understanding of the compilation
of the financial and non-financial information
to the sources from which it was obtained,
evaluating the reasonableness of estimates
made by the Company, and re-computation of
the calculations of the Reasonable Assurance
Sustainability Parameters.
Limited assurance on the Assured
Our limited assurance engagement on the
Limited Assurance Sustainability Parameters
consisted of making enquiries, primarily of
persons responsible for the preparation of the
Limited Assurance Sustainability Parameters,
and applying analytical and other procedures,
as appropriate. These procedures included:
yy Interviews with senior management and
relevant staff at corporate and selected
site level concerning sustainability strategy
and policies for material issues, and
the implementation of these across the
business;
yy Enquiries of management to gain an
understanding of the Company’s processes
for determining material issues for the
Company’s key stakeholder groups;
yy Enquiries of relevant staff at corporate
and selected site level responsible for
the preparation of the Limited Assurance
Sustainability Parameters;
yy Enquiries about the design and
implementation of the systems and
methods used to collect and report
the Limited Assurance Sustainability
Parameters, including the aggregation of
the reported information;
yy Comparing the Limited Assurance
Sustainability Parameters to relevant
underlying sources on a sample basis
to determine whether all the relevant
information has been appropriately
included in the Report;
yy Reading the Limited Assurance
Sustainability Parameters presented in
the Report to determine whether they
are in line with our overall knowledge of,
and experience with, the sustainability
performance of the Company;
yy Reading the remainder of the Report
to determine whether there are any
material misstatements of fact or
material inconsistencies based on our
understanding obtained as part of our
assurance engagement.
The procedures performed in a limited
assurance engagement vary in nature and
timing from, and are less in extent than
for, a reasonable assurance engagement,
and consequently the level of assurance
obtained in a limited assurance engagement
is substantially lower than the assurance that
would have been obtained has a reasonable
assurance engagement been performed.
Accordingly, we do not express a reasonable
assurance conclusion on the Limited
Assurance Sustainability Parameters.
Purpose of Our Report
In accordance with the terms of our
engagement, this assurance report has been
prepared for the Company for the purpose of
assisting the Directors in determining whether
the Company’s Reasonable and Limited
Assurance Sustainability Parameters are
prepared and presented in accordance with
the GRI G4 Content Index Guidelines and for
no other purpose or in any other context.
Restriction of Use
of Our Report
Our report should not be regarded as suitable
to be used or relied on by any party wishing
to acquire rights against us other than the
Company, for any purpose or in any other
context. Any party other than the Company
who obtains access to our report or a copy
thereof and chooses to rely on our report
(or any part thereof) will do so at its own
risk. To the fullest extent permitted by law,
we accept or assume no responsibility and
deny any liability to any party other than the
Company for our work, for this independent
assurance report, or for the conclusions we
have reached.
Chartered Accountants
Colombo
25th May 2016
Independent Assurance Report Annexes
GRI CONTENT INDEX
General Standard Disclosures
GRI
Indicator
Description
Page Number/Explanations
External
Assurance
15

157
42
157
119

157
46
12
54
61
64
None
12 and 100

28

28

18
12
28 and 29
12
12
12

12

24
24
25 and 26

25 and 26

12
12
12
12
147
145 - 146

81

Strategy and Analysis
G4-1
Statement from the Chairman
Organisation Profile
G4-3
G4-4
G4-5
G4-6
G4-7
G4-8
G4-9
G4-10
G4-11
G4-12
G4-13
G4-14
G4-15
G4-16
Name of the Organisation
Primary Brands, Products and/or Services
Location of Organisation’s Head Quarters
Number of countries where the Organisation operates and names of countries with either major
operations or that are specifically relevant to the sustainability issues covered in the Report
Nature of ownership and legal form
Markets served
Scale of the Reporting Organisation
Total workforce by employment type, employment contract and region broken down by gender
Percentage of employees covered by collective bargaining agreements
Organisation’s supply chain
Significant changes during the reporting period regarding size, structure or ownership
Explanation of whether and how the precautionary approach or principle is addressed
by the organisation
Externally developed economic, environmental and social charters and principles or
other initiatives to which the organisation subscribes or endorses
Memberships in associations and/or national/international advocacy organisations










Identified Material Aspects and Boundaries
G4-17
G4-18
G4-19
G4-20
G4-21
G4-22
G4-23
Organisation’s entities covered by the report
Process for Defining Report Content
Material Aspects identified for Report Content
Aspect Boundary for identified Material Aspects within the organisation
Aspect Boundary for identified Material Aspects outside the organisation
Explanation of the effect of any restatement of information provided in earlier
reports and the reason for such restatement
Significant changes from previous reporting periods in the Scope, Aspect boundaries
in the Report





Stakeholder Engagement
G4-24
G4-25
G4-26
G4-27
List of stakeholder groups engaged by the Organisation
Basis for identification and selection of stakeholders with whom to engage
Approaches to stakeholder engagement, including frequency of engagement
by type and by stakeholder group
Key topics and concerns raised through stakeholder engagements and how the
Organisation responded to them


Report Profile
G4-28
G4-29
G4-30
G4-31
G4-32
G4-33
Reporting period
Date of most recent previous report
Reporting cycle
Contact point for questions regarding the Report or its Contents
Compliance with GRI G4 Guidelines, GRI Content Index and the External Assurance Report
Policy and current practice with regard to seeking external assurance for the Report





Governance
G4-34
Annexes
Governance Structure of the Organisation, including committees under the highest governance
body responsible for decision-making on economic, environment and social impacts
General Standard Disclosures
GRI
Indicator
Description
External
Assurance
36

External
Assurance
34
34
48


123
34

56
56


67
67


39
39


67
67


67
68


68
68


68

69
69


Ethics and Integrity
G4-56
The values, principles, standards and norms of behaviour
Specific Standard Disclosures
DMA and
Indicators
Material Aspects
Category: Economic
Material Aspect: Economic Performance
G4 - DMA
G4 - EC1
G4 - EC2
G4 - EC3
G4 - EC4
Direct economic value generated, distributed and retained
Financial implications and other risks and opportunities for the organisation’s activities
due to climate change
Coverage of the organisation’s defined plan obligations
Financial assistance received from Government
Material Aspect: Market Presence
G4 - DMA
G4 - EC6
Proportion of senior management hired from the local community at significant locations
of operation
Material Aspect: Indirect Economic Impact
G4 - DMA
G4 - EC8
Significant indirect economic impacts, including the extent of impacts
Material Aspect: Procurement Practices
G4 - DMA
G4 - EC9
Proportion of spending on local suppliers at significant locations of Operations
Category: Environment
Material Aspect: Materials
G4 - DMA
G4 - EN1
Materials used by weight or volume
Material Aspect: Energy
G4 - DMA
G4 - EN6
Reduction of energy consumption
Material Aspect: Water
G4 - DMA
G4 - EN8
Total water withdrawal by source
Material Aspect: Emissions
G4 - DMA
Material Aspect: Effluents and Waste
G4 - DMA
G4 - EN23
Total weight of waste by type and disposal method
GRI Content Index Annexes
DMA and
Indicators
Material Aspects
External
Assurance
54
56


61

56

61
61


62
62


62

56
58
58



57

62
55


Category: Social
Sub-Category: Labour Practices and Decent Work
Material Aspect: Employment
G4 - DMA
G4 - LA1
Total number and rate of new employee hires and employee turnover by age group,
gender and region
G4 - LA2
Benefits provided to full-time employees that are not provided to temporary or part-time
employees by significant locations of operation
G4-LA3
Return to work and retention rates after parental leave by gender
Material Aspect: Labour/Management Relations
G4 - DMA
G4 - LA4
Minimum notice periods regarding operational changes, including whether it is specified in
collective agreements
Material Aspect: Occupational Health and Safety
G4 - DMA
G4 - LA6
G4 - LA7
Type of injury and rates of injury, occupational disease, lost days, and absenteeism,
and total number of work related fatalities, by region and by gender
With high incidence or high risk of diseases related to their occupation
Material Aspect: Training and Education
G4 - DMA
G4 - LA9
G4 - LA10
G4 - LA11
Average hours of training per year per employee by gender and by employee category
Programmes for skills management and lifelong learning that support the continued
employability of employees and assist them in managing career endings
Percentage of employees receiving regular performance and career development reviews
by gender and employee category
Material Aspect: Diversity and Equal Opportunity
G4 - DMA
G4 - LA12
Composition of governance bodies and breakdown of employees per employee category
according to gender, age group, minority group membership and other indicators of diversity
Material Aspect: Equal Remuneration for Women and Men
G4 - DMA
G4 - LA13
Ratio of basic salary and remuneration of women to men by employee category by significant
locations of operation
61

63

61

61

63

63

61

61

Material Aspect: Labour Practices and Grievance Mechanisms
G4 - DMA
G4 - LA16
Number of grievances about labour practices filed, addressed and resolved through formal
grievance mechanisms
Sub-Category: Human Rights
Material Aspect: Non-Discrimination
G4 - DMA
G4 - HR3
Total number of incidents of discrimination and corrective actions taken
Material Aspect: Freedom of Association and Collective Bargaining
G4 - DMA
G4 - HR4
Operations and suppliers identified in which the right to exercise freedom of association and
collective bargaining may be violated or at significant risk and measures taken to support
these rights
Annexes GRI Content Index
DMA and
Indicators
Material Aspects
External
Assurance
63

63

61

61

66

66

52

52

52

52

Material Aspect: Child Labour
G4 - DMA
G4 - HR5
Operations and suppliers identified as having significant risk for incidents of child labour and
measures taken to contribute to the effective abolition of child labour
Material Aspect: Human Rights Grievance Mechanisms
G4 - DMA
G4 - HR12
Number of grievances about human rights impacts filed, addressed and resolved through
formal grievance mechanisms
Sub-Category: Society
Material Aspect: Local Communities
G4 - DMA
G4 - SO1
Percentage of operations with implemented local community engagement, impact
assessments and development programmes
Material Aspect: Anti-Corruption
G4 - DMA
G4 - SO3
Total number and percentage of operations assessed for risks related to corruption and the
significant risks identified
Material Aspect: Anti-competitive Behaviour
G4 - DMA
G4 - SO7
Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices
and their outcomes
Material Aspect: Compliance
G4 - DMA
G4 - SO8
Monetary value of significant fines and total number of non-monetary sanctions for
non-compliance with laws and regulations
67

None

52

Sub-Category: Product Responsibility
Material Aspect: Customer Health and Safety
G4 - DMA
G4 - PR1
Percentage of significant product and service categories for which health and safety impacts
are assessed for improvement
52

G4 - PR2
Total number of incidents of non-compliance with regulations and voluntary codes concerning
the health and safety impacts of products and services
52

51

50

51

Material Aspect: Product and Service Labelling
G4 - DMA
G4 - PR5
Results of surveys measuring customer satisfaction
Material Aspect: Marketing Communications
G4 - DMA
G4 - PR6
Sale of banned or disputed products
51

G4 - PR7
Total number of incidents of non-compliance with regulations and voluntary codes
concerning marketing communications, including advertising, promotion and sponsorship
by type of outcomes
51

51

51

Material Aspect: Customer Privacy
G4 - DMA
G4 - PR8
Total number of substantiated complaints regarding breaches of customer privacy and losses
of customer data
GRI Content Index Annexes
INVESTOR INFORMATION
Top 20 Shareholders as at 31st March 2016
NIC/Company
Reg. No.
Name
1.
2.
Nawaloka Construction Company (Private) Ltd.
3.
Mr. K.D.D. Perera
4.
Employees Provident Fund
5.
Miss. A.G. Dharmadasa
6.
Mrs P. Nanayakkara
7.
MR. D.M. Rajapaksa
8.
Bank of Ceylon A/C Ceybank Unit Trust
9.
Merchant Bank of Sri Lanka Ltd. A/C No. 1
10.
Number
of Shares
%
483122195V
462,736,182
32.83
3836L
441,778,880
31.34
673632793V
344,566,068
24.45
2214L
9,567,443
0.68
795872094V
5,066,686
0.36
787902197V
5,066,666
0.36
473192462V
4,496,400
0.32
543L
4,241,898
0.30
254L
3,800,000
0.27
Mr. V.R. Ramanan
660661026V
3,400,000
0.24
771671446V
3,004,000
0.21
3181L
2,814,932
0.20
2,581,866
0.18
0.18
11.
Mr. A.G. Dharmadasa
12.
Nawaloka Developments (Pvt) Ltd.
13.
Mrs C.S. Dharmadasa
545520016V
14.
Mr. K.S. Warusavitarana
602370461V
2,500,066
15.
Mr. U.H. Palihakkara
430160460V
2,384,498
0.17
16.
Mrs. P. Ganeshan
467131273V
2,200,000
0.16
17.
Mr. L. Hettiarachchi
390310919V
2,087,000
0.15
18.
Mr. H.A. Pieris
330950099V
2,028,883
0.14
19.
Mrs. N.H. Abdul Husein
427692353V
1,947,900
0.14
20.
Tranz Dominion, L.L.C.
6130F
1,712,067
0.12
1,307,981,435
92.80
101,524,161
7.20
1,409,505,596
100.00
No. of Shares
% of Shareholding
Total Shares
Balance
Total No. of Shares
Range of Shareholders
No. of Shareholders
As at 31st March 2016
1 -
500
2,127
334,393
29.84
501 -
5,000
2,655
5,989,456
37.24
5,001 -
10,000
820
6,255,582
11.50
10,001 -
20,000
616
9,469,296
8.64
20,001 -
30,000
305
8,067,889
4.28
30,001 -
40,000
151
5,321,012
2.12
40,001 -
50,000
99
4,704,384
1.39
50,001 -
100,000
167
12,811,209
2.34
100,001 - 1,000,000
165
43,268,002
2.31
24
1,313,284,373
0.34
7,129
1,409,505,596
100.00
1,000,001 &
Total
Annexes
above
151
Composition of Shareholders
No. of Shareholders
as at 31.03.2016
Total
Holding
%
No. of Shareholders
as at 31.03.2015
Total
Holding
%
87
459,279,117
1.22
63
492,039,933
0.85
Category
Institutional Shareholders
Individual Shareholders
7,042
950,226,479
98.78
7,326
917,465,663
99.15
Total
7,129
1,409,505,596
100.00
7,389
1,409,505,596
100.00
14
733,432
0.20
6
315,898
0.08
Resident Shareholders
7,115
1,408,772,164
99.80
7,383
1,409,189,698
99.92
Total
7,129
1,409,505,596
100.00
7,389
1,409,505,596
100.00
Non-Resident Shareholders
Directors Shareholding as at 31st March 2016
Name
No. of Shares
462,736,182
33,332
218,000
601,198
Mr. U.H. Dharmadasa
3,360
Mr. A.G. Dharmadasa
3,004,026
Ms. A.G. Dharmadasa
5,066,686
NIL
NIL
3,400,000
NIL
Investor Information Annexes
Shares held by the Public as at 31st March 2016
In calculating the shares held by the Public as at 31st March 2016, Shares held by the
Directors, their Spouses, shares held by Nawaloka Construction Company (Pvt) Ltd.,
Nawaloka Developments (Private) Ltd., Shares held jointly by Mr. H.K.J. Dharmadasa/Seylan
Bank PLC and shares held by Mr. Victor R. Ramanan and the holders of 10% and more than
10% have been excluded:
Name of the Shareholder (Other than Public)
No. of Shares
462,736,182
33,332
218,000
601,198
Mr. U.H. Dharmadasa
3,360
Mr. A.G. Dharmadasa
3,004,026
Ms. A.G. Dharmadasa
5,066,686
Mrs. C.S. Dharmadasa
2,581,866
Mrs. Prithiva Nanayakkara
5,066,666
Chandula Lasith Perera
Nawaloka Developments (Pvt) Ltd.
13,332
441,778,880
2,814,932
Mr. H.K.U. Dharmadasa
532
Mrs. S.D. Chandrasena
48,000
Estate of Late Deshamanya H.K. Dharmadasa
Mr. Victor R. Ramanan
Mr. K.D.D. Perera
Seylan Bank PLC/Thirugnanasambandar Senthilverl
Total No. of Shares (other than public)
%
Shares held by Public
%
Total No. of Shares
Number of Public Shareholders
Annexes Investor Information
0
3,400,000
0
344,566,068
1,553,253
1,273,486,313
90.35
136,019,283
9.65
1,409,505,596
7,112
TEN YEAR STATISTICAL SUMMARY
2015/16
Group
Income Statement Data
Revenue
Cost of services
Gross profit
Other operating income
Net profit after taxation
Balance Sheet Data
Shareholders’ funds
Financial Ratios
Gross profit ratio (%)
Net profit ratio (%)
Increase in revenue (%)
Return on capital employed (%)
Current asset ratio (%)
Quick asset ratio (%)
Return on assets (%)
Debt/equity ratio (%)
Net assets per share (Rs.)
Dividend per share (Rs.)
Company
Revenue
Cost of services
Gross profit
Other operating income
Net profit after taxation
Balance Sheet Data
Financial Ratios
Gross profit ratio (%)
Net profit ratio (%)
Increase in revenue (%)
Return on capital employed (%)
Current asset ratio (%)
Quick asset ratio (%)
Return on assets (%)
Debt/equity ratio (%)
Dividend per share (Rs.)
2014/15
2013/14
(Restated)
2012/13
2011/12
5,860,218,161
4,602,433,640
3,993,473,302
4,222,907,733
3,710,878,442
(2,906,572,342)
(2,331,583,775)
(1,910,510,751)
(2,013,392,367)
(1,823,670,511)
2,953,645,819
2,270,849,865
2,082,962,551
2,209,515,366
1,887,207,931
94,495,240
65,199,571
64,194,796
44,047,999
30,210,657
637,208,825
352,342,610
475,165,536
599,414,193
459,028,530
206,034,228
87,470,836
208,953,909
452,260,028
270,686,563
3,994,897,962
3,887,681,839
3,902,955,947
3,756,665,160
3,170,442,180
50
49
52
52
51
4
2
5
11
7
27
15
-5
14
15
5
2
5
12
9
0.89
1.03
1.11
0.71
0.58
0.70
0.80
0.85
0.48
0.42
2
1
3
8
5
1.27
0.84
0.58
0.25
0.28
0.19
0.15
0.06
0.15
0.32
2.83
2.76
2.77
2.67
2.25
0.07
0.06
0.05
0.05
0.05
2,112,827,471
2,082,532,459
1,806,857,492
2,833,195,719
2,497,830,914
(1,490,055,615)
(1,229,903,547)
1,343,140,104
1,267,927,367
1,155,289,509
1,094,313,666
930,817,297
86,694,974
152,643,920
132,467,166
116,017,261
124,673,860
201,126,820
375,219,106
291,176,935
313,518,573
226,817,202
(127,565,499)
89,938,006
107,751,965
254,942,375
152,363,098
1,466,336,065
1,693,759,266
1,704,925,831
1,660,056,411
1,496,177,022
47
51
55
53
52
(5)
4
5
12
8
13
18
1
15
12
(9)
(957,537,962)
(988,218,793)
(876,040,195)
5
6
15
10
1.83
1.62
1.12
0.53
0.57
1.75
1.53
1.01
0.48
0.53
2
2
7
5
3.21
1.78
1.20
0.16
0.2
(0.09)
0.06
0.08
0.18
0.11
1.04
1.20
1.21
1.18
1.06
0.07
0.06
0.05
0.05
0.05
(2)
Annexes
2010/11
2009/10
2008/09
2007/08
2006/07
3,233,035,096
2,884,449,093
2,512,350,553
2,244,462,718
1,986,705,514
(1,645,969,580)
(1,442,227,937)
(1,306,238,370)
(1,230,247,634)
(1,088,274,165)
1,587,065,516
1,442,221,156
1,206,112,183
1,014,215,084
38,603,398
19,811,729
10,337,940
8,121,944
9,977,215
324,001,074
415,343,605
294,511,336
270,011,694
223,534,421
1,070,722,130
97,411,122
2,970,230,897
1,903,329,941
1,963,001,143
1,309,669,677
1,405,560,269
49
50
48
45
45
33
3
(4)
(2)
(6)
12
15
12
13
19
(108,502,591)
(6)
(46,557,898)
(113,423,742)
36
5
0.43
0.74
0.62
0.79
1.10
0.29
0.63
0.51
0.68
0.95
24
2
0.23
0.63
0.60
0.66
0.54
(3)
(4)
898,431,350
(2)
(8)
(4)
0.76
0.14
(0.15)
(0.07)
(0.16)
2.11
2.70
2.79
1.86
1.99
–
–
–
0.07
0.05
1,482,115,865
1,411,181,700
1,608,036,836
1,459,181,099
1,607,719,271
(767,116,507)
(747,982,289)
(837,431,514)
(820,592,033)
(830,801,032)
840,920,329
711,198,810
770,287,757
661,523,832
580,380,668
72,280,970
19,388,776
9,247,622
6,524,720
31,850,721
147,845,400
115,917,282
81,389,336
68,802,898
1,460,228
98,822,914
19,315,469
8,694,800
17,939,751
1,460,228
1,414,289,204
1,350,703,926
1,331,388,457
1,330,619,252
1,362,012,195
52
49
48
45
41
6
1
1
1
0
10
(13)
(4)
(11)
12
7
1
1
1
0
0.61
0.92
1.03
0.75
2.53
0.57
0.89
1.00
0.68
2.36
5
1
0
1
0
0.2
0.27
0.29
0.15
0.09
0.07
0.03
0.01
0.03
0.00
1
1.92
1.89
1.89
1.93
0.07
0.05
–
Annexes
–
–
QUARTERLY STATISTICS
(Rs. ’000)
Balance Sheet Data
2015/16
31.03.2016
As at
2014/15
31.12.2015
30.09.2015
30.06.2015
31.03.2015
31.12.2014
30.09.2014
30.06.2014
Total non-current assets
9,305,422
8,074,725
7,473,547
7,256,086
7,112,749
6,959,439
6,582,910
6,485,291
3,994,898
4,007,520
3,912,429
3,945,092
3,887,682
3,938,060
3,891,867
3,949,609
Total
31.03.2016
31.12.2015
30.09.2015
30.06.2015
Total
31.03.2015
31.12.2014
30.09.2014
30.06.2014
Revenue
5,860,218
1,473,316
1,575,942
1,448,821
1,362,139
4,602,434
1,222,277
1,214,044
1,108,272
1,057,841
Gross profit
2,953,646
743,900
789,191
732,248
688,307
2,270,850
598,484
613,495
543,717
515,154
315,252
15,436
135,903
90,003
73,910
96,648
52,193
28,557
46,927
31.03.2016
31.12.2015
30.09.2015
30.06.2015
31.03.2015
31.12.2014
30.09.2014
30.06.2014
3.70
3.70
3.90
3.20
3.50
3.60
3.90
3.50
For the three months ended
Net Profit before tax
(31,029)
Ordinary Share Information
Nominal Value per Share Rs. 1.00
Market Price per Share (Rs.)
High
Low
3.10
3.00
2.90
2.90
2.90
3.00
3.20
3.20
Closing
3.50
3.30
3.60
3.10
2.90
3.30
3.70
3.20
31.03.2016
31.12.2015
30.09.2015
30.06.2015
31.03.2015
31.12.2014
30.09.2014
30.06.2014
Return on shareholders’
funds (%)
0.39
3.39
2.30
1.87
-0.80
1.33
0.73
1.19
2.83
2.84
2.78
2.80
2.76
2.79
2.76
2.80
Financial Measures
Revenue (Rs. Mn)
Net Profit Before Tax (Rs. Mn)
1,750
150
1,400
120
1,050
90
700
60
350
30
0
Jun 15
Sep 15
Dec 15
Mar 16
0
Jun 15
Sep 15
Dec 15
Mar 16
Market Price Per Share (Rs.)
4.00
Highest
Price
3.50
3.00
Closing
Price
2.50
Lowest
Price
2.00
1.50
Jun 15
Sep 15
Dec 15
Mar 16
Annexes
CORPORATE INFORMATION
Name of the Company
Auditors
KPMG,
Chartered Accountants,
No. 32A, Sir Mohamed Macan Markar Mawatha,
Colombo 00 300.
Company Registration No.
PQ 78
Registered Office
No. 23, Deshamanya H.K. Dharmadasa Mawatha,
Colombo 00 200, Sri Lanka.
Telephone
(+94 11) 2544444-56, 2305051-79
Telefax
(+94 11) 2430393
E-mail/Website
[email protected], www.nawaloka.com
Legal Form
Quoted Public Company with limited liability incorporated in
Sri Lanka under the Companies Ordinance 1938 and
reregistered under the Companies Act No. 07 of 2007.
Board of Directors
1. Mr. H.K. Jayantha Dharmadasa (Chairman & CEO)
2. Mr. Rienzie T. Wijetilleke (Vice-Chairman)
3. Professor Lal Chandrasena (Director/General Manager)
4. Deshabandu Tilak de Zoysa
5. Mr. Tissa K. Bandaranayake
6. Mr. U.H. Dharmadasa
7. Mr. A.G. Dharmadasa
8. Ms. A.G. Dharmadasa
9. Mr. D. Sunil AbeyRatna
10. Mr. Palitha Kumarasinghe PC
11. Mr. V. Ramanan
Lawyer(s)
Nithi Murugesu & Associates
Attorneys-at-Law & Notaries Public,
No. 28 (Level 2), W.A.D. Ramanayake Mawatha,
Colombo 00 200.
Mr. H. Chandrakumar de Silva
Attorney-at-Law,
No. 7, Hedges Court,
Colombo 00 100.
Bankers
Hatton National Bank PLC
Sampath Bank PLC
Commercial Bank of Ceylon PLC
Bank of Ceylon
Deutsche Bank
DFCC Bank PLC
Subsidiaries
Joint Venture
Nawaloka Metropolis Laboratories (Pvt) Ltd.
Secretaries to the Company
M & A Company Secretaries (Private) Limited,
No. 28 (Level 2),
W.A.D. Ramanayake Mawatha,
Colombo 00 200.
Annexes
NOTICE OF MEETING
Notice is hereby given that the 27th Annual General Meeting of NAWALOKA HOSPITALS PLC will be held at the Cinema hall of the ‘BMICH’
(Bandaranaike Memorial International Conference Hall) at Bauddhaloka Mawatha, Colombo on Thursday 30th June 2016, at 10.30 a.m. for the
following purposes:
Agenda
1. To receive and consider the Report of the Board of Directors on the Affairs of the Company and the Financial Statements for the year ended
31st March 2016, together with the Report of Auditors thereon;
2. To resolve in terms of Section 211 of the Companies Act No. 07 of 2007 to appoint/reappoint Mr. Rienzie T. Wijetilleke (who is currently 76
years) and who retires at the end of the Annual General Meeting, as a Director until the next Annual General Meeting, notwithstanding him
having exceeded the age of 70 years and to declare that the age limit referred to in Section 210 of the said Act, shall not apply to him and
subject to his rotation;
3. To resolve in terms of Section 211 of the Companies Act No. 07 of 2007 to appoint/reappoint Mr. Tissa K. Bandaranayake (who is currently
73 years) and who retires at the end of the Annual General Meeting, as a Director until the next Annual General Meeting, notwithstanding
him having exceeded the age of 70 years and to declare that the age limit referred to in Section 210 of the said Act, shall not apply to him
and subject to his rotation;
4. To resolve in terms of Section 211 of the Companies Act No. 07 of 2007 to appoint/reappoint Professor Lal Chandrasena (who is currently
70 years) and who retires at the end of the Annual General Meeting, as a Director until the next Annual General Meeting, notwithstanding
him having exceeded the age of 70 years and to declare that the age limit referred to in Section 210 of the said Act, shall not apply to him
and subject to his rotation;
5. To re-elect Directors as follows:
(a) Re-elect, as a Director, in terms of Article 74, Mr. U.H. Dharmadasa who retires by rotation and offers himself for re-election;
(b) Re-elect, as a Director, in terms of Article 74, Ms. A.G. Dharmadasa who retires by rotation and offers himself for re-election;
(c) Re-elect, as a Director, in terms of Article 74, Mr. D. Sunil AbeyRatna who retires by rotation and offers himself for re-election;
(d) Re-elect, as a Director, in terms of Article 81, Mr. Palitha Kumarasinghe PC who retires by rotation and offers himself for re-election;
(e) Re-elect, as a Director, in terms of Article 81, Mr. V.R. Ramanan who retires by rotation and offers himself for re-election.
6. To authorise the Board of Directors to determine and make donations to charities;
7. To reappoint Messrs KPMG (Chartered Accountants) as Auditors of the Company and authorise the Board of Directors to determine their
remuneration; and
8. To transact any other business of which due notice has been given.
Sgd.
M & A Company Secretaries (Pvt) Ltd.
Company Secretaries
25th May 2016
Notes
1. A member is entitled to appoint a proxy to attend and vote instead of him/herself. A proxy need not be a member of the Company. A Form of Proxy
accompanies this Notice.
2. The completed Form of Proxy must be deposited at the Registered Office, No. 23, Deshamanya H.K. Dharmadasa Mawatha, Colombo 02,
Sri Lanka, not later than 10.30 a.m. on 28th June 2016 (Forty-Eight hours prior to the meeting).
3. A person representing a Corporation is required to carry a certified copy of the Resolution authorising him/her to act as the Representative
of the Corporation. A Representative need not be a member.
4. A person representing a shareholder as the Attorney (Power of Attorney) is required to carry the original or a certified copy of the said
Power of Attorney.
5. The Transfer Books of the Company will be kept open.
Annexes
FORM OF PROXY
I/We …………………………………………………………………………………………… (NIC/PP No.) …………………………………………………
of ……………………………………………………………………………………………………………………………………………………………………
being a member/members of NAWALOKA HOSPITALS PLC hereby appoint:
Mr. U.H. Dharmadasa
Mr. A.G. Dharmadasa
Ms. A.G. Dharmadasa
or
or
or
or
or
or
or
or
or
or
or
failing
failing
failing
failing
failing
failing
failing
failing
failing
failing
failing
him
him
him
him
him
him
him
her
him
him
him
as *my/our Proxy to ** …………………………………………… (NIC/ PP No.) ……………………………… vote as indicated hereunder for me*/us
on my*/our behalf at the Annual General Meeting of the Company to be held on Thursday 30th June 2016 at 10.30 a.m. at the Cinema hall of the
‘BMICH’ (Bandaranaike Memorial International Conference Hall) at Bauddhaloka Mawatha, Colombo and at any adjournment thereof and at every
poll which may be taken in consequence thereof.
For
i.
To receive and consider the Report of the Board of Directors on the Affairs of the Company and the Financial Statement for the
year ended 31st March 2016, together with the Report of Auditors thereon;
ii.
To resolve in terms of Section 211 of the Companies Act No. 07 of 2007 to appoint/reappoint Mr. Rienzie T. Wijetilleke (who is
currently 76 years) and who retires at the end of the Annual General Meeting, as a Director until the next Annual General Meeting,
notwithstanding him having exceeded the age of 70 years and to declare that the age limit referred to in Section 210 of the said
Act, shall not apply to him and subject to his rotation;
Against
iii. To resolve in terms of Section 211 of the Companies Act No. 07 of 2007 to appoint/reappoint Mr. Tissa K. Bandaranayake (who is
notwithstanding him having exceeded the age of 70 years and to declare that the age limit referred to in section 210 of the said
iv.
To resolve in terms of Section 211 of the Companies Act No. 07 of 2007 to appoint/reappoint Professor Lal Chandrasena (who is
notwithstanding him having exceeded the age of 70 years and to declare that the age limit referred to in Section 210 of the said
v.
To re-elect Directors as follows:
a. Re-elect, as a Director, in terms of Article 74, Mr. U.H. Dharmadasa who retires by rotation and offers himself for re-election;
b. Re-elect, as a Director, in terms of Article 74, Ms. A.G. Dharmadasa who retires by rotation and offers himself for re-election;
c. Re-elect, as a Director, in terms of Article 74, Mr. D. Sunil AbeyRatna who retires by rotation and offers himself for re-election;
d. Re-elect, as a Director, in terms of Article 81, Mr. Palitha Kumarasinghe PC who retires by rotation and offers himself for re-election;
e. Re-elect as a Director, in terms of Article 81, Mr. V.R. Ramanan who retires by rotation and offers himself for re-election.
vi. To authorise the Board of Directors to determine and make donations to charities;
vii. To reappoint Messrs KPMG (Chartered Accountants) as Auditors of the Company and authorise the Board of Directors to determine
their remuneration; and
viii. To transact any other business of which due Notice has been given.
In witness*my/our hands this …………… day of ……………… Two Thousand and Sixteen.
………………………………………
Signature of Shareholder/s
Note:
a *Please delete the inappropriate words.
b **If you wish your Proxy to speak at the meeting you should interpolate the words ‘Speak and’ in the place indicated with and initial such interpolation.
Instructions as to Completion
1. In terms of Article 40 (a) of the Articles of Association of the Company:
The instrument appointing a proxy shall be in writing and 1. in the case of an individual, shall be signed by the appointer or his Attorney (if signed by the Attorney of the
Company reserves the right to request to be furnished with a copy of the said Power of Attorney); and
2. in the case of a corporation or company shall be either under its common seal or seal or signed by its Attorney
or by an Officer on behalf of the Company.
The Company may, but shall not be bound to, furnish evidence of the authority of any such Attorney or Officer.
A proxy need not be a member of the Company.
2. Kindly perfect the Form of Proxy by filling it legibly with your full name and address and it must be signed at the space
provided. Please fill in the date of signature and indicate with an ‘X’ in the space provided, as to how your proxy is to
vote on each resolution. If no indication is given, the proxy, in his/her discretion may vote as he/she thinks fit.
3. In terms of Article 52 of the Articles of Association of the Company in the case of joint-holding of a share, the Senior
tenders a vote, whether in person or by proxy or by Attorney or by representative and that vote shall be accepted to the
exclusion of the votes of the other joint-holders and for this purpose seniority shall be determined by the order in which
the names stand in the Register of Members in respect of the joint-holding.
4. In case of a Joint-holding only one member or his duly appointed proxy may attend.
5. To be valid, the completed Form of Proxy should be deposited at the Registered Office of the Company situated at
No. 23, Deshamanya H.K. Dharmadasa Mawatha, Colombo 02 not later than 48 hours of the date and time appointed
for the meeting.
Form of Proxy
This Nawaloka Hospitals PLC annual report has been
produced by Smart Media The Annual Report Company,
a certified carbon neutral organisation. Additionally,
the greenhouse gas emissions resulting from activities
outsourced by Smart Media in the production of this
annual report, including the usage of paper and printing,
are offset through verified sources.
This Nawaloka Hospitals PLC
annual report has been
prepared using the Smart
Integrated Reporting
MethodologyTM of
Smart Media The Annual
Report Company.
No. 23, Deshamanya H. K. Dharmadasa Mawatha, Colombo 2, Sri Lanka.
Tel: +94 112 544 444-56, +94 115 577 111 Fax: +94 112 430 393
[email protected]
www.nawaloka.com

Nawaloka Hospitals PLC Annual Report 2015/16

Transcription

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